Exhibit 10.2
    

    

    

    
      CONFIDENTIAL SEPARATION AND RELEASE
      AGREEMENT

    

    

    

    
      This Confidential Separation and Release Agreement (“Agreement”)
      is made and entered into by and between Neal Goldberg (“Employee”)
      on the one hand, Zale Delaware, Inc. and Zale Corporation (collectively
      “Zale” or the “Company”) on the other,
      hereinafter collectively referred to as the “Parties.”
    

    
      

      RECITALS

    

    
      WHEREAS, Employee’s employment with Zale has terminated;
    

    
      WHEREAS, Employee’s last day of employment was January 13, 2010 (the
      “Separation Date”);
    

    
      NOW, THEREFORE, in consideration of the Recitals and the mutual
      promises, covenants, and agreements set forth herein, the receipt and
      sufficiency of which are hereby acknowledged, the Parties covenant and
      agree as follows:
    

    
      1.        Effective as of the Separation Date, Employee’s position as
      Chief Executive Officer and all other positions held by Employee with
      Zale, its subsidiaries and affiliates have been terminated, and Employee
      hereby resigns as a director of Zale and all subsidiaries.  Employee
      agrees to execute any and all documents the Company may deem necessary
      to effectuate such terminations and resignation.
    

    
      2.        RELEASE OF CLAIMS
    

    
      (a)       Employee, individually and on behalf of Employee’s attorneys,
      heirs, assigns, successors, executors, and administrators, hereby
      GENERALLY RELEASES, ACQUITS, AND DISCHARGES Zale and its respective
      current and former parent, subsidiary, affiliated, and related
      corporations, firms, associations, partnerships, and entities, their
      successors and assigns, and the current and former owners, shareholders,
      directors, officers, employees, agents, attorneys, representatives, and
      insurers of said corporations, firms, associations, partnerships, and
      entities, and their guardians, successors, assigns, heirs, executors,
      and administrators (hereinafter collectively referred to as the “Releasees”
      and individually as a “Releasee”) from and against any and
      all claims, complaints, grievances, liabilities, obligations, promises,
      agreements, damages, causes of action, rights, debts, demands,
      controversies, costs, losses, and expenses (including attorneys’ fees
      and expenses) whatsoever, under any municipal, local, state, or federal
      law, common or statutory -- including, but in no way limited to, claims
      arising under the United States and Texas Constitutions, Age
      Discrimination in Employment Act of 1967 (“ADEA”),
      as amended, Title VII of the Civil Rights Act of 1964, as amended
      (including the Civil Rights Act of 1991), the Americans with
      Disabilities Act of 1990 as amended by the Americans with Disabilities
      Amendment Act.  the Employee Retirement Income Security Act of 1974, (“ERISA”),
      as amended, the Labor Management Relations Act, as amended, the
      Occupational Safety and Health Act, as amended, the Racketeer Influenced
      and Corrupt Organizations Act (RICO), as amended, the Sarbanes Oxley Act
      of 2002, the Sabine Pilot Doctrine, the American Jobs Creation Act of
      2004, the Texas Commission on Human Rights Act, the Texas Pay Day
      Act,  the Worker Adjustment and Retraining Notification Act (“WARN”),
      the Family and Medical Leave Act (“FMLA”), the Consolidated Omnibus
      Budget Reconciliation Act (“COBRA”), claims of retaliatory discharge
      under the Texas Workers’ Compensation Act, or any other claims,
      including claims in equity or common law claims -- for any actions or
      omissions whatsoever, whether known or unknown and whether connected
      with the employment relationship between Employee and Zale, the
      cessation of Employee’s employment with Zale which existed or may have
      existed prior to, or contemporaneously with, the execution of this
      Agreement (collectively, the “Released Claim(s)”).  Employee
      agrees that this Agreement includes a release of any and all negligence
      claims, contractual claims (express and implied), wrongful discharge
      claims, fraud, misrepresentation, and claims of discrimination,
      harassment, or retaliation of every possible kind.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      (b)       Employee agrees not to assert any claims released above in a
      class or collective action and further agrees not to become, and
      promises not to consent to become, a member (including a representative
      class plaintiff) of any class in a case brought in court or in
      arbitration in which claims are asserted against any of the Releasees
      that are related in any way to Employee’s employment with or termination
      from Company and/or that involve events which have occurred as of the
      Effective Date of this Release.  If Employee, without Employee’s prior
      knowledge and consent, is made a member of a class in any proceeding,
      whether in court or in arbitration, Employee will opt out of the class
      at the first opportunity afforded to him after learning of Employee’s
      inclusion.  In this regard, Employee agrees that Employee will execute,
      without objection or delay, an “opt-out” form presented to him either by
      the court or the arbitral forum in which such proceeding is pending or
      by counsel for the Company.
    

