Exhibit 10.2
AMENDMENT NO. 2 TO
CHANGE IN CONTROL AGREEMENT AND
NOTICE OF TERMINATION
THIS AMENDMENT NO. 2 TO CHANGE IN
CONTROL AGREEMENT AND NOTICE OF TERMINATION
(“Amendment”) is made and entered into as of 13th day
of October, 2009, by and between Acuity Specialty Products, Inc.
and its parent, Zep Inc. (collectively, the “Company”),
and John K. Morgan (“Executive”).
WHEREAS, Acuity Brands, Inc. and
Executive previously entered into that certain Amended and Restated
Change in Control Agreement, dated as of April 21, 2006, which
agreement was amended on July 23, 2007 (“Change in
Control Agreement”); and
WHEREAS, effective on or about
October 31, 2007, the Company became the successor to Acuity
Brands, Inc. and assumed the Change in Control Agreement;
and
WHEREAS, the parties now wish to
amend the Change in Control Agreement in certain respects as set
forth herein; and
WHEREAS, pursuant to
Section 1(a) of the Change in Control Agreement, the Company
wishes to give notice of termination of the Change in Control
Agreement upon the expiration of the two-year term ending on the
second anniversary of this Amendment.
AMENDMENT
NOW, THEREFORE, the Change in
Control Agreement is hereby amended as follows:
1. Succession of the Company
under the Change in Control Agreement . Effective as of
October 31, 2007, Zep Inc. (“Zep”) then a
wholly-owned subsidiary of Acuity Brands, Inc., was spun-off in a
transaction pursuant to which Acuity Brands, Inc. distributed to
its stockholders, all of the outstanding shares of the common stock
of Zep. In connection with this spin-off, Acuity Specialty
Products, Inc., a wholly-owned subsidiary of Zep (“Acuity
Specialty Products”), became Executive’s employer, and
the Company succeeded to all of the rights and obligations of
Acuity Brands, Inc. under, and assumed, the Change in Control
Agreement. For purposes of this Change in Control Agreement, the
following shall apply:
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(a)
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The applicable
entity with respect to Executive’s employment status, and
employment-related issues, shall mean both Zep and Acuity Specialty
Products, and their successors. Thus, Executive must terminate
employment with both Zep and Acuity Specialty Products (and any
successor(s)) in order to become entitled to compensation and
benefits under Sections 3.1 or 3.2 of this Agreement.
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(b)
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The applicable
entity with respect to determining if a Change in Control has
occurred shall be Zep or Acuity Specialty Products.
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2. Change in Control . The
definition of Change in Control in Section 2.2 of the Change
in Control Agreement, is hereby deleted in its entirety, and
replaced with the following language:
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“2.2
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Change in
Control . For purposes of
this Agreement, a “Change in Control” shall mean any of
the following events:
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(a)
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Change in
Ownership of Zep . The
acquisition by any one person, or more than one person acting as a
group (within the meaning of section 409A of the Internal Revenue
Code (the “Code”)), of ownership of stock of Zep that,
together with stock held by such person or group, constitutes more
than fifty percent (50%) of the total fair market value or
total voting power of the stock of Zep, as applicable.
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(b)
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Change in
Effective Control of Zep. Either of the following:
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(i)
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The
acquisition, during any 12-month period, by any one person, or more
than one person acting as a group (within the meaning of Code
section 409A), of stock of Zep comprising thirty percent
(30%) or more of the total voting power of the stock of Zep,
as applicable.
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(ii)
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The
replacement, during any 12-month period, of at least two-thirds
(2/3) of the members of the board of directors of Zep
(“Board”) with directors whose appointment or election
is not endorsed by two-thirds (2/3) of the members of the
Board before the date of such appointment or election.
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(c)
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Change in
Ownership of a Substantial Portion of Zep’s Assets
. The acquisition by any one
person, or more than one person acting as a group (within the
meaning of Code section 409A), during the 12-month period ending on
the date of the most recent acquisition by such person or persons,
of assets of Zep that have a total gross fair market value of more
than fifty percent (50%) of the total gross fair market value
of all of the assets of Zep, as applicable, immediately before such
acquisition or acquisitions. For purposes of this provision,
“gross fair market value” means the value of the assets
of Zep (as applicable), or the value of the assets being disposed
of, determined without regard to any liabilities associated with
such assets.
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A Change in Control shall also
include an event described in subsections 2.2(a), (b)(i) and (c),
of Acuity Specialty Products.
The provisions of this Agreement
relating to a Change in Control shall be interpreted and
administered in a manner consistent with Code section 409A and the
regulations and additional guidance thereunder.”
3. Healthcare Provisions
Following Termination of Employment . Subsection 3.1(b)(iii) of
the Change in Control Agreement is hereby deleted in its entirety
and replaced with the
