EMPLOYEE BENEFITS AGREEMENT

Exhibit 10.3

EMPLOYEE BENEFITS AGREEMENT

between

ACUITY BRANDS, INC.

and

ZEP INC.

Dated as of the 31st day of October, 2007

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TABLE OF CONTENTS

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APPENDIX A - E

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EMPLOYEE BENEFITS AGREEMENT

THIS EMPLOYEE BENEFITS AGREEMENT , dated as of the 31st day of October, 2007, is by and between Acuity Brands, Inc., a Delaware corporation (“Acuity” or the “Corporation”), and Zep Inc., a Delaware corporation (“SpinCo”).

WHEREAS, Acuity’s Board of Directors has determined that separation from the Corporation of substantially all of the Corporation’s specialty products assets and business and public ownership of such assets and business is in the best interests of Acuity and its stockholders; and

WHEREAS, Acuity has consolidated the assets and operations of substantially all of the specialty products business owned by it and its Subsidiaries into SpinCo and its Subsidiaries; and

WHEREAS, Acuity intends to accomplish the separation of SpinCo through a distribution of the stock of SpinCo to the stockholders of Acuity that is intended to be tax free pursuant to section 355 of the Internal Revenue Code of 1986, as amended (the “Distribution”); and

WHEREAS, Acuity and SpinCo have entered into an Agreement and Plan of Distribution, dated as of October 31, 2007 (the “Distribution Agreement”), and several other agreements that will govern certain matters relating to the Distribution and the relationship of Acuity and SpinCo and their respective Subsidiaries following the Distribution; and

WHEREAS, pursuant to the Distribution Agreement, Acuity and SpinCo have agreed to enter into this Agreement for the purpose of allocating assets, liabilities, and responsibilities with respect to certain employee compensation and benefit plans and programs between them.

NOW, THEREFORE, in consideration of the mutual promises contained herein and in the Distribution Agreement, the parties agree as follows:

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ARTICLE I D EFINITIONS AND R EFERENCES

For purposes of this Agreement, capitalized terms used (other than the formal names of Acuity Plans (as defined below)) and not otherwise defined shall have the respective meanings assigned to them below or as assigned to them in the Distribution Agreement (as defined above):

“Action” means any demand, action, cause of action, suit, countersuit, arbitration, inquiry, proceeding, or investigation by or before any Governmental Authority or any arbitration or mediation tribunal, pending or threatened, known or unknown.

“Acuity Common Stock” has the same meaning as the term “Parent Common Stock” under the Distribution Agreement.

“Acuity Executive” means an employee or former employee of a member of the Acuity Group or a member of the SpinCo Group who, as of the Close of the Distribution Date, is or was eligible to participate in or receive a benefit under any Acuity Executive Program.

“Acuity Group” has the same meaning as the term “Parent Group” under the Distribution Agreement.

“Agreement” means this Employee Benefits Agreement, including all the attached Appendices.

“Annual Incentive Plan,” when immediately preceded by “Acuity” means the Acuity Brands, Inc. Management Compensation and Incentive Plan, and any other short-term compensation, bonus, or incentive compensation programs established or maintained by the Acuity Group. When immediately preceded by “SpinCo,” “Annual Incentive Plan” means any short-term compensation, bonus, or incentive compensation programs to be established or maintained by SpinCo pursuant to Section 2.3.

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“ASO Contract” means an administrative services contract, related prior practice, or related understanding with a third-party administrator that pertains to any Acuity Health and Welfare Plan or any SpinCo Health and Welfare Plan.

“Award” means a long-term or short-term award under a Long-Term Incentive Plan or an Annual Incentive Plan or, as the context or facts may require, any other award under another incentive or special bonus, incentive, or award program or arrangement.

“Close of the Distribution Date” means 11:59 P.M., Eastern Time, on the Distribution Date.

“Code” means the Internal Revenue Code of 1986, as amended, or any successor federal income tax law. Reference to a specific Code provision also includes any proposed, temporary, or final regulation in force under that provision.

