Retirement Growth Account Plan - The Estee Lauder Cos. Inc.


              THE ESTEE LAUDER INC. RETIREMENT GROWTH ACCOUNT PLAN

                                TABLE OF CONTENTS

SECTION 1 NAME AND CONSTRUCTION................................................2

SECTION 2 DEFINITIONS..........................................................4

SECTION 3 PARTICIPATION.......................................................12

SECTION 4 RETIREMENT DATES....................................................14

SECTION 5 PARTICIPANTS' RETIREMENT ACCOUNTS...................................15

SECTION 6 CONTRIBUTIONS.......................................................22

SECTION 7 DEATH BENEFIT.......................................................23

SECTION 8 TERMINATION OF EMPLOYMENT...........................................25

SECTION 9 OPTIONAL FORMS OF BENEFIT...........................................27

SECTION 10 PAYMENT OF RETIREMENT INCOME.......................................31

SECTION 11 ADMINISTRATION OF THE PLAN.........................................33

SECTION 12 INVESTMENT OF PLAN ASSETS; DUTIES OF FUDICIARY COMMITTEE...........36

SECTION 13 OBLIGATIONS OF THE EMPLOYER........................................38

SECTION 14 MISCELLANEOUS PROVISIONS...........................................39

SECTION 15 ADOPTION OF PLAN BY MEMBERS OF THE GROUP...........................41

SECTION 16 AMENDMENT AND TERMINATION..........................................43

SECTION 17 LIMITATION ACCORDING TO TREASURY DEPARTMENT REQUIREMENTS...........45

SECTION 18 TOP-HEAVY PLAN PROVISIONS..........................................46



                                                                    Exhibit 10.5

                            AMENDMENT AND RESTATEMENT
                                     OF THE
                                ESTEE LAUDER INC.
                         RETIREMENT GROWTH ACCOUNT PLAN

                                    SECTION 1

                              NAME AND CONSTRUCTION

                  1.1 Name of Plan. This Plan shall be known as the "Estee
Lauder Inc. Retirement Growth Account Plan."

                  1.2 Construction. It is the intention of Estee Lauder that the
amended and restated Plan, and its attendant trust fund, will continue to meet
the requirements of ERISA and be qualified and exempt from taxes under Sections
401 and 501 of the Code. Effective January 1, 1996, the Plan also is intended to
be a "multiple employer plan" within the meaning of Section 413(c) of the Code.
The Plan is intended to be a defined benefit plan for purposes of ERISA and the
Code.

                  1.3 Effective Date.

                           (a) This Amendment and Restatement of the Plan shall
generally be effective as of January 1, 1999; provided, however, that:

                                    (i) The provisions of Sections 2.12, 2.16,
         5.2, 7.1(a), 7.3, 8.4(b), 8.4(c) and 15 (other than Section 15.5) shall
         be effective January 1, 1991.

                                    (ii) The provisions of Section 14.10 shall
         be effective December 12, 1994.

                                    (iii) The provisions of Sections 2.6, 2.10,
         2.15, 2.19, 2.21, 15.5 and 16, and Appendix K, shall be effective
         January 1, 1996.

                                    (iv) The provisions of Section 7.1(b) shall
         be effective October 1, 1996, and prior to such date the terms and
         conditions of such Section are governed by Section 6.1(b) of the Plan
         in effect on January 1, 1993.

                                    (v) The provisions of Sections 2.11 and 5.4
         shall be effective January 1, 1997.

                                    (vi) The provisions of Appendix L shall be
         effective November 10, 1997.


                                    (vii) The provisions of the last paragraph
         of Section 5.5 and Section 8.4(a) shall be effective January 1, 1998.

                                    (viii) The provisions of Appendix A shall be
         effective January 1, 1999 (except that those provisions thereof which,
         by their terms, are not limited to periods on and after that date,
         shall be effective January 1, 1991).

                                    (ix) The changes to such other provisions of
         the Plan shall be effective as of such dates as are set forth in such
         provisions.

                                    (x) Other provisions of the Plan shall be
         effective as of such other earlier or later dates as shall be necessary
         to comply with those changes in applicable law which were effective
         prior to January 1, 1999.

                           (b) The rights of any person who terminated
employment or retired on or before the effective date of any of the relevant
provisions of this amendment and restatement of the Plan, including his or her
eligibility for benefits, shall be determined solely under the terms of the Plan
as in effect on the date of his termination or retirement, unless such person is
thereafter reemployed (and, to the extent relevant, again becomes an Active
Participant) on or after the effective date of any such provision of amendment
and restatement, in which case such provision shall apply to such person.

                                       3


                                    SECTION 2

                                   DEFINITIONS

                  "Accrued Benefit" means a monthly amount of retirement income
determined for a Participant as of a specified date, commencing on a
Participant's Normal Retirement Date, and payable as a single life annuity. The
Accrued Benefit as of a specified date equals the Participant's Retirement
Account divided by the applicable factor from Appendix A. For those who were
participants in the Prior Plans as of December 31, 1990 and satisfy the
applicable requirements set forth in Appendix B, the Accrued Benefit is the
greater of the accrued benefit described above or the accrued benefit determined
under the Prior Plans, as described in Section 5.5 hereof.

                  2.1 "Actuarial Equivalent" means, with respect to a
Participant's Accrued Benefit, another annuity or benefit that commences at a
different date and/or is payable in a different form than the Accrued Benefit,
but which has the same present value as the Accrued Benefit, when measured on
the basis of the applicable interest rate, mortality table and other factors
specified in Appendix A as of the date of commencement of payment of such
annuity or benefit, as calculated by or under the supervision of an actuary
appointed by Estee Lauder or the Fiduciary Committee, which actuary has been
enrolled under Subtitle C of Title III of ERISA.

                  2.2 "Approved Absence" means (a) any period of absence from
work (other than any such absence on account of a period of Disability), with
the approval or direction of the Employer, for up to 12 months and, provided
said Employee returns to work for the Employer at such time as the Employer may
reasonably require, the Approved Absence may exceed such 12-month period but
will not be in excess of 24 months, (b) any period of absence during which the
Employee was in military service with the armed forces (including Coast Guard
and Merchant Marine Service) if the Employee has reemployment rights under
applicable laws and complies with the requirements of the law as to reemployment
and is reemployed, and (c) any period of Disability, but (except as provided in
the last paragraph of Section 5.5) not to exceed twelve months. An Approved
Absence will be disregarded for the purpose of the Plan, and the Employee will
be regarded as in the service of the Employer during any period of an Approved
Absence.

                  The Hours of Service credited during an Approved Absence shall
be those which would normally have been credited but for such absence, or in any
case in which the Employer is unable to determine such hours normally credited,
eight (8) Hours of Service per day.

                  2.3 "Average Final Compensation" means the highest average
annual "compensation" which is produced by averaging an Employee's compensation
for any Five (5) consecutive calendar years within the Employee's Years of
Credited Service. For purposes of this Section only, "compensation" means the
straight time basic salary or wages paid to an Employee by the Employer for his
services during each calendar year, inclusive of salary

                                       4


reduction contributions made by an Employer on behalf of the Employee under a
"cash or deferred arrangement" described in Section 401(k) of the Code and
pre-tax contributions made by the Employee under a "cafeteria plan" described in
Section 125 of the Code and maintained by an Employer, but excluding bonuses,
payments for overtime, other Employer contributions for pension, insurance or
other welfare benefits, or any other special payments. Notwithstanding the
foregoing provisions of this Section 2.4, except to the extent otherwise
provided in Section 5.5, "compensation" for each calendar year shall not exceed
$150,000, subject to any adjustment, for Plan Years beginning on or after
January 1, 1994, to reflect increases in the cost of living determined by the
Secretary of the Treasury pursuant to Section 401(a)(17) of the Code.

                  2.4 "Beneficiary" means any person entitled pursuant to
Section 7.3 of this Plan to receive benefits because of the death of a
Participant.

                  2.5 "Board of Directors" or "Board" means the Board of
Directors of Estee Lauder.

                  2.6 "Break in Service" means, with respect to any person, a
Plan Year during which such person does not perform more than 500 Hours of
Service; provided, however, that for purposes of Years of Eligibility Service,
such term shall mean the 12-month period commencing on a person's Employment
Commencement Date or a Plan Year, as the case may be (a "computation period"),
during which such person does not perform more than 500 Hours of Service. A
person who is absent from work for maternity or paternity reasons shall be
credited with the lesser of the number of Hours of Service necessary to prevent
a Break in Service or the number of hours which otherwise would normally have
been credited to such person but for such absence (i) in the computation period
in which the absence begins, if necessary to prevent a Break in Service, and
(ii) in all other cases, in the following computation period. For purposes of
this Section, an absence from work for maternity or paternity reasons means an
absence (i) by reason of the pregnancy of the person, (ii) by reason of the
birth of a child of the person, (iii) by reason of the placement of a child with
the person in connection with the adoption of such child by such person or (iv)
for purposes of caring for such child for a period beginning immediately
following such birth or placement. No person shall incur a Break in Service
solely on account of an absence which qualifies under the Family Medical Leave
Act of 1993, to the extent required under the provisions of such Act.

                  2.7 "Code" means the Internal Revenue Code of 1986, as
amended.

                  2.8 "Committee" means The Estee Lauder Inc. Employee Benefits
Committee appointed pursuant to Section 11 hereof.

                  2.9 "Compensation" means, for a particular Plan Year, the
straight time basic salary or wages paid to an Employee by the Employer for his
services during such Plan Year, inclusive of salary reduction contributions made
by an Employer on behalf of the Employee under a "cash or deferred arrangement"
described in Section 401(k) of the Code, and pre-tax contributions made by the
Employee under a "cafeteria plan" described in Section 125 of the Code and
maintained by the Employer, and including bonuses, payments for overtime and
shift differential, but excluding commissions, other Employer contributions for
pension, insurance or

                                       5


other welfare benefits, or any other special payments and excluding amounts paid
under Estee Lauder's Short-Term Disability Plan or Long-Term Disability Plan. In
addition to other applicable limitations that may be set forth in the Plan and
notwithstanding any other contrary provision of the Plan, Compensation taken
into account under the Plan for the purpose of calculating a Plan Participant's
Accrued Benefit shall not exceed $200,000 ($150,000 for Plan Years beginning on
or after January 1, 1994), subject to any adjustment to reflect increases in the
cost of living determined by the Secretary or the Treasury pursuant to Section
401(a)(17) of the Code.

                  2.10 "Disability" means, with respect to any Employee, a
condition which constitutes a disability under the terms of the Employer's
Long-Term Disability Plan and under Title II of the Federal Social Security Act,
regardless of whether such Employee is otherwise in fact entitled to receive
benefits under the Employer's Long-Term Disability Plan and/or Title II of the
Federal Social Security Act.

                  2.11 "Early Retirement Date" means the first day of the month
which next follows a Participant's termination of employment on or after
attainment of at least age 55 and completion of at least ten (10) Years of
Service, but prior to the Participant's Normal Retirement Date.

                  2.12 "Effective Date," with respect to the Plan as amended and
restated and set forth herein, means January 1, 1999; provided, however, that
certain provisions of the Plan shall be effective as of the dates set forth in
Section 1.3.

                  2.13 "Employee" means any person who is classified as a common
law employee of an Employer, in accordance with the Employer's standard
personnel practices; provided, however, that such term shall not include:

                           (a) a person who is represented by or included in a
collective bargaining unit recognized by the Employer unless the Employer and
the collective bargaining agent have agreed that the Plan shall apply to such
unit;

                           (b) with respect to periods prior to July 1, 1998, a
In-Store Employee;

                           (c) a person who would be an In-Store Employee, but
for the fact that such person is classified as an international military sales
person;

                           (d) a person who is a nonresident alien who receives
no compensation from an Employer which constitutes income from sources within
the United States;

                           (e) a "leased employee," within the meaning of
Section 414(n) of the Code;

                           (f) a person who is classified as an "on-call
employee" in accordance with the Employer's standard personnel practices;

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                           (g) with respect to periods on and after December 1,
1997, a person who is employed by the Aveda Division of Aramis Inc.; or

                           (h) a person who is otherwise classified by the
Employer as an independent contractor, in accordance with the Employer's
standard personnel practices, regardless of whether such person may thereafter
be held to be a common law employee of an Employer by a court, the Internal
Revenue Service or any other relevant federal, state or local governmental
authority or agency.

                  2.14 "Employer" means Estee Lauder, and any other company
included within the Group that includes Estee Lauder (or any other corporation
or unincorporated trade or business not included within the Group that includes
Estee Lauder) that adopts the Plan with the approval of Estee Lauder, as
provided in Section 15 hereof, and any successor to any such other company. With
respect to each Employee, "Employer" shall mean his principal employer.

                  2.15 "Employment Commencement Date" means, with respect to any
person, the date coincident with or next following the date on which such person
first performs an Hour of Service; provided, however, that with respect to a
person who incurs a Break in Service and is thereafter reemployed, such term
shall mean the date subsequent to such Break in Service on which he first
performs an Hour of Service.

                  2.16 "Entry Date" means each January 1 and July 1; provided,
however, that prior to January 1, 1993, with respect to any person who was a
regular and non-contingent Employee of the Employer, "Entry Date" means the
first date coincident with or next following such person's Employment
Commencement Date.

                  2.17 "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.

                  2.18 "Estee Lauder" means Estee Lauder Inc., a corporation
duly organized under the laws of the State of Delaware, and any successor
thereto.

                  2.19 "Fiduciary Committee" means the Estee Lauder Inc.
Fiduciary Investment Committee, the members of which shall be appointed by the
Board.

                  2.20 "Group" means Estee Lauder and any other unit or
organization that is related to Estee Lauder as a member of a "controlled group
of corporations," a group under "common control" or an "affiliated service
group," all as determined pursuant to Sections 414(b), (c), and (m) of the Code.
With respect to a participating Employer which is not in the same Group as Estee
Lauder, "Group" means such Employer and any other unit or organization that is
related to such employer as a member of a "controlled group of corporations," a
group under "common control" or an "affiliated service group," all as determined
pursuant to Sections 414(b), (c) and (m) of the Code. For purposes of
determining whether or not a person is an Employee and the period of employment
of such person, each such unit or organization shall be included in the Group
only for such period or periods during which it is a "member" of the Group.

                  2.21 "Hour of Service" means:


                                       7


                           (a) Each hour for which an Employee is directly or
indirectly compensated, or entitled to be compensated, by the Employer for the
performance of duties.

                           (b) Each hour for which an Employee is credited by
the Employer during an Approved Absence.

                           (c) Each hour, to a maximum of 501 hours for any
single continuous period, for which an Employee is directly or indirectly
compensated, or entitled to be compensated, by the Employer for reasons other
than the performance of duties (irrespective of whether the employment
relationship has terminated) due to vacation, holidays, incapacity, layoff, jury
duty or military duty. Hours shall not be credited for payment to an Employee
from a plan required by workers' compensation, unemployment compensation or
disability insurance laws, nor shall hours be credited for reimbursement of such
an Employee for his medical or medically-related expenses.

                           (d) Each hour for which back pay, irrespective of
mitigation of damages, has been awarded or agreed to by the Employer provided
that if such award or agreement of back pay is for reasons other than the
performance of duties, such hours shall be subject to the restrictions of
paragraph (c).

                  The same Hours of Service shall not be credited under more
than one of the paragraphs above. All Hours of Service shall be computed and
credited to computation periods in accordance with Sections 2530.200b-2(b) and
(c) of the Department of Labor regulations; provided, however, that Hours of
Service under paragraph (a) above, with respect to any payroll period, shall be
credited for the Plan Year in which such payroll period ends. In determining an
Employee's Hours of Service, he shall receive credit for all Hours of Service
performed for any corporation or other entity which is a member of the Group;
provided that (a) he shall not be credited with any Hours of Service performed
for any such corporation or other entity prior to the time that such entity
becomes a member of the Group and (b) the number of Hours of Service so credited
with respect to his employment with such entity shall cease at the time such
entity is no longer a member of the Group.

                  Notwithstanding any of the foregoing requirements of this
definition, an individual employed by the Employer (or by any other member of
the Group which includes the Employer) as a common law employee, but who is not
then classified as an Employee (including, but not limited to, an individual who
was an Employee and thereafter becomes an Inactive Participant on account of a
transfer of employment to a non-Employer member of the Group) shall, except for
purposes of determining Years of Credited Service, nevertheless be credited with
Hours of Service for all periods with respect to which such person is in fact so
employed as a common law employee, to the same extent as if he had been an
Employee.

                  2.22 "In-Store Employee" means any person who:

                           (a) is classified by Estee Lauder, or by any other
member of the Group of which Estee Lauder is a part, as a common law employee of
such Employer, under such Employer's standard personnel practices; and

                                       8


                           (b) is paid a commission or whose principal function
is making sales directly to the public, other than any such person who is
classified by such Employer, under its standard personnel practices, as an
international military sales person.

                  2.23 "Initial Effective Date" means January 1, 1991.

                  2.24 "Normal Retirement Date" means the first day of the month
which next follows a Participant's attainment of at least age 65 and completion
of at least Five (5) Years of Service.

                  2.25 "Normal Retirement Income" means a Participant's Accrued
Benefit payable hereunder at his Normal Retirement Date in the form provided in
Section 9.1 hereof.

                  2.26 "Participant" means any person who has become eligible to
participate in the Plan in accordance with Section 3, and who has neither been
paid in full any benefit to which he may be entitled under the Plan nor
completely forfeited such benefit. An "Active Participant" means a Participant
who is an Employee. An "Inactive Participant" means a Participant who is not an
Active Participant.

