Document:

Exhibit 10.8b

                                    EXHIBIT B
                              To Agreement between
                         The Estee Lauder Companies Inc.
                                       and
                                Leonard A. Lauder
                          and dated as of July 1, 1995

                   OPTION AGREEMENT (this "Agreement") dated this 16th day of
         November, 1995 providing for the granting of options by The Estee
         Lauder Companies Inc., a Delaware corporation (the "Company"), to
         Leonard A. Lauder, an Executive employee of the Company (the
         "Executive").

                   By agreement dated as of July 1, 1995, the Company has
         employed the Executive in the position of Chief Executive Officer of
         the Company (the "Employment Agreement"). As contemplated by the
         Employment Agreement, and as set out at Section 3(c) therein, the Board
         of Directors of the Company has determined that the Executive is to be
         granted options to purchase shares of the Company's Class A Common
         Stock, par value $.01 per share (the "Shares"), on the terms and
         subject to the conditions hereinafter provided.

                   The stock options to be granted pursuant hereto shall not be
         Incentive Stock Options as defined in Section 422A of the Internal
         Revenue Code of 1986, as amended, (the "Code").

                   1. NUMBER OF SHARES. Provided that Shares shall have been
         offered for sale to the public in compliance with the Securities Act of
         1933, as amended (the "Securities Act"), on or prior to December 31,
         1995, the Company hereby awards to the Executive options to purchase
         2,600,000 Shares (the "Stock Options") as follows:

                   (a)   600,000 Stock Options shall be awarded as of the date
                         that Shares are first offered for sale to the public
                                (the "Initial Award");

                   (b)   500,000 Stock Options shall be awarded as of July 1,
                                1996 (the "1996 Award");

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                   (c)   500,000 Stock Options shall be awarded as of July 1,
                                1997 (the "1997 Award");

                   (d)   500,000 Stock Options shall be awarded as of July 1,
                                1998 (the "1998 Award"), and

                   (e)   500,000 Stock Options shall be awarded as of July 1,
                                1999 (the "1999 Award").

         Notwithstanding the foregoing, no award shall be made if the Employment
         Agreement shall have been terminated for any reason on or prior to the
         date scheduled for such award.

                   2. EXERCISE PRICE. For each Stock Option granted hereunder,
         the per-share exercise price shall be equal to 100% of the closing
         price of the Class A Common Stock on the New York Stock Exchange or any
         other national securities exchange or other market system as reported
         by The Wall Street Journal on the date of grant or, if there shall be
         no trading on such date, the date next preceding on which trading
         occurred (the "Market Value").

                   3. PAYMENT OF EXERCISE PRICE. The Stock Option exercise price
         may be paid in cash, by the delivery of shares of Class A Common Stock
         of the Company then owned by the Executive or by a combination of these
         methods. Payment may also be made by delivering a properly executed
         exercise notice to the Company together with a copy of irrevocable
         instructions to a broker to deliver promptly to the Company the amount
         of sale or loan proceeds to pay the exercise price. The Company may
         prescribe any other method of paying the exercise price that it
         determines to be consistent with applicable law, including, without
         limitation, in lieu of the exercise of a Stock Option by delivery of
         shares of Class A Common Stock of the Company then owned by the
         Executive, providing the Company with a notarized statement attesting
         to the number of shares owned, where upon verification by the Company,
         the Company may issue to the Executive only the number of incremental
         shares to which the Executive is entitled upon exercise of the Stock
         Option.

                   4. EXERCISE PERIOD. Stock Options granted hereunder shall be
         exercisable as set forth below.

                   (a) With respect to Stock Options granted in the Initial
         Award:

                       (i) 200,000 of such Stock Options may be exercised from
         and after January 1, 1999;

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                       (ii) 200,000 of such Stock Options may be exercised from
         and after January 1, 2000; and

                       (iii) 200,000 of such Stock Options may be exercised from
         and after January 1, 2001.