“Conversion Formula” means the appropriate formula which shall be applied in adjusting the exercise price and number of Acuity options under the Acuity Stock Incentive Plans and in determining the exercise price and number of SpinCo options under the SpinCo Stock Incentive Plan. The Conversion Formula for SpinCo options under the SpinCo Stock Incentive Plan shall be based on the closing per share prices of Acuity Common Stock (with a due bill) and SpinCo Common Stock (on a when-issued basis) as traded on the NYSE on the Distribution Date or such other prices as jointly agreed upon by SpinCo and Acuity, and shall be determined and applied in such a manner as to maintain (1) the aggregate spread of such options, which is the difference between the exercise price per share of Acuity Common Stock covered by the option and the price per share of Acuity Common Stock (with a due bill) immediately preceding the Distribution, multiplied by the total number of shares covered by the option; and (2) the ratio of the exercise price per share covered by the option to the price per share of Acuity Common Stock (with a due bill) immediately preceding the Distribution. The Conversion Formula for adjusting Acuity options under the Acuity Stock Incentive Plans shall be based on the closing per share prices of Acuity Common Stock (without giving effect to the dividend) and Acuity Common Stock (after giving effect to the dividend) as traded on the NYSE on the Distribution Date or such other prices as determined by Acuity, and shall be determined and applied in such a manner as to maintain the aggregate spread and exercise price ratio as described in the previous sentence for SpinCo options.

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“Corporate Office” means the corporate office of Acuity, including certain individuals employed by Acuity Brands, Inc., a Delaware corporation.

“Deferred Compensation Plans,” when immediately preceded by “Acuity” means the Acuity Brands, Inc. Supplemental Deferred Savings Plan, Acuity Brands, Inc. 2005 Supplemental Deferred Savings Plan, the Acuity Brands, Inc. Senior Management Benefit Plan, and the Acuity Brands, Inc. Executives’ Deferred Compensation Plan. When immediately preceded by “SpinCo,” “Deferred Compensation Plans” means the executive deferred compensation plans to be assumed, established or maintained by SpinCo pursuant to Section 2.3.

“Distribution” has the meaning given that term under the Distribution Agreement.

“Distribution Agreement” is defined in the preamble of this Agreement.

“Distribution Date” has the meaning given that term under the Distribution Agreement.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended. Reference to a specific provision of ERISA also includes any proposed, temporary, or final regulation in force under that provision.

“Executive Programs,” when immediately preceded by “Acuity” means the executive benefit and nonqualified plans, programs, and arrangements established, maintained, agreed upon, or assumed by a member of the Acuity Group for the benefit of employees and former employees of members of the Acuity Group before the Close of the Distribution Date. When immediately preceded by “SpinCo,” “Executive Programs” means the executive benefit plans and programs to be established, assumed or maintained by SpinCo or a member of the SpinCo Group, including those plans and programs listed and designated as such in Appendix B.

“Foreign Plan,” when immediately preceded by “Acuity,” means a Plan maintained by the Acuity Group or when immediately preceded by “SpinCo,” a plan to be established or which is maintained by the SpinCo Group, in either case for the benefit of employees who are

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compensated under a payroll which is administered outside the 50 United States, its territories and possessions, and the District of Columbia, including those Plans described in Appendix D.

“Governmental Authority” means any federal, state, local, foreign, or international court, government, department, commission, board, bureau, agency, official, or other regulatory, administrative, or governmental authority, including the Department of Labor, the Securities and Exchange Commission, the Internal Revenue Service, and the Pension Benefit Guaranty Corporation.

“Group Insurance Policy” means a group insurance policy issued in connection with any Acuity Health and Welfare Plan or any SpinCo Health and Welfare Plan, as applicable.

“Health and Welfare Plans,” when immediately preceded by “Acuity” means the health and welfare benefit plans, programs, and policies (including the Reimbursement Plans) which are sponsored by Acuity. When immediately preceded by “SpinCo,” “Health and Welfare Plans” means the benefit plans, programs, and policies (including the Reimbursement Plans) corresponding to those plans, programs, and policies sponsored by Acuity as of the Distribution Date, including those plans, programs, and policies listed in Appendix C to this Agreement which will be sponsored by a member of the SpinCo Group Immediately after the Distribution Date.

“HMO” means a health maintenance organization that provides benefits under the Acuity Health and Welfare Plans or the SpinCo Health and Welfare Plans, as applicable.