    
      (c)       Employee understands
      that nothing in this Agreement is intended to interfere with or deter
      Employee’s right to challenge the waiver of an ADEA claim or state law
      age discrimination claim or the filing of an ADEA charge or ADEA
      complaint or state law age discrimination complaint or charge with the
      EEOC or any state discrimination agency or commission or to participate
      in any investigation or proceeding conducted by those
      agencies.  Further, Employee understands that nothing in this Agreement
      would require Employee to tender back the money received under this
      Agreement if Employee seeks to challenge the validity of the ADEA or
      state law age discrimination waiver.  Further, nothing in this Agreement
      is intended to require the payment of damages, attorneys’ fees or costs
      to Zale should Employee challenge the waiver of an ADEA or state law age
      discrimination claim or file an ADEA or state law age discrimination
      suit except as authorized by federal or state law.  Notwithstanding the
      foregoing two sentences, as provided above Employee also waives any
      right to recover from any Releasee in a civil suit brought by any
      governmental agency or any other individual on his behalf with respect
      to any Released Claim.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      (d)       This release excludes Employee’s right to enforce the terms of
      this Agreement, the Indemnification Agreement between Zale Corporation
      and the Employee dated September 24, 2009 (the “Indemnification
      Agreement”) and any claim which cannot be released by private
      agreement, such as workers’ compensation claims, claims after the
      Effective Date of this Agreement, and the right to file administrative
      charges with certain government agencies.  Nothing in this Agreement
      shall be construed to prohibit Employee from filing a charge with or
      participating in any investigation or proceeding conducted by the Equal
      Employment Opportunity Commission, National Labor Relations Board, or a
      comparable state or local agency.  Notwithstanding the previous two
      paragraphs, Employee agrees to waive any right to recover monetary
      damages in any charge, complaint, or lawsuit against Zale filed by
      Employee or by anyone else on Employee’s behalf.
    

    
      (e)       This general release covers both claims that Employee knows
      about and those that Employee may not know about, except that it does
      not waive any rights or claims, including claims under the ADEA, that
      may arise after the Effective Date of this Agreement (as defined
      below).  Employee further represents and warrants that: (i) Employee has
      been fully and properly paid for all hours worked; (ii) Employee has
      received all leave to which Employee is entitled in accordance with
      applicable law; and (iii) Employee has not suffered any on the job
      injury for which Employee has not already filed a claim.  Employee
      further acknowledges, agrees and hereby stipulates that: (i) during
      Employee’s employment with the Company, Employee was allowed to take all
      leave and afforded all other rights to which Employee was entitled under
      the Family and Medical Leave Act (“FMLA”); and (ii) the
      Company has not in any way interfered with, restrained or denied the
      exercise of (or attempt to exercise) any FMLA rights, nor terminated or
      otherwise discriminated against Employee for exercising (or attempting
      to exercise) any such rights.
    