                  (b) With Respect to Stock Options granted in the 1996 Award:

                       (i) 166,667 of such Stock Options may be exercised from
         and after January 1, 2000;

                       (ii) 166,667 of such Stock Options may be exercised from
         and after January 1, 2001; and

                       (iii) 166,666 of such Stock Options may be exercised from
         and after January 1, 2002.

                  (c) With respect to Stock Options granted in the 1997 Award:

                       (i) 166,667 of such Stock Options may be exercised from
         and after January 1, 2001;

                       (ii) 166,667 of such Stock Options may be exercised from
         and after January 1, 2002; and

                       (iii) 166,666 of such Stock Options may be exercised from
         and after January 1, 2003.

                  (d) With respect to Stock Options granted in the 1998 Award:

                       (i) 166,667 of such Stock Options may be exercised from
         and after January 1, 2002;

                       (ii) 166,667 of such Stock Options may be exercised from
         and after January 1, 2003; and

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                       (iii) 166,666 of such Stock Options may be exercised from
         and after January 1, 2004.

                  (e) With respect to Stock Options granted in the 1999 Award:

                       (i) 166,667 of such Stock Options may be exercised from
         and after January 1, 2003;

                       (ii) 166,667 of such Stock Options may be exercised from
         and after January 1, 2004; and

                       (iii) 166,666 of such Stock Options may be exercised from
         and after January 1, 2005.

                   No Stock Option awarded hereunder shall be exercisable later
         than ten years after the date it is awarded except in the event of the
         Executive's death, in which case, the exercise period of Stock Options
         awarded but unexercised as of the date of death may be extended beyond
         such period but no later than one year after the date of death. Stock
         Options awarded hereunder shall not be transferrable otherwise then by
         will or the laws of descent and distribution, and shall be exercisable
         during the Executive's lifetime only by the Executive. Any attempted
         transfer contrary to the foregoing shall be null and void and without
         effect.

                   5. POST-EMPLOYMENT EXERCISES. The exercise of any Stock
         Option after termination of the Executive's employment with the Company
         shall be subject to satisfaction of the conditions precedent that the
         Executive neither (i) competes with, or takes other employment with or
         renders services to a competitor of, the Company, its subsidiaries or
         affiliates without the written consent of the Company, nor (ii)
         conducts himself in a manner adversely affecting the Company.

                   6. ADJUSTMENT PROVISIONS; CHANGE IN CONTROL.

                       (a) If there shall be any change in the Class A Common
         Stock of the Company, through merger, consolidation, reorganization,
         recapitalization, stock dividend, stock split, reverse stock split,
         split up, spinoff, combination of shares,

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         exchange of shares, dividend in kind or other like change in capital
         structure or distribution (other than normal cash dividends) to all
         holders of Class A Common Stock of the Company, an adjustment shall be
         made to each outstanding Stock Option such that each such Stock Option
         shall thereafter be exercisable for such securities, cash and/or other
         property as would have been received in respect of the Class A Common
         Stock subject to such Stock Option had it been exercised in full
         immediately prior to such change or distribution, and such an
         adjustment shall be made successively each time any such change shall
         occur. In addition, in the event of any such change or distribution, in
         order to prevent dilution or enlargement of the Executive's rights
         hereunder, the Company will have authority to adjust, in an equitable
         manner, the number and kind of shares that may be issued with respect
         to any Stock Option hereunder, the number and kind of shares subject to
         outstanding Stock Options, the exercise price applicable to outstanding
         Stock Options, and the Market Value of the Class A Common Stock and
         other value determinations applicable to outstanding Stock Options.
         Appropriate adjustments may also be made by the Company in the terms of
         any Stock Options to reflect such changes or distributions and to
         modify any other terms of outstanding Stock Options on an equitable
         basis. In addition, the Company is authorized to make adjustments to
         the terms and conditions of Stock Options, in recognition of unusual or
         nonrecurring events affecting the Company or the financial statements
         of the Company, or in response to changes in applicable laws,
         regulations, or accounting principles.