“HMO Agreements” means contracts, letter agreements, practices, and understandings with HMOs that provide medical, dental, prescription drug, or vision services under the Acuity Health and Welfare Plans and the SpinCo Health and Welfare Plans, as applicable.

“Immediately after the Distribution Date” means 12:00 A.M., Eastern Time, on the day after the Distribution Date.

“Individual Agreement” means an individual contract or agreement (whether written or unwritten) entered into between a member of the Acuity Group or a member of the SpinCo Group and any employee or individual who will be an employee of, or otherwise assigned to, the

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SpinCo Group Immediately after the Distribution Date that establishes the right of such individual to special compensation or benefits, special bonuses, supplemental pension benefits, hiring bonuses, loans, guaranteed payments, special allowances, tax equalization payments, special expatriate compensation payments, disability benefits, or other forms of compensation and benefits.

“Liabilities” means any and all losses, claims, charges, debts, premiums, demands, actions, costs, and expenses (including any current or future benefit payments or other entitlements, and administrative and related costs and expenses of any Plan, program, service or consulting agreement, or arrangement), of any nature whatsoever, whether absolute or contingent, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whether or not imposed or determined by a court, whenever arising.

“Long-Term Incentive Plan,” when immediately preceded by “Acuity” means the Acuity Brands, Inc. Long-Term Incentive Plan, as amended and restated, and any other long-term incentive plans established or maintained by a member of the Acuity Group. When immediately preceded by “SpinCo,” “Long-Term Incentive Plan” means the long-term incentive plan to be established or assumed by SpinCo pursuant to Section 2.3.

“Master Pension Trust” means the trust evidenced by the Acuity Brands, Inc. Defined Benefit Plans Master Trust Agreement, as amended from time to time, and currently associated with the defined benefit plans that are sponsored by Acuity or one of its affiliates.

“Master Savings Trust,” when immediately preceded by “Acuity,” means the trust evidenced by the Acuity Brands, Inc. Defined Contribution Plans Master Trust Agreement, as amended from time to time, and currently associated with the defined contribution plans that are sponsored by Acuity or one of its affiliates.

“Material Feature” means any feature of a Plan that could reasonably be expected to be of material importance to the sponsoring employer or the participants and beneficiaries of the Plan, which could include, depending on the type and purpose of the particular Plan, the class or classes of employees eligible to participate in such Plan, the nature, type, form, source, and level of benefits provided by the employer under such Plan and the amount or level of contributions, if any, required or permitted to be made by participants (or their dependents or beneficiaries) to such Plan.

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“NYSE” means the New York Stock Exchange, Inc., a national securities exchange.

“Participating Company” means any Person (other than an individual) that is participating in a Plan sponsored by a member of the Acuity Group or a member of the SpinCo Group, as the context requires.

“Person” means an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity, or any Governmental Authority.

“Plan,” when immediately preceded by “Acuity” or “SpinCo,” means any plan, policy, program, payroll practice, on-going arrangement, contract, trust, insurance policy, or other agreement or funding vehicle, whether written or unwritten, providing benefits to employees or former employees of the Acuity Group or the SpinCo Group, as applicable.

“Reimbursement Plans,” when immediately preceded by “Acuity,” means the Acuity Health Care Flexible Spending Account and the Acuity Dependent Care Flexible Spending Account, as applicable. When immediately preceded by “SpinCo,” “Reimbursement Plans” means the health care flexible spending account plan and the dependent care flexible spending account plan to be established or maintained by SpinCo pursuant to Section 2.3 that corresponds to the corresponding Acuity Reimbursement Plans.

“Savings Plan(s),” when immediately preceded by “Acuity,” means the defined contribution plans that are sponsored by a member of the Acuity Group other than the SpinCo Savings Plan(s). When immediately preceded by “SpinCo,” “Savings Plan(s)” means the defined contribution plan(s) listed in Appendix A to this Agreement that will be sponsored by a member of the SpinCo Group for periods Immediately after the Distribution Date.

“SpinCo Business” has the same meaning as the term “SpinCo Business” under the Distribution Agreement.

