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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE FISCAL YEAR ENDED JULY 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------------- -------------
Commission file number 001-04129
A. Full title of the plan and the address of the plan, if different from that of
issuer named below:
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive offices:
ZALE CORPORATION
901 W. WALNUT HILL LANE
IRVING, TEXAS 75038-1003
================================================================================
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
Financial Statements and Supplemental Schedules
July 31, 2003 and 2002
(With Independent Auditors' Report Thereon)
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits
July 31, 2003 and 2002 2
Statements of Changes in Net Assets Available for Benefits
Years ended July 31, 2003 and 2002 3
Notes to Financial Statements 4
Supplemental Schedules
1 Schedule H, Part IV, Line 4i - Schedule of Assets (Held at End of Year)
July 31, 2003 11
2 Schedule G, Part III - Schedule of Nonexempt Transactions
Year ended July 31, 2003 12
</Table>
INDEPENDENT AUDITORS' REPORT
The Plan Committee
Zale Corporation Savings and Investment Plan:
We have audited the accompanying statements of net assets available for benefits
of the Zale Corporation Savings and Investment Plan (the Plan) as of July 31,
2003 and 2002, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Zale
Corporation Savings and Investment Plan as of July 31, 2003 and 2002, and the
changes in net assets available for benefits for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
(held at end of year) and nonexempt transactions are presented for purposes of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
KPMG LLP
Fort Worth, Texas
January 26, 2004
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
Statements of Net Assets Available for Benefits
July 31, 2003 and 2002
<Table>
<Caption>
2003 2002
----------- -----------
Assets:
Investments, at fair market value:
Cash and short-term investments $ 347,366 255,616
Common stock mutual funds 37,381,490 34,307,677
Bond mutual funds 13,221,576 9,999,249
Government securities mutual funds 18,524,696 15,426,890
Zale Corporation common stock 17,560,407 13,233,826
Participants' loans 3,910,960 3,741,612
----------- -----------
Total investments 90,946,495 76,964,870
----------- -----------
Receivables:
Employer's contributions 1,986,033 885,503
Participants' contributions 60,666 --
Other receivables 58,126 72,964
----------- -----------
Total receivables 2,104,825 958,467
Liabilities:
Excess contributions payable 101,139 343,265
----------- -----------
Net assets available for benefits $92,950,181 77,580,072
=========== ===========
</Table>
See accompanying notes to financial statements.
2
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended July 31, 2003 and 2002
<Table>
<Caption>
2003 2002
----------- -----------
Additions to net assets:
Investment income:
Net appreciation $10,563,776 --
Interest and dividends 2,166,812 2,576,134
----------- -----------
Total investment income 12,730,588 2,576,134
Contributions:
Employer 1,984,837 3,109,857
Participants 7,471,375 7,996,048
Rollovers 177,769 218,575
----------- -----------
Total contributions 9,633,981 11,324,480
Transfer of assets for Piercing Pagoda plan merger -- 10,920,669
----------- -----------
Total additions 22,364,569 24,821,283
----------- -----------
Deductions from net assets:
Net depreciation in fair value of assets -- 12,313,719
Payments to participants and beneficiaries 6,893,321 13,136,866
Refund of excess contributions 101,139 343,265
----------- -----------
Total deductions 6,994,460 25,793,850
----------- -----------
Net increase (decrease) in net assets available
for benefits 15,370,109 (972,567)
Net assets available for benefits, beginning of year 77,580,072 78,552,639
----------- -----------
Net assets available for benefits, end of year $92,950,181 77,580,072
=========== ===========
</Table>
See accompanying notes to financial statements
3
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
July 31, 2003 and 2002
(1) DESCRIPTION OF PLAN
The Zale Corporation Savings and Investment Plan (the Plan) is a defined
contribution retirement plan. The following description of the Plan
provides only general information. Participants should refer to the
Summary Plan Description for a more complete description of the Plan's
provisions.