                       (b) Notwithstanding any other provision hereunder, if
         there is a "Change in Control" (as hereinafter defined) of the Company,
         all then outstanding Stock Options shall immediately become
         exercisable. For purposes of this Section 6(b), a "Change in Control"
         of the Company shall be deemed to have occurred upon any of the
         following events:

                        (i) A change in control of the direction and
                   administration of the Company's business of a nature that
                   would be required to be reported in response to Item 6(e) of
                   Schedule 14A of Regulation 14A promulgated under the
                   Securities Exchange Act of 1934, as amended (the "Exchange
                   Act"); or

                        (ii) During any period of two (2) consecutive years, the
                   individuals who at the beginning of such period constitute
                   the Company's Board of Directors or any individuals who would
                   be "Continuing

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                   Directors" (as hereinafter defined) cease for any reason to
                   constitute at least a majority thereof; or

                        (iii) The Company's Class A Common Stock shall cease to
                   be publicly traded; or

                        (iv) The Company's Board of Directors shall approve a
                   sale of all or substantially all of the assets of the
                   Company, and such transaction shall have been consummated; or

                        (v) The Company's Board of Directors shall approve any
                   merger, consolidation, or like business combination or
                   reorganization of the Company, the consummation of which
                   would result in the occurrence of any event described in
                   Section 6(b)(ii) or (b)(iii) above, and such transaction
                   shall have been consummated.

                  Notwithstanding the foregoing, (A) changes in the relative
beneficial ownership among members of the Lauder family and family-controlled
entities shall not, by themselves, constitute a Change in Control of the
Company, (B) any spin-off of a division or subsidiary of the Company to its
stockholders and (C) any event listed in clauses (i) through (v) above that the
Board of Directors determines not to be a Change in Control of the Company,
shall not constitute a Change in Control of the Company.

                  For purposes of this Section 6(b), "Continuing Directors"
shall mean (x) the directors of the Company in office on the date that shares of
the Company's Class A Common Stock are first offered for sale to the public and
(y) any successor to any such director and any additional director who after
such date was nominated or selected by a majority of the Continuing Directors in
office at the time of his or her nomination or selection.

                  The Company, in its discretion, may determine that, upon the
occurrence of a Change in Control of the Company, each Stock Option outstanding
hereunder shall terminate within a specified number of days after notice to the
Executive, and the Executive shall receive, with respect to each share of Class
A Common Stock subject to such Stock Option, an amount equal to the excess of
the Market Value of such shares of Common Stock immediately prior to the
occurrence of such Change in Control over the

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exercise price per share of such Stock Option; such amount to be payable in
cash, in one or more kinds of property (including the property, if any, payable
in the transaction) or in a combination thereof, as the Company, in its
discretion, shall determine. The provisions contained in the preceding sentence
shall be inapplicable to any Stock Option awarded hereunder within six (6)
months before the occurrence of a Change in Control if the Executive is subject
to the reporting requirements of Section 16(c) of the Exchange Act and no
exception from liability under Section 16(b) of the Exchange Act is otherwise
available to the Executive.

                  7. WITHHOLDING. All payments or distributions of Stock Options
made hereunder shall be net of any amounts required to be withheld pursuant to
applicable Federal, state and local tax withholding requirements. The Company
may require the Executive to remit to it an amount sufficient to satisfy such
tax withholding requirements prior to the delivery of any certificates for such
Class A Common Stock. The Company may, in its discretion and subject to such
rules as it may adopt (including any as may be required to satisfy applicable
tax and/or non-tax regulatory requirements), permit the Executive to pay all or
a portion of the federal, state and local withholding taxes arising in
connection with any Stock Option by electing to have the Company withhold shares
of Class A Common Stock having a Market Value equal to the amount of tax to be
withheld, such tax calculated at rates required by statute or regulation.

                  8. TENURE. The Executive's right to continue to serve the
Company or any of its subsidiaries as an officer, employee, or otherwise, shall
not be enlarged or otherwise affected by his award hereunder.

