FORM OF ZALE CORPORATION 2003 STOCK INCENTIVE PLAN, AS AMENDED PERFORMANCE-BASED RESTRICTED STOCK UNITS PLAN AGREEMENT

Participant

Issue Date

Number of Units

Employee ID

Grant

Zale Corporation (the "Company"), on behalf of Zale Delaware, Inc. ("Zale Delaware"), its wholly-owned subsidiary, has granted to the Participant named above, as of the Issue Date, the above number of Restricted Stock Units, subject to the terms and conditions set forth in this Plan Agreement and in the Zale Corporation 2003 Stock Incentive Plan, as amended (the "Plan").

Issue Date

The Issue Date for the Restricted Stock Units granted to the Participant pursuant to this Plan Agreement shall be the date set forth above.

Vesting Date(s), Performance Based Award

The Restricted Stock Units issued pursuant to this Plan Agreement shall vest                                    (each, a "Vesting Date"), subject to satisfaction of the Performance Goal(s) set forth on Exhibit A hereto.

Consequences of Vesting

Upon each Vesting Date, the Participant shall be entitled to receive [one share of the Company's common stock, par value $.01 per share ("Common Stock")][such number of shares of the Company's common stock, par value $.01 per share (the "Common Stock") as shall be determined in Exhibit A hereto], for each Restricted Stock Unit that vested on such Vesting Date or, in the sole discretion of the Committee, in lieu thereof, the Company shall pay to the Participant the Fair Market Value of such number of shares of Common Stock. Unl