                  2.27 "Periodic Adjustment Percentage" means the greater of (i)
the arithmetic daily average of one-year Treasury Constant Maturities for each
calendar year immediately preceding the applicable Plan Year for which it is
applied, as published in the Federal Reserve Statistical Release H.15 (519) of
the Board of Governors of the Federal Reserve System, or (ii) 4%.

                  2.28 "Plan" means The Estee Lauder Inc. Retirement Growth
Account Plan as effective January 1, 1991, and as it hereafter may be further
amended from time to time.

                  2.29 "Plan Year" means the calendar year.

                  2.30 "Prior Plan" means the Estee Lauder Inc. Employee
Retirement Plan, As Amended Effective July 1, 1975 (incorporating all amendments
adopted through December 31, 1990), or the Estee Lauder Hemisphere Corporation
Pension Plan, As Amended and Restated Effective January 1, 1986 (incorporating
all amendments adopted through December 31, 1990), as such plans were in effect
immediately prior to January 1, 1991, whichever plan (if any) is applicable to a
Participant. The terms and provisions of the applicable Prior Plan fix and
determine the rights and obligations under the Plan with respect to any Employee
whose employment terminated prior to January 1, 1991.

                  2.31 "Retirement Account" means the bookkeeping account
maintained with respect to a Participant as described in Section 5.1 hereof.

                  2.32 "Retirement Income Commencement Date" means the first day
of the first period for which a benefit under the Plan is paid as an annuity or
any other form.

                                       9


                  2.33 "Social Security Earnings Limit" means the thirty-five
year average of the maximum annual wages covered by the Federal Social Security
Act as in effect, ending in the year Social Security retirement age (as defined
in Section 415(b)(8) of the Code) is attained.

                  2.34 "Surviving Spouse" means a wife or husband of a
Participant who has been married to such Participant by legal contract
throughout the one-year period ending on the earlier of the death of the
Participant or the Participant's Retirement Income Commencement Date; provided,
however, that such term shall also include a wife or husband who married the
Participant during the one-year period prior to such date and, at the date of
the Participant's death, has been married to the Participant for at least one
(1) year.

                  2.35 "Trustee" means the trustee or trustees which may at any
time be acting as trustee of the Trust Fund, as provided in Section 12 hereof.

                  2.36 "Trust Fund" or "Fund" means all funds at any time held
by the Trustee and/or insurance company for the purposes of the Plan, as
provided in Section 12 hereof.

                  2.37 "Year of Credited Service" means, with respect to any
Participant, a Plan Year during which the Participant completes at least 1,000
Hours of Service as an Employee, commencing on such Participant's Entry Date,
or, if later, January 1, 1993. In the case of a Participant who participated in
the Plan prior to January 1, 1993, Years of Credited Service shall also include
all Years of Credited Service accrued under the Plan as of December 31, 1992;
fractional Years of Credited Service accrued under the Plan as of December 31,
1992 shall be converted to Hours of Service by crediting such Participant, for
the Plan Year commencing on January 1, 1993, with 190 Hours of Service for each
calendar month during which the Participant performed an Hour of Service. In the
case of a Participant who was a participant in a Prior Plan, Years of Credited
Service shall, in addition, include all Credited Service (as defined in the
Prior Plan) recognized under such Prior Plan for benefit accrual purposes as of
December 31, 1990.

                  2.38 "Year of Eligibility Service" means, with respect to any
person, a consecutive 12-month period beginning on such person's Employment
Commencement Date during which he completes at least 1,000 Hours of Service. If
such person fails to complete at least 1,000 Hours of Service during such
12-month period, then a "Year of Eligibility Service" shall be determined based
on the completion of at least 1,000 Hours of Service in the Plan Year beginning
with or within the 12-month period beginning on such person's Employment
Commencement Date, and then each Plan Year thereafter.

                  In the case of a Participant who terminates employment and
does not have any nonforfeitable right to his Accrued Benefit, Years of
Eligibility Service before a period of consecutive one-year Breaks in Service
shall not be taken into account if the number of consecutive one-year Breaks in
Service in such period equals or exceeds Five (5). A Participant whose Years of
Eligibility Service are disregarded pursuant to the preceding sentence shall,
upon his reemployment, be treated as newly employed for eligibility purposes. If
a Participant's Years of Service may not thus be disregarded, such Participant
shall again become an Active Participant immediately upon the date he first
performs an Hour of Service as an Employee.

                                       10


                  2.39 "Year of Service" means, with respect to any person, a
Plan Year during which the person completes at least 1,000 Hours of Service
(except as set forth in Section 8.4 hereof (relating to the "rule of parity"))
commencing on the later of January 1, 1993, or

                                    (i) for purposes of Section 5.2 hereof, in
         the case of any In-Store Employee who becomes a Participant on July 1,
         1998 or in the case of employment by a non-Employer member of the
         Group, the Employment Commencement Date,

                                    (ii) for purposes of Section 5.2, in the
         case of any Participant not described in the foregoing clause (ii),
         such person's Entry Date, and

                                    (iii) for purposes of Section 8 hereof, the
         Employment Commencement Date.

In the case of a person who was in the employ of an Employer or other member of
the Group prior to January 1, 1993, Years of Service shall also include all
Years of Service accrued under the Plan as of December 31, 1992; fractional
Years of Service accrued under the Plan as of December 31, 1992 shall be
converted to Hours of Service by crediting such person, for the Plan Year
commencing on January 1, 1993, with 95 Hours of Service for each semi-monthly
period during which the person performed an Hour of Service.

                  In the case of a person who was a participant in a Prior Plan,
Years of Service shall, in addition, include (i) for purposes of Section 8
hereof, all Service (as defined in the Prior Plan) recognized for purposes of
vesting under such Prior Plan as of December 31, 1990 and (ii) for purposes of
Section 5.2, all Credited Service (as defined in the Prior Plan) recognized
under such Prior Plan for benefit accrual purposes as of December 31, 1990.

                  The masculine pronoun wherever used herein shall include the
feminine pronoun, and the singular shall include the plural.

                                       11


                                    SECTION 3

                                  PARTICIPATION

                  3.1 Each Employee who was a participant in a Prior Plan
immediately prior to the Initial Effective Date shall become a Participant
herein as of the Initial Effective Date.

                  3.2 Each person who becomes an Employee on or after the
Initial Effective Date, or who became an Employee prior to that date but was not
a participant in a Prior Plan immediately prior to the Initial Effective Date,
shall become a Participant on the first Entry Date on which such person is an
Employee coincident with or next following his completion of a Year of
Eligibility Service; provided, however, that any person who was an In-Store
Employee on June 30, 1998 and completed at least a Year of Eligibility Service
at any time on or prior to such date shall become a Participant on July 1, 1998
if such person remains an Employee on such date; and further, provided, that, in
the case of any Employee whose Entry Date, determined without regard to any Year
of Eligibility Service requirement, would otherwise have occurred prior to
January 1, 1993, such Employee shall become a Participant as of such Entry Date,
without the need to also complete a Year of Eligibility Service.

                  3.3 If a person who has been in the employ of an Employer or
another member of the Group as a non-Employee subsequently becomes an Employee,
such Employee shall become a Participant in accordance with Section 3.2 hereof.

                  3.4 A Participant who has become an Inactive Participant on
account of his ceasing to be an Employee, while remaining employed by a member
of the Group, shall once again become an Active Participant upon the date on
which he first performs an Hour of Service as an Employee following the date he
becomes an Inactive Participant.

                  3.5 Except as otherwise provided in this Section, benefits
commencing after Normal Retirement Age shall not be less than the Actuarial
Equivalent of the benefits to which the Participant would have been entitled if
such benefits had commenced at Normal Retirement Age. Upon written notification
to a Participant who elects to remain in service pursuant to Section 4.3 hereof,
or to a former retired Participant who returns to the service of an Employer as
a Participant herein, the retirement income payments to which the Participant is
entitled on and after Normal Retirement Age but before he retires (or, in the
case of a former retired Participant, again retires) shall be permanently
forfeited so long as such Participant remains in "section 203(a)(3)(B) service,"
as described in Department of Labor Regulation Section 2530.203-3(c). For this
purpose, a Participant's service shall be deemed "section 203(a)(3)(B) service"
for any month in which he is credited with at least 40 Hours of Service or such
other standard as may be applicable under Section 203(a)(3)(B) of ERISA. In the
case of a Participant whose retirement income commenced to be paid before his
Normal Retirement Date, upon his subsequent retirement, his retirement income
shall be recomputed, based on the amount credited to his 

                                       12


Retirement Account pursuant to Section 5 hereof and reduced on an actuarial
basis to take account of retirement income payments previously received by him.

                                      13


                                    SECTION 4

                                RETIREMENT DATES

                  4.1 Except as otherwise provided in this Section 4, each
Participant may retire on his Normal Retirement Date and shall receive the
Normal Retirement Income.

                  4.2 A Participant may retire on or after his Early Retirement
Date and shall be entitled to receive his Accrued Benefit on or after his
termination of employment in accordance with the provisions of Sections 9 and 10
hereof.

                  4.3 Any Participant whose employment is continued by the
Employer after the Participant has reached his Normal Retirement Date shall
receive retirement income payments commencing on the first day of the month
following the date of his actual retirement, based on the amount credited to his
Retirement Account at such date.

                                       14


                                    SECTION 5

                        PARTICIPANTS' RETIREMENT ACCOUNTS

                  5.1 A Retirement Account shall be established and maintained
for each Participant pursuant to this Section 5 (and for certain individuals who
were participants in a Prior Plan) to which credits shall be made in accordance
with the provisions of this Section 5. Except as otherwise provided in Section 5
hereof, an Inactive Participant who was a participant in a Prior Plan before
January 1, 1991 but is not an Active Participant at any time on or after January
1, 1991 shall be credited with an amount equal to his "Accrued Benefit under the
Prior Plan," determined in accordance with Appendix A, but a Retirement Account
shall not be established for such Inactive Participant. Except as otherwise
provided in Section 5.5 and 5.6 hereof, a Participant's Accrued Benefit under
this Plan shall be based on the amount credited to his Retirement Account. The
Retirement Account established and maintained pursuant to this Section 5 is
intended to be a bookkeeping account. Neither the establishment of such
Retirement Account nor the making of credits to such Retirement Account shall be
construed as an allocation of assets of the Plan to, or a segregation of such
assets in, such account, or otherwise as creating a right of the Participant to
receive specific assets of the Plan. Benefits provided under the Plan shall be
paid from the general assets of the Plan in the amounts, in the forms and at the
times provided in Sections 4, 8, 9 and 10 hereof.

                  5.2 The annual amount credited to a Participant's Retirement
Account pursuant to this Section shall be based upon the Participant's Years of
Service and the Participant's Compensation for the applicable Plan Year or
portion thereof. Credits pursuant to this Section shall be made to a
Participant's Retirement Account as of the last day of each Plan Year beginning
with 1991 and ending with the last day of the month in which occurs the
Participant's termination of employment.

                           (a) For each Participant who has fewer than Five (5)
Years of Service as of the last day of the Plan Year, credits shall be made to
the Participant's Retirement Account in an amount equal to three percent (3%) of
the Participant's Compensation earned while an Active Participant for such Plan
Year.

                           (b) For each Participant who has Five (5) Years of
Service as of the last day of the Plan Year, credits shall be made to the
Participant's Retirement Account in an amount equal to the sum of (i) three
percent (3%) of the Participant's Compensation earned while an Active
Participant for such Plan Year multiplied by a fraction, the numerator of which
is the number of whole calendar months in such Plan Year while an Active
Participant preceding the anniversary of his Entry Date ("Anniversary Date") and
the denominator of which is the number of whole months in such Plan Year while
an Active Participant, and (ii) four percent (4%) of the Participant's
Compensation earned while an Active Participant for such Plan Year multiplied by
a fraction, the numerator of which is the number of whole calendar months in
such Plan Year while an Active Participant following the Anniversary Date
(including the calendar month in

                                       15


which the Anniversary Date occurs) and the denominator of which is the number of
whole months in such Plan Year while an Active Participant.

                           (c) For each Participant who has more than Five (5)
but fewer than ten (10) Years of Service as of the last day of the Plan Year,
credits shall be made to the Participant's Retirement Account in an amount equal
to four percent (4%) of the Participant's Compensation earned while an Active
Participant for such Plan Year.

                           (d) For each Participant who has ten (10) Years of
Service as of the last day of the Plan Year, credits shall be made to the
Participant's Retirement Account in an amount equal to the sum of (i) four
percent (4%) of the Participant's Compensation earned while an Active
Participant for such Plan Year multiplied by a fraction, the numerator of which
is the number of whole calendar months in such Plan Year while an Active
Participant preceding the Anniversary Date and the denominator of which is the
number of whole months in such Plan Year while an Active Participant, and (ii)
five percent (5%) of the Participant's Compensation earned while an Active
Participant for such Plan Year multiplied by a fraction, the numerator of which
is the number of whole calendar months in such Plan Year while an Active
Participant following the Anniversary Date (including the calendar month in
which the Anniversary Date occurs) and the denominator of which is the number of
whole months in such Plan Year while an Active Participant.

                           (e) For each Participant who has more than ten (10)
Years of Service as of the last day of the Plan Year, credits shall be made to
the Participant's Retirement Account in an amount equal to five percent (5%) of
the Participant's Compensation earned while an Active Participant for such Plan
Year.

                  No credits shall be made pursuant to this Section with respect
to any period during which a Participant is an Inactive Participant. In the
event that a Participant becomes an Inactive Participant by reason of his
transfer of employment to a non-Employer member of the Group, no credits shall
be made to his Retirement Account pursuant to this Section after the end of the
month in which the transfer occurs, and for purposes of this Section his
Compensation shall be considered to be $0 after the end of the Plan Year in
which the transfer occurs until such time that he again performs an Hour of
Service as an Employee (i.e., again becomes an Active Participant); provided,
however, that such Participant's Retirement Account balance shall continue to be
increased in accordance with Section 5.4 hereof following such transfer.

                  5.3 In the case of an Active Participant in the Plan who as of
the Initial Effective Date had an accrued benefit under a Prior Plan as of
December 31, 1990, there shall be credited to the Retirement Account of such
Participant as of January 1, 1991, an amount that is the single sum value of his
"Accrued Benefit under the Prior Plan," determined in accordance with Appendix
A.

                  5.4 For Plan Years beginning on or after the Initial Effective
Date, each Participant's Retirement Account balance on the first day of the Plan
Year shall be automatically increased as of the last day of the Plan Year by an
amount equal to the Retirement Account balance on the first day of the Plan Year
multiplied by the Periodic Adjustment Percentage;

                                       16


provided, however, in the case of a Participant who terminates employment, for
any reason, such increase shall continue to be made until the last date as of
which a Retirement Account balance is maintained for such Participant; further
provided, however, if such increase is for less than a full Plan Year, the
Periodic Adjustment Percentage shall be proportionately reduced.

                  5.5 In the case of any Participant on or after the Initial
Effective Date who was a Participant under a Prior Plan on December 31, 1990 and
satisfies the applicable requirements set forth in Appendix B, such
Participant's Accrued Benefit shall be the greater of (ii) the amount credited
to his Retirement Account or (ii) the accrued benefit which would have been
determined for him under the terms and provisions of the Prior Plan as in effect
immediately prior to the Initial Effective Date, had such Prior Plan continued
in effect until the date of his termination of employment. For this purpose, in
the case of the Prior Plan which is the Estee Lauder Inc. Employee Retirement
Plan, the annual amount of the Participant's Normal Retirement Income is equal
to the greater of (a), (b), (c) or (d) below:

                           (a) One percent (1%) of that portion of his Average
Final Compensation which is not in excess of his Social Security Earnings Limit
plus one and one-half percent (1-1/2%) of that portion of such Average Final
Compensation which is in excess of such Social Security Earnings Limit,
multiplied by the number of his Years of Credited Service.

                           (b) $2,500 with 25 or more Years of Credited Service
and reduced proportionately for Years of Credited Service less than 25.

                           (c) The amount which would otherwise have been
determined under (a) above had such Participant terminated employment on
December 31, 1988, calculated without regard to any dollar limitations on the
amount of "Average Final Compensation" otherwise taken into account under the
Estee Lauder Inc. Employee Retirement Plan as then in effect.

                           (d) The amount which would otherwise have been
determined under (a) above had such Participant terminated employment on
December 31, 1993 (or, if earlier, his actual date of termination of employment)
and had such Participant's "compensation" (as used in Section 1.4) for each Plan
Year during the period ending on such applicable date been limited to $200,000
(or such greater amount as may have been permitted after taking into account
increases for cost of living for such Plan Year, as determined by the Secretary
of the Treasury) and with such dollar limit further applied by taking into
account the family aggregation rules of Section 414(q)(6) of the Code pursuant
to Section 401(a)(17) of the Code (as in effect on such applicable date).

                  In the case of the Estee Lauder Hemisphere Corporation Pension
Plan, the annual amount of the Participant's Normal Retirement Income would be
equal to the greater of (a), (b), (c) or (d) below:

                           (a) One percent (1%) of that portion of his Average
Final Compensation which is not in excess of his Social Security Earnings Limit
plus one and one-half percent (1-1/2%) of that portion of such Average Final
Compensation which is in excess of such Social Security Earnings Limited,
multiplied by the number of his Years of Credited Service.

                                       17


                           (b) $1,620 with 25 or more Years of Credited Service
and reduced proportionately for Years of Credited Service less than 25.

                           (c) The amount which would otherwise have been
determined under (a) above had such Participant terminated employment on
December 31, 1988 and calculated without regard to any dollar limitations on the
amount of "Average Final Compensation" otherwise taken into account under the
Estee Lauder Hemisphere Corporation Pension Plan as then in effect.