    
      3.        Employee acknowledges and agrees that Employee will keep the
      terms, amount, and facts of, and any discussions leading up to, this
      Agreement STRICTLY AND COMPLETELY CONFIDENTIAL, and that Employee will
      not communicate or otherwise disclose to any employee of Zale (past,
      present, or future), or to any member of the general public, the terms,
      amounts, copies, or fact of this Agreement, except as may be required by
      law or compulsory process; provided, however, that Employee may
      make such disclosures to Employee’s tax/financial advisors or legal
      counsel as long as they agree to keep the information confidential.  If
      asked about any of such matters, Employee’s response shall be that
      Employee may not discuss any of such matters.  In the event of a breach
      of the confidentiality provisions set forth in this paragraph of the
      Agreement by Employee, Zale may suspend any payments due under this
      Agreement pending the outcome of litigation and/or arbitration regarding
      such claimed breach of this Agreement by Employee.  Zale acknowledges
      and agrees that Zale will keep the facts and discussions leading up to
      this Agreement STRICTLY AND COMPLETELY CONFIDENTIAL, except as may be
      required by law or compulsory process, or, in connection with any
      request or requirement of any governmental or regulatory agency in any
      formal or informal administrative or regulatory investigation or
      proceeding.  The Parties agree that this paragraph is a material
      inducement to entering into this Agreement.  Additionally, the Parties
      agree that a breach of this paragraph will cause irreparable harm and
      that the Parties may enforce this paragraph without posting a bond.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
      4.        The Parties expressly acknowledge, agree, and covenant that
      neither Employee nor any executive officer or director of Zale will make
      any public or private statements, comments, or communications in any
      form, oral, written, or electronic (all of the foregoing, for purposes
      of this paragraph, “Communications”), which in any way could constitute
      libel, slander, or disparagement of the other Party or any other
      Releasee or which may be considered to be derogatory or detrimental to
      the name or business reputation of the other Party or any other
      Releasee; provided, however, that the terms of this paragraph
      shall not: (a) apply to Communications which are subject to a claim of
      privilege existing under common law, statute, or rule of procedure; (b)
      apply to Communications required by law or made in response to a valid
      subpoena or other lawful order compelling the Parties to provide
      testimony or information; provided, however, that in responding to a
      valid subpoena or other lawful order, the Parties agree to provide the
      other Party with advance notice and an opportunity to seek a protective
      order or other safeguard for its confidential information; or (c) be
      construed to inhibit or limit the Parties ability to initiate or
      cooperate with any investigation by a governmental or regulatory agency
      or official.  The Parties agree that this provision is a material
      inducement to the Parties entering into this Agreement.  Additionally,
      the Parties agree that a breach of this paragraph will cause irreparable
      harm and that this paragraph may be enforced without posting a bond.
    

    
      5.        In exchange for the general release set forth in this
      Agreement and other valuable consideration given and received by the
      Parties, the Parties agree as follows:
    

    
      (a)  Employee shall receive $500,000, payable in
      one lump sum to be paid on the later of February 15, 2010, or the
      Effective Date (as defined in paragraph 18 below) of this Agreement plus $100,000,
      payable in one lump sum to be paid on the first business day following
      July 31, 2010.  These payments constitute Employee’s “Severance Pay” and
      shall be subject to applicable taxes and withholding.
    

    
      (b)  All vested stock options granted to Employee will remain
      exercisable for ninety (90) days following the Separation Date, subject
      to the earlier expiration of the terms of such stock options. All
      unvested stock options and all unvested restricted stock and units are
      forfeited as of the Separation Date.
    

    
      (c)  For a period of one (1) year from the Separation Date, Employee may
      elect to continue medical and other health benefits in effect as of the
      Separation Date by completing and submitting the Consolidated Omnibus
      Budget Reconciliation Act (“COBRA”) election forms to the Zale COBRA
      Administrator, provided that Employee is in compliance with this
      Agreement. As further consideration for the release provided in this
      Agreement, for a period of one (1) year from the Separation Date or, if
      earlier, until Employee is eligible to receive coverage under the health
      plan of another employer, Zale will provide supplemental payments to the
      COBRA carrier such that Employee’s premiums for coverage will be equal
      to the amount that the then current Zale employees pay for the same
      level of coverage and such premiums will be submitted by Employee
      directly to the Zale COBRA Administrator.  Thereafter, Employee will
      have the right to elect to continue such medical benefits for the
      remainder of the COBRA eligibility period by paying the full cost of
      such coverage to the Zale COBRA Administrator.  Employee agrees to
      notify Zale promptly in writing if he becomes eligible for coverage
      under the health plan of another employer. Employee will be provided
      with a notice of the interaction of the extended medical insurance
      benefits under this Agreement and Employee’s COBRA rights following the
      Separation Date.  The provisions of this paragraph 5(c) will not
      prohibit Zale from changing the terms of any medical benefit programs,
      provided that any such changes apply to all employees of Zale (e.g.,
      Zale may switch premium rates, insurance carriers or preferred provider
      organizations or change coverage).  Employee acknowledges that the
      continuation and/or contribution of benefits described in this paragraph
      does not affect the date on which the Employee’s COBRA period begins,
      and that the period that Employee’s COBRA period begins/began on the
      Separation Date.  In other words, this continuation of benefits shall
      count against Employee’s continuation of coverage period required under
      COBRA.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      (d)  Employee acknowledges and agrees that the Severance Pay referenced
      in paragraph 5(a) constitutes new and adequate consideration to support
      the release set forth in this paragraph 2 of this Agreement and fully
      compensates Employee for the claims Employee is releasing. For purposes
      of this Agreement, “Consideration” means something of value to which
      Employee is not already entitled.
    

