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Sample Business Contracts

Employment Agreement - Zale Corp. and Robert J. DiNicola

Employment Forms

  • Employment Agreement. Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
  • Consulting Agreement. Answer simple questions to build a contract with a consultant. Specify the services rendered, when payment is due, as well as IP rights.
  • Commission Agreement. Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Executive Employment Agreement. Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
  • More Employment Agreements

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                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT, dated as of February 21, 2001, is by and between Zale
Corporation, a Delaware corporation ("Company"), and Robert J. DiNicola
("Executive").

         WHEREAS, Executive and Company desire to enter into a new employment
agreement;

         NOW, THEREFORE, in consideration of the foregoing recital and of the
mutual covenants set forth herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:

         1. Employment. Executive agrees to enter into the continued employment
of the Company, and the Company agrees to employ Executive, on the terms and
conditions set forth in this Agreement. Executive agrees during the Term (as
hereinafter defined) to devote substantially all of his business time, efforts,
skills and abilities to the performance of his duties as stated in this
Agreement and to the furtherance of the Company's business.

               Executive's job title will be Chairman of the Board and Chief
Executive Officer, and his duties will be those as are designated by the Board
of Directors of the Company ("Board"), consistent with the position of Chairman
of the Board and Chief Executive Officer. Executive further agrees to serve,
without additional compensation, as an officer or director, or both, of any
subsidiary, division or affiliate of the Company or any other entity in which
the Company holds an equity interest, provided, however, that (a) the Company
shall indemnify Executive from liabilities in connection with serving in any
such position to the same extent as his indemnification rights pursuant to the
Company's Certificate of Incorporation, By-laws and applicable Delaware law, and
(b) such other position shall not materially detract from the responsibilities
of Executive pursuant to this Section 1 or his ability to perform such
responsibilities.

         2. Compensation.

               (a) Base Salary. During the Term of Executive's employment with
the Company pursuant to this Agreement, the Company shall pay to Executive as
compensation for his services an annual base salary of not less than $1,100,000
payable semi-monthly ("Base Salary"). Executive's Base Salary will be payable in
arrears in accordance with the Company's normal payroll procedures and will be
reviewed annually and subject to upward adjustment at the discretion of the
Board or an authorized Committee or representative thereof.

               (b) Incentive Bonus. Executive's incentive compensation program
for the term of this Agreement shall be determined under the Company's Executive
Bonus Program, established by the Board in its discretion. Executive is eligible
to receive up to 110% of his Base Salary in accordance with the terms and
conditions of the Executive Bonus Program.




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               (c) Vacation. Executive shall be entitled to a reasonable
vacation of not less than 5 weeks each year of the term of this Agreement.

               (d) Executive Perquisites. Executive shall be entitled to receive
such executive perquisites and fringe benefits as are provided to the senior
most executives and their families under any of the Company's plans and/or
programs in effect from time to time and such other benefits as are customarily
available to executives of the Company and their families.

               (e) Club Membership. The Company shall pay all fees for
membership by Executive in a club of his choice, together with the dues therefor
for use by Executive for conferences, meetings and entertainment within the
scope of his employment.

               (f) Tax Withholding. The Company has the right to deduct from any
compensation payable to Executive under this Agreement social security (FICA)
taxes and all federal, state, municipal or other such taxes or charges as may
now be in effect or that may hereafter be enacted or required.

               (g) Life Insurance. In addition to the company's group life
insurance coverage, the Company shall provide Executive with additional life
insurance coverage in the amount of $2,000,000.

               (h) Medical Insurance. In addition to the Company's group medical
insurance coverage and/or Executive Medical Insurance Plan ("Medical Plans"),
the Company shall reimburse Executive for all additional medical expenses
incurred by Executive which are defined as reimbursable under the Company's
Medical Plans.

               (i) Expense Reimbursements. The Company shall pay or reimburse
Executive for all reasonable business expenses incurred or paid by Executive in
the course of performing his duties hereunder, including but not limited to
reasonable travel expenses for Executive and his spouse. As a condition to such
payment or reimbursement, however, Executive shall maintain and provide to the
Company reasonable documentation and receipts for such expenses.

