SEPARATION AGREEMENT

Exhibit 10.(b)

Zep Inc.

SEPARATION AGREEMENT

THIS AGREEMENT (the “Agreement”), made and entered into as of this 15th day of January, 2009, by and between Zep Inc., a Delaware corporation (the “Company”), and William A. Holl (the “Executive”).

WITNESSETH:

WHEREAS , Executive is a valued senior employee of the Company; and

WHEREAS , Executive wishes to retire from service with the Company; and

WHEREAS , the Company wishes to ensure that Executive will assist in the transition of his job responsibilities in order to minimize the business disruption to the Company stemming from his resignation and to establish Executives post-employment obligations to the Company, and the Company is prepared to provide Executive with certain benefits in consideration for these commitments; and

WHEREAS , the Company and Executive have determined that it is in their mutual best interests to enter into this Agreement;

NOW, THEREFORE , the parties hereby agree as follows:

Unless earlier terminated as hereinafter provided, this Agreement shall commence on the date hereof and shall expire automatically upon the date when all benefits due to Executive as set forth herein have been provided by the Company; provided, however, that certain provisions hereof shall survive any expiration or termination of this Agreement, to the extent set forth herein. As of the date hereof, this Agreement is intended to, and shall, supersede and replace in its entirety any prior severance agreement and the severance obligations contained in any employment letter agreement between Executive and the Company (or a predecessor to the Company).

2.1 “ Company ”. Zep Inc., a Delaware corporation, or any successor to its business and/or assets.

2.2 “ Date of Resignation ”. The agreed date of Executive’s resignation from service with the Company, January 15, 2009.

2.3 “ Section 409A ”. Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and rulings thereunder.

2.4 “ Separation Period ”. The period from Executive’s Date of Resignation through March 15, 2010.

This Agreement provides for the payment of compensation and benefits to Executive upon the event of his resignation from the Company. The Executive will be fully bound by all of the terms and conditions of this Agreement. Except as provided in the preceding sentences, the separation pay and benefits provided for in Section 4 herein shall be in lieu of any other severance pay to which the Executive may be entitled under any Company severance plan, program or arrangement for a termination or resignation of employment arguably covered by such circumstances.

Upon Executive’s resignation from the Company, he shall be entitled to the compensation and benefits described below, provided that Executive executes a valid General Release as set forth in Section 4.7 and Exhibit A hereto. Separation payments shall be payable ratably according to the Executive’s regular payroll period following the Date of Resignation, beginning upon the first payroll date following receipt by the Company of Executive’s General Release and the expiration of the applicable revocation period thereafter, and continuing through March 15, 2010; provided that in no event shall separation payments (other than distributions pursuant to the Company’s Supplemental Deferred Savings Plan) be made later than March 15, 2010, in order to ensure the applicability of the short term deferral exception of Section 409A.

4.1 Base Salary . Executive shall receive an amount equivalent to eighteen (18) months of his base salary (subject to withholding of all applicable taxes), to be paid ratably for the entire Separation Period (as defined in Section 2.4 above), payable in the same manner as it was being paid on his Date of Resignation.

4.2 Annual Bonus . Executive shall be paid a bonus in an amount equal to the greater of (i) the annual incentive bonus that would be paid or payable to Executive for the fiscal year of the Company during which Executive’s Date of Resignation occurs under the Company’s annual incentive plan (“Incentive Plan”), assuming the target level(s) of performance had been met for such fiscal year, multiplied by a fraction (the “Pro Rata Fraction”), the numerator of which is the number of days that have elapsed in the then current fiscal year through Executive’s Date of Resignation and the denominator of which is 365, or (ii) the annual incentive bonus that would be paid or payable to Executive for the fiscal year of the Company during which Executive’s Date of Resignation occurs under the Incentive Plan based upon the Company’s actual performance for such fiscal year, multiplied by the Pro Rata Factor. The bonus amount determined pursuant to Section 4.2(i) shall be paid to Executive as early as ten (10) days following Executive’s Date of Resignation, or upon receipt by the Company of Executive’s General Release and the expiration of the applicable revocation period, whichever is later, and any additional amount payable pursuant to Section 4.2(ii) shall be payable at the same time as bonuses are payable to other executives under the Incentive Plan.