    
      (e)  Employee agrees to immediately return to Zale his employee
      identification badge, keys, and all Company-owned equipment and
      documents (paper and electronic) and will not maintain copies of the
      same in any form, whether tangible or intangible.
    

    
      (f)  Employee agrees to reconcile Employee’s outstanding expenses and
      advances with Zale and to pay Zale any outstanding balance owed after
      all agreed offsets are taken within ten (10) days of the Effective Date
      of this Agreement (as defined below); provided however, that, by
      signature to this Agreement, Employee authorizes Zale to make any
      deductions from Employee’s compensation, including the Consideration,
      that are deemed necessary by Zale to comply with state or federal laws
      on withholdings, to compensate Zale for property damaged or property not
      returned by Employee, to recover advances paid to Employee, and/or to
      pay Zale for expenses owed by Employee to the Company.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      (g)  Employee agrees that for a period of two (2) years from the
      Separation Date, Employee will not, on his own behalf or on behalf of
      any other person, partnership, association, corporation, or any other
      entity: (a) directly or indirectly, or through a third person hire,
      cause to be hired or solicit any employees of the Company, its
      subsidiaries or affiliates; or (b) in any manner attempt to influence or
      induce any employee of the Company, its subsidiaries or affiliates to
      leave the employment of the Company, its subsidiaries or affiliates, nor
      will he use or disclose to any person, partnership, association,
      corporation or other entity any information concerning the names and
      addresses of any employees of the Company, its subsidiaries or
      affiliates.  The restrictions contained in this subpart (f) will be
      tolled on a day-for-day basis for each day during which Employee
      participates in any activity in violation of such restriction. The
      Parties agree that the restrictions in this subpart (f) on solicitation
      of employees are supported by good and valuable consideration.  The
      Parties further agree that any invalidity or unenforceability of any one
      or more of the restrictions on solicitation will not render invalid or
      unenforceable any remaining restrictions on solicitation. Additionally,
      should an arbitrator or a court of competent jurisdiction determine that
      the scope of any provision of this subpart (f) is too broad to be
      enforced as written, the Parties intend that the arbitrator or court
      reform the provision to such narrower scope as it determines to be
      reasonable and enforceable.
    

    
      6.        Employee agrees to cooperate fully with Zale, specifically
      including any attorney or other consultant retained by Zale, in
      connection with any pending or future litigation, arbitration, business,
      or investigatory matter.  The Parties acknowledge and agree that such
      cooperation may include, but shall in no way be limited to, Employee
      being available for interview by Zale, or any attorney or other
      consultant retained by Zale, and providing to Zale any documents in
      Employee’s possession or under Employee’s control.  Zale agrees to
      provide Employee with reasonable notice of the need for assistance when
      feasible.
    

    
      7.        Employee acknowledges that during Employee’s employment,
      Employee has had access to and become familiar with various trade
      secrets and proprietary and confidential information of Zale, its
      subsidiaries and affiliates, including, but not limited to: identities,
      responsibilities, contact information, performance and/or compensation
      levels of employees, costs and methods of doing business, systems,
      processes, computer hardware and software, compilations of information,
      third-party IT service providers and other Company vendors, records,
      sales reports, sales procedures, financial information, customer
      requirements, pricing techniques, customer lists, price lists,
      information about past, present, pending and/or planned Company
      transactions, and other confidential information (collectively, referred
      to as “Trade Secrets”) which are owned by Zale, its
      subsidiaries and/or affiliates and regularly used in the operation of
      its business, and as to which Zale, its subsidiaries and/or affiliates
      take precautions to prevent dissemination to persons other than certain
      directors, officers and employees.  Employee acknowledges and agrees
      that the Trade Secrets: (1) are secret and not known in the industry;
      (2) give the Company or its subsidiaries and/or affiliates an advantage
      over competitors who do not know or use the Trade Secrets; (3) are of
      such value and nature as to make it reasonable and necessary to protect
      and preserve the confidentiality and secrecy of the Trade Secrets; and
      (4) are valuable and special and unique assets of Zale or its
      subsidiaries and/or affiliates, the disclosure of which could cause
      substantial injury and loss of profits and goodwill to Zale or its
      subsidiaries and/or affiliates.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      (a)  Regardless of whether Employee signs this Agreement, Employee shall
      not use in any way or disclose any of the Trade Secrets, directly or
      indirectly, at any time in the future.  All files, records, documents,
      information, data, and similar items relating to the business of Zale,
      whether prepared by Employee or otherwise coming into Employee’s
      possession, will remain the exclusive property of Zale, and in any event
      must be promptly delivered to Zale upon the Separation Date.
    