         3. Term. Unless sooner terminated pursuant to Section 4 of this
Agreement, and subject to the provisions of Section 5 hereof, the term of this
Agreement shall commence as of the date hereof and shall continue for an initial
period of three (3) years (the "Initial Term"). At the end of the Initial Term
and each subsequent "Renewal Term" (as hereinafter defined), the term of this
Agreement shall be automatically renewed and extended for a period of three (3)
years ("Renewal Term"), unless either party hereto delivers a written
termination notice to the other party at least ninety (90) days prior to the end
of the Initial Term or the then current Renewal Term (as the case may be).


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         4. Termination. Notwithstanding the provisions of Section 3 hereof, but
subject to the provisions of Section 5 hereof, this Agreement (and Executive's
employment hereunder) shall terminate as follows:

               (a) Death. This Agreement shall terminate upon the death of
Executive; provided, however, that the Company shall continue to pay (in
accordance with its normal payroll procedures) the Base Salary to Executive's
estate for a period of twelve (12) months after the date of Executive's death.

               (b) Termination for Cause. The Company may terminate this
Agreement at any time for "Cause" (as hereinafter defined) by delivering a
written termination notice to Executive. For purposes of this Agreement, "Cause"
shall mean any of: (i) Executive's conviction of a felony or a crime involving
moral turpitude; (ii) Executive commits an act constituting fraud, deceit or
material misrepresentation with respect to the company; (iii) Executive
embezzles funds or assets from the Company; (iv) Executive becomes addicted to
any alcoholic, controlled or illegal substance or drug; (v) Executive commits
any act or omission which would give the Company the right to terminate
Executive's employment under applicable law; or (vi) Executive fails to correct
or cure any material breach of or default under this Agreement within ten (10)
days after receiving written notice of such breach or default from the Company.

               (c) Termination Without Cause. The Company may terminate this
Agreement at any time by delivering a written termination notice to Executive.

               (d) Termination by Executive. Executive may terminate this
Agreement at any time by delivering a written termination notice to the Company;
provided, however, that Executive shall receive the benefits specified in
Section 5 hereof if such termination is made for any of the following reasons:

                              (i) a reduction by the Company in the Executive's
               base salary or the Company's failure to increase (within 12
               months of Executive's last increase in base salary) the
               Executive's base salary, unless such failure is the result of (A)
               a hiring or salary freeze uniformly applied to all employees or
               (B) Executive's failure to meet preestablished and objective
               performance criteria;

                              (ii) Company's principal executive offices shall
               be moved to a location outside Dallas County, Texas or Executive
               is required to be based anywhere other than the Company's
               principal executive offices;

                              (iii) the assignment to the Executive by the
               Company of duties inconsistent with, or the reduction of the
               powers and functions associated with, Executive's position,
               duties, responsibilities and status with the Company or an
               adverse change in Executive's titles or offices, unless such
               action is the result of




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               Executive's failure to meet preestablished and objective
               performance criteria or termination of employment for Disability
               or Cause; and

                              (iv) any material breach by the Company of any
               provision of this Agreement.

                  (e) Termination Following Disability. In the event, Executive
becomes mentally or physically impaired or disabled and is unable to perform his
material duties and responsibilities hereunder for a period of at least ninety
(90) days in the aggregate during any one hundred twenty (120) consecutive day
period, the Company may terminate this Agreement by delivering a written
termination notice to Executive. Notwithstanding the foregoing, Executive shall
continue to receive his full salary and benefits under this Agreement for a
period of twelve (12) months after the effective date of such termination.

               (f) Payments. Following any expiration or termination of this
Agreement, and in addition to any amounts owed pursuant to Section 5 hereof, the
Company shall pay to Executive all amounts earned by Executive hereunder prior
to the date of such expiration or termination.

         5. Certain Termination Benefits. (a) Notwithstanding anything else
contained herein to the contrary, in the event (i) the Company elects not to
renew the term of this Agreement pursuant to Section 3 hereof, (ii) the Company
terminates this Agreement pursuant to Section 4(c), or (iii) Executive
terminates this Agreement pursuant to Section 4(d) (i)-(iv), then Executive
shall be entitled to the following benefits:

                              (1.) Severance. The Company shall continue to pay
               (in accordance with its normal payroll procedures) the Base
               Salary to Executive (or Executive's estate if Executive dies) for
               a thirty-six (36) month period (the "Severance Period") after the
               effective date of such expiration or termination.