(a) GENERAL
Employees are eligible to participate in the Plan on the first day
of the month following the later of the date the employee reaches
age 21 or the date on which the employee completes one year of
service. One year of service is defined by the Plan as 1,000 or
more hours of service completed in a 12-month period beginning on
date of employment with Zale Corporation (the Company or Employer)
or an anniversary of the employment date. Employees covered under
a collective bargaining agreement and certain nonresident aliens
are excluded from participation.
In September 2000, the Company purchased Piercing Pagoda, Inc.,
which sponsored the Piercing Pagoda, Inc. Retirement and Savings
Plan. This plan was merged into the Plan effective August 1, 2001.
Piercing Pagoda, Inc. employees who meet the eligibility
requirements of the Plan are now eligible to participate in the
Plan.
(b) EMPLOYEE CONTRIBUTIONS
Under the Plan, participants are permitted to voluntarily
contribute, on a pretax basis, from 1% to 30% of their annual
earnings to their Employee 401(k) Contribution Account. All
participants are subject to Internal Revenue Service (IRS)
limitations on these contributions. The maximum amount a
participant could contribute under this limitation is $12,000 and
$11,000 for each calendar year 2003 and 2002, respectively.
Effective August 1, 2002, employees who are or will be at least 50
years of age by the end of a calendar year are eligible to make
additional pre-tax contributions called catch-up contributions to
the Plan at any time during such calendar year. The maximum amount
of catch-up contributions a participant can contribute is $1,000
in 2002 and $2,000 in 2003.
(c) EMPLOYER CONTRIBUTIONS
The Plan provides that the Company make matching contributions
(Employer 401(k) Matching Contributions) to each eligible
participant who voluntarily contributes to the Plan. Prior to
March 1, 2002, the Company matched one dollar in Company Common
Stock for every dollar contributed by participants up to 4% of the
participant's annual compensation, subject to IRS limitations.
Effective March 1, 2002, the Plan was amended to require
employment on the last day of the Plan year (July 31) in order to
receive an allocation of matching contributions, unless the
participant died, retired on or after age 65, or became disabled
during the plan year. Further, the matching contributions were
reduced to 50% of the first 4% of annual compensation contributed
to the Plan as a salary deferral contribution. Matching
contributions are made in Company Common Stock, subject to IRS
limitations. After March 1, 2002, matching contributions are
allocated after the end of the Plan year. In addition, forfeitures
may be used to pay the Plan's administrative expenses as well as
to reduce matching contributions.
4
(Continued)
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
July 31, 2003 and 2002
(d) INVESTMENT OPTIONS
Upon enrollment in the Plan, participants may direct contributions
in whole percentage increments to the following investment
options:
<Table>
Bond Investment Option Invests primarily in domestic fixed income
securities such as corporate bonds, U.S.
government securities, certificates of
deposit, commercial paper, and other
fixed income securities.
Dreyfus Government Fund Option Invests solely in securities issued and guaranteed
by the U.S. government or its agencies or
instrumentalities, and repurchase agreements
collateralized by these securities.
Growth and Income Investment Option Invests in domestic and international common
stocks, other equity securities, corporate and
government bonds, and short-term cash
equivalents.
Growth Investment Option Invests primarily in domestic common stocks and
other equity securities, with a smaller allocation
to international securities.
Aggressive Growth Investment Option Invests primarily in common stocks and other equity
securities of small, rapidly growing companies and
also larger companies with strong growth potential.
This option invests in both domestic and international
securities.
Global Investment Option Invests primarily in common stocks and other equity
securities of companies based both within and outside
of the United States.
Zale Corporation Common Stock Participants invest up to 25% of their salary deferral
contribution accounts and up to 100% of the balance of
their other accounts in Company Common Stock.
</Table>
Participants may change their investment options daily. After
initial contributions, participants may reallocate investments in
these investment options. Earnings or losses of the Plan are
allocated to the participants based on their relative account
balances in the respective investment programs of the Plan.
