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                                                                   EXHIBIT 10.20
                             AMENDMENT NUMBER THREE
                                       TO
                            WHITEHALL JEWELLERS, INC.
                                   401(k) PLAN


                  WHEREAS, Whitehall Jewellers, Inc., a Delaware corporation
(the "Company"), has heretofore adopted and maintains a defined contribution
plan for the benefit of certain employees designated the "Whitehall Jewellers,
Inc. 401(k) Plan" (the "Plan"); and

                  WHEREAS, the Company desires to amend the Plan in certain
respects;

                  NOW, THEREFORE, pursuant to the power of amendment contained
in Section 14.1 of the Plan, the Plan is hereby amended, effective March 11,
1999, by adding at the end thereof the Appendix A attached hereto.






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                  IN WITNESS WHEREOF, the Company has caused this instrument to
be executed by its Chairman and attested by its Secretary on this 11th day of
March, 1999.


                                          WHITEHALL JEWELLERS, INC.


                                          By:    /s/ Hugh M. Patinkin    
                                              ----------------------------
                                                         Chairman



ATTEST:


    /s/ John R. Desjardins       
-------------------------------
          Secretary









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                                   APPENDIX A
                                       TO
                            WHITEHALL JEWELLERS, INC.
                                   401(k) PLAN

                 Special Rule for Employees Formerly Employed by
                Carlyle & Co. at Walnut Square, Dalton, Georgia,
               Carlyle & Co. at Lycoming Mall, Muncy, Pennsylvania
                                  or Jewel Box


         Solely for the purpose of determining whether an Employee has completed
a Year of Service, all service completed by such individual while employed by
any of (a) Carlyle & Co. at Walnut Square, Dalton, Georgia (the "Dalton Store"),
(b) Carlyle & Co. at Lycoming Mall, Muncy, Pennsylvania (the "Muncy Store") or
(c) Jewel Box ("Jewel Box") shall be included, provided that the individual
satisfies the following conditions:

         1.       The individual was employed by the Dalton Store, the Muncy
                  Store or Jewel Box on the day immediately preceding the date
                  (the "Closing Date") of the completion of the transactions
                  contemplated by the Agreement (the "Agreement") dated the 19th
                  day of June, 1998, by and between Carlyle & Co. Jewelers, a
                  Delaware corporation, Carlyle & Co. Montgomery, an Alabama
                  corporation, and J.E. Caldwell Co., a Pennsylvania corporation
                  and the Company;

         2.       The individual is offered employment by the Company in
                  connection with the transaction contemplated by the Agreement;
                  and

         3.       The individual accepts such offer of employment with Whitehall
                  Jewellers, Inc. and on or about the Closing Date becomes an
                  employee of the Company.











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