                  9. INVESTMENT REPRESENTATION AND RELATED MATTERS. The
Executive hereby represents that Stock Options awarded hereunder are being
acquired for investment purposes and not for sale or with a view to distribution
thereof. The Executive hereby acknowledges that as of the date hereof there does
not exist a Registration Statement on an appropriate form under the Securities
Act and applicable state securities laws that has become effective and includes
a prospectus which is current with respect to shares of Class A Common Stock
subject to Stock Options awarded hereunder. Accordingly, the Executive
acknowledges and agrees that any subsequent offer for sale or sale of any such
shares of Class A Common Stock shall be made either pursuant to (i) a
Registration Statement on appropriate form under the Securities Act and, where
applicable, state securities laws, which Registration Statement shall have
become

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effective and shall be current with respect to the shares of Class A Common
Stock being offered and sold, or (ii) a specific exemption from the registration
requirements of the Securities Act and any applicable securities laws, but in
claiming such exemption, the Executive shall, prior to any offer for sale or
sale of such shares, obtain a favorable written opinion of counsel, in form and
substance satisfactory to counsel for the Company, as to the applicability of
such exemption.

                    The Executive agrees that the Company shall have the
authority to endorse upon the certificate or certificates representing the
Shares acquired hereunder such legends referring to the foregoing restrictions
and any other applicable restrictions, as it may deem appropriate.

                  10. NOTICES. Any notice required or permitted under this
Option Agreement shall be deemed to have been duly given if delivered,
telecopied or mailed, certified or registered mail, return receipt requested to
the Executive,in any case, in accordance with Section 16 of the Employment
Agreement.

                  11. FAILURE TO ENFORCE NOT A WAIVER. The failure of the
Company to enforce at any time any provision of the this Option Agreement shall
in no manner be construed to be a waiver of such provision or of any other
provision hereof.

                  12. GOVERNING LAW. This Option Agreement shall be governed by
and construed according to the laws of the State of New York, applicable to
agreements made and performed in that state.

                  13. PARTIAL INVALIDITY. The invalidity or illegality of any
provision herein shall not be deemed to affect the validity of any other
provision.

                  14. COUNTERPARTS. This Option Agreement may be executed in
counterparts each of which taken together shall constitute one and the same
instrument.

                  15. AMENDMENT. This Option Agreement may not be amended except
by an instrument in writing making specific reference hereto signed by each of
the parties hereto; PROVIDED, HOWEVER, the provisions of Section 1 hereof may
not be amended more than once every six (6) months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act of 1974 or the
rules thereunder.

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                  IN WITNESS WHEREOF, the Company has executed this Option
Agreement in duplicate on the date and year first above written.

                          THE ESTEE LAUDER COMPANIES INC.

                          By: /s/ ANDREW J. CAVANAUGH
                              -----------------------
                              Name:  Andrew J. Cavanaugh
                              Title: Senior Vice President - Corporate Human
                                     Resources

                  The undersigned hereby accepts, and agrees to, all terms and
provisions of the foregoing Option Agreement.

                              /s/ LEONARD A. LAUDER
                              ---------------------
                                  Leonard A. Lauder

                   [Signature page to Option Agreement, dated November 16, 1995,
between The Estee Lauder Companies Inc. and Leonard A. Lauder.]

                                       9EXHIBIT 10.9B

                                    EXHIBIT B
                              To Agreement between
                         The Estee Lauder Companies Inc.
                                       and
                                Ronald S. Lauder
                        and dated as of November 16, 1995

                   OPTION  AGREEMENT (this  "Agreement")  dated this 16th day of
November,  1995  providing  for the  granting  of  options  by The Estee  Lauder
Companies Inc., a Delaware corporation (the "Company"),  to Ronald S. Lauder, an
Executive employee of the Company (the "Executive").

