FORM OF ZALE CORPORATION 2003 STOCK INCENTIVE PLAN, AS AMENDED INCENTIVE STOCK OPTION PLAN AGREEMENT

Employee ID

Participant

Grant Date

Number of Options

Option Exercise Price

Grant

Zale Corporation (the "Company"), on behalf of Zale Delaware, Inc., its wholly-owned subsidiary, hereby grants to the Participant named above, as of the grant date above, the above number of Incentive Stock Options to purchase common stock of the Company ("Company Stock") at the above Option Exercise Price per share subject to the terms and conditions set forth in this Plan Agreement and in the Zale Corporation 2003 Stock Incentive Plan (the "Plan"), as amended.

Vesting

Each Option shall become cumulatively exercisable as to         percent of the shares covered thereby on each of the                                    anniversaries of the Grant Date.

Expiration

No Option shall be exercisable more than 10 years after the Grant Date.

Exercise

An Option may be exercised for all or any portion of the shares as to which it is exercisable; provided, that no partial exercise of an Option shall be for an aggregate exercise price of less than $1,000.

An Option shall be exercised by delivering notice to Zale Corporation Investor Relations, MS 5A-8, P.O. Box 152777, Irving, Texas 75015-2777 no less than one business day in advance of the effective date of the proposed exercise (Please call Investor Relations for the proper form). Such notice shall be accompanied by this Plan Agreement, and may be withdrawn at any time prior to the close of business on the business day immediately preceding the effective date of the proposed exercise. Payment for shares of Company Stock purchased upon the exercise of an Option shall be made on the effective date of such exercise by cash, certified check, bank cashier's check or wire transfer or in such other manner as shall be authorized by the Company in accordance with the Plan.

Certificates for shares of Company Stock purchased upon the exercise of an O