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“SpinCo Common Stock” has the same meaning as the term “SpinCo Common Stock” under the Distribution Agreement.

“SpinCo Group” has the same meaning as the term “SpinCo Group” under the Distribution Agreement.

“SpinCo Mirror Plan” means any of the SpinCo Health and Welfare Plans set forth on Exhibit C hereto, and any SpinCo Executive Program that will be substantially similar to an Acuity Executive Program, as set forth on Appendix B hereto.

“SpinCo Savings Trust” means the trust to be established and maintained by SpinCo pursuant to Section 4.1 that will be associated with the SpinCo Savings Plan.

“SpinCo Stand-Alone Plan” means any Plan maintained by Acuity or an affiliate of Acuity, that, no later than the Close of the Distribution Date, will be assumed, sponsored and maintained by SpinCo or a member of the SpinCo Group for the exclusive benefit of Transferred Individuals, including but not limited to the SpinCo Savings Plan set forth on Appendix A, and those Executive Plans set forth and designated as Stand-Alone Plans on Appendix B hereto.

“Stock Incentive Plan,” when immediately preceded by “Acuity,” means the Acuity Brands, Inc. Long-Term Incentive Plan, the Acuity Brands, Inc. Non-Employee Directors Stock Option Plan and any other stock-based incentive plan established or maintained by a member of the Acuity Group. When immediately preceded by “SpinCo,” “Stock Incentive Plan” means the stock incentive plans to be established or assumed by SpinCo pursuant to Section 2.3.

“Subsidiary” of any Person means any corporation or other organization, whether incorporated or unincorporated, of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is, directly or indirectly, owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries; provided , however , that no Person that is not directly or indirectly wholly owned by any other Person shall be a Subsidiary of such other Person unless such other Person controls, or has the right, power, or ability to control, that Person.

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“Transferred Corporate Employee” means an employee of the Corporate Office who, pursuant to an agreement between Acuity and SpinCo, is designated to become an employee of SpinCo or a member of the SpinCo Group after the Distribution.

“Transferred Individual” means any individual who, as of the Close of the Distribution Date:

(1) is actively employed by, or on a leave of absence (including those individuals receiving short-term disability benefits and those taking leave pursuant to the Family and Medical Leave Act of 1993, as amended) from, a member of the SpinCo Group (or is deemed to be so employed or on leave in accordance with an agreement between Acuity and SpinCo);

(2) is a Transferred Corporate Employee; or

(3) is not actively employed by, nor on a leave of absence (including those individuals receiving short-term disability benefits and those taking leave pursuant to the Family and Medical Leave Act of 1993, as amended) from, Acuity or a member of the Acuity Group, or SpinCo or a member of the SpinCo Group, and:

(A) whose most recent (through the Close of the Distribution Date) active employment with Acuity or a past or present affiliate of Acuity was with a member of the SpinCo Group or the SpinCo Business, or the predecessors of such business; or

(B) who otherwise is identified pursuant to a methodology approved by Acuity and SpinCo, which methodology shall be consistent with the intent of the parties that former employees of Acuity or a past or present affiliate of Acuity and such other individuals who performed services for Acuity (including non-employees) will only be aligned with SpinCo if they primarily provided services to the SpinCo Group or SpinCo Business.

An alternate payee under a qualified domestic relations order (within the meaning of Code § 414(p) and ERISA § 206(d)), alternate recipient under a qualified medical child support order (within the meaning of ERISA § 609(a)), beneficiary, or covered dependent, in each case, of an employee or former employee described in (1), (2) or (3) above shall also be a Transferred Individual with respect to the interest of such alternate payee, alternate recipient, beneficiary, or covered dependent in that employee’s or former employee’s benefit under the applicable Plans. Such an alternate payee, alternate recipient, beneficiary, or covered dependent shall not otherwise be considered a Transferred Individual with respect to his or her own benefits under any applicable Plans, unless he or she is a Transferred Individual by virtue of either of subparagraphs (1), (2) or (3) above. In addition, Acuity and SpinCo may agree to designate any other individuals, or group of individuals, as Transferred Individuals.