                   By  agreement  dated as of  November , 1995,  the Company has
employed the  Executive in the position of Chairman of the Board of Directors of
each of Clinique  Laboratories,  Inc. and Estee Lauder International,  Inc. (the
"Employment Agreement"). As contemplated by the Employment Agreement, and as set
out at  Section  3(b)  therein,  the  Board  of  Directors  of the  Company  has
determined that the Executive is to be granted options to purchase shares of the
Company's Class A Common Stock, par value $.01 per share (the "Shares"),  on the
terms and subject to the conditions hereinafter provided.

                   The stock options to be granted  pursuant hereto shall not be
Incentive Stock Options as defined in Section 422A of the Internal  Revenue Code
of 1986, as amended, (the "Code").

                   1. NUMBER OF SHARES.  Provided  that  Shares  shall have been
offered for sale to the public in compliance with the Securities Act of 1933, as
amended (the  "Securities  Act"),  on or prior to December 31, 1995, the Company
hereby awards to the Executive  options to purchase  650,000  Shares (the "Stock
Options") as follows:

                      (a) 150,000  Stock Options shall be awarded as of the date
that Shares are first offered for sale to the public (the "Initial Award");

                      (b) 125,000  Stock  Options shall be awarded as of July 1,
1996 (the "1996 Award");

                      (c) 125,000  Stock  Options shall be awarded as of July 1,
1997 (the "1997 Award");

                      (d) 125,000  Stock  Options shall be awarded as of July 1,
1998 (the "1998 Award"), and

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                      (e) 125,000  Stock  Options shall be awarded as of July 1,
1999 (the "1999 Award").

                   Notwithstanding the foregoing,  no award shall be made if the
Employment  Agreement  shall have been  terminated for any reason on or prior to
the date scheduled for such award.

                        2.  EXERCISE  PRICE.   For  each  Stock  Option  granted
hereunder,  the per-share  exercise  price shall be equal to 100% of the closing
price of the Class A Common  Stock on the New York Stock  Exchange  or any other
national  securities  exchange  or other  market  system as reported by The Wall
Street  Journal  on the date of grant or, if there  shall be no  trading on such
date, the date next preceding on which trading occurred (the "Market Value").

                        3. PAYMENT OF EXERCISE PRICE.  The Stock Option exercise
price may be paid in cash,  by the delivery of shares of Class A Common Stock of
the Company then owned by the  Executive,  or by a combination of these methods.
Payment may also be made by delivering a properly  executed  exercise  notice to
the Company  together  with a copy of  irrevocable  instructions  to a broker to
deliver  promptly to the Company the amount of sale or loan  proceeds to pay the
exercise  price.  The  Company  may  prescribe  any other  method of paying  the
exercise  price  that  it  determines  to be  consistent  with  applicable  law,
including,  without  limitation,  in lieu of the  exercise of a Stock  Option by
delivery  of shares of Class A Common  Stock of the  Company  then  owned by the
Executive,  providing  the Company with a notarized  statement  attesting to the
number of shares owned, where upon verification by the Company,  the Company may
issue to the  Executive  only the  number  of  incremental  shares  to which the
Executive is entitled upon exercise of the Stock Option.

                        4.  EXERCISE  PERIOD.  Stock Options  granted  hereunder
shall be exercisable as set forth below.

                       (a) With respect to Stock Options  granted in the Initial
Award:

                           (i) 50,000 of such  Stock  Options  may be  exercised
from and after January 1, 1999;

                           (ii) 50,000 of such Stock  Options  may be  exercised
from and after January 1, 2000; and

                           (iii)  50,000 of such Stock  Options may be exercised
from and after January 1, 2001.

                       (b) With  Respect  to Stock  Options  granted in the 1996
Award:

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                           (i) 41,667 of such  Stock  Options  may be  exercised
from and after January 1, 2000;

                           (ii) 41,667 of such Stock  Options  may be  exercised
from and after January 1, 2001; and

                           (iii)  41,666 of such Stock  Options may be exercised
from and after January 1, 2002.