                              (2.) Benefits. During the first twelve (12) months
               of the Severance Period, Executive shall continue to receive the
               benefits provided under Sections 2(b)-2(e) hereof.

                              (b) Executive has been previously afforded
               retirement benefits pursuant to the Second Amended and Restated
               Employment Agreement dated August 1, 2000, (the "Amended and
               Restated Agreement") and this Agreement is intended to preserve
               certain of those retirement benefits. Notwithstanding anything
               else contained herein to the contrary, in the event (i) the
               Company elects not to renew the term of this Agreement pursuant
               to Section 3 hereof or (ii) this Agreement is terminated for any
               reason, then Executive shall be entitled to the following
               benefits:

                              (1.) Benefits. Executive shall continue to receive
               the benefits provided under Sections 2(g) and 2(h) above until
               Executive's death.



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                              (2.) Relocation. Pursuant to Section 5(i) of the
               Amended and Restated Employment Agreement, Company agreed to pay
               Executive certain relocation expenses in connection with the sale
               of his residence in Dallas and the move of his home and family
               outside of Dallas County, Texas. The Company has already
               reimbursed Executive for the costs associated with the sale of
               his home in Dallas. Should Executive desire, within 12 months of
               the termination or expiration of this Agreement, to move outside
               the Dallas County area, Company will reimburse Executive for all
               reasonable and appropriate moving and other expenses actually
               incurred by him in connection with the purchase of a residence
               outside of Dallas County, Texas.

                              (3.) Consulting Agreement. In the event of
               nonrenewal or termination of this Agreement, Executive and the
               Company shall enter into a Consulting Agreement in the form
               attached hereto as Exhibit A.


                              (c) Offset. The payments which would have been due
               and payable in accordance with Section 5(a) hereof shall be
               reduced by an amount equal to any amounts that Executive receives
               in connection with any other employment during the Severance
               Period. Any fringe benefits received by Executive in connection
               with any other employment that are reasonably comparable, but not
               necessarily as beneficial, to Executive as the fringe benefits
               then being provided by the Company pursuant to Section 5(b)
               hereof, shall be deemed to be the equivalent of, and shall
               terminate the Company's responsibility to continue providing the
               fringe benefits then being provided by the Company pursuant to
               Section 5(b) hereof. The Company acknowledges that, if
               Executive's employment with the Company is terminated, Executive
               shall have no duty to mitigate damages.

                              (d) General Release. Acceptance by Executive of
               any amounts pursuant to this Section 5 shall constitute a full
               and complete release by Executive of any and all claims Executive
               may have against the Company, its officers, directors and
               affiliates, including, but not limited to, claims he might have
               relating to Executive's cessation of employment with the Company;
               provided, however, that there may properly be excluded from the
               scope of such general release the following:

                                             (i) claims that Executive may have
                              against the Company for reimbursement of ordinary
                              and necessary business expenses incurred by him
                              during the course of his employment;

                                             (ii) claims that may be made by the
                              Executive for payment of Base Salary, fringe
                              benefits or stock options properly due to him; or

                                             (iii) claims respecting matters for
                              which the Executive is entitled to be indemnified
                              under the Company's Certificate of Incorporation
                              or Bylaws, respecting third party claims asserted
                              or third party litigation pending or threatened
                              against the Executive.



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A condition to Executive's receipt of any amounts pursuant to this Section 5
shall be Executive's execution and delivery of a general release as described
above. In exchange for such release, the Company shall, if Executive's
employment is terminated without Cause, provide a release to Executive, but only
with respect to claims against Executive which are actually known to the Company
as of the time of such termination.