Subject to the other provisions of this definition, an individual may be a Transferred Individual pursuant to this definition regardless of whether such individual is, as of the

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Distribution Date, alive, actively employed, on a temporary leave of absence from active employment, on layoff, terminated from employment, retired or on any other type of employment, post-employment, or independent contractor status relative to Acuity or SpinCo or to an Acuity or SpinCo Plan. Transferred Individual includes any individual who is on an international assignment whether paid on a U.S. payroll or a payroll outside the U.S. if such individual otherwise falls within any of the above categories.

Notwithstanding anything to the contrary in this definition, the term Transferred Individual under this Agreement shall not include any individual who was otherwise directly transferred from former employment with a member of the Acuity Group to employment with any other Person, whether by sale or transfer of the assets and liabilities or stock of a business or otherwise, unless such individual has been re-employed as an active employee of a member of the Acuity Group subsequent to such event and prior to the Close of the Distribution Date.

Nothing contained in this Agreement shall permit, or be construed or interpreted to permit, any non-employee of Acuity or SpinCo to participate, at any time, in any Plan of Acuity or SpinCo.

“Transition Services Agreement” means the Transition Services Agreement entered into by Acuity and SpinCo governing certain matters related to the relationship of the parties after the Distribution.

Unless the context clearly indicates otherwise, reference to a particular Article, Section, subsection or paragraph means the Article, Section, subsection or paragraph so delineated in this Agreement.

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ARTICLE II G ENERAL P RINCIPLES

Except for each Liability that is expressly retained in writing by Acuity or excluded in writing by Acuity from those being assumed by SpinCo and unless otherwise provided for elsewhere in this Agreement, SpinCo hereby assumes and agrees to pay, perform, fulfill, and discharge, in accordance with their respective terms and conditions, all of the following (regardless of when or where such Liabilities arose or arise or were or are incurred): (i) all Liabilities to or relating to Transferred Individuals arising out of or resulting from employment by, or the performance of services for, a member of the Acuity Group before becoming Transferred Individuals and thereafter (including Liabilities under Acuity Plans and SpinCo Plans), (ii) all other Liabilities to or relating to Transferred Individuals, and their dependents and beneficiaries, to the extent relating to, arising out of or resulting from future, present, or former employment with, or the provision of services for, a member of the SpinCo Group or the SpinCo Business (including Liabilities under Acuity Plans and SpinCo Plans), (iii) all Liabilities under any Individual Agreements relating to Transferred Individuals, and (iv) all other Liabilities relating to, arising out of, or resulting from obligations, liabilities, and responsibilities expressly assumed or retained by a member of the SpinCo Group or a SpinCo Plan pursuant to this Agreement.

Subject to the terms and conditions of this Agreement, each member of the SpinCo Group that is, as of the date of this Agreement, a Participating Company in any of the Acuity Plans shall continue as such through the Close of the Distribution Date unless, for periods before the Distribution Date, the parties mutually agree otherwise. Effective as of any date before the Distribution Date, a member of the SpinCo Group not described in the preceding sentence may, at its request and with the consent of Acuity (which consent shall not be unreasonably withheld), become a Participating Company in any or all of the Acuity Plans in which Transferred Individuals participate.

Acuity shall continue through the Close of the Distribution Date to administer, or cause to be administered, in accordance with their terms and applicable law, the Acuity Plans and Acuity (or its designee) shall have the sole discretion and authority to interpret the Acuity Plans through such date and during any subsequent period.

SpinCo shall perform with respect to its participation in the Acuity Plans, and shall cause each other member of the SpinCo Group that is a Participating Company in any Acuity Plan to perform the duties of a Participating Company as set forth in such Plans, and any written or oral procedures adopted pursuant thereto, including: (i) assisting in the administration of claims, to

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the extent requested by the claims administrator or plan administrator of the applicable Acuity Plan, (ii) cooperating fully with Acuity Plan auditors, benefit personnel and benefit vendors, (iii) preserving the confidentiality of all financial and business arrangements Acuity has or may have with any vendors, claims administrators, trustees or any other entity or individual with whom Acuity has entered into an agreement relating to the Acuity Plans, and (iv) preserving the confidentiality of participant health information (including health information in relation to leaves under the Family and Medical Leave Act of 1993, as amended).