5
(Continued)
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
July 31, 2003 and 2002
(e) LOAN PROVISIONS
The Plan allows eligible participants to borrow from their
Employee 401(k) Contribution and Rollover Accounts a minimum of
$1,000 and a maximum equal to the lesser of $50,000 or 50% of
their account balance. The $50,000 limit is reduced by the
participant's highest loan balance in the last 12 months. Loan
transactions are treated as a transfer to (from) the investment
fund from (to) the participant loan fund. Loan terms range from
one to five years or up to fifteen years for the purchase of a
primary residence. The loans are secured by the balance in the
participant's account and bear interest at the Wall Street Journal
prime interest rate at the time the loan is made plus 2%, as
determined by the Plan Committee (the Committee). Interest rates
ranged between 6.00% and 6.75 % for loans established during the
Plan year ended July 31, 2003 and between 6.75% and 8.75% for the
Plan year ended July 31, 2002. Principal and interest are paid
ratably through biweekly payroll deductions.
(f) VESTING
A participant is automatically fully vested in employee
contributions and Employer 401(k) Matching Contributions plus
actual earnings thereon. Through July 1998, the Company also made
discretionary profit-sharing contributions to the Plan.
Participants vest in employer discretionary profit sharing
contributions and earnings thereon as follows:
<Table>
<Caption>
VESTED
PERCENT OF
DISCRETIONARY
PROFIT SHARING
Years of active service CONTRIBUTIONS
- --------------------------------- ------------------
Less than 3 years 0%
3 years 20%
4 years 40%
5 years 60%
6 years 80%
7 or more years 100%
</Table>
For the purpose of this schedule, a year of service means a year
from August 1 to July 31 during which a participant works at least
1,000 hours of service. Additionally, full vesting occurs upon a
participant's death, full and permanent disability, or retirement
after age 65 with five years of participation. Participants are
eligible to receive their vested interests in the Plan upon
termination from the Company.
(g) DISTRIBUTIONS AND WITHDRAWALS
Upon retirement, a participant may withdraw the full value of his
or her account in a single, lump-sum distribution or a direct
rollover to an Individual Retirement Account or another plan.
Distribution of the participant's entire balance also becomes due
upon death or total disability. Upon termination of employment for
any other reason, if the participant's vested account balance is
less than $5,000, it will be automatically distributed unless the
participant elects to roll it over to an IRA
6
(Continued)
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
July 31, 2003 and 2002
or another plan. If the participant's vested account is at least
$5,000, the participant may leave the balance in the Plan until
normal retirement age. Participants may make hardship withdrawals
during employment from their Employee 401(k) Contributions (but
not the earnings thereon) or Employer Discretionary Profit-Sharing
Contributions and earnings thereon (but not Employer 401(k)
Matching Contributions) at specific times, subject to certain
restrictions.
(h) FORFEITED ACCOUNTS
Forfeited accounts may be used to reduce future Employer
contributions. Effective March 1, 2002, the forfeitures may also
be used to pay the Plan's administrative expenses. For the Plan
years ended July 31, 2003 and 2002, forfeited nonvested accounts
were approximately $60,000 and $393,000, respectively. Of those
forfeited accounts, approximately $60,000 and $373,000,
respectively, were used to reduce Employer contributions in
accordance with the Plan document.
(i) TAX STATUS
The Plan has received a favorable determination letter dated
August 4, 2003 from the IRS stating that the Plan and the related
trust are designed in accordance with the applicable provisions of
the Internal Revenue Code (the Code). The Company and the Plan's
tax counsel believe the Plan is designed and continues to operate
in accordance with the provisions of the Code.
(j) PLAN ADMINISTRATION
The Plan is administered by the Committee, which is appointed by
the Company's board of directors (the Board) or Chief Executive
Officer. The Company retains the services of State Street Bank as
the trustee of the Plan and Mellon HR Solutions, formerly known as
PricewaterhouseCoopers Unifi Network, as the Plan's recordkeeper.
