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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