Unless otherwise provided in this Agreement, to the extent applicable, effective as of the Close of the Distribution Date, SpinCo and each member of the SpinCo Group shall cease to be a Participating Company in any of the Acuity Plans remaining with Acuity, and Acuity and each member of the Acuity Group shall cease to be a Participating Company in any Plan assumed by SpinCo or a member of the SpinCo Group.

Unless otherwise provided in this Agreement, effective no later than the Close of the Distribution Date, SpinCo or a member of the SpinCo Group shall assume or cause to be assumed, the SpinCo Stand-Alone Plans for the benefit of Transferred Individuals and other current, future and former employees of the SpinCo Group. SpinCo and Acuity shall take all action necessary to provide for such assumption of the SpinCo Stand-Alone Plans, including any necessary amendments, and the name of the Plans shall be changed as and where appropriate.

Unless otherwise provided in this Agreement, effective no later than the Close of the Distribution Date, SpinCo or a member of the SpinCo Group shall adopt or cause to be adopted, the SpinCo Mirror Plans for the benefit of Transferred Individuals and other current, future, and former employees of the SpinCo Group. The foregoing SpinCo Mirror Plans as in effect Immediately after the Distribution Date shall be substantially similar to the corresponding Acuity Plans as in effect as of the Close of the Distribution Date.

The SpinCo Mirror Plans shall be, with respect to Transferred Individuals, in all respects the successors in interest to, shall recognize all rights and entitlements as of the Close of the Distribution Date under, and shall not provide benefits that duplicate benefits provided by, the corresponding Acuity Plans for such Transferred Individuals. Acuity and SpinCo shall agree on methods and procedures, including amending the respective Plan documents, to prevent Transferred Individuals from receiving duplicative benefits from the Acuity Plans and the SpinCo Plans. SpinCo shall not permit any SpinCo Plan to commence benefit payments to Transferred Individuals until it receives written notice from Acuity regarding the date on which payments under the corresponding Acuity Plan shall cease. With respect to Transferred Individuals, each SpinCo Mirror Plan shall provide that all benefit or other elections, all

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designations of beneficiaries, all service, all compensation, and all other benefit-affecting determinations that, as of the Close of the Distribution Date, were recognized under the corresponding Acuity Plan (for periods immediately before the Close of the Distribution Date) shall, as of Immediately after the Distribution Date, receive full recognition, credit, and validity and be taken into account under such SpinCo Plan to the same extent as if such items originally occurred under such SpinCo Plan, except to the extent that duplication of benefits would result. The provisions of this Agreement for the transfer of assets, if any, from certain trusts relating to Acuity Plans (including Foreign Plans) to the corresponding trusts relating to SpinCo Plans (including Foreign Plans) are based upon the understanding and agreement of the parties that each such SpinCo Plan will assume all Liabilities of the Transferred Individuals and corresponding Acuity Plan to or relating to Transferred Individuals, as provided for herein. If there are any legal or other authoritative reasons that any such Liabilities are not effectively assumed by the appropriate SpinCo Plan, then the amount of assets transferred to the trust relating to such SpinCo Plan from the trust relating to the corresponding Acuity Plan shall be recomputed, ab initio , as set forth in this Agreement but taking into account the retention of any such Liabilities by such Acuity Plan, and assets shall be transferred by the trust relating to such SpinCo Plan to the trust relating to such Acuity Plan so as to place each such trust in the position it would have been in, had the initial asset transfer been made in accordance with such recomputed amount of transferred Liabilities and assets.

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ARTICLE III D EFINED B ENEFIT P LANS

Acuity agrees to retain, and be responsible for, all Liabilities relating to the Acuity Pension Plans listed on Appendix A, regardless of when such liabilities arose or arise or were or are incurred. Acuity shall retain the sponsorship, and responsibility for, the Master Pension Trust and all of its assets.