Additionally, the Committee retains the services of Capital
Research & Consulting, an investment advisory firm, to monitor
fund performances.
(2) AMENDMENT OR TERMINATION OF THE PLAN
The Company's Board has the right to amend or terminate the Plan or to
reduce or stop contributions either temporarily or permanently at its
sole discretion. If the Board exercised its right to stop contributions
permanently or to terminate the Plan, the entire amount in each
participant's account would be 100% vested and distributed under the
direction of the Committee. The Board has no intention to terminate the
Plan.
(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF ACCOUNTING
The Plan uses the accrual method of accounting. The
classifications in use at July 31, 2003 have been applied to the
financial statements for July 31, 2002.
7
(Continued)
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
July 31, 2003 and 2002
(B) INVESTMENT VALUATION AND INCOME RECOGNITION
Investments in mutual fund securities and the Company's common
stock are valued at fair market value based on quoted market
prices as of the Plan's year-end. Purchases and sales of
securities are recorded on a trade-date basis. The Plan offers
seven investment options. These investment options are: Bond
Investment, Dreyfus Government Fund Option, Growth and Income
Investment, Growth Investment, Aggressive Growth Investment,
Global Investment, and Zale Corporation Common Stock (see note
1(d) for detail of investment options).
Net appreciation and depreciation of investments are
calculated based on the difference between the fair market
value of the investments as of the beginning of the year, or
purchase price if purchased during the year, and the fair
market value of the investment as of the end of the year, or
the selling price if sold during the year. Such amounts are
shown as net depreciation or appreciation in these financial
statements.
(C) ADMINISTRATION EXPENSES
The Plan has a revenue sharing agreement with the Plan's
mutual funds and recordkeeper involving Sub Transfer Agent and
12b-1 revenues. Sub Transfer Agent revenues and 12b-1 revenues
are deposited directly to the Plan. Most administrative
expenses related to the Plan's investments are paid by the
Plan and are offset by the Sub Transfer Agent and 12b-1
revenues. While it is not required that the Company reimburse
the Plan for any administrative expenses not covered by Sub
Transfer Agent, 12b-1 revenues, and forfeitures, the Company
has done so in the past and may do so in the future. For the
Plan year's ended July 31, 2003 and 2002, the Plan incurred
approximately $191,000 and $152,000, respectively, of expenses
that were not covered by funds received under the
revenue-sharing agreement and were paid by the Company.
(D) USE OF ESTIMATES
The preparation of the financial statements in conformity with
accounting principles generally accepted in the United States
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amount of changes in
net assets during the reporting period. Actual results could
differ from those estimates.
The Plan provides for certain investments that are exposed to
various risks, such as interest rate, credit, and overall
market volatility. Due to the level of risk associated with
certain investment securities, it is reasonably possible that
changes in values of investment securities will occur in the
near term, and such changes could materially affect the
amounts reported in the statements of net assets available for
benefits and of changes in net assets available for benefits.
(E) PAYMENT OF BENEFITS
Payments to participants and beneficiaries are recorded when
paid.
8
(Continued)
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
July 31, 2003 and 2002
(4) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
At July 31, 2002, the Plan had not paid $324,602 of benefits to
participants who had requested distribution prior to year-end. In
accordance with accounting principles generally accepted in the United
States of America, these amounts are not included as liabilities in the
accompanying statements of net assets available for benefits as of July
31, 2002. All requests for distributions were paid in the current Plan
year for 2003.
