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Exhibit 99.2

ZALE CORPORATION
COMPENSATION COMMITTEE CHARTER
(As of July 2003)

Purposes

The primary purposes of the Compensation Committee are to (1) oversee the
compensation of the Companys officers, (2) approve and recommend to the Board
the Companys policies, programs, procedures and objectives for compensating
its officers and key employees and (3) administer the Companys equity based
incentive compensation plans. Its responsibilities in that regard include:



| |  |  | Monitoring compensation practices at other
companies generally and in the retail industry in particular;
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| |  |  | Establishing corporate goals and objectives with
respect to compensation; and                           
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| |  |  | Overseeing the Companys compensation setting
practices.                                                

In discharging this oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all Company
books, records, facilities, personnel, legal counsel and independent auditors,
along with the power to retain, at the Companys expense, outside counsel or
other experts for this purpose.

The Committee shall review the adequacy of this charter on an annual basis
and recommend any appropriate changes to the Board for consideration.

Membership

Appointment and Removal. The Committee shall be appointed by the Board
and shall serve at the pleasure of the Board for such term as the Board may
decide or, with respect to an individual Committee member, until such Committee
member is no longer a Board member. The Board shall designate the chairperson
of the Committee.

Number and Meetings. The Committee shall be comprised of not less than
three members of the Board. The Committee shall meet as often as necessary to
fulfill its responsibilities.

Independence.The Committee members will each meet (1) the independence
requirements of the New York Stock Exchange, (2) qualify as an outside
director within the meaning of Section 162(m) of the Internal Revenue Code of
1986 and (3) qualify as a non-employee director within the meaning of Rule
16b-3 of the Securities Exchange Act of 1934. These requirements are attached
hereto as Annex A. Accordingly, the members of the Committee will be directors
who the Board affirmatively concludes have no material relationship to the
Company, as determined by the Board, either directly or as a partner,
shareholder or officer of any organization that has a relationship with the
Company.





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The failure of the Committee to satisfy the independence requirements set
forth above shall not invalidate any actions taken by the Committee.

Responsibilities

The following functions shall be the common, recurring activities of the
Committee in carrying out its duties.

1.          Executive Compensation Policies and Programs. The Committee shall
review, approve and administer the Companys compensation policies and programs
for officers and key employees.

2.          Director Compensation. The Committee shall periodically review the
status of Board compensation policies and shall discuss the results of such
review with the Board. The Committee shall not, however, have the authority to
approve or determine director compensation.

3.          Chief Executive Officer Compensation. The Committee shall review and
approve, at least annually, corporate goals and objectives relevant to the
compensation of the Chief Executive Officer of the Company. The Committee will
evaluate the performance of the Chief Executive Officer in light of those
corporate goals and objectives and have sole authority to determine the Chief
Executive Officers compensation level based on those evaluations and such
other factors as it deems appropriate. The Committee shall report the
determination of the Chief Executive Officers compensation to the Board.

4.          Officer Compensation. The Committee shall review and recommend to the
Board the compensation level of the Companys officers other than the Chief
Executive Officer.

5.          Incentive Compensation Plans. The Committee shall make recommendations
to the Board with respect to the approval and adoption of all cash and equity
based incentive compensation plans in which any officer of the Company
participates.

6.          Equity-Based Plans. The Committee shall make recommendations to the
Board with respect to the approval and adoption of all equity based incentive
plans and grants thereunder and shall oversee the grants, guidelines and rules
thereunder.

7.          Certain Other Plans. Unless expressly provided otherwise, the
Committee shall administer the Companys equity based incentive compensation
plans and other plans adopted by the Board that contemplate administration by a
Board committee; provided, however,that, absent express approval of the Board,
the Committee will not administer or have oversight of the administration of
any employee benefit plan subject to the Employee Retirement Income Security
Act.

8.          Regulatory Compliance. The Committee shall, in consultation with
appropriate officers of the Company, oversee regulatory compliance with respect
to compensation matters, including overseeing any compensation programs
intended to preserve tax deductibility and, as may be required, establishing
performance goals and determining whether performance goals have been attained
for purposes of Section 162(m) of the Internal Revenue Code.

9.          Employment Agreements and Severance Agreements. The Committee shall
review and recommend to the Board any proposed employment agreement with any
executive

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officer of the Company, including newly-hired executive officers and employees
promoted to executive officer positions. The Committee shall review and
recommend to the Board guidelines with respect to severance or other
termination payments to be made to executive officers, other officers and key
employees of the Company and shall recommend to the Board any exceptions to
those guidelines with respect to executive officers.

10.          Approval of Newly-Hired and Promoted Executive Officers. The
Committee shall review and recommend to the Board the hiring and initial
compensation of newly-hired executive officers and officers promoted to
executive officer positions. With respect to the position of Chief Executive
Officer, the Boards review and approval shall be required to appoint a
newly-hired person or to promote a person to that office, but the Committee
shall have the sole authority to determine the compensation of a newly-hired
Chief Executive Officer or a person promoted into that position.

11.          Proxy Statement Report. The Committee shall prepare the report
required by the rules of the Securities Exchange Commission to be included in
the Companys annual proxy statement.

12.          Review of Other Matters. The Committee shall review and discuss such
other matters that relate to the accounting, auditing and financial reporting
practices and procedures of the Company as the Committee may, in its own
discretion, deem desirable in connection with the review functions described
above.

13.          Other Duties. The Committee shall perform any other duties or
responsibilities delegated to the Committee by the Board from time to time.

14.          Reports to the Board. The Committee shall report regularly to the
Board.

15.          Annual Evaluation. The Committee shall conduct and review with the
Board annually an evaluation of the Committees performance with respect to the
requirements of this charter.

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Annex ACompensation Committee
Independence Requirements

A director who receives, or whose immediate family member receives, more
than $100,000 per year in direct compensation from the Company (other than
director or committee fees or pension or other forms of deferred compensation
for prior service so long as the compensation is not contingent on continued
service), is presumed not to be independent until five years after he or she
ceases to receive more than $100,000 per year in such compensation. In
addition, the following directors shall not satisfy the definition of
independent:



| |  |  | A director who is affiliated with the Company, which
means a person that controls, is controlled by, or is under
common control with the Company;                                                                                                                                                                                                                                                                                                            
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| |  |  | A director who accepts, directly or indirectly, any
consulting, advisory, compensatory fee or any other fee from the
Company other than directors fees;                                                                                                                                                                                                                                                                                                     
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| |  |  | A director who is affiliated with or employed by, or
whose immediate family member is affiliated with or employed in a
professional capacity by, a present or former internal or
external auditor of the Company until five years after the end of
either the affiliation or the auditing relationship;                                                                                                                                                      
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| |  |  | A director who is employed, or whose immediate family
member is employed, as an executive officer of another company
where any of the Companys present executives serve on that
companys compensation committee until five years after the end
of such service or the employment relationship; or                                                                                                                                                          
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| |  |  | A director who is an executive officer or an employee,
or whose immediate family member is an executive officer, of
another company (1) that accounts for at least 2% or $1 million,
whichever is greater, of the Companys consolidated gross
revenues, or (2) for which the Company accounts for at least 2%
or $1 million, whichever is greater, of such other companys
consolidated gross revenues, until five years after falling below
such threshold.

For purposes of Section 162(m) of the Internal Revenue Code, a member
cannot (1) be a current employee of the Company or an affiliate, (2) be a
former employee of the Company or an affiliate who receives compensation for
prior services (other than benefits under a tax-qualified retirement plan)
during the taxable year, (3) be a former officer of the Company or an affiliate
or (4) receive remuneration from the Company or an affiliate, either directly
or indirectly, in any capacity other than as a director. (For this purpose,
remuneration includes any payment in exchange for goods or services). The
foregoing four requirements shall be interpreted consistent with Treas. Reg.
§1.162-27(e)(3).

For purposes of Rule 16b-3 of the Exchange Act, no member of the Committee
can (1) currently be an officer (as defined in Rule 16a-1(f) of the Exchange
Act) of the Company or a subsidiary of the Company, or otherwise be currently
employed by the Company or a subsidiary of the Company, (2) receive
compensation, either directly or indirectly, from the Company or a subsidiary
of the Company, for services rendered as a consultant or in any capacity other
than as a director, except for an amount that does not exceed the dollar amount
for which disclosure would be required pursuant to Reg. S-K, Item 404(a) of the
Exchange Act, (3) possess an

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interest in any other transaction for which disclosure would be required
pursuant to Rule 404(a) or (4) engage in a business relationship for which
disclosure would be required pursuant to Rule 404(b) of the Exchange Act.

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