4.3 Restricted Stock . Any Restricted Stock granted to Executive under the Zep Inc. Long-Term Incentive Plan (“LTIP”) or any predecessor plan for which the specific performance targets have been achieved and a Vesting Start Date (as defined in the agreement granting the Restricted Stock to Executive, the “Restricted Stock Agreement”) has been established as of Executive’s Date of Resignation shall become fully vested and nonforfeitable as of Executive’s Date of Resignation and, subject to the proviso at the end of this sentence, all Restricted Stock for which a Vesting Start Date has not been established shall be immediately forfeited; provided, that if the Restricted Stock Agreement granting the Restricted Stock to Executive provides for more favorable continued vesting after Executive’s Date of Resignation, the provisions of such Restricted Stock Agreement shall apply to the vesting of Executive’s Restricted Stock after the Date of Resignation. The Vested Value (as defined in the Restricted Stock Agreement) of the shares of Restricted Stock vesting pursuant to this Section 4.3 shall be delivered to Executive in the manner provided in Section 2.2 of the Restricted Stock Agreement as early as ten (10) days following Executive’s Date of Resignation, using Executive’s Date of Resignation as the date for determining the Vested Value, or upon receipt by the Company of Executive’s General Release and the expiration of the applicable revocation period, whichever is later. This Section 4.3 does not apply to Restricted Stock that only contains time-based vesting.

4.4 Health Care and Life Insurance . The health care (including dental and vision coverage, if applicable) and term life insurance coverages provided to Executive at his Date of Resignation shall be continued at the same level as for active executives and in the same manner as if he had not resigned his employment with the Company, beginning on the Date of Resignation and ending on the last day of the Separation Period. Any additional coverages Executive had upon his Date of Resignation, including dependent coverage, will also be continued for such period on the same terms, to the extent permitted by the applicable policies or contracts. Any costs Executive was paying for such coverages at the time of his resignation shall be paid by Executive by separate check payable to the Company each month in advance or, at Executive’s election, may be deducted from his base salary payments under Section 4.1. If the terms of the life insurance plan referred to in this Section 4.4, or the laws applicable to such plan, do not permit continued participation by Executive as required by this subsection, then the Company will arrange for other coverage satisfactory to Executive at the Company’s expense providing substantially identical benefits or, at the Company’s election, the Company will pay Executive an amount each month during the Separation Period equal to the costs to Executive for the coverage.

If the terms of the health care plan referred to in this Section 4.4 do not permit continued participation by Executive as required by this subsection, or if the healthcare benefits to be provided to Executive and his dependents pursuant to this Section 4.4 cannot be provided in a manner such that the benefit payments will be tax-free to Executive and his dependents, then the Company shall (A) pay to Executive each month during the Separation Period after Executive’s Date of Resignation an amount equal to the monthly rate for COBRA (as defined below) coverage under the healthcare plan that is then being paid by former active employees for the level of coverage that applies to Executive and his dependents, minus the amount active employees are then paying for such coverage, and (B) permit Executive and his dependents to elect to participate in the healthcare plan for the Separation Period upon payment of the applicable rate for COBRA coverage during the Separation Period. A benefit provided under

this Section 4.4 shall cease if Executive obtains other employment and, as a result of such employment, health care or life insurance benefits are available to Executive. This continued coverage shall run concurrent with any continuation coverage period available to the Executive under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”). At the end of the Separation Period, the Executive and/or his qualified beneficiaries shall be solely responsible for the payment of the applicable premium for any remaining period of COBRA continuation coverage.

4.5 Outplacement Services . Company will pay Executive a one-time cash payment in an amount equal to ten percent (10%) of Executive’s base salary to cover the cost of any outplacement services Executive may elect to retain, such payment to be made at the same time as the bonus amount described in Section 4.2(i) above.

4.6 Other Benefits . Except as expressly provided herein, all other fringe benefits provided to Executive as an active employee of the Company shall cease on his Date of Resignation, provided that any conversion or extension rights applicable to such benefits shall be made available to Executive at his Date of Resignation or when such coverages otherwise cease at the end of the Separation Period. Except as expressly provided herein, for all other plans sponsored by the Company, the Executive’s employment shall be treated as terminated on his Date of Resignation, and Executive’s right to benefits shall be determined under the terms of such plans; provided, however, in no event will Executive be entitled to severance payments or benefits under any other severance plan, policy, program or agreement of the Company.