                           (d) The amount which would otherwise have been
determined under (a) above had such Participant terminated employment on
December 31, 1993 (or, if earlier, his actual date of termination of employment)
and had such Participant's "compensation" (as used in Section 1.4) for each Plan
Year during the period ending on such applicable date been limited to $200,000
(or such greater amount as may have been permitted after taking into account
increases for cost of living for such Plan Year, as determined by the Secretary
of the Treasury) and with such dollar limit further applied by taking into
account the family aggregation rules of Section 14(q)(6) of the Code pursuant to
Section 401(a)(17) of the Code (as in effect on such applicable date).

                  In the case of a Participant whose Accrued Benefit is
determined under the terms of a Prior Plan under this Section, a Participant
may, subject to consent as provided in Sections 9.4 and 9.5 hereof, elect a
reduced retirement income to commence on the first day of any month which is
between the date of his Early Retirement Date and his Normal Retirement Date.

                  In the case of the Estee Lauder Inc. Employee Retirement Plan,
the amount of the percentage of such reduction shall be equal to the sum of (a)
the product derived by multiplying 7/12ths of one percent (1%) times the number
of whole calendar months by which the pension commencement date precedes the
Participant's attainment of age 57 and (b) the product derived by multiplying
5/12ths of one percent (1%) by the excess of (i) the number of whole calendar
months by which the pension commencement date precedes the Participant's
attainment of age 62 over (ii) the number of whole calendar months specified in
(a). No reduction shall be applied to such early retirement income amount if the
pension commencement date occurs on or after the Participant's attainment of age
62.

                  In the case of the Estee Lauder Inc. Hemisphere Corporation
Pension Plan, the amount of the percentage of such reduction shall be equal to
the sum of (a) the product derived by multiplying 1/4 of one percent (1%) times
the number of whole calendar months (up to and including the first 60 thereof)
by which the pension commencement date precedes the Normal Retirement Date and
(b) the product derived by multiplying 1/2 of one percent (1%) by the number of
calendar months, if any, by which the pension commencement date precedes by more
than 60 calendar months the Normal Retirement Date.

                  Notwithstanding any other provision of the Plan to the
contrary:

                           (a) in the case of any Participant who is eligible
for a benefit set forth in this Section 5.5 and incurs a Disability prior to
January 1, 1998, such Participant (i) shall continue to be credited with Hours
of Service during the period of such Disability, to the same extent as if such
person

                                       18


had not become so disabled, for purposes of determining such person's Years of
Credited Service used in calculating such person's benefit pursuant to this
Section 5.5, and (ii) shall, during the portion of such Participant's period of
such Disability beginning on January 1st of the year following the year in which
such period of Disability first commenced, be considered to continue to receive
"compensation" for purposes of determining such person's Average Final
Compensation, based upon such person's level of "base pay" as in effect
immediately prior to the incurring of such Disability, and

                           (b) in the case of any Participant who is eligible
for a benefit set forth in this Section 5.5 and incurs a Disability on or after
January 1, 1998, such Participant (i) shall continue to be credited with Hours
of Service during a period not exceeding the first twelve months of such
Disability, to the same extent as if such person had not become so disabled, for
purposes of determining such person's Years of Credited Service used in
calculating such person's benefit pursuant to this Section 5.5, and (ii) shall,
during that portion (if any) of such Participant's period of such Disability
beginning on January 1st of the year following the year in which such period of
Disability first commenced during which such Participant continues to be so
credited with Hours of Service pursuant to the immediately preceding clause (i),
be considered to continue to receive "compensation" for purposes of determining
such person's Average Final Compensation, based upon such person's level of
"base pay" as in effect immediately prior to the incurring of such Disability;

provided, however, that in no event shall such person continue to be so credited
with Hours of Service or be imputed with "compensation" for periods after such
person's Normal Retirement Date.

                  5.6 Notwithstanding anything to the contrary provided herein
or elsewhere in the Plan, any Participant who retires on or after his Normal
Retirement Date with at least Five (5) Years of Credited Service but less than
ten (10) Years of Credited Service shall be entitled to a Normal Retirement
Income of not less than $100 per month for life, and any Participant who retires
on or after his Normal Retirement Date with at least ten (10) Years of Credited
Service shall be entitled to a Normal Retirement Income of not less than $200
per month for life.

                  5.7 The benefits otherwise payable to a Participant or a
Beneficiary under this Plan and, where relevant, the Accrued Benefit of a
Participant, shall be limited to the extent required, and only to the extent
required, by the provisions of Section 415 of the Code and rulings, notices and
regulations issued thereunder. To the extent applicable, Section 415 of the Code
and rulings, notices and regulations issued thereunder are hereby incorporated
by reference into this Plan. In calculating these limits, the following rules
shall apply:

                           (a) Except where otherwise specifically set forth in
rulings, notices and regulations incorporated into this Plan by reference, the
limitations applicable to alternative forms of benefits (other than a "qualified
joint and survivor annuity," as defined in Section 417(b) of the Code) shall be
determined using the factors set forth in Appendix A.

                           (b) If the applicable limits of Section 415 of the
Code are increased after a benefit is in pay status by virtue of an adjustment
to those limits reflecting a change in the cost of

                                       19


living index, benefit payments to a Participant or his Beneficiary shall be
increased automatically to the maximum extent permitted under the revised
limits. This increase shall occur only to the extent it would not cause the
benefit to exceed the benefit to which the Participant or Beneficiary would have
been entitled in the absence of the limits under Section 415 of the Code.

                           (c) If, upon the death of a Participant whose
benefits were limited under this Section, the Surviving Spouse shall be entitled
to a benefit payment smaller than that which was payable while the Participant
was alive, the benefit payments to the Surviving Spouse shall equal the lesser
of:

                                    (i) the benefit payment which would be
         payable to the Surviving Spouse if benefits under this Plan had not
         been limited by this Section, and

                                    (ii) the benefit payment which would be
         payable to the Surviving Spouse if the benefit provided under this Plan
         had been a "qualified joint and survivor annuity," as defined in
         Section 417(b) of the Code, with survivor benefits equal to 100% of the
         amount payable while the Participant was alive, in an amount equal to
         the maximum limitations provided under this Section.

                           (d) If the Participant is, or ever has been, covered
under one or more qualified defined contribution plans maintained by the
Employer or another member of the Group, the combined plan limits of Section
415(e) of the Code shall be calculated by reducing the limits applicable to this
Plan first, prior to restricting annual additions to any such defined
contribution plan; provided, however, that this paragraph (d) shall apply only
with respect to Plan Years commencing prior to January 1, 2000. Notwithstanding
the foregoing, or any other provision of this Plan to the contrary, the benefits
otherwise payable to (or on account of) any Participant on or after January 1,
2,000 (including any Participant who is already receiving an annuity under the
Plan prior to that date) shall, to the maximum extent permitted by the Code, be
determined by disregarding any limit which may have been previously imposed on
such person's benefits under this Plan pursuant to the provisions of the
preceding sentence; provided, however, that there shall be no adjustment in the
benefits otherwise paid to such person with respect to periods prior to January
1, 2,000; and, further provided, that this sentence shall not apply with respect
to any person who has, prior to January 1, 2000, received a lump sum
distribution under the Plan.

                           (e) If the Participant is entitled to a benefit under
any defined benefit plan which is, or ever has been, maintained by the Employer
or another member of the Group, the limits under this Section shall be applied
to the combined benefits payable and the benefit payable hereunder shall be
reduced to the extent necessary to make the combined benefits meet the limits
under this Section.

                           (f) To calculate average compensation for a
Participant's high-three years of service, compensation shall be the Employee's
Compensation, and the three-year average shall be calculated using consecutive
limitation years. A limitation year shall be a Plan Year for purposes of this
Section.

                                       20


                           (g) The amendments to Section 415(b) of the Code made
by Public Law 103-465 (as modified by Public Law 104-188) shall first be
effective January 1, 1999.

                  5.8 Notwithstanding any other provision of the Plan to the
contrary, the Accrued Benefit of an Inactive Participant who (i) was a
participant in a Prior Plan and (ii) had a condition of Disability as of
December 30, 1990, shall continue to be determined under the benefit formula of
such Prior Plan, unless such Inactive Participant is eligible for the benefit
set forth in Section 5.5 hereof. A Participant who first has a condition of
Disability on or after January 1, 1991 shall be covered under the benefit
formula of this Plan as of the Initial Effective Date unless such Participant is
eligible for the benefit set forth in Section 5.5 hereof. For purposes of
determining the opening Retirement Account balance under this Plan, Average
Final Compensation shall be used, except that with respect to any year in which
there were no earnings or earnings were reduced because of Disability, such
Participant's last year of actual base pay shall be used on an annualized basis.

                                       21


                                    SECTION 6

                                  CONTRIBUTIONS

                  6.1 No contributions are to be made by Participants under this
Plan.

                  6.2 Subject to the provisions of Section 13 hereof, the
Employer intends to contribute over a period of time such amounts as may be
determined by actuarial calculations to be required of the Employer to provide
benefits in accordance with the Plan. Any forfeitures arising under the Plan
shall not be applied to increase the benefits any Participant would otherwise
receive under the Plan but shall be applied to reduce the Employer contributions
under the Plan.

                  6.3 Subject to the provisions of Section 13 hereof, the
administrative expenses of the Plan, except to the extent paid by the Employer,
shall be paid out of the funds of the Plan.

                  6.4 Except as provided in paragraphs (a) and (b) below, and
except as provided in Section 16 hereof, Employer contributions made under the
Plan will be held for the exclusive benefit of Participants, and their joint
annuitants or Beneficiaries and may not revert to the Employer.

                           (a) A contribution made by the Employer under a
mistake of fact may be returned to the Employer within one (1) year after it is
contributed to the Plan.

                           (b) A contribution conditioned upon its deductibility
under Section 404 of the Code may be returned, to the extent the deduction is
disallowed, to the Employer within one (1) year after the disallowance.

The maximum contribution that may be returned to the Employer will not exceed
the amount actually contributed to the Plan, or the value of such contribution
on the date it is returned to the Employer, if less.

                  6.5 In recognition of the fact that the Plan is, effective
January 1, 1996, subject to the requirements of Section 413(c) of the Code, the
provisions of Section 413(c)(4) of the Code shall, with respect to periods on
and after that date, be applied consistent with such rules and procedures as
shall be adopted by the actuary appointed under the Plan.

                                       22


                                    SECTION 7

                                  DEATH BENEFIT

                  7.1 Death Before Retirement Date.

                           (a) If a Participant with a nonforfeitable right to
the amount credited to his Retirement Account pursuant to Section 8 hereof dies
prior to commencement of benefits, then his Surviving Spouse, or if (i) the
Participant elects a Beneficiary other than his Surviving Spouse and such
Surviving Spouse consents to such designation pursuant to Section 7.3 of the
Plan or (ii) the Participant is unmarried, the Participant's designated
Beneficiary, shall receive the amount credited to the Retirement Account,
payable in a single life annuity. The Surviving Spouse (or designated
Beneficiary, if applicable) may elect to receive such benefit in a cash lump sum
payment; provided, however, that if the Actuarial Equivalent value of such
amount does not exceed $3,500 (with respect to Plan Years beginning prior to
January 1, 1998) or $5,000 (with respect to Plan Years beginning on or after
January 1, 1998), such value shall automatically be paid in a cash lump sum in
accordance with the last sentence of Section 10.1 hereof.

                           (b) Notwithstanding the foregoing subsection (a), if
(i) a Participant described in such subsection (a) was subject to the provisions
of Section 5.5 and (ii) at the time of his death there is a Surviving Spouse and
the Participant has not designated a Beneficiary other than his Surviving Spouse
with such Surviving Spouse's consent pursuant to Section 7.3, the single life
annuity otherwise payable to such Surviving Spouse pursuant to this Section 7.1
shall not be less than the single life annuity otherwise payable to such person
determined in accordance with the provisions of Section 6.1 or 6.2, as the case
may be, of the appropriate Prior Plan and based solely on such Participant's
Normal Retirement Income determined in accordance with Section 5.5; provided,
however, that if the Actuarial Equivalent value of the single life annuity
otherwise so determined pursuant to this subsection (b) does not exceed $3,500
(with respect to Plan Years beginning prior to January 1, 1998) or $5,000 (with
respect to Plan Years beginning on or after January 1, 1998), such value shall
automatically be paid in a cash lump sum in accordance with the last sentence of
Section 10.1 hereof.

                  7.2 Death After Date of Commencement of Benefits. In the event
of a Participant's death after commencement of benefits, and if an optional form
of benefit under Section 9.3 hereof is applicable, then the death benefit
payable hereunder, if any, shall be determined in accordance with such optional
election. Otherwise, no death benefit shall be payable.

                  7.3 Beneficiary Designation. If a Participant has a Surviving
Spouse, his Surviving Spouse shall be his Beneficiary, unless the Participant
designates someone other than his Surviving Spouse as his Beneficiary (other
than as a contingent Beneficiary) and the Surviving Spouse consents to such
designation. If the Participant does not have a Surviving Spouse or if his
Surviving Spouse consents, the Participant shall have the right to designate any

                                       23


person as a Beneficiary, to receive the amount, if any, payable pursuant to this
Plan upon his death and may from time to time change any such designation in
accordance with procedures established by the Committee. Each such designation
shall be in a written instrument filed with the Committee or its designee, and
shall be in such form as may be required by the Committee or its designee. In
the event that a Participant designates someone other than his Surviving Spouse
as his Beneficiary (other than as a contingent Beneficiary), such Beneficiary
designation shall not be effective unless (i) the Surviving Spouse consents to
such Beneficiary designation in writing, in a form acceptable to the Committee
or its designee, and such consent is witnessed by a Plan representative or a
notary public or (ii) the Participant provides the Committee or its designee
with sufficient evidence to show that the Participant does not have a Surviving
Spouse or that his Surviving Spouse cannot be located. The Committee shall
decide which Beneficiary, if any, shall have been validly designated. If a
Participant does not have a Surviving Spouse and no Beneficiary has been
designated, or if a Participant does not have a Surviving Spouse and the
Committee determines that a designation made by the Participant is not effective
for any reason, the Committee shall designate as Beneficiary the estate of the
deceased Participant.

                                       24


                                    SECTION 8

                            TERMINATION OF EMPLOYMENT

                  8.1 A Participant shall be 100% vested in the amount credited
to his Retirement Account after having completed at least Five (5) Years of
Service. If a Participant terminates employment other than by early or normal
retirement or death after having completed at least Five (5) Years of Service,
he shall be entitled to elect payment of the amount credited to his Retirement
Account as of such date of termination in a cash lump sum or, (i) if the
Participant has a Surviving Spouse at the time of such termination of
employment, as an annuity of the form described in Section 9.2 hereof or (ii) if
the Participant has no Surviving Spouse at the time of such termination of
employment, as an annuity of the form of benefit described in Section 9.1
hereof. Such payment shall be made (or in the case of an annuity, shall
commence) in accordance with the last sentence of Section 10.1 hereof, and such
election to be subject to consent as provided in Sections 9.4 and 9.5 hereof;
provided, however, that if the Actuarial Equivalent value of such amount does
not exceed $3,500 (with respect to Plan Years beginning prior to January 1,
1998) or $5,000 (with respect to Plan Years beginning on or after January 1,
1998), such value shall automatically be paid in a cash lump sum in accordance
with the last sentence of Section 10.1 hereof. If such Participant does not
elect such lump sum or annuity, he shall be entitled to receive a Normal
Retirement Income commencing on his Normal Retirement Date, payable in a lump
sum or as an annuity, in accordance with Sections 9.1 or 9.2 hereof, to the
extent applicable. For purposes of this Section 8, a Participant who is
terminated for Disability after a one-year absence because of Disability shall
be deemed to have completed at least Five (5) Years of Service.

                  8.2 In no event shall the retirement income of a terminated
Employee who was a participant under a Prior Plan immediately prior to the
Initial Effective Date be less than the Actuarial Equivalent of the benefit that
would have been payable under the Prior Plan had the Participant's employment
terminated immediately prior to the Initial Effective Date.

                  8.3 Notwithstanding any other provision of this Plan, each
Participant shall be 100% vested in his Retirement Account on his Normal
Retirement Date.

                  8.4 (a) If a Participant's service terminates prior to having
completed Five (5) Years of Service, and at a time when he is 0% vested in the
amount credited to his Retirement Account, he shall, notwithstanding any other
provision of the Plan to the contrary, be deemed to automatically receive, as of
such person's date of termination of employment, a single lump sum distribution
which is the Actuarial Equivalent of his entire vested Accrued Benefit under the
Plan, and he shall thereupon forfeit his Retirement Account as of such same
date. Any forfeiture resulting from the operation of this Section, or any other
provisions of the Plan, shall be used to reduce future Employer contributions.

                           (b) If a Participant's Retirement Account is
forfeited pursuant to the preceding paragraph (a) above and such Participant is
subsequently reemployed as an Employee of an Employer (i) after the number of
consecutive one-year Breaks in Service equals or exceeds Five (5), the Years of
Service completed prior to the Breaks in Service shall not be aggregated

                                       25


with Years of Service completed after the reemployment date, or (ii) prior to
incurring Five (5) or more consecutive one-year Breaks in Service, the amounts
previously credited to his Retirement Account will be restored, the Years of
Service completed prior to the Breaks in Service will be aggregated with the
Years of Service after his reemployment date and the Participant shall become a
Participant of the Plan upon his reemployment.

                           (c) If a Participant's vested percentage is 100% at
the time of his termination of employment, and such Participant is subsequently
reemployed as an Employee of an Employer, Years of Service completed prior to
any number of one-year Breaks in Service shall be aggregated with Years of
Service after the reemployment. If such Participant received a complete
distribution of his benefits under the Plan prior to his reemployment, then the
amounts credited to his Retirement Account as of his date of termination shall
be restored on his reemployment date, but any subsequent distribution paid to
the Participant after his reemployment shall be offset by the present value of
any distributions previously paid to him at any time in accordance with the
requirements of Section 411(a)(7) of the Code and the regulations promulgated
thereunder.