    
      (b)  Employee agrees that upon receipt of any formal or informal
      request, requirement, subpoena, process, or other action seeking
      Employee’s direct or indirect disclosure or production of any Trade
      Secrets to any entity, agency, tribunal, or person, or in connection
      with a judicial, administrative or other proceeding, Employee shall
      promptly and timely notify Zale, and promptly and timely provide a
      description and, if applicable, hand deliver a copy of such request,
      requirement, subpoena, process or other action to Zale.  In all such
      instances, Employee irrevocably nominates and appoints Zale (including
      any attorney retained by Zale) as Employee’s true and lawful
      attorney-in-fact to act in Employee’s name, place and stead to perform
      any act that Employee might perform to defend and protect against any
      disclosure of any Trade Secret.  For purposes of this paragraph 7, this
      Agreement shall be considered a Trade Secret.
    

    
      (c)  Employee agrees and acknowledges that the agreements in this
      paragraph are in addition to, and do not limit, Employee’s obligations
      and responsibilities under and Employee Handbook, Code of Business
      Conduct and Ethics or other similar document with whose terms Employee
      previously agreed to abide.
    

    
      8.        Employee represents and warrants that the restraints created
      by the covenants in paragraphs 5(g) and 7 pertaining to no
      hire/non-solicitation, confidentiality and nondisclosure are: (a)
      reasonable and that the enforcement of the restrictions contained in
      such paragraphs would not be unduly burdensome to Employee; (b) no
      greater than necessary to protect the legitimate interests of the
      Company, including its confidential business or proprietary information
      and trade secrets, including, but not limited to, the Trade Secrets; and
      (c) not outweighed by either the hardship to Employee or any injury
      likely to the public.   
    

    
      9.        By entering into this Agreement, the Company does not admit,
      and specifically denies, any violation of any contract (express or
      implied), local, state, or federal law, common or statutory.  Neither
      the execution of this Agreement nor compliance with its terms, nor the
      consideration provided for herein shall constitute or be construed as an
      admission by  Zale (or any of its agents, representatives, attorneys, or
      employers) of any fault, wrongdoing, or liability whatsoever, and
      Employee acknowledges and understands that all such liability is
      expressly denied.  This Agreement has been entered into in release and
      compromise of claims as stated herein and to avoid the expense and
      burden of dispute resolution.
    

    
      10.       In the event the Board of Directors of the Company (the “Board”)
      determines that Employee has engaged in negligence or fraudulent or
      intentional misconduct that has resulted in a significant restatement of
      the Company’s financial results and, had the results been properly
      calculated, Employee would have received less compensation, the Employee
      acknowledges that, upon the Board’s written notice to Employee, Employee
      shall reimburse to the Company any portion of any performance based or
      incentive compensation paid or awarded to Employee, whether cash or
      equity-based, in all years that is greater than would have been paid or
      awarded calculated based upon the restated financial results. Without
      limiting the foregoing, the Board shall seek recoupment in all instances
      where Section 304 of the Sarbanes-Oxley Act of 2002 requires the Company
      to seek recoupment. This Section 10 shall not limit the Company’s
      entitlement to take other appropriate actions with respect to Employee.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      11.       If any provision or term of this Agreement is held to be
      illegal, invalid, or unenforceable, such provision or term shall be
      fully severable; this Agreement shall be construed and enforced as if
      such illegal, invalid, or unenforceable provision had never comprised
      part of this Agreement; and the remaining provisions of this Agreement
      shall remain in full force and effect and shall not be affected by the
      illegal, invalid, or unenforceable provision or by its severance from
      this Agreement.  Furthermore, in lieu of each such illegal, invalid, or
      unenforceable provision or term there shall be added automatically as a
      part of this Agreement another provision or term as similar to the
      illegal, invalid, or unenforceable provision as may be possible and that
      is legal, valid, and enforceable.
    