                       (c) With  respect  to Stock  Options  granted in the 1997
Award:

                           (i) 41,667 of such  Stock  Options  may be  exercised
from and after January 1, 2001;

                           (ii) 41,667 of such Stock  Options  may be  exercised
from and after January 1, 2002; and

                           (iii)  41,6664 of such Stock Options may be exercised
from and after January 1, 2003.

                       (d) With  respect  to Stock  Options  granted in the 1998
Award:

                           (i) 41,667 of such  Stock  Options  may be  exercised
from and after January 1, 2002;

                           (ii) 41,667 of such Stock  Options  may be  exercised
from and after January 1, 2003; and

                           (iii)  41,666 of such Stock  Options may be exercised
from and after January 1, 2004.

                       (e) With  respect  to Stock  Options  granted in the 1999
Award:

                           (i) 41,667 of such  Stock  Options  may be  exercised
from and after January 1, 2003;

                           (ii) 41,667 of such Stock  Options  may be  exercised
from and after January 1, 2004; and

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                           (iii)  41,666 of such Stock  Options may be exercised
from and after January 1, 2005.

                        No Stock Option awarded  hereunder  shall be exercisable
later  than ten years  after the date it is  awarded  except in the event of the
Executive's  death,  in which case, the exercise period of Stock Options awarded
but  unexercised as of the date of death may be extended  beyond such period but
no later than one year after the date of death.  Stock Options awarded hereunder
shall not be  transferrable  otherwise  then by will or the laws of descent  and
distribution,  and shall be exercisable during the Executive's  lifetime only by
the Executive.  Any attempted  transfer  contrary to the foregoing shall be null
and void and without effect.

                        5. POST-EMPLOYMENT  EXERCISES. The exercise of any Stock
Option after termination of the Executive's employment with the Company shall be
subject to satisfaction of the conditions  precedent that the Executive  neither
(i)  competes  with,  or takes other  employment  with or renders  services to a
competitor of, the Company,  its subsidiaries or affiliates  without the written
consent  of the  Company,  nor  (ii)  conducts  himself  in a  manner  adversely
affecting the Company.

                        6. ADJUSTMENT PROVISIONS; CHANGE IN CONTROL.

                           (a) If  there  shall  be any  change  in the  Class A
Common  Stock of the Company,  through  merger,  consolidation,  reorganization,
recapitalization,  stock dividend,  stock split,  reverse stock split, split up,
spinoff,  combination of shares,  exchange of shares,  dividend in kind or other
like  change in capital  structure  or  distribution  (other  than  normal  cash
dividends) to all holders of Class A Common Stock of the Company,  an adjustment
shall be made to each outstanding  Stock Option such that each such Stock Option
shall thereafter be exercisable for such securities,  cash and/or other property
as would have been  received in respect of the Class A Common  Stock  subject to
such Stock Option had it been exercised in full immediately prior to such change
or distribution, and such an adjustment shall be made successively each time any
such  change  shall  occur.  In  addition,  in the  event of any such  change or
distribution,  in order to prevent  dilution or enlargement  of the  Executive's
rights  hereunder,  the Company will have  authority to adjust,  in an equitable
manner,  the number and kind of shares  that may be issued  with  respect to any
Stock Option  hereunder,  the number and kind of shares  subject to  outstanding
Stock Options,  the exercise price applicable to outstanding Stock Options,  and
the  Market  Value of the Class A Common  Stock and other  value  determinations
applicable to outstanding  Stock Options.  Appropriate  adjustments  may also be
made by the Company in the terms of any Stock Options to reflect such changes or
distributions  and to modify any other terms of outstanding  Stock Options on an
equitable  basis. In addition,  the Company is authorized to make adjustments to
the  terms and  conditions  of Stock  Options,  in  recognition  of  unusual  or
nonrecurring  events  affecting the Company or the  financial  statements of the
Company,  or  in  response  to  changes  in  applicable  laws,  regulations,  or
accounting principles.