                  8.5 Notwithstanding the foregoing provisions of this Section 8
and solely in the case of a Participant subject to the provisions of Section
5.5:

                           (a) if such Participant's Accrued Benefit is in fact
determined pursuant to Section 5.5, rather than with reference to the amount
credited to his Retirement Account, then the provisions of Section 8.1 shall
instead be applied with reference to such Accrued Benefit so determined pursuant
to Section 5.5, and in connection therewith, the amount of any cash lump sum
shall be the Actuarial Equivalent of such Accrued Benefit; and

                           (b) regardless of whether such Participant's Accrued
Benefit is in fact so determined pursuant to Section 5.5, the provisions of
Section 8.4 shall be applied with reference to both such person's Retirement
Account and the amount otherwise calculated pursuant to Section 5.5.

                                       26


                                    SECTION 9

                            OPTIONAL FORMS OF BENEFIT

                  9.1 Normal Form of Benefit.

                           (a) The normal form of benefit shall be an income
payable monthly for life, commencing on the Normal Retirement Date and
terminating with the payment preceding death; provided, however, that a
Participant may, with spousal consent under the terms of Section 9.4 hereof, if
applicable, elect to receive the amount credited to his Retirement Account in a
single cash lump sum; further provided, however, that if the Actuarial
Equivalent value of such amount does not exceed $3,500 (with respect to Plan
Years beginning prior to January 1, 1998) or $5,000 (with respect to Plan Years
beginning on or after January 1, 1998), such value shall automatically be paid
to the Participant in a cash lump sum in accordance with the last sentence of
Section 10.1 hereof.

                           (b) Notwithstanding the foregoing subsection (a) and
solely in the case of a Participant subject to the provisions of Section 5.5, if
such Participant's Accrued Benefit is in fact determined pursuant to Section
5.5, rather than with reference to the amount credited to his Retirement
Account, then the provisions of the foregoing subsection (a) shall instead be
applied with reference to such Accrued Benefit so determined pursuant to Section
5.5, and in connection therewith, the amount of any cash lump sum shall be the
Actuarial Equivalent of such Accrued Benefit.

                  9.2 Automatic Post-Retirement Surviving Spouse Option. Subject
to the conditions hereinafter set forth in this Section, if a Participant has a
Surviving Spouse at his Retirement Income Commencement Date, the amount of
retirement income payment to which he would otherwise be entitled under the
normal form of benefit described in Section 9.1 shall be reduced on an Actuarial
Equivalent basis to reflect the fact that, if such spouse shall survive him, a
retirement income shall be payable under the Plan to his Surviving Spouse during
such spouse's remaining lifetime after his death in an amount equal to 50% of
the reduced amount of retirement income payments. A married Participant may
elect (and may revoke such election and thereafter reelect) that his retirement
income not be paid in the 50% joint and survivor form described in the preceding
sentence, subject to the provisions of Section 9.4 hereof.

                  9.3 Notwithstanding the foregoing provisions of this Section
9, a Participant who retires on or after his Early Retirement Date may, subject
to consent as provided in Sections 9.4 and 9.5 hereof, elect to receive the
value of (i) his entire Accrued Benefit in accordance with one of the following
optional forms, except that Option 1 or 2 may not be elected with respect to an
Accrued Benefit accrued prior to January 1, 1991; (ii) his Accrued Benefit as of
his Retirement Income Commencement Date less the value of his Accrued Benefit as
of December 31, 1990 separately in accordance with Option 1 or 2; and (iii) his
Accrued Benefit as of December 31, 1990, under a Prior Plan separately in
accordance with Option 3, 4 or 5; provided, however, that

                                       27


the Prior Plan benefit may be received separately only if a Participant elects
Option 1 or 2 under clause (ii) hereof.

                  Option 1. An Actuarial Equivalent retirement income to be paid
to the retired Participant for the rest of his life, and after his death either
50% or 100% (in accordance with his election) of such Actuarial Equivalent
retirement income to be paid to his contingent annuitant for the rest of the
contingent annuitant's life.

                  Option 2. An Actuarial Equivalent retirement income to be paid
to the retired Participant payable for the greater of his lifetime or a period
of ten (10) years. If the retired Participant dies before the expiration of ten
(10) years, the remaining installments of his Actuarial Equivalent retirement
income shall be paid to his Beneficiary.

                  Option 3. An Actuarial Equivalent retirement income to be paid
to the retired Participant for the rest of his life, and after his death either
25%, 66.67%, 75% or 100% (in accordance with his election) of such Actuarial
Equivalent retirement income to be paid to his contingent annuitant for the rest
of the contingent annuitant's life.

                  Option 4. An Actuarial Equivalent retirement income to be paid
to the retired Participant for the rest of his life, and if he dies before
receiving 120 monthly payments, such Actuarial Equivalent retirement income to
be paid to his Beneficiary for the remainder of the 120 months.

                  Option 5. A Participant who retires early in accordance with
Section 4.2 hereof may elect to receive an Actuarial Equivalent retirement
income providing larger monthly payments, in lieu of the retirement income
otherwise payable upon early retirement, until the earliest date on which his
Social Security benefit could commence; thereafter his monthly retirement income
payments shall be reduced by the estimated monthly amount of his Social Security
benefit computed to commence on such date. This optional form provides, insofar
as practical, a level total retirement income (from this Plan and Social
Security) for the Participant. In the event of the election of this Social
Security adjustment option, the monthly payment of the adjusted retirement
income shall commence at the date of retirement and shall cease with the earlier
of the last payment prior to the death of the Participant or the last payment
payable as calculated under this option.

                  9.4 The following rules and requirements must be met in order
for any optional form of retirement income to be applicable.

                           (a) The election must be made pursuant to a qualified
election (as described in paragraphs (b) and (g) of this Section) and filed with
the Committee or its designee within the 90-day period ending on the Retirement
Income Commencement Date.

                           (b) The consent of a contingent annuitant or
Beneficiary shall not be required for a qualified election of an option; except
that, if a married Participant elects to receive a form of benefit other than
the Automatic Post-Retirement Survivor Spouse Option described in Section 9.2
hereof, a qualified election requires that the Surviving Spouse waive such
spouse's

                                       28


right to the Automatic Post-Retirement Surviving Spouse Option. Such waiver
shall not be effective unless (i) the consent is in writing; (ii) the election
designates a specific alternate Beneficiary, including any class of
Beneficiaries or any contingent Beneficiaries, which may not be changed without
spousal consent (or the Surviving Spouse expressly permits designations by the
Participant without any further spousal consent); (ii) the Surviving Spouse's
consent acknowledges the effect of the election; (iv) the Surviving Spouse's
consent is witnessed by a Plan representative or notary public; and (v) the
election designates a form of benefit payment that may not be changed without
spousal consent (or the Surviving Spouse expressly permits designations by the
Participant without any further spousal consent). In the absence of a waiver by
such spouse, other than for the reason that such spouse cannot be located, the
election of a form of payment other than as provided in Section 9.2 hereof shall
be null and void. Any consent by a Surviving Spouse obtained under this
provision (or establishment that the consent of a Surviving Spouse may not be
obtained) shall be effective only with respect to such Surviving Spouse. A
consent that permits designations by the Participant without any requirement of
further consent by the Surviving Spouse must acknowledge that such spouse has
the right to limit consent to a specific Beneficiary, and a specific form of
benefit where applicable, and that such spouse voluntarily elects to relinquish
either or both of such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Surviving Spouse at any time prior to the
commencement of benefits. The number of revocations shall not be limited. No
consent obtained under this provision shall be valid unless the Participant has
received notice as provided in paragraph (g) of this Section.

                           (c) An election may not be made nor will it be
accepted by the Committee or its designee, or if accepted it shall become null
and void, if the Actuarial Equivalent value of the Participant's entire Accrued
Benefit as of his Retirement Income Commencement Date would be $3,500 or less
(with respect to Plan Years beginning prior to January 1, 1998) or $5,000 or
less (with respect to Plan Years beginning on or after January 1, 1998), and
such value shall automatically be paid to the Participant in a cash lump sum.

                           (d) If the stated effective date of the option is
prior to the Participant's Normal Retirement Date and the Participant continues
in service after such stated effective date, the election shall become null and
void but, subject to the rules and requirements contained in this Section, the
Participant may thereafter make another election. If the stated effective date
is the Participant's Normal Retirement Date or any later date and he continues
in service after such stated effective date, the option shall take effect upon
his subsequent death or retirement.

                           (e) If a Participant who has elected Option 4 under
Section 9.3 hereof dies while the option is in effect, and his Beneficiary is a
natural person who survives the Participant but dies before the 120 monthly
payments have been paid to the Participant and the Beneficiary, the lump sum
discounted value of the unpaid balance of such 120 monthly payments shall be
paid to the Beneficiary's estate.

                           (f) If the contingent annuitant is other than the
Surviving Spouse, and if the actuarial present value of the payments to be made
to the Participant under an option will be less than 51% of the Actuarial
Equivalent value of the normal form of retirement benefit provided in Section
9.1 hereof, the optional benefit shall be adjusted so that the value of the

                                       29


Participant's benefit will be equal to 51% of the Actuarial Equivalent value of
the Participant's normal form of retirement benefit.

                           (g) No election shall be a qualified election unless,
at least 30 days (or such a shorter period permitted by the Code and the
regulations promulgated thereunder) and no more than 90 days prior to the
Participant's Retirement Income Commencement Date, the Committee shall furnish
him (by mail or personal delivery) a statement generally describing the 50%
joint and survivor form and explaining the relative financial effects of making
an election under Section 9.2 hereof, or an election of an optional form of
payment under Section 9.3 hereof. The statement shall also describe the right of
the Participant and his Surviving Spouse to waive the 50% joint and survivor
form, the effect of such a waiver, and the right to revoke such waiver.

                  9.5 If the Actuarial Equivalent value of a Participant's
vested Accrued Benefit exceeds (or at the time of any prior distribution
exceeded) $3,500 (with respect to Plan Years beginning prior to January 1, 1998)
or $5,000 (with respect to Plan Years beginning on or after January 1, 1998),
and the Accrued Benefit is "immediately distributable" (as defined below), the
Participant and any Surviving Spouse (or where either the Participant or the
spouse has died, the survivor) must consent to any distribution of such Accrued
Benefit. An Accrued Benefit is "immediately distributable" if any part of the
Accrued Benefit could be distributed to the Participant (or Surviving Spouse)
before the Participant attains (or would have attained if not deceased) Normal
Retirement Age. The consent of the Participant and any Surviving Spouse shall be
obtained in writing within the 90-day period ending on the Retirement Income
Commencement Date. The Participant and any Surviving Spouse shall be notified of
the right to defer any distribution until the Participant's Accrued Benefit is
no longer immediately distributable. Such notification shall include a general
description of the material features, and an explanation of the relative values
of, the optional forms of benefit available under the Plan in a manner that
would satisfy the notice requirements of Section 417(a)(3) of the Code, and
shall be provided no less than 30 days (or such shorter period permitted by the
Code and the regulations promulgated thereunder) and no more than 90 days prior
to the Retirement Income Commencement Date. Notwithstanding the foregoing, only
the Participant need consent to the commencement of a distribution in the 50% or
100% joint and survivor form while the Accrued Benefit is immediately
distributable. Neither the consent of the Participant nor the Surviving Spouse
shall be required to the extent that a distribution is required to satisfy
Section 401(a)(9) or 415 of the Code.

                                       30


                                   SECTION 10

                          PAYMENT OF RETIREMENT INCOME

                  10.1 Subject to the provisions of Sections 9 and 11 hereof,
retirement income payable in other than a lump sum shall be payable in monthly
installments, as of the first day of each month with the first payment to be
made as of the appropriate retirement date or earlier date of termination of
employment, but in no event later than the 60th day after the later of the close
of the Plan Year in which the Participant attains age 65 or terminates
employment or in which occurs his tenth (10th) Year of Credited Service, and
with final payment to be made as of the first day of the month in which death
occurs, or, if earlier, the first day of the month payments cease under the
option elected. Subject to the foregoing sentence, retirement income payable in
a single cash lump sum shall be paid on or as soon as administratively possible
following the date he becomes entitled thereto.

                  10.2 Anything elsewhere in the Plan to the contrary
notwithstanding, the entire nonforfeitable interest of each Participant shall be
either:

                           (a) distributed to the Participant not later than the
Participant's "Required Beginning Date" (as defined in Section 10.2(b)), or

                           (b) distributed to, or for the benefit of, the
Participant and the Participant's contingent annuitant in installments beginning
not later than the Participant's Required Beginning Date and continuing, in
accordance with such regulations as the Secretary of the Treasury may prescribe,
(i) over the life of the Participant or over the lives of the Participant and
the Participant's contingent annuitant or (ii) over a period certain not
extending beyond the life expectancy of the Participant and the Participant's
Beneficiary. For purposes of this Section, the "Required Beginning Date" shall
mean the later of April 1 of the calendar year which follows the calendar year
in which the Participant attains age 70 1/2, or the calendar year in which the
Participant retires; provided, however, that a distribution to a Participant who
is a five percent owner (as defined in Section 416 of the Code) shall begin no
later than April 1 of the calendar year which follows the calendar year in which
such Participant attains age 70-1/2. Notwithstanding the foregoing, any
Participant who attains age 70-1/2 after December 31, 1995 but on or before
December 31, 1997 may elect to nevertheless commence his distribution on April 1
of the calendar year following the calendar year in which the Participant
attains age 70-1/2 even if the Participant is still employed by the Employer. In
addition to the foregoing, in applying the rules of this Section 10.2, the
regulations promulgated under Section 401(a)(9) of the Code are incorporated
herein by reference, as are the rules promulgated by the Department of the
Treasury and the Internal Revenue Service with respect to compliance with
Section 401(a)(9) of the Code without violating Section 411(d)(6) of the Code.

                  If distribution of a Participant's nonforfeitable interest has
begun in accordance with Section 10.2(b) hereof and the Participant dies before
his entire nonforfeitable interest has

                                       31


been distributed to him, the remaining portion of such interest shall be
distributed at least as rapidly as under the method of distribution being used
under Section 10.2(b) hereof as of the date of the Participant's death.

                  If a Participant dies before distribution of the Participant's
nonforfeitable interest has begun in accordance with Section 10.2(b) hereof, the
entire nonforfeitable interest shall be distributed within five years after the
death of the Participant, except such portion thereof as shall be payable in
installments to, or for the benefit of, the Participant's contingent annuitant,
beginning not later than one (1) year after the date of the Participant's death
and continuing, in accordance with such regulations as the Secretary of the
Treasury may prescribe, over the life of the contingent annuitant (or over a
period certain not extending beyond the life expectancy of the contingent
annuitant); provided, however, that if the Surviving Spouse is the Participant's
contingent annuitant, the date on which the distributions are required to begin
shall not be later than the Participant's Required Beginning Date and, if the
Surviving Spouse dies before the distributions to the Surviving Spouse begin,
this paragraph shall be applied as if the Surviving Spouse was the Participant.

                                       32


                                   SECTION 11

                           ADMINISTRATION OF THE PLAN

                  11.1 Except with respect to those responsibilities delegated
to the Fiduciary Committee hereunder, the Plan shall be administered by the
Committee, which shall be responsible for carrying out the provisions of the
Plan. The Committee shall be a "named fiduciary" under Section 402(a)(2) of
ERISA. The Committee shall consist of at least three (3) members who shall be
appointed in the manner authorized by the Board. Vacancies therein shall be
filled in the same manner as appointments. Any member of the Committee may be
removed by action of the Board or may resign of his own accord by delivering his
written resignation to the Board and to the secretary of the Committee.

                  11.2 The members of the Committee shall elect from their
number a chairman and shall appoint a secretary, who need not be a member of the
Committee. They may appoint from their number subcommittees with such powers as
they shall determine, may authorize one or more of their number or any agent to
execute or deliver any instrument or make any payment in their behalf, and may
employ clerks and may employ such counsel, accountants, and actuaries as may be
required in carrying out the provisions of the Plan.

                  11.3 The Committee shall hold meetings upon such notice, at
such time, and at such place as they may determine.

                  11.4 A majority of the members of the Committee at the time in
office shall constitute a quorum for the transaction of business. All
resolutions or other actions taken by the Committee shall be by vote of a
majority of those present at the meeting, but not less than two (2), or in
writing by a majority of members at the time in office, if they act without a
meeting.

                  11.5 No member of the Committee who is also an Employee shall
receive any compensation for his services as such, but the Employer may
reimburse any member for any necessary expenses incurred.

                  11.6 The Committee shall from time to time establish rules for
the administration of the Plan and the transaction of its business. Except as
herein otherwise expressly provided, the Committee shall have the exclusive
right to interpret the Plan and to decide any matters arising thereunder in
connection with the administration of the Plan, the eligibility of any person to
benefits thereunder and the amounts of such benefits. It shall endeavor to act
by general rules so as not to discriminate in favor of any person. Its decisions
and the records of the Committee shall be conclusive and binding upon the
Employer, the Participants, and all other persons having any interest under the
Plan.

                  The Committee shall have the power to amend the Plan in order
to comply with applicable law and to ensure effective operation of the Plan for
the benefit of Participants, provided that such amendment does not increase the
total cost of providing benefits under the

                                       33


Plan by an amount in excess of $200,000 in any Plan Year computed in accordance
with generally accepted accounting or actuarial principles; and provided,
further, that such amendment does not affect the duties delegated hereunder to
the Fiduciary Committee.