The following is a reconciliation of net assets available for benefits
per the financial statements and the Form 5500:
<Table>
<Caption>
2003 2002
----------- -----------
Net assets available for benefits per the financial
statements $92,950,181 77,580,072
Amounts allocated to withdrawing participants -- (324,602)
----------- -----------
Net assets available for benefits per the Form 5500 $92,950,181 77,255,470
=========== ===========
</Table>
The following is a reconciliation of benefits paid to participants per
the financial statements to the Form 5500:
<Table>
<Caption>
2003
-----------
Payments to participants and beneficiaries per the financial statements $ 6,893,321
Amounts allocated to withdrawing participants at end of year --
Less amounts allocated to withdrawing participants at beginning of year (324,602)
-----------
Distributions to participants per the Form 5500 $ 6,568,719
===========
</Table>
(5) INVESTMENTS
The following investments are greater than 5% of ending net assets as
of July 31, 2003 and 2002:
<Table>
<Caption>
2003 2002
----------- -----------
Oppenheimer Ltd. Term Government Fund $ 6,732,824 5,232,093
Oppenheimer Strategic Income Fund 6,663,400 5,008,853
Bond Fund of America 6,558,176 4,990,396
Franklin Custodian U.S. Government Securities Fund 6,385,180 6,950,851
Zale Corporation Common Stock 17,560,407 13,233,826
</Table>
9
(Continued)
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
Notes to Financial Statements
July 31, 2003 and 2002
For the Plan years ended July 31, 2003 and 2002, the Plan's
investments' net appreciation (depreciation) in the fair value of
investments is as follows:
<Table>
<Caption>
2003 2002
------------ ------------
Bond Investment Option $ 631,456 (396,187)
Growth and Income Investment Option 780,641 (2,591,207)
Growth Investment Option 419,485 (3,060,613)
Aggressive Growth Investment Option 1,604,157 (4,231,809)
Global Investment Option 187,004 (650,824)
Dreyfus Government Fund Option (3,036) --
Zale Corporation Common Stock 6,944,069 (1,383,079)
------------ ------------
$ 10,563,776 (12,313,719)
============ ============
</Table>
As of July 31, 2003 and 2002, the Plan did not directly invest in any
derivative financial instruments; however, the Bond Investment Option,
Growth and Income Investment Option, Aggressive Growth Investment
Option, and the Global Investment Option held by the Plan include
mutual funds that invest in derivative financial instruments. As
described in the investments' prospectuses, futures, forwards, and
options are used only for the purpose of managing the funds' exposure
to stock and bond markets and to fluctuations in interest rates and
currency values.
(6) RELATED-PARTY TRANSACTIONS
During the 2003 and 2002 Plan years, the Plan engaged in certain
transactions with State Street Bank and Trust in its role as the
trustee and asset custodian for the Plan. Such transactions are
considered as exempt party-in-interest transactions.
(7) PROHIBITED TRANSACTIONS
The Plan engaged in certain prohibited transactions related to the
unintentional late remission of contributions to the Plan's trust. The
transactions, totaling $47,788, are detailed in the supplemental
Schedule of Nonexempt Transactions attached to these financial
statements. The Plan's management will correct the prohibited
transactions, plus lost earnings, in accordance with ERISA.
