Exhibit 10.1
    

    
      

      CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT
    

    
                The following document is a Confidential Release Agreement
      (the “Agreement”) required in order for you to receive severance and
      other benefits under your Employment Security Agreement dated December
      22, 2008 (the “ESA”).  Please review the Agreement carefully.  If
      you wish to accept the terms of the Agreement, you must
      deliver it to Mary Ann Doran, Senior Vice President Human Resources,
      within 47 days following the Separation Date, as defined
      in the Agreement.  Thus, the Agreement must be
      delivered to Mary Ann Doran, Senior Vice President Human Resources, by
      5:00 p.m. on March 9, 2009.
    

    
      If you choose not to execute the Agreement or if you fail to execute and
      deliver the Agreement within the timeframe described above, you will not
      be entitled to any of the severance payments or separation benefits
      provided for in the event of a Qualifying Termination under your ESA
      other than earned wages and any rights you may have under COBRA.
    

    
      Please contact Mary Ann Doran, Senior Vice President Human Resources, if
      you have any questions regarding the Confidential Separation and Release
      Agreement:
    

    
      Mary Ann Doran
Senior VP Human Resources
901 W. Walnut Hill Lane
Irving,
      TX  75038
972.580.4583
mdoran@zalecorp.com
    

    
      

      


    

    
    	
          
            CONFIDENTIAL RELEASE AGREEMENT
          

        	
          
            Page 1
          

        


    

    

    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
      CONFIDENTIAL SEPARATION AND RELEASE
      AGREEMENT
    

    
      


    

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

    
      RECITALS
    

    
                   WHEREAS, Employee was employed by Zale;
    

    
                   WHEREAS, Employee’s last day of employment is January
      20, 2009 (the “Separation Date”);
    

    
      NOW, THEREFORE, in consideration of the Recitals and the mutual
      promises, covenants, and agreements set forth herein and in the
      Employment Security Agreement between Employee and Zale dated December
      22, 2008 (the “ESA”), the receipt and sufficiency of which are hereby
      acknowledged, and to fulfill Employee’s obligation under Section 2.1 of
      the ESA, the Parties covenant and agree as follows:
    

    
      1.        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 (including, but not limited to Zale
      Corporation), 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, wages, bonuses, 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 Age Discrimination in Employment
      Act of 1967 (“ADEA”), 29 U.S.C. § 621, et
      seq., as amended, 29 U.S.C. §626(f) et seq., Title
      VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et
      seq., as amended (including the Civil Rights Act of 1991), the
      Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12101, et
      seq., as amended, state/local anti-discrimination and
      anti-retaliation laws, Employee Retirement Income Security Act of 1974,
      (“ERISA”), 29 U.S.C. §§ 1001 et seq.,
      as amended, the Labor Management Relations Act, 29 U.S.C. §§ 141 et
      seq., as amended, the Occupational Safety and Health Act , 29 U.S.C.
      §§ 651 et seq., as amended, the Racketeer Influenced
      and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961 et
      seq., as amended, the Sarbanes Oxley Act of 2002, the Sabine Pilot
      Doctrine, the American Jobs Creation Act of 2004, The Worker Adjustment
      and Retraining Notification Act, 29 U.S.C. 2101 et seq., as amended,
      Texas Labor Code §§ 21.001 et seq., as amended, Texas
      Labor Code §§ 61.001 et seq., as amended, 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, wrongful discharge claims, and claims of
      discrimination or retaliation of every possible kind.
    

    
      

      


    

    
    	
          
            CONFIDENTIAL RELEASE AGREEMENT
          

        	
          
            Page 2
          

        


    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
      (b)       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, nor does the Employee agree to
      ratify any ADEA or state law age discrimination waiver that fails to
      comply with the Older Workers’ Benefit Protection Act by retaining the
      money received under the Agreement.  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 Employee behalf with
      respect to any Released Claim.
    

    
      (c)       This release excludes 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 sentences, 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.
    

    
      (d)       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 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.
    

    
      

      


    

    
    	
          
            CONFIDENTIAL RELEASE AGREEMENT
          

        	
          
            Page 3
          

        


    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    

    

    
                2.        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.  The Parties agree that this paragraph is a material
      inducement to Zale entering into this Agreement.  Additionally, the
      Parties agree that a breach of this paragraph by Employee will cause
      Zale irreparable harm and that Zale may enforce this paragraph without
      posting a bond.
    

    
                3.        Employee acknowledges and agrees that he has ongoing
      obligations under the ESA, including, but not limited to, continued
      compliance with the covenants set forth in Article II of the ESA.  
    

    
                4.        In consideration for the covenants and other
      agreements set forth in the ESA and Employee’s agreement to, compliance
      with, and execution, without revocation, of this Agreement as set forth
      in Section 14, Employee shall receive:
    

    
                (a)       $952,543.00,
      less applicable taxes and withholding, representing Employee’s
      “Severance Pay” as defined in the ESA, payable in equal installments
      over the 24 month period following the first ordinary payroll payment
      date that follows the date that is sixty (60) days after the Separation
      Date; provided, however, that all unpaid portions of such Severance Pay
      shall be distributed to Employee in a lump sum on the payroll date
      immediately preceding March 15, 2010.
    

    
                (b)       Employee shall be entitled to receive the Accrued
      Obligations, if any, specified in Section 1.1(b) of the ESA.
    

    
                (c)       Employee shall be entitled to receive the continued
      welfare benefits specified in Section 1.1(c) of the ESA; and
    

    
                (d)       Employee shall be entitled to receive the
      outplacement services specified in Section 1.1(d) of the ESA.
    

