Exhibit 10.3

FORM OF

ZALE CORPORATION

NON-EMPLOYEE DIRECTOR EQUITY COMPENSATION PLAN, AS AMENDED

DEFERRED STOCK UNITS

PLAN AGREEMENT

 

 

 

 

 

 

 

 

Participant

 

Issue Date

 

Number of Units

 

 

 

Grant

 

Zale Corporation (the “Company”) has granted to the Participant named above, as
of the Issue Date, the above number of Deferred Stock Units, subject to the
terms and conditions set forth in this Plan Agreement and in the Zale
Corporation Non-Employee Director Equity Compensation Plan, as amended (the
“Plan”).

 

 

 

Issue Date

 

The Issue Date for the Deferred Stock Units granted to the Participant pursuant
to this Plan Agreement shall be the date set forth above.

 

 

 

Vesting

 

The Deferred Stock Units granted to the Participant pursuant to this Plan
Agreement shall be fully vested at all times.

 

 

 

Payment Date

 

The Payment for the Deferred Stock Units granted hereby shall be [________ __,
20__.][the date elected by the Participant in the deferral election form
attached hereto.]

 

 

 

Payment

 

On the Payment Date, the Company promptly shall cause to be delivered to the
Participant a number of shares of Company Stock equal to the number of Deferred
Stock Units granted to the Participant (and any additional Deferred Stock Units
or other amounts credited with respect to Dividend Equivalents), unless the
Board of Directors in its sole discretion determines that payment shall be made
instead by delivering an amount of cash equal to the Fair Market Value thereof.
Notwithstanding the foregoing, such shares may be subject to restrictions on
transfer as a result of applicable securities laws.

 

 

 

No Dividends or Voting Rights

 

The Participant shall not be entitled to receive dividend payments with respect
to the Deferred Stock Units and shall have no voting rights with respect to the
Deferred Stock Units. Unless otherwise provided by the Board of Directors the
Participant shall be entitled to receive, currently or on a deferred basis,
Dividend Equivalents with respect to the number of shares of Company Stock
covered by the Deferred Stock Units. The Board of Directors may provide that the
Dividend Equivalents shall be deemed to have been reinvested in additional
Deferred Stock Units or otherwise reinvested.

 

 

 

Restrictions on Transfer

 

Prior to payment of a Deferred Stock Unit, no transfer of the Participant’s
rights with respect to the Deferred Stock Unit, whether voluntary or
involuntary, by operation of law or otherwise, shall be permitted. Immediately
upon any attempt to transfer such rights, such Deferred Stock Unit, and all of
the rights related thereto, shall be forfeited by the Participant.

 

 

Misc.

 

Upon the occurrence of a Change in Control that is a Section 409A Change in
Control as defined in Appendix A Plan, the Company shall promptly (but in all
events within 2-1/2 months) pay to the Participant all outstanding Deferred
Stock Units (and any additional Deferred Stock Units or other amounts credited
with respect to Dividend Equivalents) by delivering an amount of cash equal to
the Fair Market Value thereof. Upon the occurrence of any other Change in
Control (i) as of the date of the Change of Control the Company shall credit to
an account for the Participant the Fair Market Value of the Deferred Stock Units
granted to the Participant (and any additional Deferred Stock Units or other
amounts credited with respect to Dividend Equivalents) and (ii) the Company
shall pay the value of the account together with interest at the rate of 10% per
annum to the Participant in accordance with paragraph (e) of Section 8B of the
Plan.

 

 

 

 

 

Capitalized terms not otherwise defined herein shall have the meanings assigned
to them in the Plan.

 

 

 

 

 

Zale Corporation

 

 

 

 

 

 

 

 

 

 

 

 

Authorized Officer

 

 

 

 

 

 

 

 

I hereby agree to be bound by all the terms and

 

 

conditions of this Plan Agreement and the Plan.

 

 

 

 

 

 

 

 

 

 

 

 

Participant

 

 

Deferral Election Annual Cash Retainer

Under the

Non-Employee Director

Equity Compensation Plan

 

The undersigned director of Zale Corporation, a Delaware corporation (the
“Company”), in lieu of receiving his $_______ annual cash retainer elects to
receive Deferred Stock Units issued pursuant to Section 8B of the Non-Employee
Director Equity Compensation Plan (the “Plan”). Pursuant to Section 8B(e) of the
Plan, the undersigned elects for these Deferred Stock Units to be paid six
months after his separation from service from the Company (whether by
resignation, removal, death or otherwise).

 

In the event that the Deferred Stock Units are issued other than quarterly in
arrears, I agree to return to the Company the portion of any award that is for a
quarter with respect to which I would not have been paid a cash retainer.

 

This Deferral Election shall apply to all future annual cash retainers payable
to the undersigned until this election is revoked; provided that this Deferral
Election shall become irrevocable with respect to Deferred Stock Units granted
in any calendar year on the last day of the immediately preceding calendar year.

 

This Payment Date Election shall apply to all awards of Deferred Stock Units to
the undersigned pursuant to the Plan until this election is revoked.

 

IN WITNESS WHEREOF, the undersigned has executed this Deferral Election this
_____ date of _________, 20____.

 

 

 

 

 

 

 

 

 

 

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