                           (b) Notwithstanding any other provision hereunder, if
there is a "Change

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in Control" (as hereinafter  defined) of the Company, all then outstanding Stock
Options shall immediately become exercisable. For purposes of this Section 6(b),
a "Change in Control" of the Company  shall be deemed to have  occurred upon any
of the following events:

                           (i) A change in control of the direction and

administration of the Company's business of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); or

                           (ii) During any period of two (2) consecutive  years,
the  individuals  who at the beginning of such period  constitute  the Company's
Board of Directors or any  individuals  who would be "Continuing  Directors" (as
hereinafter  defined)  cease for any  reason to  constitute  at least a majority
thereof; or

                           (iii) The Company's  Class A Common Stock shall cease
to be publicly traded; or

                           (iv) The Company's Board of Directors shall approve a
sale  of all  or  substantially  all of the  assets  of the  Company,  and  such
transaction shall have been consummated; or

                           (v) The  Company's  Board of Directors  shall approve
any merger, consolidation, or like business combination or reorganization of the
Company,  the  consummation of which would result in the occurrence of any event
described in Section 6(b)(ii) or (b)(iii) above, and such transaction shall have
been consummated.

                   Notwithstanding  the  foregoing,  (A) changes in the relative
beneficial  ownership  among members of the Lauder family and  family-controlled
entities  shall  not,  by  themselves,  constitute  a Change in  Control  of the
Company,  (B) any  spin-off  of a division or  subsidiary  of the Company to its
stockholders  and (C) any event listed in clauses (i) through (v) above that the
Board of  Directors  determines  not to be a Change in Control  of the  Company,
shall not constitute a Change in Control of the Company.

                   For purposes of this  Section  6(b),  "Continuing  Directors"
shall mean (x) the directors of the Company in office on the date that shares of
the Company's  Class A Common Stock are first offered for sale to the public and
(y) any  successor to any such  director and any  additional  director who after
such date was nominated or selected by a majority of the Continuing Directors in
office at the time of his or her nomination or selection.

                   The Company, in its discretion,  may determine that, upon the
occurrence of a Change in Control of the Company,  each Stock Option outstanding
hereunder shall terminate  within a

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<PAGE>

specified number of days after notice to the Executive,  and the Executive shall
receive,  with  respect  to each share of Class A Common  Stock  subject to such
Stock  Option,  an amount equal to the excess of the Market Value of such shares
of Common Stock  immediately  prior to the  occurrence of such Change in Control
over the  exercise  price  per share of such  Stock  Option;  such  amount to be
payable in cash, in one or more kinds of property  (including  the property,  if
any, payable in the transaction) or in a combination thereof, as the Company, in
its  discretion,  shall  determine.  The  provisions  contained in the preceding
sentence shall be inapplicable to any Stock Option awarded  hereunder within six
(6) months  before the  occurrence  of a Change in Control if the  Executive  is
subject to the reporting  requirements  of Section 16(c) of the Exchange Act and
no exception from liability under Section 16(b) of the Exchange Act is otherwise
available to the Executive.

                        7.  WITHHOLDING.  All payments or distributions of Stock
Options  made  hereunder  shall be net of any  amounts  required  to be withheld
pursuant to applicable  Federal,  state and local tax withholding  requirements.
The Company may require the  Executive  to remit to it an amount  sufficient  to
satisfy  such  tax  withholding  requirements  prior  to  the  delivery  of  any
certificates  for such Class A Common Stock.  The Company may, in its discretion
and subject to such rules as it may adopt  (including  any as may be required to
satisfy  applicable  tax and/or  non-tax  regulatory  requirements),  permit the
Executive  to pay all or a portion of the federal,  state and local  withholding
taxes  arising  in  connection  with any Stock  Option by  electing  to have the
Company  withhold  shares of Class A Common Stock having a Market Value equal to
the amount of tax to be  withheld,  such tax  calculated  at rates  required  by
statute or regulation.