10
SCHEDULE 1
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
EIN: 75-0675400
Plan No.: 002
Schedule H, Part IV, Line 4i - Schedule of Assets (Held at End of Year)
July 31, 2003
<Table>
<Caption>
(a) (b) (c) (e)
IDENTITY OF ISSUER SHARES DESCRIPTION OF INVESTMENT CURRENT VALUE
- ----- -------------------------------------- -------------- ----------------------------------------------- -------------
Short-term investments/cash:
* State Street Bank 347,366 ST Investment Fund/Cash $ 347,366
Mutual funds: Bond Investment Option:
Oppenheimer 950,176 Oppenheimer Ltd Term Government Fund 6,732,824
Oppenheimer 1,699,847 Oppenheimer Strategic Income Fund 6,663,400
American Funds 504,863 Bond Fund of America 6,558,176
Franklin Templeton 950,176 Franklin Custodian U.S. Gov. Securities Fund 6,385,180
Growth and Income Investment Option:
American Funds 257,323 Income Fund of America 3,973,067
Washington Mutual 512,056 Van Kampen Equity Income Fund A 3,697,046
Mass. Financial Services 262,092 MFS Total Return Fund 3,645,750
Putnam Funds 407,216 Putnam Asset Allocation A 3,705,667
Growth Investment Option:
American Funds 82,515 Washington Mutual Investors 2,128,060
American Funds 131,321 Growth Fund of America 2,832,602
Mass. Financial Services 152,443 MFS Core Growth 2,154,024
Janus 112,692 Janus Aspen Cap App Fund 2,156,926
Aggressive Growth Investment Option:
Davis 134,726 Davis NY Venture Fund 3,197,050
Franklin Templeton 135,853 Franklin Small Capital Growth Fund 3,544,415
Franklin Templeton 113,537 Franklin California Growth Fund 3,267,591
American Funds 212,131 American Funds AMCAP Fund 3,222,263
Global Investment Option:
American Funds 37,975 Europacific Growth Fund 957,737
Oppenheimer 23,127 Oppenheimer Global Fund 972,480
Putnam Mutual Funds 52,869 Putnam International Equity Fund 938,417
Franklin Templeton 53,061 Templeton Growth A 961,462
Dreyfus Government Fund Option:
Dreyfus Fund 1,433,625 General Government Securities Money Market
Fund 1,433,625
* Zale Corporation 369,304 Zale Corporation Common Stock, par value $0.01 17,560,407
* Participant's loans N/A Participant's loans, interest rates ranging from
6.00% - 8.75% 3,910,960
-------------
Total $ 90,946,495
=============
</Table>
* Column (a) indicates each identified person/entity known to be a party in
interest.
Historical cost (column (d)) is not presented on this schedule, as all
investments are participant directed.
This supplemental schedule lists assets held for investment purposes as of July
31, 2003, as required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure.
See accompanying independent auditors' report.
11
SCHEDULE 2
ZALE CORPORATION
SAVINGS AND INVESTMENT PLAN
EIN: 75-0675400
Plan No.: 002
Schedule G, Part III - Schedule of Nonexempt Transactions
Year ended July 31, 2003
<Table>
<Caption>
(a) (b) (c) (h) (i) (j)
IDENTITY OF CURRENT NET GAIN
PARTY DESCRIPTION OF COST OF VALUE ON EACH
INVOLVED RELATIONSHIP TRANSACTION ASSET OF ASSET TRANSACTION
- ---------------- ------------ ----------------------------------- ------------- ----------- -----------
Zale Corporation Employer Lending of funds to employer at
effective rates of 46.1% $ 1,070 1,566 496
Zale Corporation Employer Lending of funds to employer at
effective rates of 37.0% 1,349 1,847 498
Zale Corporation Employer Lending of funds to employer at
effective rates of 28.2% 89 114 25
Zale Corporation Employer Lending of funds to employer at
effective rates of 26.3% 44,423 56,109 11,686
Zale Corporation Employer Lending of funds to employer at
effective rates of 25.5% 424 532 108
Zale Corporation Employer Lending of funds to employer at
effective rates of 23.0% 188 231 43
Zale Corporation Employer Lending of funds to employer at
effective rates of 12.7% 147 166 19
Zale Corporation Employer Lending of funds to employer at
effective rates of 2.7% 98 101 3
</Table>
This supplemental schedule lists nonexempt transactions for the year ended July
31, 2003, as required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure.
See accompanying independent auditors' report.
12
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Zale Corporation Savings and Investment Plan
--------------------------------------------
(Registrant)
Date January 27, 2004 /s/ CYNTHIA T. GORDON
---------------- --------------------------------------------
Cynthia T. Gordon
Senior Vice-President, Controller
(principal accounting officer of the
registrant)
INDEX TO EXHIBIT
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
23.1 Independent Auditors' Consent