The Committee may appoint a Plan administrator for the Plan and shall delegate
to the Plan administrator the duty to maintain all records and accounts
necessary for the effective administration of the Plan, and to take any actions
necessary to comply with the reporting and disclosure requirements imposed by
the Code, ERISA and any other applicable federal or state statute or regulation,
including any law or regulation promulgated by any foreign governing body which
applies to the Plan. The Committee may delegate to any Plan administrator such
other duties as it may deem necessary and appropriate. The Committee shall
receive reports from each such Plan administrator as the Committee may request.

                  11.7 The Committee shall cause to be maintained accounts
showing the fiscal transactions of the Plan, and in connection therewith shall
require the Trustee to submit any necessary reports, and shall keep in
convenient form such data as may be necessary for actuarial valuations of the
assets and liabilities of the Plan.

                  11.8 The members of the Committee, the Fiduciary Committee,
the Board, and the officers and directors of the Employer shall be entitled to
rely upon all tables, valuations, certificates, and reports furnished by any
duly appointed actuary, upon all certificates and reports made by any duly
appointed accountant, and upon all opinions given by any duly appointed legal
counsel. The members of the Committee, the Fiduciary Committee, the Board, and
the officers and directors of the Employer shall not be held liable for any
action taken in good faith in reliance upon any such tables, valuations,
certificates, reports, or opinions. All actions so taken shall be conclusive
upon each of them and upon all persons having any interest under the Plan. No
member of the Committee shall be personally liable by virtue of any instrument
executed by him or on his behalf as a member of the Committee, or for any
mistake of judgment made by himself or any other member or by anyone employed by
the Employer, or for any loss unless resulting from his own actions, including
gross negligence or willful misconduct. Each member of the Committee shall be
indemnified by the Employer against losses reasonably incurred by him in
connection with any claim, proceeding or action to which he may be a party by
reason of his membership in the Committee (including amounts paid in a
settlement approved by the Employer and reasonable attorney's fees and expenses
incurred in connection with such claim, proceeding or action); provided,
however, that such indemnification shall not apply to matters as to which he
shall be finally adjudged, by a court of competent jurisdiction in a decision
from which no appeal may be taken or with respect to which the time to appeal
has expired without an appeal having been made, to have engaged in gross
negligence or willful misconduct. The foregoing right of indemnification shall
be in addition to any other rights to which any such member may be entitled as a
matter of law or pursuant to the bylaws of Estee Lauder or any other Employer.

                  11.9 In the event that any Participant, contingent annuitant
or Beneficiary claims to be entitled to a benefit under the Plan, and the
Committee determines that such claim

                                       34


should be denied in whole or in part, the Committee shall, in writing, notify
such claimant within 90 days of receipt of such claim that his claim has been
denied, setting forth the specific reasons for such denial. Such notification
shall be written in a manner reasonably expected to be understood by such
Participant or other payee and shall set forth the pertinent sections of the
Plan relied on and, where appropriate, an explanation of how the claimant can
obtain review of such denial. Within 60 days after the mailing or delivery by
the Committee of such notice, such claimant may request, by mailing or delivery
of written notice to the Committee, a review by the Committee of the decision
denying the claim. If the claimant fails to request such a hearing within such
60-day period, it shall be conclusively determined for all purposes of this Plan
that the denial of such claim by the Committee is correct. If such claimant
requests a review within such 60-day period, he shall have the opportunity to
review pertinent documents and to submit a written statement to the Committee.
After such review, the Committee shall determine whether such denial of the
claim was correct and shall notify such claimant in writing of its determination
within 60 days from receipt of his request and no further review shall
thereafter be required by the Committee.

                                       35


                                   SECTION 12

                           INVESTMENT OF PLAN ASSETS;
                          DUTIES OF FUDICIARY COMMITTEE

                  12.1 All assets for providing the benefits of the Plan shall
be held in trust for the exclusive benefit of Participants, contingent
annuitants and Beneficiaries under the Plan, and no part of the corpus or income
shall be used for, or diverted to, purposes other than for the exclusive benefit
of Participants, contingent annuitants, and Beneficiaries under the Plan except
as provided in Sections 6.3 and 16.4 hereof. No Participant, contingent
annuitant, or Beneficiary under the Plan, nor any other person, shall have any
interest in or right to any part of the earnings of the Trust Fund, or any
rights in, to, or under the Trust Fund or any part of its assets, except to the
extent expressly provided in the Plan.

                  12.2 All contributions to the Plan by the Employer shall be
committed in trust to the Trustee and/or to an insurance company as provided for
in Section 404 of ERISA. The Trustee shall be appointed from time to time by the
Fiduciary Committee by the appropriate instrument, with such powers in the
Trustee as to investment, reinvestment, control, and disbursement of the funds
as the Fiduciary Committee shall approve and as shall be in accordance with the
Plan. The Fiduciary Committee may remove, replace, or add a Trustee at any time.
Upon the removal, replacement, or resignation of any Trustee, the Fiduciary
Committee may designate a successor Trustee.

                  12.3 In the discretion of the Fiduciary Committee all
contributions to the Plan by the Employer committed to the Trustee and/or
insurance company may be commingled from time to time in whole or in part with
any other fund or funds held by the Trustee and/or insurance company for use in
connection with the payment of pensions of any Employee of the Employer or with
any other fund or funds held by the Trustee and/or insurance company pursuant to
any other retirement plan which is a qualified pension plan under Section 401(a)
of the Code. For purposes of this Plan, the word "fund" or "funds" as used in
this Section 12 and hereafter in this Plan shall mean the allocable portion of
the fund or funds held by the Trustee and/or insurance company in respect of the
contributions made pursuant to this Plan.

                  12.4 The Fiduciary Committee shall determine the manner in
which the funds of the Plan shall be disbursed in accordance with the Plan and
the provisions of the trust instrument, including the form of voucher or warrant
to be used in making disbursements and the qualifications of persons authorized
to approve and sign the same and any other matters incident to the disbursement
of such funds.

                  12.5 The Fiduciary Committee shall adopt from time to time
actuarial tables to be used as the basis for all actuarial calculations and
shall recommend the rates of contribution payable by the Employer to the Plan as
provided in Section 6 hereof. The Fiduciary Committee shall determine from time
to time the per centum rate of interest to be used as the basis for all

                                       36


calculations. As an aid to the Fiduciary Committee in adopting tables and in
recommending the rates of contribution payable by the Employer to the Plan, the
actuary appointed by the Fiduciary Committee shall make annual actuarial
valuations of the assets and liabilities of the Plan and shall certify to the
Fiduciary Committee the tables and rates of contribution which he would
recommend for use by the Fiduciary Committee.

                                       37


                                   SECTION 13

                           OBLIGATIONS OF THE EMPLOYER

                  13.1 All contributions by the Employer for benefits under the
Plan shall be voluntary, and the Employer shall be under no legal obligation to
make and/or continue to make them. The Employer shall have no liability in
respect to payments or benefits or otherwise under the Plan, and the Employer
shall have no liability in respect to the administration of the Trust Fund or of
the funds, securities, or other assets paid over to the Trustee, and each
Participant, each contingent annuitant, and each Beneficiary shall look solely
to such Trust Fund for any payments or benefits under the Plan.

                                       38


                                   SECTION 14

                            MISCELLANEOUS PROVISIONS

                  14.1 Except as otherwise provided by law (which shall include
a "qualified domestic relations order" pursuant to Section 414(p) of the Code
and any other circumstance described in Section 401(a)(13) of the Code and the
Treasury regulations promulgated thereunder), no benefit payable under the Plan
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge; nor shall any such benefit be in any
manner liable for or subject to the debts, contracts, liabilities, engagements,
or torts of the person entitled to such benefit.

                  14.2 If any Participant, contingent annuitant, or Beneficiary
under the Plan shall become bankrupt or attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge any benefit in a manner not allowed
pursuant to Section 14.1, then such benefit shall, in the discretion of the
Committee, cease and terminate. In that event the Committee shall hold or apply
the benefit or any part thereof to or for such Participant, contingent annuitant
or Beneficiary, his spouse, children, or other dependents, or any of them, in
such manner and in such proportions as the Committee shall in its sole
discretion determine.

                  14.3 The establishment and/or maintenance of the Plan shall
not be construed as conferring any rights upon any Employee or any person for a
continuation of employment, and shall not be construed as limiting in any way
the right of the Employer to discharge any Employee or to treat him without
regard to the effect which such treatment might have upon him as a Participant
of the Plan.

                  14.4 If any person entitled to receive any benefits from the
Trust Fund is a minor or, in the judgment of the Committee, legally, physically
or mentally incapable of personally receiving any distributions, the Committee
may instruct the Trustee to make distribution to such other person, persons, or
institutions that, in the judgment of the Committee, are then maintaining or
have custody of such distributee.

                  14.5 The determination of the Committee as to the identity of
the proper payee of any benefit under the Plan and the amount of such benefit
properly payable shall be conclusive, and payment in accordance with such
determination shall constitute a complete discharge of all obligations on
account of such benefit.

                  14.6 In the event any amount shall become payable from the
Trust Fund to a Beneficiary or the estate of any deceased person and if, after
written notice from the Trustee mailed to the last known address of such
Beneficiary, or of the executor or administrator of such estate (as certified to
the Trustee by the Committee), such person or such executor or administrator
shall not have presented himself to the Trustee within two years after the
mailing of such notice, the Trustee shall notify the Committee, and the
Committee shall instruct the Trustee

                                       39


to distribute such amount due to such Beneficiary or such estate among one or
more of the spouse and blood relatives of such deceased person, as designated by
the Committee.

                  14.7 This Plan may be adopted, by action of the Board of
Directors, with respect to Employees who are United States citizens employed by
a foreign subsidiary (as defined in Section 3121(1)(8) of the Code) of the
Employer, with such Employees being treated as Employees of an Employer for the
purpose described in Section 406 of the Code if the following conditions are
met:

                           (a) the Employer has entered into an agreement under
Section 3121(1) of the Code which applies to the foreign subsidiary by which
such Employees are employed; and

                           (b) no contributions under another funded plan of
deferred compensation (whether or not a plan described in Section 401(a),
403(a), or 405(a) of the Code) are provided by any other Employer with respect
to the remuneration paid to such Employees by such subsidiary.

                  14.8 In the case of any merger or consolidation with, or
transfer of assets or liabilities to, any other plan each Participant in the
Plan will (if the Plan then terminated) receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation or transfer (if the Plan had then terminated). Such merger,
consolidation or transfer shall comply with Section 414(l) of the Code and the
regulations promulgated thereunder.

                  14.9 The rights of any person who terminated employment or
retired on or before the effective date of any of the relevant provisions of
this restatement, including his eligibility for benefits, shall be determined
solely under the terms of the Plan as in effect on the date of his termination
of employment or retirement, unless such person is thereafter reemployed and
again becomes a Participant.

                  14.10 Notwithstanding any provision of the Plan to the
contrary, contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of the Code.

                                       40


                                   SECTION 15

                    ADOPTION OF PLAN BY MEMBERS OF THE GROUP

                  15.1 Any member of the Group, other than Estee Lauder, or any
other corporation or unincorporated trade or business which is not a member of
the Group may, with the consent of the Board of Directors, adopt this Plan,
thereby bringing such Group member or other corporation or unincorporated trade
or business within the definition of Employer. With respect to such member of
the Group or other corporation or unincorporated trade or business, the term
"Original Effective Date" of the Plan shall refer to the date as to which such
member adopts the Plan or the date as of which the Plan is extended to such
member as the case may be.

                  15.2 The Board of Directors shall, subject to the requirements
of ERISA and the Code, determine the extent to which, if at all, the period of
employment prior to the extension of the Plan to a member of the Group or other
corporation or unincorporated trade or business shall be recognized for purposes
of the Plan.

                  15.3 In the event that a retirement plan or pension plan
maintained by a member of the Group, or other corporation or unincorporated
trade or business, for any other division, plant, or location is added to this
Plan, the rights and benefits of Employees who were covered under such other
plan shall, from and after the Original Effective Date of the Plan with respect
to said Employer, be determined under such terms and conditions with respect to
such Employees as shall be specified by the Board of Directors in the resolution
approving the adoption or extension of the Plan as to the said Employees.

                  The assets under such other plans maintained by a member of
the group applicable to Employees to be covered by this Plan shall, to the
extent practicable and subject to the provisions of Section 14.8 hereof, be
transferred to the Fund under this Plan, and such transferred assets shall be
merged with the Fund held under this Plan.

                  15.4 If any Employer which has come within the definition of
Employer pursuant to this Section 15 subsequently withdraws or is withdrawn from
the Plan, or discontinues the Plan with respect to all or part of its Employees,
the Committee shall determine the share of the Fund which shall be allocated to
the Employees of such Employer who are thereby affected. If a separate defined
benefit pension plan is being continued for such Employees, such Employer shall,
subject to the provisions of Section 14.8 hereof, designate a successor Trustee
under a separate instrument to whom such allocable funds shall be transferred
with respect to all or the specified classifications of its Employees, as the
case may be, unless the Board of Directors shall determine that such Employer
and its affected Employees may upon proper action of such Employer continue to
participate in the Trust Fund maintained in connection with this Plan. If the
Plan is discontinued with respect to all or part of such Employer's Employees,
such allocable funds shall be allocated with respect to each Employee affected,
and shall be applied pursuant to Section 16.4 hereof.

                                       41


                  15.5 If any Employer which is not a member of the Group which
includes Estee Lauder adopts the Plan in accordance with Section 15.1, the Plan
shall be treated as a "multiple employer plan" within the meaning of Section
413(c) of the Code, and it shall comply with all the requirements of the Code
and ERISA applicable to such plans.

                                       42


                                   SECTION 16

                            AMENDMENT AND TERMINATION

                  16.1 Estee Lauder reserves the right at any time, and from
time to time, by action of the Committee to amend, in whole or in part,
retroactively or prospectively or both, any or all of the provisions of the
Plan; provided, however, that no part of the assets of the Plan shall, by reason
of any amendment, be used for or diverted to purposes other than for the
exclusive benefit of Participants, contingent annuitants, and Beneficiaries; and
further provided that any amendment adopted by the Committee which would cause
the Plan and the trust established under the Plan to cease to meet the
requirements of Section 401(a) or 501(a) of the Code respectively, shall be null
and void; and any actions taken under the Plan pursuant to such amendment, any
benefit increases (or decreases) accruing under the Plan as a result of such
amendment, and any increases (or decreases) in benefit payments under the Plan
made as a result of such amendment, during the period from the date of adoption
of such amendment to the date it is determined that such amendment should so
cause the Plan and the trust under the Plan to cease to meet such requirements,
shall be, respectively, rectified, nullified, and restored as soon as possible
to the extent necessary to permit the Plan and the trust under the Plan to
continue to meet the requirements of Section 401(a) and 501(a) of the Code,
respectively. 

Notwithstanding the previous paragraph herein, no amendment to the Plan shall:

                           (a) reduce the Participant's accrued normal
retirement income as of the date on which the amendment is adopted,

                           (b) eliminate or reduce any early retirement benefit
or retirement-type subsidy to be determined by regulation), or an optional form
of retirement income under the Plan, with respect to the accrued normal
retirement income, or

                           (c) reduce a retired Participant's retirement income
as of the beginning of the Plan Year in which the amendment is effective.

                  The Board of Directors' approval shall be required for any
amendment to the Plan which is anticipated by the Committee to increase the cost
to Estee Lauder of maintaining the Plan by $200,000 or more in any year,
computed in accordance with generally accepted accounting or actuarial
principles.

                  16.2 The Board of Directors may terminate the Plan at any time
as to all or any particular group or groups of Participants and such other
persons, if any, who have or may become entitled to benefits under the Plan on
account of such Participants as to whom the Plan shall have been terminated,
which Participants and other persons shall be referred to collectively as the
terminated group in this Section 16. After the Plan termination date which is
applicable to the terminated group, benefits shall be provided to the terminated
group in accordance with Section 16.4 hereof. In the event of such termination,
each member of the terminated group will be fully (100%) vested in his accrued
benefit.

                                       43


                  16.3 The terminated group's portion of the Fund shall equal
the sum of that part of the fair market value on the Plan termination date of
the entire Fund that would have been allocated to each person in the terminated
group in accordance with Section 16.4 hereof if the Plan had been terminated on
such date as to all Participants in the Plan and no expenses were incurred in
connection with such termination of the Plan.

                  16.4 A terminated group's share of the Fund shall be allocated
as follows:

                           (a) first, to provide benefits to each person in the
terminated group in accordance with Section 4044(a) of ERISA, and the
regulations issued pursuant thereto;

                           (b) then, to the extent that after the making of the
allocation described in (a) above, there remain in the Fund any assets which are
applicable to the terminated group, the said assets shall be applied to pay for
any unpaid administrative expenses for the administration of the Plan as to the
terminated group; and

                           (c) lastly, to the extent that after making the
allocations described in (a) and (b) above, there remain in the Fund any assets
which are applicable to the terminated group, then such remaining assets shall
be paid to the Employer for its own use and benefit provided that such payment
to the Employer does not contravene any provision of law.

                                       44


                                   SECTION 17

                             LIMITATION ACCORDING TO
                        TREASURY DEPARTMENT REQUIREMENTS

                  The purpose of this Section is to conform the Plan to the
requirements of Section 1.401(a)(4)-5(b) of the Income Tax Regulations.