    
      12.       This Agreement constitutes the entire Agreement of the Parties
      regarding the subject matter hereof, and supersedes all prior and
      contemporaneous negotiations and agreements, oral or written, express or
      implied, regarding the subject hereof, including, but not limited to,
      the Amended and Restated Employment Agreement between the Employee and
      Zale Corporation dated December 22, 2008, save for the Indemnification
      Agreement and the Zale Code of Business Conduct and Ethics, which
      survive Employee’s separation and which are incorporated herein by
      reference in full for all purposes as though restated in this
      Agreement.  All prior and contemporaneous negotiations and agreements
      regarding the subject hereof are deemed incorporated and merged into
      this Agreement and are deemed to have been abandoned if not so
      incorporated.  No representations, oral or written, are being relied
      upon by any party in executing this Agreement other than the express
      representations of this Agreement.  This Agreement cannot be changed or
      terminated without the express written consent of the Parties.  The
      rights under this Agreement may not be assigned by Employee, unless Zale
      consents in writing to said assignment.  Employee represents that
      Employee has not assigned any of the claims related to the matters set
      forth herein.  Employee understands and agrees that Zale shall make no
      other payments and shall have no other obligations to Employee except as
      described herein.
    

    
      13.       This Agreement shall be exclusively governed by and construed
      in accordance with the laws of the State of Texas without regard to the
      conflicts of laws provisions of Texas law, or of any other jurisdiction,
      except where preempted by federal law.  The Parties hereby agree that
      any action to enforce an arbitrator’s award pursuant to paragraph 14
      shall be filed exclusively in a state or federal court of competent
      jurisdiction in Dallas County, Texas and the Parties hereby consent to
      the exclusive jurisdiction of such court; provided, however, that
      nothing herein shall preclude the Parties’ rights to conduct collection
      activities in the courts of any jurisdiction with respect to the order
      or judgment entered upon the arbitrator’s award by the Texas court.  
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      14.       Subject to the terms and
      any exceptions provided in this Agreement, the Parties each waive the
      right to a jury trial and waive the right to adjudicate their disputes
      arising under this Agreement outside the mediation and arbitration forum
      provided for in this Agreement.  The Parties will first attempt to
      mediate any dispute arising under this Agreement in Dallas County, Texas
      before resorting to arbitration.  The mediation of any such dispute
      shall be conducted in accordance with the then-current American
      Arbitration Association (“AAA”) procedures for the
      resolution of disputes by mediation, by a mediator mutually agreed upon
      by the Parties.  If the Parties cannot agree upon a mediator, a mediator
      will be selected by AAA in accordance with the AAA strike list
      method.  All discussions connected with this mediation will be
      confidential and treated as compromise and settlement
      discussions.  Nothing disclosed in such discussions, which is not
      independently discoverable, may be used for any purpose in any later
      proceeding.  All expenses of mediation, except expenses of the
      individual Parties, shall be shared equally by the Parties, unless
      otherwise agreed.  In the event that the mediation process is ended
      without resolution, the dispute shall be resolved by arbitration.  The
      arbitration shall be administered by a single neutral arbitrator
      admitted to practice law in Texas for a minimum of ten (10) years and
      agreed upon by both Parties.  Any such arbitration proceeding shall take
      place in Dallas County, Texas and shall be administered by the
      AAA-Dallas office in accordance with its then-current applicable rules
      and procedures, including the National Rules for the Resolution of
      Employment Disputes of the AAA.  The arbitrator will have the authority
      to award the same remedies, damages and costs that a court could
      award.  The arbitrator shall issue a reasoned award explaining the
      decision, the reasons for the decision and any damages awarded.  The
      arbitrator’s decision will be final and binding.  This provision can be
      enforced under the Federal Arbitration Act.
    

    
      (a)       As the sole exception to the exclusive and binding nature of
      the arbitration commitment set forth above, the Employee and the Company
      agree that the Company shall have the right to initiate an action in a
      court of competent jurisdiction to request temporary, preliminary and
      permanent injunctive or other equitable relief, including specific
      performance, to enforce the terms of paragraphs 3, 4, 5(g), 6, 7, and 14
      of this Agreement without the necessity of proving inadequacy of legal
      remedies or irreparable harm or posting bond.  Nothing herein shall
      prevent the Company from pursuing the same injunctive and equitable
      relief in the arbitration proceedings.  Moreover, nothing in this
      paragraph should be construed to constitute a waiver of the Parties’
      rights and obligations to arbitrate regarding matters other than those
      specifically addressed in this paragraph.
    

    
      (b)       Should a court of competent jurisdiction determine that the
      scope of the arbitration and related provisions of this Agreement are
      too broad to be enforced as written, the Parties intend that the court
      reform the provision in question to such narrower scope as it determines
      to be reasonable and enforceable, and enforce the Parties’ agreement to
      arbitrate.
    