                        8. TENURE.  The  Executive's  right to continue to serve
the Company or any of its  subsidiaries as an officer,  employee,  or otherwise,
shall not be enlarged or otherwise affected by his award hereunder.

                        9. INVESTMENT  REPRESENTATION  AND RELATED MATTERS.  The
Executive  hereby  represents  that Stock  Options  awarded  hereunder are being
acquired for investment purposes and not for sale or with a view to distribution
thereof. The Executive hereby acknowledges that as of the date hereof there does
not exist a Registration  Statement on an appropriate  form under the Securities
Act and applicable  state securities laws that has become effective and includes
a  prospectus  which is current  with  respect to shares of Class A Common Stock
subject  to  Stock  Options  awarded  hereunder.   Accordingly,   the  Executive
acknowledges  and agrees that any subsequent  offer for sale or sale of any such
shares  of  Class  A  Common  Stock  shall  be  made  either  pursuant  to (i) a
Registration  Statement on appropriate  form under the Securities Act and, where
applicable,  state  securities  laws,  which  Registration  Statement shall have
become  effective  and shall be  current  with  respect to the shares of Class A
Common  Stock being  offered  and sold,  or (ii) a specific  exemption  from the
registration  requirements  of the Securities Act and any applicable  securities
laws, but in claiming such exemption,  the Executive  shall,  prior to any offer
for sale or sale of such shares,  obtain a favorable written opinion of counsel,
in form  and  substance  satisfactory  to  counsel  for the  Company,  as to the
applicability of such exemption.

                                       6
<PAGE>

                        The  Executive  agrees that the  Company  shall have the
authority to endorse  upon the  certificate  or  certificates  representing  the
Shares acquired  hereunder such legends referring to the foregoing  restrictions
and any other applicable restrictions, as it may deem appropriate.

                        10. NOTICES. Any notice required or permitted under this
Option  Agreement  shall  be  deemed  to have  been  duly  given  if  delivered,
telecopied or mailed,  certified or registered mail, return receipt requested to
the  Executive,  in any case,  in accordance  with Section 16 of the  Employment
Agreement.

                        11. FAILURE TO ENFORCE NOT A WAIVER.  The failure of the
Company to enforce at any time any provision of the this Option  Agreement shall
in no  manner be  construed  to be a waiver  of such  provision  or of any other
provision hereof.

                        12.  GOVERNING  LAW.  This  Option  Agreement  shall  be
governed  by and  construed  according  to the laws of the  State  of New  York,
applicable to agreements made and performed in that state.

                        13. PARTIAL INVALIDITY.  The invalidity or illegality of
any  provision  herein  shall not be deemed to affect the  validity of any other
provision.

                        14. COUNTERPARTS.  This Option Agreement may be executed
in counterparts  each of which taken together shall  constitute one and the same
instrument.

                        15. AMENDMENT.  This Option Agreement may not be amended
except by an instrument in writing making  specific  reference  hereto signed by
each of the parties  hereto;  PROVIDED,  HOWEVER,  the  provisions  of Section 1
hereof may not be amended  more than once  every six (6)  months,  other than to
comport with changes in the Code, the Employee Retirement Income Security Act of
1974 or the rules thereunder.

                                       7
<PAGE>

                        IN WITNESS WHEREOF, the Company has executed this Option
Agreement in duplicate on the date and year first above written.

                             THE ESTEE LAUDER COMPANIES INC.

                             By: /s/  ANDREW J. CAVANAUGH
                                 -----------------------------------------------
                                 Name:  Andrew J. Cavanaugh
                                 Title: Senior Vice President - Corporate Human
                                        Resources

                        The undersigned hereby accepts, and agrees to, all terms
and provisions of the foregoing Option Agreement.

                             /s/  RONALD S. LAUDER
                             ---------------------------------------------------
                             Ronald S. Lauder

                        [Signature  page  to  Option  Agreement,   dated  as  of
November , 1995, between The Estee Lauder Companies Inc. and Ronald Lauder.]

                                       8

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