         6. Effect of Change in Control.

               (a) If within two years following a "Change of Control" (as
hereinafter defined), Executive terminates his employment with the Company for
Good Reason (as hereinafter defined) or the Company terminates Executive's
employment for any reason other than Cause or disability, the Company shall pay
to the Executive: (1) an amount equal to three times the Executive's Base Salary
as of the date of termination; (2) an amount equal to three times the average
annual cash bonus paid to Executive for the two fiscal years immediately
preceding the date of termination; (3) all benefits under the Company's various
benefit plans, including group healthcare, dental and life, for the period equal
to thirty-six (36) months from the date of termination; and (4) a lump sum
payment equal to the actuarial equivalent (determined by the Company in good
faith with assistance of its accountants or actuaries), of the benefit which
would have accrued under the Zale Delaware, Inc. Supplemental Executive
Retirement Plan ("SERP") if (i) Executive remained a participant in the SERP for
the three (3) year period commencing on the first day of the SERP's plan year
("Plan Year") in which the Executive's employment with the Company terminated
("Measurement Period"), (ii) during each Plan Year in the Measurement Period the
Executive earned benefit points equal to the highest number of the benefit
points earned by such Executive in a Plan Year during the three (3) year period
ending on the last day of the Plan Year immediately preceding the Plan Year in
which his employment with the Company terminated, and (iii) the Executive's
final average pay during the Measurement Period is the greater of his monthly
Base Salary on the date of (a) a Potential Change of Control, (b) the Change of
Control or (c) the date of his termination of employment.

               (b) "Change of Control" shall mean the date as of which: (i)
there shall be consummated (1) any consolidation or merger of the Company in
which the Company is not the continuing or surviving corporation or pursuant to
which shares of the Company's common stock would be converted into cash,
securities or other property, other than a merger of the Company in which the
holders of the Company's common stock immediately prior to the merger have the
same proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (2) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company; or (ii) the stockholders of the
Company approve any plan or proposal for the liquidation or dissolution of the
Company; or (iii) any person ( as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), shall become the beneficial





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owner (within the meaning of Rule 13d-3 under the Exchange Act) of 30% of the
Company's outstanding common stock; or (iv) during any period of two consecutive
years, individuals who at the beginning of such period constitute the entire
board of directors of the Company shall cease for any reason to constitute a
majority thereof unless the election, or the nomination for election by the
Company's stockholders, of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period.

         (c) "Good Reason" shall mean any of the following actions taken by the
Company without the Executive's written consent after a Change of Control:

                              (i) the assignment to the Executive by the Company
               of duties inconsistent with, or the reduction of the powers and
               functions associated with, the Executive's position, duties,
               responsibilities and status with the Company immediately prior to
               a Change of Control or Potential Change of Control (as defined
               below), or an adverse change in Executive's titles or offices as
               in effect immediately prior to a Change of Control or Potential
               Change of Control, or any removal of the Executive from or any
               failure to re-elect Executive to any of such positions, except in
               connection with the termination of his employment for Disability
               or Cause or as a result of Executive's death or by the Executive
               other than for Good Reason;

                              (ii) A reduction by the Company in the Executive's
               base salary as in effect on the date of a Change of Control or
               Potential Change of Control, or as the same may be increased from
               time to time during the term of his Agreement, or the Company's
               failure to increase (within 12 months of Executive's last
               increase in base salary) the Executive's base salary after a
               Change of Control or Potential Change of Control, unless such
               failure is the result of (A) a hiring or salary freeze uniformly
               applied to all employees or (B) Executive's failure to meet
               preestablished and objective performance criteria;

                              (iii) Company's principal executive offices shall
               be moved to a location outside Dallas County, Texas;

                              (iv) Company shall require the Executive to be
               based anywhere other than at the Company's principal executive
               offices or the location where the Executive is based on the date
               of a Change of Control or Potential Change of Control, or if
               Executive agrees to such relocation, the Company fails to
               reimburse the Executive for moving and all other expenses
               incurred with such move;

                              (v) The Company shall fail to continue in effect
               any Company-sponsored plan or benefit that is in effect on the
               date of a Change of Control or Potential Change of Control, and
               provides (A) incentive or bonus compensation, (B) fringe benefits
               such as vacation, medical benefits, life insurance and accident
               insurance, (C) reimbursement for reasonable expenses incurred by
               the Executive in connection with the performance of duties with
               the Company, and (D) pension benefits such as a Code Section
               401(k) plan;



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                              (vi) Any material breach by the Company of any
               provision of this Agreement; and

                              (vii) Any failure by the Company to obtain the
               assumption of this Agreement by any successor or assign of the
               Company effected in accordance with the provisions of Section 6.