    
      (c)       In the event of arbitration under the terms of this Agreement,
      the fees charged by AAA and/or the individual arbitrator shall be
      allocated such that Employee will not incur any costs other than that
      which would be incurred to file a civil action in the courts for the
      State of Texas or other court with proper jurisdiction over the dispute.
      The Parties shall each bear their own costs and attorneys’ fees incurred
      in arbitration; provided, however, that should a party to this Agreement
      sue in court or bring an arbitration action against the other party to
      this Agreement for a breach of any provision of this Agreement or
      regarding a dispute arising from the subject matter of this Agreement,
      the prevailing party shall, to the extent permitted by law, be entitled
      to recover its attorneys’ fees, court costs, arbitration expenses, and
      its portion of the fees charged by AAA and/or the individual arbitrator,
      as applicable, regardless of which party initiated the proceedings.  No
      amount of any such costs paid by Zale on behalf of Employee in any
      calendar year will affect the amount of any such costs to be paid by
      Zale on behalf of Employee in any other calendar year, and any
      reimbursements paid to Employee for such costs shall be paid within 60
      days of presentation of a fully documented invoice but in no event later
      than the last day of the calendar year next following the calendar year
      in which such costs are incurred.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      (d)       Once the arbitration has commenced, both Zale and Employee
      shall have the right to conduct normal civil discovery, the extent and
      quantity of such shall be subject to the discretion of the selected
      arbitrator.  The arbitrator shall have the exclusive authority to
      resolve any issues relating to the arbitrability of the dispute or the
      validity or interpretation of this arbitration provision, to rule on
      motions to dismiss and/or motions for summary judgment applying the
      standards governing such motions under the Texas Rules of Civil
      Procedure, and shall be empowered to award either party any remedy at
      law or in equity that the prevailing party would otherwise have been
      entitled to had the matter been litigated in court, including attorneys’
      fees and costs  The arbitrator shall issue a decision or award in
      writing, stating the essential findings of fact and conclusions of
      law.  Judgment on the award rendered by the arbitrator may be entered in
      any court having jurisdiction.  Costs shall be allocated such that
      Employee will not incur any costs other than that which would be
      incurred to file a civil action in the courts for the State of Texas or
      other court with proper jurisdiction over the dispute.
    

    
      (e)       The Parties further agree that Zale may suspend any payments
      due under this Agreement pending the outcome of litigation and/or
      arbitration regarding a breach of any provision of this Agreement or
      regarding a dispute arising from or related to the subject matter of
      this Agreement.  
    

    
      15.       One or more waivers of a breach of any covenant, term, or
      provision of this Agreement by any party shall not be construed as a
      waiver of a subsequent breach of the same covenant, term, or provision,
      nor shall it be considered a waiver of any other then existing or
      subsequent breach of a different covenant, term, or provision.
    

    
      16.       Important Notice
      Regarding Release of Claims Under the Age Discrimination in Employment
      Act of 1967 (“ADEA”):  Without in any way limiting
      the generality or scope of the Release of Claims set forth in paragraph
      2, Employee hereby acknowledges that Employee knowingly and voluntarily
      enters into this Agreement with the purpose of waiving and releasing any
      age discrimination claims he may have under the Age Discrimination in
      Employment Act of 1967 (“ADEA”), and acknowledges and agrees that:
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      (1)  This Agreement is written in a manner in which Employee fully
      understands;
    

    
      (2)  Employee specifically waives any rights or claims arising under the
      ADEA;
    

    
      (3)  This Agreement does not waive rights or claims under the ADEA that
      may arise after the date this Agreement is executed;
    

    
      (4)  The rights and claims waived in this Agreement are in exchange for
      consideration over and above anything to which Employee is already
      entitled;
    

    
      (5)  Employee has been advised in writing to consult with an attorney
      prior to executing this Agreement, and has, in fact had an opportunity
      to do so;
    

    
      (6)  Employee has been given a period of up to at least twenty-one (21)
      days, if desired, within which to consider this Agreement;  
    

