Zep Inc. Long-Term Incentive Plan Performance Stock Award Agreement

Exhibit 10.3

Zep Inc.

Long-Term Incentive Plan

Performance Stock Award Agreement

THIS AGREEMENT, made and entered into as of [GRANT DATE] by and between Zep Inc., a Delaware Corporation, (the “Company”) and [NAME] (“Grantee”).

W • I • T • N • E • S • S • E • T • H      T • H • A • T:

WHEREAS, the Company maintains the Zep Inc. Long-Term Incentive Plan (the “Plan”), and Grantee has been selected by the Committee to receive a Performance Stock Award under the Plan;

WHEREAS, the Company and Grantee have determined that Grantee shall enter into certain non-competition, non-solicitation, non-recruitment and non-disclosure covenants, attached hereto as Exhibits A, B, C and D, respectively, in consideration for receipt of the Performance Stock Award pursuant hereto, receipt of any such awards that Grantee may receive in the future, continued employment, and other good and valuable consideration, and;

NOW, THEREFORE, IT IS AGREED, by and between the Company and Grantee, as follows:

1.1 The Company hereby grants to Grantee an award of [# OF SHARES] Shares of performance stock (“Performance Stock”), subject to, and in accordance with, the restrictions, terms, and conditions set forth in this Agreement. The grant date of this award of Performance Stock is [GRANT DATE] (the “Grant Date”).

1.2 This Agreement (including any appendices or exhibits) shall be construed in accordance with, and subject to, the provisions of the Plan (the provisions of which are incorporated herein by reference) and, except as otherwise expressly set forth herein, the capitalized terms used in this Agreement shall have the same definitions as set forth in the Plan.

1.3 This award of Performance Stock is conditioned upon Grantee’s acceptance of the terms of this Agreement, as evidenced by Grantee’s execution of this Agreement or by Grantee’s electronic acceptance of the Agreement in a manner and during the time period allowed by the Company. If the terms of this Agreement are not timely accepted by execution or by such electronic means, the award of Performance Stock may be cancelled by the Committee.

2.1 Subject to Sections 2.3, 2.5, and 2.6 below, if the Grantee remains continuously employed by the Company, the Performance Stock shall vest on the date on which both (a) the stock price targets, set forth in the table below (each a “Stock Appreciation Target”),

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have been achieved, and (b) the target date (“Target Date”) associated with the specified Stock Appreciation Target in the table below, have been reached. If, upon the final Target Date, some or all of the Stock Appreciation Targets have not been achieved, the then unvested Performance Stock will become fully vested at such time if the Company’s stock price over the four year period following the Grant Date is at or above the return for the Russell 2000 Index over the same four year period. If, upon the final Target Date, the Company’s stock price over the four year period following the Grant Date is not at or above the return for the Russell 2000 Index over the same four year period, any unvested shares of Performance Stock shall immediately be forfeited, and the Grantee shall have no further right or interest in or to such forfeited Performance Shares. The vesting requirements of this Section 2.1 shall be subject to confirmation and certification by the Committee in accordance with procedures established by the Committee.

Achievement of a particular Stock Appreciation Target shall be deemed to occur when the average closing price of the Company’s common stock on the New York Stock Exchange for twenty (20) consecutive trading days, on a rolling basis, is equal to or exceeds the particular Stock Appreciation Target. In the event that the Company’s stock ceases to be traded on the New York Stock Exchange, then the Company’s stock price for purposes of the Agreement shall be such stock’s Fair Market Value as defined in the Plan.

If a Stock Appreciation Target is achieved prior to its corresponding Target Date, then that Stock Appreciation Target will be considered to have been met upon the attainment of the Target Date, regardless of changes in the price of Shares that may occur thereafter.

The vesting of the award of Performance Stock, which is based upon the achievement of the Stock Appreciation Targets and continuous service through the corresponding Target Dates, shall be as follows:

For purposes of this Agreement, employment with a Subsidiary of the Company or service as a member of the Board of Directors of the Company shall be considered employment with the Company.

2.2 Except as otherwise provided below, on the date (the “Vesting Date”) the Shares of the Performance Stock become vested during the Grantee’s employment (the “Vested Shares”) pursuant to Section 2.1 above, the Grantee shall own the Vested Shares free and clear of all restrictions imposed by this Agreement (except those imposed by Section 3.4 below), and the Company shall transfer the Vested Shares to an unrestricted account in the name of the Grantee as soon as reasonably practical after each Vesting Date.

2.3 In the event, prior to the Vesting Date, (i) Grantee dies while actively employed by the Company, or (ii) Grantee has his employment terminated by reason of

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Disability, any Performance Stock shall become fully vested and nonforfeitable as of the date of Grantee’s death or Disability. The Company shall transfer the Shares of Performance Stock, free and clear of any restrictions imposed by this Agreement (except for Section 3.4) to Grantee (or, in the event of death, his surviving spouse or, if none, to his estate) as soon as practical after his date of death or termination for Disability.

2.4 In exchange for receipt of consideration in the form of the Performance Stock award pursuant to this Agreement, the prospect of receiving such awards in the future, continued employment, and other good and valuable consideration, Grantee agrees that, upon his termination of employment with the Company, for the period set forth in the Exhibits attached hereto (the “Restricted or Confidentiality Period”), Grantee shall comply with the non-competition, non-solicitation, non-recruitment, and non-disclosure restrictions attached hereto as Exhibits A, B, C and D , respectively (the “Restrictive Covenants”). The parties hereto recognize that Grantee may experience periodic material changes in his job title and/or to the principal duties, responsibilities or services that he is called upon to perform on the behalf of the Company. If Grantee experiences such a material job change, the parties shall, as soon as is practicable, enter into a signed, written addendum to Exhibit A hereto reflecting such material change. Moreover, in the event of any material change in corporate organization on the part of the Direct Competitors set forth in Exhibit A hereto, the parties agree to amend Exhibit A , as necessary, at the Company’s request, in order to reflect such change. Upon execution, any such written modification to Exhibit A shall represent an enforceable amendment to this Agreement and shall augment and supplant the definitions of the terms Executive Services or Direct Competitor set forth in Exhibit A hereto, as applicable.

2.5 Except for death or Disability as provided in Section 2.3, or except as otherwise provided in a severance agreement, employment agreement or similar agreement with Grantee, if Grantee terminates his employment or if the Company terminates Grantee prior to the Vesting Date, for any reason, the Performance Stock shall cease to vest further, and all Shares of Performance Stock which had not vested prior to such termination shall be immediately forfeited, and Grantee shall have no further right or interest in or to such unvested Performance Stock.

2.6 Notwithstanding the other provisions of this Agreement, in the event of a Change in Control prior to the Vesting Date, all unvested Shares of Performance Stock (whether or not the corresponding Stock Appreciation Targets have been attained or the Target Date has occurred) shall become fully vested and nonforfeitable as of the date of the Change in Control. The Company shall transfer the Shares of Performance Stock that become vested pursuant to this Section 2.6 to an unrestricted account in the name of Grantee as soon as practical after the date of the Change in Control.

2.7 The Performance Stock may not be sold, assigned, transferred, pledged, or otherwise encumbered prior to the Vesting Date for such shares of Performance Stock.

3.1 The Performance Stock shall be registered in the name of Grantee only after the achievement of the Stock Appreciation Target (the “Vesting Start Date”) for such

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Shares of Performance Stock. The Company may issue stock certificates or evidence Grantee’s interest by using a restricted book entry account with the Company’s transfer agent. Physical possession or custody of any stock certificates that are issued shall be retained by the Company until such time as the Shares are vested in accordance with Section 2. The Company reserves the right to place a legend on such stock certificate(s) restricting the transferability of such certificates and referring to the terms and conditions (including forfeiture) of this Agreement and the Plan.

3.2 After the Vesting Start Date has occurred with respect to certain Performance Stock, Grantee shall be entitled to receive dividends or similar distributions declared on such Performance Stock and Grantee shall be entitled to vote such Performance Stock, provided that these rights shall cease in the event such Performance Stock is forfeited.

3.3 In the event of a Change in Capitalization, the number and class of Shares or other securities that Grantee shall be entitled to, and shall hold, pursuant to this Agreement shall be appropriately adjusted or changed by the Committee to reflect the Change in Capitalization in accordance with Section 4(d) of the Plan, provided that any such additional Shares or additional or different shares or securities shall remain subject to the restrictions in this Agreement.

3.4 Grantee represents and warrants that he is acquiring the Performance Stock for investment purposes only, and not with a view to distribution thereof. Grantee is aware that the Performance Stock may not be registered under the federal or any state securities laws and that in that event, in addition to the other restrictions on the Shares, they will not be able to be transferred unless an exemption from registration is available or the Shares are registered. By making this award of Performance Stock, the Company is not undertaking any obligation to register the Performance Stock under any federal or state securities laws.

Nothing in this Agreement or the Plan shall be interpreted or construed to confer upon Grantee any right with respect to continuance of employment by the Company or a subsidiary, nor shall this Agreement or the Plan interfere in any way with the right of the Company or a Subsidiary to terminate Grantee’s employment at any time. The Plan may be terminated at any time, and even if the Plan is not terminated, Grantee shall not be entitled to any additional awards under the Plan.

Grantee shall be responsible for all federal, state, and local income taxes payable with respect to this award of Performance Stock and dividends paid on unvested Performance Stock that has reached a Vesting Start Date. Grantee shall have the right to make such elections under the Internal Revenue Code of 1986, as amended, as are available in connection with this award of Performance Stock. The Company and Grantee agree to report the value of the Performance Stock in a consistent manner for federal income tax purposes. The Company shall have the right to retain and withhold from any payment of Performance Stock or cash the amount of taxes required by any government to be withheld or otherwise deducted and paid with respect

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to such payment. In furtherance thereof and, at its discretion, the Company may require Grantee to reimburse the Company for any such taxes required to be withheld and may withhold any distribution in whole or in part until the Company is so reimbursed. In lie