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,” &