    
      (7)  Once executed, the Employee has a period of seven (7) days within
      which he can revoke this Agreement, and the Agreement shall not be
      effective until the seven-day revocation period has been
      exhausted.  Thus, the Effective Date of this Agreement is the eighth day
      after this Agreement has been executed, provided it was not
      revoked.  The last day on which this Agreement can be revoked is called
      the “Last Revocation Day.” If Employee chooses to revoke this Agreement,
      he must do so in writing, and the revocation must be addressed and
      delivered to Theo Killion, President, at 901 W. Walnut Hill Lane, Irving
      Texas 75038 before the expiration of the seven (7) day revocation
      period. If Employee delivers the revocation by hand or facsimile, the
      revocation will be considered timely if delivered or faxed to the
      Company’s Human Resources Department at the above address and/or fax
      number within seven (7) days of his execution of this Agreement. If he
      delivers the revocation by mail, the revocation will be considered
      timely if it is mailed to the Company’s Human Resources Department at
      the above address and postmarked within seven (7) days of Employee’s
      execution of this Agreement; and
    

    
      (8)  Any changes made to this Agreement, whether material or immaterial,
      will not restart the running of this 21-day period.
    

    
      17.       The Parties represent that they have the sole and exclusive
      right and full capacity to execute this Agreement.
    

    
      18.       The “Effective Date”
      of this Agreement is the date that is eight (8) days following the date
      on which Employee signs this Agreement, so long as Employee has not
      revoked acceptance of this Agreement before such date.
    

    
      19.       By executing this Agreement, Employee also acknowledges that
      Employee: (a) is not relying upon any statements, understandings,
      representations, expectations, or agreements other than those expressly
      set forth in this Agreement; (b) has made Employee’s own investigation
      of the facts and is relying solely upon Employee’s own knowledge and the
      advice of Employee’s own legal counsel; and (c) knowingly waives any
      claim that this Agreement was induced by any misrepresentation or
      nondisclosure and any right to rescind or avoid this Agreement based
      upon presently existing facts, known or unknown.  The Parties stipulate
      that each Party is relying upon these representations and warranties in
      entering into this Agreement.  These representations and warranties
      shall survive the execution of this Agreement.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      20.       All terms and provisions of this Agreement, and the drafting
      of this Agreement, have been negotiated by the Parties at arm’s length
      and to mutual agreement, with consideration by and participation of
      each, and no party shall be deemed the scrivener of this Agreement.
    

    
      21.       This Agreement may be executed in one or more counterparts,
      each of which shall be deemed to be an original and which together shall
      constitute one and the same instrument.
    

    
      PLEASE READ CAREFULLY. THIS CONFIDENTIAL SEPARATION AGREEMENT AND
      RELEASE INCLUDES THE RELEASE OF ALL CLAIMS AGAINST THE COMPANY, KNOWN OR
      UNKNOWN, THAT MAY HAVE OCCURRED AS OF THE DATE OF THIS AGREEMENT.  THIS
      AGREEMENT ALSO CONTAINS A PROVISION REQUIRING THE PARTIES TO RESOLVE ANY
      DISPUTES BY ARBITRATION.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
      The Parties have signed this Agreement on the dates written by the
      signatures below, to be effective on the Effective
      Date.  Notwithstanding any other provision in this Agreement, if
      Employee does not sign and deliver this Agreement to ______________ at
      ___________________, on or before twenty-one (21) days
      following Employee’s receipt of this Agreement, then this Agreement will
      be null and void, and Employee will not
      be entitled to the Consideration described in this Agreement.
    

    

    

    
    	
           
        	
          
            EXECUTED in New York, New York on this 11th day of February, 2010
          

        
	

        	
           
        	

        	

        
	

        	

        	

        	
          
            EMPLOYEE
          

        
	

        	

        	

        	
          
            /s/ Neal Goldberg
          

        
	

        	

        	

        	
          
            Neal Goldberg
          

        
	

        	

        	

        	
           
        
	

        	
          
            EXECUTED in Irving, Texas on this 10th day of February, 2010
          

        
	

        	

        	

        	
           
        
	

        	

        	
          
            ZALE DELAWARE, INC.
          

        
	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
          
            /s/ Theo Killion
          

        
	

        	

        	

        	
           
        
	

        	

        	
          
            Its:
          

        	

        
	

        	

        	

        	
           
        
	

        	
          
            EXECUTED in Irving, Texas on this 10th day of February, 2010
          

        
	

        	

        	

        	
           
        
	

        	

        	
          
            ZALE CORPORATION
          

        
	

        	

        	

        	
           
        
	

        	

        	
          
            By:
          

        	
          
            /s/ Theo Killion
          

        
	

        	

        	

        	
           
        
	

        	

        	
          
            Its: