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EXHIBIT 10.14

ZALE CORPORATION BONUS PLAN(As of July 2003)

Zale Corporation is committed to building and maintaining quality senior
management and to encouraging maximum focus on business improvement. This Plan
has been developed to allow all eligible senior management the opportunity to
receive an annual bonus based on our success.

Payouts under this Plan are intended to constitute qualified performance-based
compensation for purposes of Section 162(m) of the Internal Revenue Code.

ELIGIBILITY
    
    Senior management of Zale Corporation, as selected by the Compensation Committee.


MEASURES
    
    Bonus awards shall be based on the following measures:ANDWEIGHTING
    
    Measure
    
    WeightingConsolidated net income
    
    50%Division operating earnings
    
    50%


The consolidated net income and division operating
earnings targets shall be established by the
Compensation Committee of Zale Corporations Board
of Directors (the Compensation Committee) on an
annual basis prior to the commencement of a fiscal
year, except to the extent permitted by Section
162(m) to be established subsequently.PAYOUTS
    
    Payouts may be triggered by achieving single
targets of consolidated net income and division
operating earnings or may be graduated based upon
multiple targets, as determined by the Compensation
Committee.BONUS OPPORTUNITY
    
    The Compensation Committee shall establish one or
more bonus opportunities between 25% and 100%. The
bonus opportunities may be applicable either to
classes of employees, such as Division Presidents
or to individual employees, as the Compensation
Committee may determine.MAXIMUM PAYOUT
    
    No employee shall be entitled to receive a bonus of
more than $2,000,000 with respect to a fiscal year.






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ADDITIONAL ELIGIBILITY REQUIREMENTS
    
    
    
    Must have joined Zale Corporation in a bonus
eligible position on or before February 1st of the
applicable fiscal year. A pro-rated payout will be
based on full months in the eligible position
through July 31st of the applicable fiscal year.
    
    Must be actively on payroll, or on an approved
leave of absence, on July 31st of the applicable
fiscal year.
    
    If promoted to bonus eligible position on or
before February 1st of a fiscal year, bonus will be
pro-rated based on full months in the eligible
position through July 31st of the applicable year.
    
    If changed to non-bonus eligible position after
February 1st of a fiscal year, but on active
payroll on July 31st of the applicable fiscal year,
bonus will be pro-rated based upon full months in
the eligible position.
    
    Participants terminated due to a broadly based
reduction in force after February 1st of a fiscal
year will be eligible for a pro-rated payout based
upon full months in a bonus eligible position.
Those terminated due to a broadly based reduction
in force before February 1st of a fiscal year and
those terminated for any other reason during the
fiscal year will not be eligible to receive a bonus
payout.
    
    In the event of death, approved long-term
disability or approved retirement prior to February
1st of a fiscal year, a pro-rated payment will be
made to the participant or the participants estate
based upon full months in a bonus eligible
position.
    
    Participants will be notified of their
eligibility level at the beginning of the fiscal
year or when they become bonus eligible. A Bonus
Participant Agreementin such form as Zale
Corporation shall approve must be signed at that
time.
    
    Any bonus eligible employee who receives an I
rating, or lower, in either summary rating category
in a given year, will not be eligible for any bonus
for that year.


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
    
    Senior management, for purposes of eligibility for participation in this plan,
shall include the chief executive officer, president, any vice president and any
director level employee (or the equivalents thereto even if designated by a
different title) of Zale Corporation and its subsidiaries.ADMINIS-
TRATION
    
    
    
    The Compensation Committee may, at its sole discretion, adjust bonus awards to
reflect special or unusual circumstances of any individual or
individuals.
    
    Any employee on an approved leave of absence may, at the Compensation
Committees sole discretion, have his or her bonus reduced, pro rata, to reflect
the period of absence.
    
    All bonuses pursuant to this plan must be approved by the Compensation
Committee.
    
    Payouts will occur by September 30 of the fiscal year following the fiscal
year with respect to which the bonuses were earned.
    
    At its election, prior, during or following completion of a fiscal year, the
Compensation Committee may pay bonuses with respect to such fiscal year in Zale
Corporation common stock.
    
    This plan may be implemented using one or more documents designated for
classes of employees or individual employees.
    
    This plan shall be interpreted and administered in a manner consistent with
the awards hereunder constituting qualified performance-based compensation for
purposes of Section 162(m) of the Internal Revenue
Code.Zale Corporation reserves the right to amend, modify, suspend or terminate this
plan and payouts hereunder in its sole discretion, provided that stockholder
approval shall be sought with respect to any amendment that, absent stockholder
approval, would negatively impact the status of payouts under this plan for
purposes of Section 162(m) of the Internal Revenue CodeNothing in this
plan shall be construed as a contract of employment.


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