                  17.1 If a benefit becomes or is payable for a Plan Year to a
Participant who is among the 25 highest paid "highly compensated employees" or
"highly compensated former employees" (each as defined in Section 414(q) of the
Code and regulations and rulings issued thereunder) for a Plan Year, such
benefit cannot exceed an amount equal to the payments that would be made during
the Plan Year on behalf of the Participant under a single life annuity that is
the Actuarial Equivalent of the sum of the Participant's Accrued Benefit and any
other benefits under the Plan; provided, however, that this Section shall not
apply if (i) benefits that would be payable to such a Participant are less than
one percent (1%) of the total value of current liabilities under the Plan, or
(ii) the assets of the Trust Fund exceed, immediately after payment of a benefit
to such a Participant, 110% of the value of current liabilities under the Plan.
(For purposes of this Section, the value of current liabilities shall be as
defined in Section 412(l)(7) of the Code.)

                  17.2 In the event of a termination of the Plan, the benefit of
any highly compensated employee or highly compensated former employee shall be
limited to a benefit that is nondiscriminatory under Section 401(a)(4) of the
Code.

                  17.3 In the event Congress should provide by statute, or the
Internal Revenue Service or Department of the Treasury should provide by
regulation or ruling, that such limitations are no longer necessary for the Plan
to meet the requirements of Section 401(a) or other applicable provisions of the
Code then in effect, such limitations shall become void and shall no longer
apply, without the necessity of further amendment to the Plan.

                                       45


                                   SECTION 18

                            TOP-HEAVY PLAN PROVISIONS

                  18.1 Anything elsewhere in this Plan to the contrary
notwithstanding, the provisions of this Section 18 shall apply to the Plan for
any Plan Year if, on the last day of the preceding Plan Year, either (i) the
present equivalent actuarial value of the cumulative accrued normal retirement
income of Key Employees exceeds 60% of the present equivalent actuarial value of
the cumulative accrued normal retirement income of all Participants, or (ii) the
sum of (A) the present equivalent actuarial value of the cumulative accrued
normal retirement income of Key Employees under the Plan, (B) the present
equivalent actuarial value of the accumulated accrued benefits of Key Employees
under all other qualified defined benefit plans included in the Aggregation
Group, and (C) the cumulative accrued benefits of Key Employees under all
qualified defined contribution plans included in the Aggregation Group exceeds
60% of the sum of (D) the present equivalent actuarial value of the cumulative
accrued normal retirement income of all Participants under the Plan, (E) the
present equivalent actuarial value of the accumulated accrued benefits of all
Participants under all other qualified defined benefit plans included in the
Aggregation Group, and (F) the cumulative accrued benefits of all Participants
under all qualified defined contribution plans included in the Aggregation
Group. For the purpose of the foregoing sentence, the "equivalent actuarial
value" of the cumulative accrued normal retirement income of each Participant
under the Plan shall be calculated utilizing a five percent (5%) interest rate
assumption and is increased by the amount of the aggregate distributions, if
any, made with respect to the Participant under the Plan during the five-year
period ending on the last day of the preceding Plan Year; and the present
equivalent actuarial value of the accumulated accrued benefit of each
Participant under all other qualified defined benefit plans and the cumulative
accrued benefit of each Participant under any qualified defined contribution
plan shall be increased by the amount of the aggregate distributions, if any,
made with respect to the Participant under such other plan during that five-year
period. The term "Aggregation Group" shall mean all plans to which the Employer
contributes in which a Key Employee is a Participant and all other plans to
which the Employer contributes that enable any such plan to meet the
requirements of Section 401(a)(4) or Section 410 of the Code. If a Participant
is not a Key Employee for any Plan Year, but was a Key Employee in a prior Plan
Year, the accrued normal retirement income for such Participant shall not be
taken into account. The accrued normal retirement income of any Participant or
former Participant who has not during the five-year period ending on the last
day of the preceding Plan Year received from the Employer any compensation
(other than benefits under the Plan) shall not be taken into account. In any
Plan Year for which the provisions of this Section 18 apply and thereafter, each
Employee who is a Participant during that Plan Year and has completed at least
three (3) Years of Service shall have a nonforfeitable right, in the event he
ceases to be an Employee prior to his Normal Retirement Date, otherwise than by
death or early retirement, to receive for the remainder of his life (beginning
at his Normal Retirement Date if he is still living) a deferred vested
retirement income in an amount per month equal to his accrued normal retirement
income computed as of

                                       46


the date he ceases to be an Employee (including benefits accrued before the
provisions of this Section 18 apply).

                  Notwithstanding the foregoing, each such Employee who has
completed not less than three (3) Years of Service shall be permitted to elect,
within 90 days after the first day of the Plan Year for which the provisions of
this Section 18 apply, to have his nonforfeitable percentage computed in
accordance with the provisions of Section 8 hereof without regard to this
paragraph.

                  18.2 In any Plan Year for which the provisions of this Section
18 apply, if the accrued normal retirement income of any Participant who is not
a Key Employee, when expressed as an equivalent actuarial value of a benefit
payable annually in the form of a single life annuity (with no ancillary
benefits) beginning when the Participant attains age 65 (without taking into
account contributions or benefits under Chapter 2 of Chapter 21 of Title II of
the Social Security Act, or any other Federal or State law), is less than the
Compensation from Estee Lauder not in excess of $150,000, for years in the
Participant's Testing Period, then the accrued normal retirement income of that
Participant shall be increased to an amount equal at the last day of that Plan
Year to such Applicable Percentage of the Participant's average Compensation
from the Employer for years in the Participant's Testing Period.

                  18.3 In any Plan Year for which the provisions of this Section
18 apply, the Compensation from the Employer of each Participant taken into
account under the Plan shall not exceed the first $150,000 (or such other figure
as shall result from such annual cost-of-living adjustments as the Secretary of
the Treasury or his delegate shall make pursuant to Section 401(a)(17)(B) of the
Code).

                  18.4 In any Plan Year commencing prior to January 1, 2000 for
which the provisions of this Section 18 apply, the figure "1.0" shall be
substituted for the figure "1.25" as required by Section 416 of the Code for the
purpose of determining an Employee's "defined contribution plan fraction" and
"defined benefit plan fraction" under Section 415(e) of the Code.

                  18.5 For purposes of this Section, the following definitions
shall apply:

                           (a) "Applicable Percentage" means, in respect of any
Participant, the lesser of (i) 2 percent multiplied by the number of the
Participant's Years of Service (disregarding any Year of Service in which ended
a Plan Year for which the provisions of this Section 18 were not applicable and
any Year of Service completed in a Plan Year beginning before January 1, 1984)
or (ii) 20 percent.

                           (b) "Compensation" means, for purposes of this
Section only, Compensation as defined in Section 2.10 hereof but including any
special pay or remuneration reportable to the Internal Revenue Service on Form
W-2 for Federal income tax purposes, but with respect to Plan Years commencing
prior to January 1, 1998, "Compensation" excludes contributions made by an
Employer on behalf of an Employee under a "cash or deferred arrangement"
described in Section 401(k) of the Code.

                                       47


                           (c) "Key Employee" means a Participant, former
Participant or the contingent annuitant of any Participant who, at any time
during the Plan Year or any of the four preceding Plan Years, is or was (i) an
officer of an Employer whose compensation from the Employer for the Plan Year
exceeds $45,000 (or such other figure as shall result from such annual
cost-of-living adjustments as the Secretary of the Treasury or his delegate
shall make pursuant to Section 415(d) of the Code), or (ii) one (1) of the ten
(10) employees of the Employer whose Compensation for the Plan Year exceeds
$30,000 (or such other figure as shall result from such annual cost-of-living
adjustments as the Secretary of the Treasury or his delegate shall make pursuant
to Section 415(d) of the Code) and who owns the largest interests in the
Employer, or (iii) the owner of five percent (5%) or more of the outstanding
stock of the Employer (or stock possessing more than five percent (5%) of the
total combined voting power of all stock of the Employer), or (iv) an owner of
one percent (1%) or more of the outstanding stock of the Employer (or stock
possessing more than one percent (1%) of the total combined voting power of all
stock of the Employer) whose Compensation from the Employer for the Plan Year is
more than $150,000. Any Employee who is not a Key Employee shall be deemed a
Non-Key Employee.

                           (d) "Testing Period" means, in respect of any
Participant, the period of consecutive years (not exceeding Five (5)), and
disregarding any Year of Service in which ended a Plan Year for which the
provisions of this Section 18 were not applicable, any Year of Service completed
in a Plan Year beginning before January 1, 1984, and any year that begins after
the close of the last Plan Year for which the provisions of this Section 18 were
applicable) during which the Participant had the greatest aggregate Compensation
from the Employer.

                                       48



                              THE ESTEE LAUDER INC.

                         RETIREMENT GROWTH ACCOUNT PLAN




                             As Amended and Restated

                       Generally Effective January 1, 1999


                                TABLE OF CONTENTS

APPENDIX A                                  A-1

APPENDIX B                                  B-1

APPENDIX C                                  C-1

APPENDIX D                                  D-1

APPENDIX E                                  E-1

APPENDIX F                                  F-1

APPENDIX G                                  G-1

APPENDIX H                                  H-1

APPENDIX I                                  I-1

APPENDIX J                                  J-1

APPENDIX K                                  K-1

APPENDIX L                                  L-1

APPENDIX M                                  M-1





                                   APPENDIX A

         1. Except as otherwise noted below, the assumptions to be used to
convert a single life annuity into any other form of benefit, other than a lump
sum distribution, are as follows:

                      Interest Rate:        6%

                      Mortality Table:      1971 TPF&C Mortality Table for
                                            male lives, set back four years

         2. To the extent that (A) any Participant's Retirement Account is to be
converted into an equivalent, immediately payable, annual amount of single life
annuity and (B) the distribution of such single life annuity is to begin as of
date prior to January 1, 1999, such conversion shall be done by applying an
immediate conversion factor to such Participant's Retirement Account, with such
factor based upon the above specified mortality table and the Pension Benefit
Guaranty Corporation ("PBGC") immediate interest rate applicable to the month as
of which the distribution of the single life annuity is otherwise to begin.

         To the extent that (A) any Participant's Retirement Account is to be
converted into an equivalent, immediately payable, annual amount of single life
annuity and (B) the distribution of such single life annuity is to begin as of
date during calendar year 1999, such conversion shall be done by applying an
immediate conversion factor to such Participant's Retirement Account, with such
factor based upon the "applicable mortality table" (as defined under Section
417(e)(3)(A) of the Code, as amended by Public Law 103-465) and whichever of the
following two interest rates results in the larger single life annuity:

(i)     the "applicable interest rate" (as defined under Section 417(e)(3)(A) of
        the Code, as amended by Public Law 103-465) as in effect for the second
        calendar month immediately prior to the first day of the calendar
        quarter in which falls the date as of which the distribution of the
        single life annuity is otherwise to begin, and

(ii)    such same "applicable interest rate" as in effect for the second
        calendar month immediately prior to the month in which falls the date as
        of which such distribution of the single life annuity is otherwise to
        begin.

         To the extent that (A) any Participant's Retirement Account is to be
converted into an equivalent, immediately payable, annual amount of single life
annuity and (B) the distribution of such single life annuity is to begin as of
date on or after January 1, 2000, such conversion shall be done by applying an
immediate conversion factor to such Participant's Retirement Account, with such
factor based upon the "applicable mortality table" (as defined under Section
417(e)(3)(A) of the Code, as amended by Public Law 103-465) and the "applicable
interest rate" (as defined under Section 417(e)(3)(A) of the Code, as similarly
so amended) as in effect for the second calendar month immediately prior to the
first day of the calendar quarter in which falls the date as of which the
distribution of the single life annuity is otherwise to begin.


                                                           A-1




         3. To the extent that (A) any immediately payable, lump sum
distribution under the Plan is the equivalent of a single life annuity otherwise
deferred to a Participant's Normal Retirement Date and (B) such distribution is
to occur as of a date prior to January 1, 1999, such Participant's Retirement
Account is converted into an annual amount of such a deferred single life
annuity using a deferred conversion factor, with such factor based upon the
above specified mortality table and the PBGC immediate/deferred blended interest
rate (under Section 417(e)(3) of the Code, as in effect immediately prior to the
enactment of Public Law 103-465) applicable to the month as of which the
distribution of such lump sum benefit is otherwise to occur.

         To the extent that (A) any immediately payable, lump sum distribution
under the Plan is the equivalent of a single life annuity otherwise deferred to
a Participant's Normal Retirement Date and (B) such distribution is to occur as
of a date during calendar year 1999, such Participant's Retirement Account is
converted into an annual amount of such a deferred single life annuity using a
deferred conversion factor, with such factor based upon the "applicable
mortality table" (as defined under Section 417(e)(3)(A) of the Code, as amended
by Public Law 103-465) and whichever of the following two interest rates results
in the larger single life annuity:

(i)     the "applicable interest rate" (as defined under Section 417(e)(3)(A) of
        the Code, as amended by Public Law 103-465) as in effect for the second
        calendar month immediately prior to the first day of the calendar
        quarter in which falls the date as of which such distribution is
        otherwise to occur, and

(ii)    such same "applicable interest rate" as in effect for the second
        calendar month immediately prior to the month in which falls the date as
        of which such distribution is otherwise to occur.

         To the extent that (A) any immediately payable, lump sum distribution
under the Plan is the equivalent of a single life annuity otherwise deferred to
a Participant's Normal Retirement Date and (B) such distribution is to occur as
of a date on or after January 1, 2000, such Participant's Retirement Account is
converted into an annual amount of such a deferred single life annuity using a
deferred conversion factor, with such factor based upon the "applicable
mortality table" (as defined under Section 417(e)(3)(A) of the Code, as amended
by Public Law 103-465) and the applicable interest rate" (as defined under
Section 417(e)(3)(A) of the Code, as similarly so amended) as in effect for the
second calendar month immediately prior to the first day of the calendar quarter
in which falls the date as of which such distribution is otherwise to occur.

         4. To the extent that (A) any Participant's single life annuity
otherwise payable immediately is converted into an equivalent, immediately
payable lump sum distribution and (B) the distribution of such lump sum benefit
is to occur as of a date prior to January 1, 1999, such conversion shall be done
by applying an immediate conversion factor to the annual


                                                          A-2



amount of such single life annuity, with such factor based upon the above
specified mortality table and the PBGC immediate interest rate applicable to the
month as of which the distribution of such lump sum benefit is otherwise to
occur.

         To the extent that (A) any Participant's single life annuity otherwise
payable immediately is converted into an equivalent, immediately payable lump
sum distribution and (B) the distribution of such lump sum benefit is to occur
as of a date during calendar year 1999, such conversion shall be done by
applying an immediate conversion factor to the annual amount of such single life
annuity, with such factor based upon the "applicable mortality table" (as
defined under Section 417(e)(3)(A) of the Code, as amended by Public Law
103-465) and whichever of the following two interest rates results in the larger
single life annuity:

(i)     the "applicable interest rate" (as defined under Section 417(e)(3)(A) of
        the Code, as amended by Public Law 103-465) as in effect for the second
        calendar month immediately prior to the first day of the calendar
        quarter in which falls the date as of which such distribution is
        otherwise to occur, and

(ii)    such same "applicable interest rate" as in effect for the second
        calendar month immediately prior to the month in which falls the date as
        of which such distribution is otherwise to occur.

         To the extent that (A) any Participant's single life annuity otherwise
payable immediately is converted into an equivalent, immediately payable lump
sum distribution and (B) the distribution of such lump sum benefit is to occur
as of a date on or after January 1, 2000, such conversion shall be done by
applying an immediate conversion factor to the annual amount of such single life
annuity, with such factor based upon the "applicable mortality table" (as
defined under Section 417(e)(3)(A) of the Code, as amended by Public Law
103-465) and the "applicable interest rate" (as defined under Section
417(e)(3)(A) of the Code, as also so amended) as in effect for the second
calendar month immediately prior to the first day of the calendar quarter in
which falls the date as of which such distribution is otherwise to occur.

         5. Each Participant's single life annuity otherwise deferred to such
Participant's Normal Retirement Date is, if the distribution of a lump sum
benefit is otherwise to occur as of a date prior to January 1, 1999, converted
into an equivalent, immediately payable lump sum distribution by using a
deferred conversion factor, with such factor based upon the above specified
mortality table and the PBGC immediate/deferred blended interest rate (under
Section 417(e)(3) of the Code, as in effect immediately prior to the enactment
of Public Law 103-465) applicable to the month as of which the distribution of
such lump sum benefit is otherwise to occur.

         Each Participant's single life annuity otherwise deferred to such
Participant's Normal Retirement Date is, if the distribution of a lump sum
benefit is otherwise to occur as of a date during calendar year 1999, converted
into an equivalent, immediately payable lump sum distribution by using a
deferred conversion factor, with such factor based upon the "applicable
mortality table" (as defined under Section 417(e)(3)(A) of the Code, as amended
by Public Law



                                                          A-3



103-465) and whichever of the following two interest rates results in the larger
single life annuity:

(i)     the "applicable interest rate" (as defined under Section 417(e)(3)(A) of
        the Code, as amended by Public Law 103-465) as in effect for the second
        calendar month immediately prior to the first day of the calendar
        quarter in which falls the date as of which such distribution is
        otherwise to occur, and

(ii)    such same "applicable interest rate" as in effect for the second
        calendar month immediately prior to the month in which falls the date as
        of which such distribution is otherwise to occur.

         Each Participant's single life annuity otherwise deferred to such
Participant's Normal Retirement Date is, if the distribution of a lump sum
benefit is otherwise to occur as of a date on or after January 1, 2000,
converted into an equivalent, immediately payable lump sum distribution by using
a deferred conversion factor, with such factor based upon the "applicable
mortality table" (as defined under Section 417(e)(3)(A) of the Code, as amended
by Public Law 103-465) and the "applicable interest rate" (as defined under
Section 417(e)(3)(A) of the Code, as similarly so amended) as in effect for the
second calendar month immediately prior to the first day of the calendar quarter
in which falls the date as of which such distribution is otherwise to occur.