               (d) "Potential Change of Control" shall mean the date as of which
(1) the Company enters into an agreement the consummation of which, or the
approval by shareholders of which, would constitute a Change of Control; (ii)
proxies for the election of Directors of the Company are solicited by anyone
other than the Company; (iii) any person (including, but not limited to, any
individual, partnership, joint venture, corporation, association or trust)
publicly announces an intention to take or to consider taking actions which, if
consummated, would constitute a Change of Control; or (iv) any other event
occurs which is deemed to be a Potential Change of Control by the Board and the
Board adopts a resolution to the effect that a Potential Change of Control has
occurred.

               (e) In the event that (i) Executive would otherwise be entitled
to the compensation and benefits described in Section 6(a) hereof ("Compensation
Payments"), and (ii) the Company determines, based upon the advice of tax
counsel selected by the Company's independent auditors and acceptable to
Executive, that, as a result of such Compensation Payments and any other
benefits or payments required to be taken into account under Code Section
280G(b)(2) ("Parachute Payments"), any of such Parachute Payments would be
reportable by the Company as "excess parachute payments", such Compensation
Payments shall be reduced to the extent necessary to cause Executive's Parachute
Payments to equal 2.99 times the "base amount" as defined in Code Section
280G(b)(3) with respect to such Executive. However, such reduction in the
Compensation Payments shall be made only if, in the opinion of such tax counsel,
it would result in a larger Parachute Payment to the Executive than payment of
the unreduced Parachute Payments after deduction of tax imposed on and payable
by the Executive under Section 4999 of the Code ("Excise Tax"). The value of any
non-cash benefits or any deferred payment or benefit for purposes of this
paragraph shall be determined by the Company's independent auditors.

               (f) The parties hereto agree that the payments provided under
Section 6(a) above, as the case may be, are reasonable compensation in light of
Executive's services rendered to the Company and that neither party shall
contest the payment of such benefits as constituting an "excess parachute
payment" within the meaning of Section 280G(b)(1) of the Code.

               (g) Unless the Company determines that any Parachute Payments
made hereunder must be reported as "excess parachute payments" in accordance
with Section 6(e)





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above, neither party shall file any return taking the position that the payment
of such benefits constitutes an "excess parachute payment" within the meaning of
Section 280G(b)(1) of the Code.

         7. Non-Competition. Executive agrees that during the Term and for a
period of the lesser of the balance of the Term or eighteen (18) months from the
date of the termination of Executive's employment with the Company pursuant to
Sections 4(c)(d), 5 and 6 herein, he will not, directly or indirectly, compete
with the Company by providing to any company that is in a "Competing Business"
services substantially similar to the services currently being provided by
Executive. Competing Business shall be defined as any business that engages, in
whole or in part, in the wholesale or retail sale of jewelry in the United
States, and Executive's employment function or affiliation is directly or
indirectly in such business of jewelry. Executive shall not be obligated to
abide by the foregoing covenant if the Company defaults in the payment of any
severance compensation or benefits.

         8. Nonsolicitation of Employees. For a period of two years after the
termination or cessation of his employment with the Company for any reason
whatsoever, Executive shall not, on his own behalf or on behalf of any other
person, partnership, association, corporation, or other entity, solicit or in
any manner attempt to influence or induce any employee of the Company or its
subsidiaries or affiliates (known by the Executive to be such) to leave the
employment of the Company or its subsidiaries or affiliates, nor shall he use or
disclose to any person, partnership, association, corporation or other entity
any information obtained while an employee of the Company concerning the names
and addresses of the Company's employees.

