The Estee´ Lauder Companies Inc. 767 Fifth Avenue New York, NY 10153 William P. Lauder Executive Chairman 4JUN200414215137 September 24, 2010 Dear Fellow Stockholder: You are cordially invited to attend the Annual Meeting of Stockholders. It will be held on Tuesday, November 9, 2010, at 10:00 a.m., local time, at the Jumeirah Essex House in New York City, where we will ask you to vote on the election of five nominees as director to serve until the 2013 Annual Meeting of Stockholders, the approval of the Amendment to the Amended and Restated Fiscal 2002 Share Incentive Plan, and the ratification of the Audit Committee’s appointment of KPMG LLP as independent auditors for the 2011 fiscal year. As we did last year, we will be using the Securities and Exchange Commission rule allowing companies to provide their stockholders with access to proxy materials over the Internet. On or about September 29, 2010, we will begin mailing a Notice of Internet Availability of Proxy Materials to our stockholders informing them that our 2010 Proxy Statement, Fiscal 2010 Annual Report and voting instructions are available online. As more fully described in that Notice, all stockholders may choose to access our proxy materials on the Internet or may request to receive paper copies of the proxy materials. This allows us to conserve natural resources and reduces the costs of printing and distributing the proxy materials, while providing our stockholders with access to the proxy materials in a fast and efficient manner. Please vote your shares using the Internet or telephone, or by requesting a printed copy of the proxy materials and completing and returning by mail the proxy card you will receive in response to your request. Instructions on each of these voting methods are outlined in the enclosed Proxy Statement. Please vote as soon as possible. I look forward to seeing you at the Annual Meeting. 29SEP200911402972 YOUR VOTE IS IMPORTANT. PLEASE PROMPTLY SUBMIT YOUR PROXY BY INTERNET, TELEPHONE OR MAIL. THE ESTEE´ LAUDER COMPANIES INC. 767 Fifth Avenue New York, New York 10153 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS Date and Time: Tuesday, November 9, 2010, at 10:00 a.m., local time Place: Jumeirah Essex House Grand Salon 160 Central Park South New York, NY Items of Business: 1. To elect the five nominees as director to serve until the 2013 Annual Meeting of Stockholders; 2. To approve the Amendment to the Amended and Restated Fiscal 2002 Share Incentive Plan; and 3. To ratify the Audit Committee’s appointment of KPMG LLP as independent auditors for the 2011 fiscal year. We also will transact such other business as may properly come before the meeting and any adjournments or postponements of the meeting. By Order of the Board of Directors SPENCER G. SMUL Senior Vice President, Deputy General Counsel and Secretary New York, New York September 24, 2010 THE BOARD OF DIRECTORS URGES YOU TO VOTE BY THE INTERNET OR BY TELEPHONE OR BY REQUESTING A PRINTED COPY OF THE PROXY MATERIALS AND COMPLETING AND RETURNING BY MAIL THE PROXY CARD YOU WILL RECEIVE IN RESPONSE TO YOUR REQUEST. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2010 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON NOVEMBER 9, 2010: The Company’s Proxy Statement for the 2010 Annual Meeting of Stockholders and the Annual Report to Stockholders for the fiscal year ended June 30, 2010 are available at http://www.proxyvoting.com/el. TABLE OF CONTENTS Annual Meeting and Voting ................................................... 1 Admission to the Meeting .................................................... 1 Who May Vote? ........................................................... 1 Why did I receive a notice in the mail regarding the Internet availability of the proxy materials? . 1 How do I cast my vote if I am a stockholder of record? ............................... 1 How do I cast my vote if my shares are held in ‘‘street name’’? ......................... 2 May I change my vote? ...................................................... 2 What constitutes a quorum? ................................................... 2 What if a quorum is not represented at the Annual Meeting? .......................... 2 How many votes are required to approve a proposal? ................................ 2 How will my shares be voted? ................................................. 3 Who will count the vote? ..................................................... 3 May I see a list of stockholders entitled to vote as of the Record Date? ................... 3 Can I access the Notice of Annual Meeting, Proxy Statement, Annual Report and Form 10-K on the Internet? ............................................................ 3 ELECTION OF DIRECTORS ................................................ 4 Board of Directors ......................................................... 4 NOMINEES FOR ELECTION TO TERM EXPIRING 2013 (CLASS II) ............... 4 INCUMBENT DIRECTORS—TERM EXPIRING 2011 (CLASS III) .................. 6 INCUMBENT DIRECTORS—TERM EXPIRING 2012 (CLASS I) .................... 7 Ownership of Shares ........................................................ 10 Additional Information Regarding the Board of Directors ............................. 19 Stockholders’ Agreement .................................................... 19 Board Committees ......................................................... 19 Board and Board Committee Meetings; Attendance at Annual Meetings; Executive Sessions ...... 20 Board Leadership Structure .................................................. 20 Board Role in Risk Oversight ................................................. 21 Risk in Compensation Programs ............................................... 21 Director Qualifications ...................................................... 21 Board Membership Criteria .................................................. 24 Board Independence Standards for Directors ...................................... 25 Communications with the Board ............................................... 26 Director Nominees Recommended by Stockholders .................................. 26 Corporate Governance Guidelines and Code of Conduct .............................. 26 Audit Committee Report ..................................................... 27 Section 16(a) Beneficial Ownership Reporting Compliance ............................ 27 Policy and Procedures for the Review of Related Person Transactions ..................... 27 Certain Relationships and Related Transactions ..................................... 29 Lauder Family Relationships and Compensation .................................... 29 Registration Rights Agreement ................................................. 30 Stockholders’ Agreement .................................................... 31 Other Arrangements ........................................................ 31 i Director Compensation ...................................................... 31 Executive Compensation ..................................................... 36 Compensation Discussion and Analysis .......................................... 36 Compensation Committee and Stock Plan Subcommittee Report ........................ 50 Summary Compensation Table ................................................ 51 Employment Agreements .................................................... 53 Grants of Plan-Based Awards in Fiscal 2010 ...................................... 57 Outstanding Equity Awards at June 30, 2010 ...................................... 59 Option Exercises and Stock Vested in Fiscal 2010 ................................... 61 Pension Benefits .......................................................... 62 Nonqualified Deferred Compensation in Fiscal 2010 and at June 30, 2010 .................. 64 Potential Payments Upon Termination of Employment or Change of Control ................ 65 Equity Compensation Plan Information as of June 30, 2010 ............................ 76 APPROVAL OF THE AMENDMENT TO THE ESTEE´ LAUDER COMPANIES INC. AMENDED AND RESTATED FISCAL 2002 SHARE INCENTIVE PLAN .............. 77 BACKGROUND.......................................................... 77 SUMMARY .............................................................. 78 Shares Available .......................................................... 78 Administration ........................................................... 79 Eligibility for Participation ................................................... 79 Types of Benefits .......................................................... 79 Stock Options ............................................................ 79 Stock Appreciation Rights (‘‘SARs’’) ............................................ 80 Stock Awards ............................................................ 80 Performance Awards ....................................................... 80 Stock Units ............................................................. 80 Performance-Based Awards .................................................. 81 Minimum Vesting ......................................................... 81 Other Terms ............................................................. 82 Certain Federal Income Tax Consequences ........................................ 83 Incentive Stock Options ..................................................... 84 Non-Qualified Stock Options and Stock Appreciation Rights ........................... 84 Other Awards ...........................................................