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ARTICLE IV D EFINED C ONTRIBUTION P LANS

Effective no later than the Close of the Distribution Date, SpinCo or a member of the SpinCo Group shall take all action necessary to assume and become the plan sponsor of the SpinCo Savings Plan and shall be responsible for all Liabilities relating to the SpinCo Savings Plan. The SpinCo Savings Plan shall recognize and maintain all contribution and investment elections made by Transferred Individuals under the SpinCo Savings Plan as such elections were last in effect during the period immediately prior to the Distribution Date and shall apply such elections under the SpinCo Savings Plan for the remainder of the period or periods for which such elections are by their terms applicable (subject in all cases to applicable election change rights of the Transferred Individuals).

Effective no later than the Close of the Distribution Date: (i) all Liabilities to or relating to Transferred Corporate Employees under the Acuity Brands, Inc. 401(k) Plan (“Corporate 401(k) Plan”) shall cease to be Liabilities of the Corporate 401(k) Plan and shall be assumed in full and in all respects by the SpinCo Savings Plan; (ii) the SpinCo Savings Plan shall assume and be solely responsible for all ongoing rights of or relating to these Transferred Corporate Employees for future participation (including the right to make contributions through payroll deductions in the SpinCo Savings Plan); and (iii) the accounts of the Transferred Corporate Employees under the Corporate 401(k) Plan which are held by the Acuity Master Savings Trust shall be transferred to account(s) in the SpinCo Savings Plan under the SpinCo Savings Trust.

Effective no later than the Close of the Distribution Date, SpinCo shall establish, or cause to be established, the SpinCo Savings Trust which shall be qualified under Code § 401(a), be exempt from taxation under Code § 501(a)(1), and form part of the SpinCo Savings Plan. SpinCo shall, prior to the end of the remedial amendment period for the SpinCo Savings Plan, apply for a determination letter from the Internal Revenue Service that shall provide that the SpinCo Savings Plan and the SpinCo Savings Trust satisfy the requirements for qualification under Code sections 401(a) and 501(a), and SpinCo shall take all actions necessary or appropriate to obtain such letters.

Effective on a date selected by Acuity, which is expected to be no later than the Close of the Distribution Date (the “Savings Plan Transfer Date”), all of the assets associated with and allocated to the accounts of the SpinCo Savings Plan under the Acuity Master Savings Trust shall be transferred from the Acuity Master Savings Trust to the SpinCo Savings Trust. If the transfer of assets does not occur prior to the Close of the Distribution Date, Acuity and SpinCo shall mutually reschedule the asset transfer date; provided, however, such rescheduled date must occur not later than December 31, 2007.

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To the extent an Acuity Common Stock Fund exists on the Distribution Date in the Acuity Savings Plans or the SpinCo Savings Plan, effective no later than Immediately after the Distribution Date, a SpinCo Common Stock fund shall be added as an investment option to any Acuity Savings Plan or SpinCo Savings Plan that has such an Acuity Common Stock fund. The SpinCo Common Stock fund in the Acuity Savings Plans and the Acuity Common Stock fund in the SpinCo Savings Plan are each referred to as a “Non-Employer Stock Fund” with respect to the applicable Plan. Unless Acuity and SpinCo agree otherwise, each Non-Employer Stock Fund shall be maintained under the respective Plan through December 31, 2008, subject to Acuity’s and SpinCo’s determination that continued maintenance of the respective Non-Employer Stock Funds satisfies the fiduciary rules of ERISA. After such date, Acuity and SpinCo agree to cooperate with each other with respect to the disposition of the stock when either party decides to liquidate or otherwise terminate the Non-Employer Stock Fund in its Savings Plan(s). In the absence of any agreement regarding such liquidation, at any time that Acuity or SpinCo decides to liquidate the shares in its Non-Employer Stock Fund, the selling party shall first offer such stock for sale to the other party. If the other party does not offer to purchase the shares within 30 days at a purchase price acceptable to the selling party, the selling party may proceed to sell such shares in a reasonable manner. The Acuity Savings Plans and the SpinCo Savings Plan shall each provide that, after the Distribution Date, no new contributions may be invested in, and no amounts may be transferred from other investment options to the Non-Employer Stock Fund under the respective Plan; but, subject to the terms of the respective Plan, participants may direct that amounts be transferred out of the Non-Employer Stock Fund to other investment options. To the extent the parties determine it is necessary to preserve the tax status of the Distribution under the Code, the Acuity Savings Plans shall provide that no earnings or