         9. Nondisclosure of Trade Secrets. During the term of this Agreement,
Executive will have access to and become familiar with various trade secrets and
proprietary and confidential information of the Company, its subsidiaries and
affiliates, including, but not limited to, processes, computer programs,
compilations of information, records, sales procedures, customer requirements,
pricing techniques, customer lists, methods of doing business and other
confidential information (collectively, referred to as "Trade Secrets") which
are owned by the Company, its subsidiaries and/or affiliates and regularly used
in the operation of its business, and as to which the Company, its subsidiaries
and/or affiliates take precautions to prevent dissemination to persons other
than certain directors, officers and employees. Executive acknowledges and
agrees that the Trade Secrets (1) are secret and not known in the industry; (2)
give the Company or its subsidiaries or affiliates an advantage over competitors
who do not know or use the Trade Secrets; (3) are of such value and nature as to
make it reasonable and necessary to protect and preserve the confidentiality and
secrecy of the Trade Secrets; and (4) are valuable, special and unique assets of
the Company or its subsidiaries or affiliates, the disclosure of which could
cause substantial injury and loss of profits and goodwill to the Company or its
subsidiaries or affiliates. Executive may not use in any way or disclose any of
the Trade Secrets, directly or indirectly, either during the term of this
Agreement or at any time thereafter, except as required in the course of his
employment under this Agreement, if required in connection with a judicial or
administrative proceeding, or if the information becomes public knowledge other
than





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as a result of an unauthorized disclosure by the Executive. All files, records,
documents, information, data and similar items relating to the business of the
Company, whether prepared by Executive or otherwise coming into his possession,
will remain the exclusive property of the Company and may not be removed from
the premises of the Company under any circumstances without the prior written
consent of the Board (except in the ordinary course of business during
Executive's period of active employment under this Agreement), and in any event
must be promptly delivered to the Company upon termination of Executive's
employment with the Company. Executive agrees that upon his receipt of any
subpoena, process or other request to produce or divulge, directly or
indirectly, any Trade Secrets to any entity, agency, tribunal or person,
Executive shall timely notify and promptly hand deliver a copy of the subpoena,
process or other request to the Board. For this purpose, Executive irrevocably
nominates and appoints the Company (including any attorney retained by the
Company), as his true and lawful attorney-in-fact, to act in Executive's name,
place and stead to perform any act that Executive might perform to defend and
protect against any disclosure of any Trade Secrets.

         10. Severability. The parties hereto intend all provisions of Sections
7, 8 and 9 hereof to be enforced to the fullest extent permitted by law.
Accordingly, should a court of competent jurisdiction determine that the scope
of any provision of Sections 7, 8 or 9 hereof is too broad to be enforced as
written, the parties intend that the court reform the provision to such narrower
scope as it determines to be reasonable and enforceable. In addition, however,
Executive agrees that the nonsolicitation and nondisclosure agreements set forth
above each constitute separate agreements independently supported by good and
adequate consideration shall be severable from the other provisions of, and
shall survive, this Agreement. The existence of any claim or cause of action of
Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
the covenants of Executive contained in the nonsolicitation and nondisclosure
agreements. If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws effective during the term hereof,
such provision shall be fully severable and this Agreement shall be construed
and enforced as if such illegal, invalid or unenforceable provision never
constituted a 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 herefrom.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be added as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or enforceable provision as may be possible and be legal,
valid and enforceable.

         11. Arbitration - Exclusive Remedy.

               (a) The parties agree that the exclusive remedy or method of
resolving all disputes or questions arising out of or relating to this Agreement
shall be arbitration. Arbitration shall be held in Dallas, Texas by three
arbitrators, one to be appointed by the Company, a second to be appointed by
Executive, and a third to be appointed by those two arbitrators. The third
arbitrator shall act as chairman. Any arbitration may be initiated by either
party by written notice ("Arbitration Notice") to the other party specifying the
subject of the requested arbitration and appointing that party's arbitrator.





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               (b) If (i) the non-initiating party fails to appoint an
arbitrator by written notice to the initiating party within ten days after the
Arbitration Notice, or (ii) the two arbitrators appointed by the parties fail to
appoint a third arbitrator within ten days after the date of the appointment of
the second arbitrator, then the American Arbitration Association, upon
application of the initiating party, shall appoint an arbitrator to fill that
position.

               (c) The arbitration proceeding shall be conducted in accordance
with the rules of the American Arbitration Association. A determination or award
made or approved by at least two of the arbitrators shall be the valid and
binding action of the arbitrators. The costs of arbitration (exclusive of the
expense of a party in obtaining and presenting evidence and attending the
arbitration and of the fees and expenses of legal counsel to a party, all of
which shall be borne by that party) shall be borne by the Company only if
Executive receives substantially the relief sought by him in the arbitration,
whether by settlement, award or judgment; otherwise, the costs shall be borne
equally between the parties. The arbitration determination or award shall be
final and conclusive on the parties, and judgment upon such award may be entered
and enforced in any court of competent jurisdiction.