    
      

      


    

    
    	
          
            CONFIDENTIAL RELEASE AGREEMENT
          

        	
          
            Page 4
          

        


    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
                5.        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.  
    

    
                6.        Employee agrees that, in addition to the cessation
      of Employee’s employment with Zale, Employee shall cease from holding or
      reporting that Employee holds any positions as a director, officer
      and/or employee with Zale and/or any of the Releasees, effective on the
      Separation Date.
    

    
                7.        Employee waives and releases forever any right
      and/or rights Employee may have to seek or obtain employment,
      reemployment and/or reinstatement with Zale or any one or more other
      Releasees, and agrees not to seek reemployment with any of the same.
    

    
                8.        Zale and Employee agree that any controversy or
      claim (including all claims pursuant to common and statutory law)
      relating to this Agreement or the ESA or arising out of or relating to
      the subject matter of this Agreement, the ESA or Employee’s employment
      by Zale will be resolved exclusively through binding arbitration
      pursuant to the dispute resolution provisions contained in Article III
      and the provisions of Section 4.7 of the ESA.  
    

    
                9.        By entering into this Agreement, the Parties do not
      admit, and do specifically deny, any violation of any contract, 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
      either party (or any party’s agents, representatives, attorneys, or
      employers) of any fault, wrongdoing, or liability whatsoever, and the
      Parties acknowledge 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.       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.
    

    
                11.       This Agreement and the ESA constitute the entire
      Agreement of the Parties, and supersede all prior and contemporaneous
      negotiations and agreements, oral or written. All prior and
      contemporaneous negotiations and agreements are deemed incorporated and
      merged into this Agreement and the ESA 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 and the ESA.  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.
    

    
      

      


    

    
    	
          
            CONFIDENTIAL RELEASE AGREEMENT
          

        	
          
            Page 5
          

        


    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
                12.       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.    
    

    
                13.       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.
    

    
      14.       By executing this Agreement, Employee acknowledges and agrees
      that Employee:
    

    
    	
           
        	
          (a)
        	
          specifically waives any rights or claims arising under the ADEA
          and/or analogous state or local laws and Title VII of the Civil
          Rights Act of 1964 and other federal and local anti-discrimination
          and anti-retaliation laws;
        
	

        	

        	
           
        
	

        	
          (b)
        	
          may take up to forty-five (45) calendar days from the Separation
          Date to consider whether or not Employee desires to execute this
          Agreement;
        
	

        	

        	
           
        
	

        	
          
            (c)
          

        	
          
            may revoke this Agreement at any time during the seven (7)
            calendar day period after Employee signs and delivers this
            Agreement to Zale. Any such revocation must be in writing and
            delivered to Zale’s Senior Vice President of Human Resources, Mary
            Ann Doran at 901 W. Walnut Hill Lane, Irving, TX 75038 by such
            seventh (7th) calendar day. Employee understands that this
            Agreement is not effective, and Employee is not entitled to the
            Separation Pay and benefits in Paragraph 4, until the expiration
            of this seven (7) calendar day revocation period. Employee
            understands that upon the expiration of such seven (7) calendar
            day revocation period this entire Agreement will be binding upon
            Employee and will be irrevocable;
          

        
	

        	

        	
           
        
	

        	
          (d)
        	
          has carefully read and fully understands all of the provisions of
          this Agreement and that any and all questions regarding the terms of
          this Agreement have been asked and answered to Employee’s complete
          satisfaction;
        
	

        	

        	
           
        
	

        	
          (e)
        	
          knowingly and voluntarily agrees to all of the terms set forth in
          this Agreement and to be bound by this Agreement;
        
	

        	

        	
           
        
	

        	
          (f)
        	
          is hereby advised in writing to consult with an attorney and tax
          advisor of Employee’s choice prior to executing this Agreement and
          has had the opportunity and sufficient time to seek such advice;
        


    

    
      

      


    

    
    	
          
            CONFIDENTIAL RELEASE AGREEMENT
          

        	
          
            Page 6
          

        


    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
    	
           
        	
          (g)
        	
          understands that rights or claims under the ADEA and Title VII of
          the Civil Rights Act of 1964 that may arise after the date this
          Agreement is executed are not waived; and
        
	

        	

        	
           
        
	

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


    

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

    
      16.          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.
    

    
      17.          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 and the ESA;  (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.
    

    
      18.          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.
    

    
      

      


    

    
    	
          
            CONFIDENTIAL RELEASE AGREEMENT
          

        	
          
            Page 7
          

        


    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
      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 Mary Ann Doran at
      901 W. Walnut Hill Lane, Irving, TX  75038 on or before 47
      days following the Separation Date, then this Agreement will be null
      and void and Employee will not be entitled
      to the Separation Pay, outplacement services, or any other consideration
      described in this Agreement.
    

    
      

      


    

    
      EXECUTED in _________, Texas on this _____day of  ____________________,
      2009
    

    
      

      Date:
      ____________                                                    ______________________________
    

    
      

      


    

    
      EXECUTED in Irving, Texas on this _____day of _________________________,
      2009
    

    
      


    

    
    	

        	

        	
           
        	
          ZALE DELAWARE, INC.
        
	

        	

        	

        	

        	
           
        
	
          Date:
        	
          
            February 18, 2009
          

        	

        	
          By:
        	
          
            /s/ Mary Ann Doran
          

        
	

        	

        	

        	

        	
          Mary Ann Doran
        
	

        	

        	

        	
          Its:
        	
          
            Senior Vice President Human Resources
          

        


    

    
      

      


    

    
      EO - TX
    

    
      

      


    

    
    	
          
            CONFIDENTIAL RELEASE AGREEMENT
          

        	
          
            Page 8