                                                          A-4






                                   APPENDIX B

         In order to receive the benefits described in Section 5.5 of the Plan,
a Participant must have been a participant under a Prior Plan on December 31,
1990 and must satisfy the requirements set forth below that correspond to his
termination of employment date.

Termination of Employment Date Requirements ------------------------------ ------------ 1. After December 31, 1990 and prior to 1. Age 50 with 10 Years of Service on July 1, 1991 December 31, 1990; age 55 with 10 Years of Service on his termination of employment date 2. After June 30, 1991 and prior to 2. Age 55 with 10 Years of Service on January 1, 1993 his termination of employment date 3. After December 31, 1992 3. Age 50 with 5 Years of Service, or any age and 10 Years of Service, as of January 1, 1993
B-1 APPENDIX C ADDITIONAL EARLY RETIREMENT BENEFITS ------------------------------------ 1.1 Eligibility for Additional Benefits A. Any Participant employed in the United States by an Employer, or on sick leave or long-term disability under the Employer's Long-Term Disability Plan, may elect to retire on August 1, 1991 (such designated date of retirement hereinafter referred to in this Appendix C as the "Retirement Day") and be eligible to receive the additional benefits ("Additional Benefits") set forth under this Appendix C, provided that () on or before July 31, 1991 such Participant shall have attained at least age 55 and completed at least ten Years of Service under the Plan (including periods of disability in which no Years of Service were credited), () the document entitled "Special Retirement Option Agreement," which includes a General Release in favor of the Employer, is signed, witnessed and dated no earlier than July 8, 1991 but no later than July 18, 1991 in strict accordance with the instructions contained therein, and () such Participant shall have made an election to retire on such other forms as the Employer may require during the period commencing forty-five days after such Participant receives the "Special Retirement Option Agreement" from the Employer but ending no later than July 31, 1991. Participants who previously retired on or after January 1, 1991 and before August 1, 1991 and who were employed in the United States by the Employer shall also be eligible for the Additional Benefits under this Appendix C, provided the preceding requirements in clauses (i)-(iii) hereof are satisfied. B. Notwithstanding the provisions of paragraph A hereof, any individual whose active employment with an Employer ceased by mutual agreement on or before May 17, 1991 shall not be eligible for any benefits under this Appendix C. C. Notwithstanding the provisions of paragraph A above, any individual who is classified by an Employer as a Corporate Department Head or President of a division shall not be eligible for the Additional Benefits under this Appendix C. 1.2 Additional Benefits Each Participant eligible for Additional Benefits under this Appendix C to the Plan who elects to retire on the Retirement Day shall be entitled to the following: A. The Additional Benefits shall be equal to the benefit determined, under Section 5.5 of the Plan, by increasing the Participant's age as of August 1, 1991, by Five (5) years and Years of Service as of August 1, 1991, by Five (5) years. The Additional Benefits shall be added to the regular pension benefit determined under Section 5.5 of the Plan. B. The reduction contained in Section 5.5 of the Plan, which applies to the early commencement of a Participant's benefits prior to age 62, shall be applied after increasing the Participant's age by Five (5) years as provided under paragraph A above. C-1 C. The Additional Benefits provided under this Appendix C to the Plan shall be payable in the form applicable to the Participant in accordance with the provisions of Section 9 of the Plan. D. Participants who (i) retired on or after January 1, 1991 and prior to August 1, 1991, (ii) are receiving retirement benefits under the Plan prior to August 1, 1991, and (iii) are eligible under Section 1.01 A hereof, shall have the amount of their retirement benefits recomputed under this Appendix C from the date of their previous retirement and paid in accordance with the form of benefit previously elected under Section 9 of the Plan. No changes to the form of benefit previously elected shall be permitted; however, the Additional Benefits payable for the period of time from the date of the previous retirement to July 31, 1991 shall be paid in the form of a lump sum distribution at the time prescribed under paragraph E hereof. In no event shall Additional Benefits be paid to Participants who retired before January 1, 1991. E. If a Participant elects the Additional Benefits provided under this Appendix C to the Plan, such Participant's retirement benefits shall be payable commencing in the first month following the month in which the Retirement Day occurs. C-2 APPENDIX D ADDITIONAL EARLY RETIREMENT BENEFITS ------------------------------------ 1.1 Eligibility for Additional Benefits A. Any Participant employed in the Commonwealth of Puerto Rico by the Estee Lauder Hemisphere Division of Clinique (the "Employer"), or on sick leave or long-term disability under the Employer's Long-Term Disability Plan, may elect to retire on December 1, 1991 (such designated date of retirement hereinafter referred to in this Appendix D as the "Retirement Day") and be eligible to receive the additional benefits ("Additional Benefits") set forth under this Appendix D, provided that (i) on or before November 30, 1991 such Participant shall have attained at least age 55 and completed at least ten Years of Service under the Plan (including periods of disability in which no Years of Service were credited), (ii) the document entitled "Special Retirement Option Agreement and General Release," which includes a General Release in favor of the Employer, is signed, witnessed and dated no earlier than November 4, 1991 but no later than November 14, 1991 in strict accordance with the instructions contained therein, and (iii) such Participant shall have made an election to retire on such other forms as the Employer may require during the period commencing forty-five days after such Participant receives the "Special Retirement Option Agreement" from the Employer but ending no later than November 30, 1991. Participants who previously retired on or after January 1, 1991 and before December 1, 1991 and who were employed in the Commonwealth of Puerto Rico by the Employer shall also be eligible for the Additional Benefits under this Appendix D, provided the preceding requirements in clauses (i)-(iii) hereof are satisfied. B. Notwithstanding the provisions of paragraph A hereof, any individual whose active employment with the Employer ceased by mutual agreement on or before September 19, 1991 shall not be eligible for any benefits under this Appendix D. C. Notwithstanding the provisions of paragraph A above, any individual who is classified by the Employer as a Corporate Department Head or President of a division shall not be eligible for the Additional Benefits under this Appendix D. 1.2 Additional Benefits Each Participant eligible for Additional Benefits under this Appendix D to the Plan who elects to retire on the Retirement Day shall be entitled to the following: A. The Additional Benefits shall be equal to the benefit determined, under Section 5.5 of the Plan, by increasing the Participant's age as of December 1, 1991, by Five (5) years and Years of Service as of December 1, 1991, by Five (5) years. The Additional Benefits shall be added to the regular pension benefit determined under Section 5.5 of the Plan. B. The reduction contained in Section 5.5 of the Plan, which applies to the early commencement of a Participant's benefits, shall be applied after increasing the Participant's age by Five (5) years as provided under paragraph A above. D-1 C. The Additional Benefits provided under this Appendix D to the Plan shall be payable in the form applicable to the Participant in accordance with the provisions of Section 9 of the Plan. D. Participants who (i) retired on or after January 1, 1991 and prior to December 1, 1991, (ii) are receiving retirement benefits under the Plan prior to December 1, 1991, and (iii) are eligible under Section 1.01 A hereof, shall have the amount of their retirement benefits recomputed under this Appendix D from the date of their previous retirement and paid in accordance with the form of benefit previously elected under Section 8 of the Plan. No changes to the form of benefit previously elected shall be permitted; however, the Additional Benefits payable for the period of time from the date of the previous retirement to November 30, 1991 shall be paid in the form of a lump sum distribution at the time prescribed under paragraph E hereof. In no event shall Additional Benefits be paid to Participants who retired before January 1, 1991. E. If a Participant elects the Additional Benefits provided under this Appendix D to the Plan, such Participant's retirement benefits shall be payable commencing in the first month following the month in which the Retirement Day occurs. D-2 APPENDIX E SPECIAL PROVISIONS GOVERNING EMPLOYEES OF WHITMAN PACKAGING CORPORATION WHO DID NOT OTHERWISE BECOME ELIGIBLE EMPLOYEES PRIOR TO JANUARY 1, 1992 A. SCOPE. (i) The provisions of this Appendix E shall apply with respect to each person who first became an employee of Whitman Packaging Corporation prior to January 1, 1992; other than any such person who, prior to that date, terminated such employment and immediately thereupon transferred to, and became an employee of, an entity which was then an Employer under the Plan as then in effect (a "Whitman Employee"). The provisions of this Appendix E shall apply notwithstanding any contrary provisions of the Plan, of which this Appendix is a part. (ii) Except to the extent expressly provided to the contrary herein, all defined terms shall have the same meanings as provided under the Plan. Each reference to the Plan shall (except with reference to the first sentence of the preceding paragraph) be to either the Plan as in effect on January 1, 1991 or the Plan as amended and restated generally effective as of January 1, 1993 or January 1, 1997, as the context shall require. (iii) The provisions of this Appendix E shall not apply with respect to (a) any person described in Appendix F or (b) any person who first becomes an employee of Whitman Packaging Corporation ("Whitman") on or after January 1, 1992. B. COMMENCEMENT OF STATUS AS A PARTICIPATING EMPLOYER C. Whitman shall become an Employer under the Plan on January 1, 1992. (i) COMMENCEMENT OF PLAN PARTICIPATION A.1.C.i.A.1.1 BY WHITMAN EMPLOYEES D. No Whitman Employee shall be permitted to become a Participant prior to January 1, 1992. The first date on or after January 1, 1992 on which any such person E-1 may become a Participant shall be governed by the otherwise applicable provisions of Section 3 of the Plan. In applying the terms of such participation eligibility provision, there shall be taken into account all of such Whitman Employee's period of employment with Whitman on or after January 1, 1984, but only to the extent that any such period of employment would have been taken into account had Whitman otherwise been an Employer throughout such person's entire such period of employment. E-2 E. CREDITS TO RETIREMENT ACCOUNTS (i) In determining the amount to be credited to the Retirement Account of a Whitman Employee who becomes a Participant pursuant to the provisions of Section 5 of the Plan, there shall be taken into account all periods of such person's employment with Whitman on or after January 1, 1984 which would otherwise have been taken into account for such purpose had Whitman otherwise been an Employer throughout such person's entire such period of employment; provided, however, that there shall be taken into account for this purpose with respect to any Whitman Employee who becomes a Participant (i) who transferred from a non-exempt position to an exempt position prior to January 1, 1992, all periods of employment beginning with the date on which such Whitman Employee first became a regular, full-time employee of Whitman; (ii) who is in a non-exempt position, all periods of employment beginning on the later of (A) January 1, 1984, or (B) such Whitman Employee's Plan Entry Date for purposes of the Whitman Packaging Corporation Money Purchase Plan. F. VESTING (i) In determining the extent to which any Whitman Employee is vested in his Retirement Account pursuant to the provisions of Section 8 of the Plan, there shall be taken into account all periods of such person's employment with Whitman which are otherwise taken into account with respect to such employee pursuant to the provisions of Section 1.4 of this Appendix E. E-3 APPENDIX F SPECIAL PROVISIONS GOVERNING EMPLOYEES OF WHITMAN PACKAGING CORPORATION WHO OTHERWISE BECOME ELIGIBLE EMPLOYEES PRIOR TO JANUARY 1, 1992 SECTION 1.1 SCOPE The provisions of this Appendix F shall apply with respect to each person who, prior to January 1, 1992, (a) became an employee of Whitman Packaging Corporation and (b) thereafter terminated such employment and immediately thereupon transferred to, and became an employee of an entity which was then an Employer under the Plan as then in effect (a "Transferred Whitman Employee"). The provisions of this Appendix F shall apply notwithstanding any contrary provisions of the Plan, of which this Appendix is a part. Except to the extent expressly provided to the contrary herein, all defined terms shall have the same meanings as provided under the Plan. Each reference to the Plan shall (except with reference to the first sentence of the preceding paragraph) be to either the Plan as in effect on January 1, 1991 or the Plan as amended and restated generally effective as of January 1, 1993 or January 1, 1997, as the context shall require. The provisions of this Appendix F shall not apply with respect to (a) any person subject to the provisions of Appendix E or (b) any person who first becomes an employee of Whitman Packaging Corporation ("Whitman") on or after January 1, 1992. SECTION 1.2 CREDITS TO RETIREMENT ACCOUNTS In determining the amount to be credited to the Retirement Account of a Transferred Whitman Employee for the Plan Year commencing January 1, 1992 and for each subsequent Plan Year (but not for any prior Plan Year) pursuant to the provisions of Section 5 of the Plan, but only in the case of such a person who is otherwise entitled to have an amount so credited for such Plan Year, there shall be taken into account all periods of such person's employment with Whitman on or after January 1, 1984 which would otherwise have been taken into account for such purpose had Whitman otherwise been an Employer throughout such person's entire such period of employment; provided, however, that there shall be taken into account for this purpose with respect to any Transferred Whitman Employee (i) who transferred from a non-exempt position to an exempt position with Whitman prior to becoming a Transferred Whitman Employee, all periods of employment beginning with the date on which such Transferred Whitman Employee first became a regular, full-time employee of Whitman; (ii) who was in a non-exempt position with Whitman prior to becoming a Transferred Whitman Employee, all periods of employment beginning on the later of (iii) January 1, 1984, or (iv) such Transferred Whitman Employee's Plan Entry Date for purposes of the Whitman Packaging Corporation Money Purchase Plan. F-1 SECTION 1.3 VESTING In determining the extent to which any Transferred Whitman Employee is, for the Plan Year commencing January 1, 1992 and each subsequent Plan Year, vested in his Retirement Account pursuant to the provisions of Section 8 of the Plan, there shall be taken into account all periods of such person's employment with Whitman which are otherwise taken into account with respect to such employee pursuant to the provisions of Section 1.2 of this Appendix F. In determining the extent to which any Transferred Whitman Employee is, for any Plan Year beginning prior to January 1, 1992, vested in such aforementioned Account, such person's prior employment with Whitman shall be taken into account only to the extent required under the provisions of Section 411 of the Code. F-2 APPENDIX G SPECIAL PROVISIONS GOVERNING EMPLOYEES OF NORTHTEC INC. WHO DID NOT OTHERWISE BECOME ELIGIBLE EMPLOYEES PRIOR TO JANUARY 1, 1992 SECTION 1.1 SCOPE The provisions of this Appendix G shall apply with respect to each person who first became an employee of Northtec Inc. prior to January 1, 1992 at either its Trevose, Pa. or Bristol, Pa. locations; other than any such person who, prior to that date, terminated such employment and immediately thereupon transferred to, and became an employee of, an entity which was then an Employer under the Plan as then in effect (a "Northtec Employee"). The provisions of this Appendix G shall apply notwithstanding any contrary provisions of the Plan, of which this Appendix is a part. Except to the extent expressly provided to the contrary herein, all defined terms shall have the same meanings as provided under the Plan. Each reference to the Plan shall (except with reference to the first sentence of the preceding paragraph) be to either the Plan as in effect on January 1, 1991 or the Plan as amended and restated generally effective as of January 1, 1993 or January 1, 1997, as the context shall require. The provisions of this Appendix G shall not apply with respect to (a) any person described in Appendix H or (b) any person who first becomes an employee of Northtec Inc. ("Northtec") on or after January 1, 1992. SECTION 1.2 COMMENCEMENT OF STATUS AS A PARTICIPATING EMPLOYER Northtec shall become an Employer under the Plan on January 1, 1992. SECTION 1.3 COMMENCEMENT OF PLAN PARTICIPATION BY NORTHTEC EMPLOYEES A. No Northtec Employee shall be permitted to become a Participant prior to January 1, 1992. The first date on or after January 1, 1992 on which any such person may become a Participant shall be governed by the otherwise applicable provisions of Section 2 of the 1992 Plan. B. In applying the terms of the participation eligibility provision referred to in subsection (a) of this Section 1.3 in the case of any Northtec Employee employed at the Trevose, Pa. location prior to January 1, 1992, there shall be taken into account all of such employee's period of employment with Northtec on or after July 17, 1989, but only to the extent that any such period of employment would have been taken into account had Northtec otherwise been an Employer throughout such person's entire such period of employment. G-1 C. In applying the terms of the participation eligibility provision referred to in Section 1.3 in the case of any Northtec Employee employed at the Bristol, Pa. location prior to January 1, 1992, there shall be taken into account all of such employee's period of employment with Northtec (including, for such purpose, all periods of employment on and after November 1, 1987, with Powder Masters, which formerly operated such location), but only to the extent that any such period of employment would have been taken into account had Northtec (or Powder Masters, as the case may be) otherwise been an Employer throughout such person's entire such period of employment. SECTION 1.4 CREDITS TO RETIREMENT ACCOUNTS B. In determining the amount to be credited to the Retirement Account of a Northtec Employee who becomes a Participant pursuant to the provisions of Section 5 of the Plan, on behalf of any Northtec Employee employed at the Trevose, Pa. location prior to January 1, 1992, who otherwise becomes a Participant, there shall be taken into account all periods of such person's employment with Northtec on or after July 17, 1989 which would otherwise have been taken into account for such purpose had Northtec otherwise been an Employer throughout such person's entire such period of employment. C. In determining the amount to be credited to the Retirement Account of a Northtec Employee who becomes a Participant pursuant to the provisions of Section 5 of the Plan, on behalf of any Northtec Employee employed at the Bristol, Pa. location prior to January 1, 1992, who otherwise becomes a Participant, there shall be taken into account all periods of such person's employment with Northtec (including, for such purpose, all periods of employment on and after November 1, 1987, with Powder Masters) which would otherwise have been taken into account for such purpose had Northtec (or Powder Masters, as the case may be) otherwise been an Employer throughout such person's entire such period of employment. D. In addition to the credits referred to in subsections (b) and (c) of this Section 1.4, each Northtec Employee who becomes a Participant on January 1, 1992 shall, as of such date, be credited with $400 for each full calendar year of employment prior to January 1, 1992, but with such calendar years being limited to the period otherwise taken into account under the foregoing provisions of this Section 1.4. SECTION 1.1 VESTING In determining the extent to which any Northtec Employee is vested in his Account pursuant to the provisions of Section 8 of the Plan, there shall be taken into account all periods of such person's employment with Northtec which are otherwise taken into account with respect to such employee pursuant to the provisions of Section 1.4 of this Appendix G. G-2 SECTION 1.2 TRANSFER BETWEEN LOCATIONS In the case of any Northtec Employee who, prior to January 1, 1992 had been employed at both the Trevose, Pa. location and the Bristol, Pa. location, the provisions of this Appendix G shall, notwithstanding any other provision of this Appendix G to the contrary, be applied as if such person had, throughout the entire period prior to January 1, 1992, remained employed at whichever of such two locations such Northtec Employee was first employed. G-3 APPENDIX H SPECIAL PROVISIONS GOVERNING EMPLOYEES OF NORTHTEC INC. WHO OTHERWISE BECOME ELIGIBLE EMPLOYEES PRIOR TO JANUARY 1, 1992 SECTION 1.1 SCOPE The provisions of this Appendix H shall apply with respect to each person who, prior to January 1, 1992, (a) became an employee of Northtec Inc. at either its Trevose, Pa. or Bristol, Pa. locations and (b) thereafter terminated such employment and immediately thereupon transferred to, and became an employee of an entity which was then an Employer under the Plan as then in effect (a "Transferred Northtec Employee"). The provisions of this Appendix H shall apply notwithstanding any contrary provisions of the Plan, of which this Appendix is a part. Except to the extent expressly provided to the contrary herein, all defined terms shall have the same meanings as provided under the Plan. Each reference to the Plan shall (except with reference to the first sentence of the preceding paragraph) be to either the Plan as in effect on January 1, 1991 or the Plan as amended and restated generally effective as of January 1, 1993 or January 1, 1997, as the context shall require. The provisions of this Appendix H shall not apply with respect to (a) any person subject to the provisions of Appendix G or (b) any person who first becomes an employee of Northtec Inc. ("Northtec") on or after January 1, 1992. SECTION 1.2 CREDITS TO RETIREMENT ACCOUNTS B. In determining the amount to be credited to the Retirement Account of a Transferred Northtec Employee, who was employed at the Trevose, Pa. location prior to becoming a Transferred Northtec Employee, for the Plan Year commencing January 1, 1992 and for each subsequent Plan Year (but not for any prior Plan Year) pursuant to the provisions of Section 5 of the Plan, but only in the case of such a person who is otherwise entitled to have an amount so credited for such Plan Year, there shall be taken into account all periods of such person's employment with Northtec on or after July 17, 1989 which would otherwise have been taken into account for such purpose had Northtec otherwise been an Employer throughout such person's entire such period of employment. C. In determining the amount to be credited to the Retirement Account of a Transferred Northtec Employee, who was employed at the Bristol, Pa. location prior to becoming a Transferred Northtec Employee, for the Plan Year commencing January 1, 1992 and for each subsequent Plan Year (but not for any prior Plan Year) pursuant to the provisions of Section 5 of the Plan, but only in the case of such a person who is otherwise entitled to have an amount so credited for such Plan Year, there shall be taken into account all periods of such person's employment with Northtec (including, for such purpose, all periods of H-1 employment on and after November 1, 1987, with Powder Masters) which would otherwise have been taken into account for such purpose had Northtec (or Powder Masters, as the case may be) otherwise been an Employer throughout such person's entire such period of employment. D. In addition to the credits referred to in subsections (b) and (c) of this Section 1.2, each Transferred Northtec Employee who was otherwise a Participant in the Plan on January 1, 1992, shall, as of such date, be credited with the greater of (a) the balance otherwise determined under the Plan as of that date, without regard to this Appendix H or (b) an amount equal to the sum of $400 multiplied by the number of such person's full calendar years of employment prior to January 1, 1992. For this purpose, such calendar years of employment for any Transferred Northtec Employee shall be determined by taking into account all periods of employment otherwise taken into account with respect to such person under the foregoing provisions of this Section 1.2 as well as all periods otherwise recognized under the Plan without regard to this Appendix H. SECTION 1.1 VESTING In determining the extent to which any Transferred Northtec Employee is, for the Plan Year commencing January 1, 1992 and each subsequent Plan Year, vested in his Retirement Account pursuant to the provisions of Section 8 of the Plan, there shall be taken into account all periods of such person's employment with Northtec which are otherwise taken into account with respect to such employee pursuant to the provisions of Section 1.2 of this Appendix H. In determining the extent to which any Transferred Northtec Employee is, for any Plan Year beginning prior to January 1, 1992, vested in such aforementioned Account, such person's prior employment with Northtec shall be taken into account only to the extent required under the provisions of Section 411 of the Code. SECTION 1.2 TRANSFER BETWEEN LOCATIONS In the case of any Transferred Northtec Employee who, prior to so becoming a Transferred Northtec Employee, had been employed at both the Trevose, Pa. location and the Bristol, Pa. location, the provisions of this Appendix H shall, notwithstanding any other provisions of this Appendix H to the contrary, be applied as if such person had, throughout the entire period prior to becoming a Transferred Northtec Employee, remained employed at whichever of such two locations such person was first employed. H-2 APPENDIX I ADDITIONAL RETIREMENT BENEFITS ------------------------------ SECTION 1.1 Eligibility for Additional Benefits The following Participants shall receive the additional benefits provided pursuant to this Appendix I: NAME SOCIAL SECURITY NO. ---- ------------------- Acevedo, Muthmet Juarbe 582-82-5265 Agosto Pagan, Francisco 582-36-3267 DeJesus Moreira, Lydia 133-28-4613 Del Valle, Maria T. 113-28-4815 Iglesia Anglero, Josephina 583-28-8815 Morales Borrero, Alicia 582-96-0486 Suris Mallo, Julieta 267-80-6680 SECTION 1.2 Additional Benefits Each Participant described in the foregoing Section 1.1 of this Appendix I shall be entitled to the following: B. The Additional Benefits shall be equal to the benefit determined, under Section 5.5 of the Plan, by increasing the Participant's age by Five (5) years and Years of Credited Service by Five (5) years. The Additional Benefits shall be added to the regular pension benefit determined under Section 5.5 of the Plan. C. The reduction contained in Section 5.5 of the Plan, which applies to the early commencement of a Participant's benefits, shall be applied after increasing the Participant's age by Five (5) years as provided under paragraph A above. D. The Additional Benefits provided under this Appendix I shall be payable in the form otherwise applicable to the Participant in accordance with the generally applicable provisions of the Plan. I-1 APPENDIX J ADDITIONAL EARLY RETIREMENT BENEFITS - II ----------------------------------------- 1.1 Eligibility for Additional Benefits. (1) Any Participant who is (i) employed by the Employer, (ii) on an Approved Absence (paid or unpaid) from the Employer, (iii) on sick leave or long-term disability under the Employer's Long-Term Disability Plan with disability payments continuing on and after January 1, 1997 or (iv) receiving severance payments from the Employer that are being paid on or after January 1, 1997 (such persons being hereinafter referred to as a "Covered Employee"), may elect to retire on the first day of any month commencing on January 1, 1997 and ending on July 1, 1998 as designated by the Employer and Covered Employee in the "General Release" (such designated date of retirement hereinafter referred to in this Appendix J as the "Retirement Date"). Such Covered Employee shall be eligible to receive the benefit described in Paragraph 1.2 of this Appendix J, provided that (i) on or before December 31, 1996, such Covered Employee shall have attained at least age 50 and completed at least ten Years of Service or Years of Credited Service under the Plan, (ii) on or before December 31, 1996, any such Covered Employee who was employed by Whitman Packaging Corporation has completed at least four Years of Eligibility Service under the Plan, (iii) the document entitled "Special Retirement Opportunity" is signed, witnessed and dated no earlier than November 8, 1996 in strict accordance with the instructions contained therein, and (iv) such Covered Employee shall have made an election to retire on such other forms as the Employer may require during the period commencing at least forty-five days after such Covered Employee receives the "General Release" from the Employer but ending no later than June 4, 1998. Participants who previously retired on or after January 1, 1996 and before January 1, 1997 and who were employed in the United States by the Employer shall also be eligible for the benefits described in Paragraph 1.2 of this Appendix J, provided the preceding requirements in clauses (i)-(iv) hereof are satisfied (such persons are hereinafter referred to as "Retired Covered Employees"). (2) Notwithstanding the provisions of paragraph 1 above, any individual who is classified by an Employer as a Corporate Department Head or President of a division shall not be eligible for the benefit described in Paragraph 1.2 of this Appendix J. 1.2 Additional Benefits. (1) Each Covered Employee who elects to retire on the Retirement Date shall be entitled to his Accrued Benefit which will be calculated as if such Covered Employee was five years older than his actual age as of December 31, 1996, and by increasing his Years of Service and Years of Credited Service as of December 31, 1996 (the difference between the Covered Employee's benefit determined under this Appendix J and his benefit determined without regard to the enhancement provided under this Appendix J shall hereinafter be referred to as the "Additional Benefit"). (2) The reduction contained in Section 5.5 of the Plan, which applies to the early commencement of a Covered Employee's Accrued Benefit determined under the terms of J-1 the Prior Plan, shall be applied after increasing the Covered Employee's age by Five (5) years as provided under Paragraph 1.2(1) above. (3) If the Covered Employee elects to retire pursuant to the provisions of this Appendix J, such Covered Employee may elect at any time prior to the date of commencement of his benefit to receive his benefit, calculated in accordance with the provisions of the Plan and this Appendix J, in the forms of payment applicable to the Covered Employee in accordance with the provisions of Section 9 of the Plan. (4) All Retired Covered Employees who (i) retired on or after January 1, 1996 and prior to January 1, 1997 and (ii) are receiving retirement benefits under the Plan prior to January 1, 1997 shall have the amount of their retirement benefits recomputed under this Appendix J (taking into the account the provisions of paragraphs (1) and (2) hereof) from the date of their previous retirement and paid in accordance with the form of benefit previously elected under Section 9 of the Plan. No changes to the form of benefit previously elected shall be permitted. In no event shall Additional Benefits be paid to Participants who retired before January 1, 1996. (5) If a Covered Employee or Retired Covered Employee elects to receive the Additional Benefits provided under this Appendix J to the Plan, such Covered Employee's or Retired Covered Employee's retirement benefits shall be payable with respect to or commencing on the first month following the month in which the Retirement Date occurs. 1.3 Defined Terms. Except to the extent set forth above, the provisions of this Appendix J are subject to the terms and conditions of the Plan and defined terms used in this Appendix J shall have the same meaning as used in the Plan. J-2 APPENDIX K SPECIAL PROVISIONS GOVERNING EMPLOYEES OF BOBBI BROWN PROFESSIONAL COSMETICS, INC. WHO DID NOT OTHERWISE BECOME ELIGIBLE EMPLOYEES ------------------------------------- SECTION 1.1 SCOPE The provisions of this Appendix K shall apply notwithstanding any contrary provisions of the Plan, of which this Appendix is a part. Except to the extent expressly provided to the contrary herein, all defined terms shall have the same meanings as provided under the Plan. Each reference to the Plan shall (except with reference to the first sentence of the preceding paragraph) be the Plan as amended and restated generally effective as of January 1, 1993 or January 1, 1997, as the context shall require. SECTION 1.2 COMMENCEMENT OF STATUS AS A PARTICIPATING EMPLOYER Bobbi Brown Professional Cosmetics, Inc. ("Bobbi Brown") shall become an Employer under the Plan on January 1, 1996. SECTION 1.3 COMMENCEMENT OF PLAN PARTICIPATION BY BOBBI BROWN EMPLOYEES No Bobbi Brown employee shall be permitted to become a Participant prior to January 1, 1996. Each person who (i) is employed by Bobbi Brown on January 1, 1996 and (ii) is otherwise an Employee on that date shall become a Participant on January 1, 1996. (Each person who so becomes a Participant on that date is hereafter referred to as a "Bobbi Brown Employee".) SECTION 1.4 CREDITS TO RETIREMENT ACCOUNTS In determining the amount to be credited to the Retirement Account of a Bobbi Brown Employee who becomes a Participant, pursuant to the provisions of Section 5 of the Plan, such person's Years of Service, for such purpose, shall be determined based upon the date that such person would otherwise have, without regard to this Appendix K, first become a Participant had Bobbi Brown been an Employer throughout such person's entire period of employment with Bobbi Brown. SECTION 1.5 VESTING K-1 In determining the extent to which any Bobbi Brown Employee is vested in his Retirement Account pursuant to the provisions of Section 8 of the Plan, such person's Years of Service, for such purpose, shall be determined by taking into account all periods of such person's employment with Bobbi Brown which would otherwise have been taken into account for such purpose had Bobbi Brown otherwise been an Employer throughout such person's entire period of employment with Bobbi Brown. K-2 APPENDIX L SPECIAL PROVISIONS GOVERNING ESTEE LAUDER EMPLOYEES WHO WERE PREVIOUSLY EMPLOYED BY THE DONNA KARAN COMPANY WHO DID NOT OTHERWISE BECOME ELIGIBLE EMPLOYEES ------------------------------------------------- SECTION 1.1 SCOPE The provisions of this Appendix L shall apply with respect to each person who was an employee of The Donna Karan Company ("DK") immediately prior to November 10, 1997 and becomes an Employee prior to December 31, 1998 (a "DK Employee"). The provisions of this Appendix L shall apply notwithstanding any contrary provisions of the Plan, of which this Appendix is a part. Except to the extent expressly provided to the contrary herein, all defined terms shall have the same meanings as provided under the Plan. Each reference to the Plan shall be the Plan as amended and restated generally effective as of January 1, 1997. SECTION 1.2 COMMENCEMENT OF PLAN PARTICIPATION BY DK EMPLOYEES No DK Employee shall be permitted to become a Participant prior to November 10, 1997. The first date on or after November 10, 1997 on which any such person may become a Participant shall be governed by the otherwise applicable provisions of Section 3 of the Plan. In applying the terms of such participation eligibility provision, there shall be taken into account all of such DK Employee's period of employment with DK, but only to the extent that any such period of employment would have been taken into account had DK otherwise been an Employer throughout such person's entire period of employment with DK. SECTION 1.3 CREDITS TO RETIREMENT ACCOUNTS In determining the amount to be credited to the Retirement Account of a DK Employee who becomes a Participant pursuant to the provisions of Section 5 of the Plan, there shall be taken into account all periods of such person's employment with DK which would otherwise have been taken into account for such purpose had DK otherwise been an Employer throughout such person's entire such period of employment. L-1 SECTION 1.4 VESTING In determining the extent to which any DK Employee is vested in his Retirement Account pursuant to the provisions of Section 8 of the Plan, there shall be taken into account all periods of such person's employment with DK which are otherwise taken into account with respect to such employee pursuant to the provisions of Section 1.4 of this Appendix L. L-2 APPENDIX M SPECIAL PROVISIONS GOVERNING CERTAIN TRANSFERRED EMPLOYEES SECTION 1.1 SCOPE The provisions of this Appendix M shall apply with respect to each person (i) who was an employee of one of the companies listed below on or after the date specified below for such company, and (ii) whose employment is subsequently transferred from such company to an Employer (each a "Transferred Employee"): ----------------------------------------------------------------------- Company Date ----------------------------------------------------------------------- Make-Up Art Cosmetics Inc. December 28, 1994 Make-Up Art Cosmetics (U.S.) Inc. FFJD, Inc. ----------------------------------------------------------------------- Sassaby Cosmetics, Inc. October 31, 1997 ----------------------------------------------------------------------- Aveda Corporation December 1, 1997 Aveda Services Inc. ----------------------------------------------------------------------- The provisions of this Appendix M shall apply notwithstanding any contrary provisions of the Plan, of which this Appendix is a part. Except to the extent expressly provided to the contrary herein, all defined terms shall have the same meanings as provided under the Plan. Each reference to the Plan shall be the Plan as amended and restated generally effective as of January 1, 1999. SECTION 1.2 COMMENCEMENT OF PLAN PARTICIPATION BY TRANSFERRED EMPLOYEES The first date on which any Transferred Employee may become a Participant shall be governed by the otherwise applicable provisions of Section 3 of the Plan. In applying the terms of such participation eligibility provision, there shall be taken into account all of such Transferred Employee's period of employment with his prior employer listed in Section 1.1 of this Appendix M (including any corporate predecessor thereof), but only to the extent that any such period of employment would have been taken into account had such prior employer otherwise been an Employer throughout such person's entire period of employment. SECTION 1.3 CREDITS TO RETIREMENT ACCOUNTS In determining the amount to be credited to the Retirement Account of a Transferred Employee who becomes a Participant pursuant to the provisions of Section 5 of the Plan, there shall be taken into account all periods of such person's employment with his prior employer listed in Section 1.1 of this Appendix M (including any corporate predecessor thereof) which would otherwise have been taken into account for such purpose had such prior employer otherwise been an Employer throughout such person's entire period of employment. M-1 SECTION 1.4 VESTING In determining the extent to which any Transferred Employee is vested in his Retirement Account pursuant to the provisions of Section 8 of the Plan, there shall be taken into account all periods of such person's employment with his prior employer listed in Section 1.1 of this Appendix M (including any corporate predecessor thereof) which would otherwise have been taken into account for such purpose had such prior employer otherwise been an Employer throughout such person's entire period of employment. M-2 IN WITNESS WHEREOF, the undersigned, being duly authorized by the Benefits Committee, has caused this amended restated Plan to be executed this 14 day of July, 1999. ESTEE LAUDER INC. By: /s/ Andrew J. Cavanaugh -------------------------------- Name: Andrew J. Cavanaugh Title: Senior Vice President-- Corporate Human Resources