         12. Miscellaneous.

               (a) Notices. Any notices, consents, demands, requests, approvals
and other communications to be given under this Agreement by either party to the
other must be in writing and must be either (i) personally delivered, (ii)
mailed by registered or certified mail, postage prepaid with return receipt
requested, (iii) delivered by overnight express delivery service or same-day
local courier service, or (iv) delivered by telex or facsimile transmission, to
the address set forth below, or to such other address as may be designated by
the parties from time to time in accordance with this Section 11(a):

               If to the Company:    Zale Corporation
                                     901 W. Walnut Hill Lane
                                     Irving, Texas 75038
                                     Attention: Susan Lanigan,
                                     Senior Vice-President
                                     General Counsel

               If to Executive:      Robert DiNicola
                                     3225 Turtle Creek Boulevard
                                     #2203
                                     Dallas, Texas 75219

               Notices delivered personally or by overnight express delivery
service or by local courier service are deemed given as of actual receipt.
Mailed notices are deemed given three business days after mailing. Notices
delivered by telex or facsimile transmission are deemed





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given upon receipt by the sender of the answer back (in the case of a telex) or
transmission confirmation (in the case of a facsimile transmission).

               (b) Entire Agreement. This Agreement supersedes any and all other
employment or consulting agreements, either oral or written, between the parties
with respect to the subject matter of this Agreement and contains all of the
covenants and agreements between the parties with respect to the subject matter
of this Agreement. Notwithstanding the foregoing, the following agreements shall
remain in full force and effect:

               1.   First Amendment to Plan Agreement, dated November 3, 2000,
                    between Zale and Executive.

               2.   December 4, 2000, Promissory Note made by Executive to Zale
                    Delaware, Inc. as Holder.

               3.   Pledge and Security Agreement, dated December 4, 2000, by
                    Executive in favor of Zale Delaware, Inc.

         (c) Modification. No change or modification of this Agreement is valid
or binding upon the parties, nor will any waiver of any term or condition in the
future be so binding, unless the change or modification or waiver is in writing
and signed by the parties to this Agreement.

         (d) Governing Law and Venue. The parties acknowledge and agree that
this Agreement and the obligations and undertakings of the parties under this
Agreement will be performable in Irving, Dallas County, Texas. This Agreement is
governed by, and construed in accordance with, the laws of the State of
Delaware. If any action is brought to enforce or interpret this Agreement, venue
for the action will be in Dallas County, Texas.

         (e) Counterparts. This Agreement may be executed in counterparts, each
of which constitutes an original, but all of which constitutes one document.

         (f) Costs. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, each party shall bear its own costs and
expenses.

         (g) Estate. If Executive dies prior to the expiration of the term of
employment or during a period when monies are owing to him, any monies that may
be due him from the Company under this Agreement as of the date of his death
shall be paid to his estate and as when otherwise payable.

         (h) Assignment. The Company shall have the right to assign this
Agreement to its successors or assigns. The terms "successors" and "assigns"
shall include any person, corporation, partnership or other entity that buys all
or substantially all of the Company's assets or all of its stock, or with which
the Company merges or consolidates. The rights, duties and benefits to Executive
hereunder are personal to him, and no such right or benefit may be assigned by
him.




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<PAGE>   13


         (i) Binding Effect. This Agreement is binding upon the parties hereto,
together with their respective executors, administrators, successors, personal
representatives, heirs and permitted assigns.

         (j) Waiver of Breach. The waiver by the Company or Executive of a
breach of any provision of this Agreement by Executive or the Company may not
operate or be construed as a waiver of any subsequent breach.




         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.



                                   By: /s/ ROBERT J. DINICOLA
                                      --------------------------------------
                                      Robert J. DiNicola



                                   ZALE CORPORATION

                                   By: /s/ ALAN P. SHOR
                                      --------------------------------------
                                   Its: President - Chief Operating Officer
                                       -------------------------------------



                                   Compensation Committee of the Zale
                                   Corporation Board of Directors

                                   By: /s/ RICHARD C. MARCUS
                                      --------------------------------------
                                      Richard C. Marcus, Chairman




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