4.7 Release of Claims . To be entitled to any of the compensation and benefits described above in this Section 4, Executive shall sign the General Release attached hereto as Exhibit A. No payments shall be made under this Section 4 until such release has been properly executed and delivered to the Company and until the expiration of the revocation period, if any, provided under the release. If the release is not properly executed by the Executive and delivered to the Company within the reasonable time periods specified in the release, the Company’s obligations under this Section 4 will terminate.

4.8 Nothing in this Agreement is intended to provide for the deferral of compensation within the meaning of Code Section 409A. All payments hereunder are intended to satisfy the separation pay provisions of Treas. Reg. §1.409A-1(b)(9), as may be amended.

5.1 Purpose and Reasonableness of Provisions . Executive acknowledges that during the term of this employment with the Company through and including the Date of Resignation, the Company has furnished to Executive Confidential Information and Trade Secrets (as defined in Sections 5.11(a) and 5.11(b) respectively) which could be used by a competitor of the Company to the Company’s substantial detriment. Moreover, the parties recognize that Executive, during the course of his employment with the Company, has developed important relationships with customers and others having valuable business relationships with the Company. In view of the foregoing, Executive acknowledges and agrees that the restrictive covenants contained in this Section 5 are reasonably necessary to protect the Company’s legitimate business interests and good will.

5.2 Proprietary Rights . All Confidential Information, Trade Secrets, and all physical and electronic embodiments thereof are confidential and are and will remain the sole and exclusive property of the Company. The Executive agrees that any copyright in the expression of such Confidential Information or Trade Secrets shall be the property of the Company, and that any patent rights and any invention or novel devices or processes developed by the use of such Confidential Information or Trade Secrets shall be the exclusive property of the Company.

5.3 Trade Secrets and Confidential Information . During the term of employment and for a period of (i) four (4) years thereafter for Confidential Information that is not a trade secret under Georgia law, or (ii) until the Confidential Information that is a trade secret under Georgia law ceases to qualify as such, Executive agrees that he shall protect any such Confidential Information and shall not, except in connection with the performance of his remaining duties for the Company, disclose or otherwise copy, reproduce, use, distribute or otherwise disseminate any such Confidential Information, or any physical embodiments thereof, to any person or entity. Executive further agrees that he shall not, except in connection with the performance of his remaining duties for the Company, disclose or otherwise copy, reproduce, distribute or otherwise disseminate any Trade Secrets, or any physical embodiments thereof, to any person or entity. Executive will, in no event, take any action causing, or fail to take any action necessary in order to prevent any Confidential Information or Trade Secrets disclosed to or developed by Executive to lose their character as such; provided, however, that Executive may make disclosures required by a valid order or subpoena issued by a court or administrative agency of competent jurisdiction, in which event Executive will promptly notify the Company of such order or subpoena to provide the Company an opportunity to protect its interests. Executive’s obligations under this Section 5.3 shall survive any expiration or termination of this Agreement, provided that Executive may after such expiration or termination disclose Confidential Information or Trade Secrets with the prior written consent of the Chief Executive Officer.

The Executive attests that, during his employment with the Company, he has not and will not offer, disclose or use on Executive’s own behalf or on behalf of the Company, any information Executive received prior to employment by the Company, which was supplied to Executive confidentially or which Executive should reasonably know to be confidential, to any person, organization or entity other than the Company without the written approval of such person, organization or entity.

Nothing contained herein shall be in derogation or a limitation of the rights of the Company to enforce its rights or the duties of Executive under then applicable Georgia law relating to Trade Secrets including, in particular, the Georgia Trade Secrets Act, O.C.G.A. Sections 10-1-760, et seq .

5.4 Return of Confidential Information and Trade Secrets; Return of Property . Upon request by the Company and, in any event, upon Executive’s Date of Resignation, Executive will promptly deliver to the Company all property belonging to the Company, including but without limitation, all Confidential Information and Trade Secrets and all embodiments thereof, all Company files, customer lists, management reports, memoranda, research, Company forms, financial data and reports and other documents (including all such

data and documents in electronic form) supplied to or created by him in connection with his employment hereunder (including all copies of the foregoing) in his possession or control, and all of the Company’s equipment and other materials in his possession or control. Executive’s obligations under this Section 5.4 shall survive any expiration or termination of this Agreement.

5.5 Inventions . The Executive does hereby assign to the Company the entire right, title and interest in any Invention (as defined in Section 5.11(d) below) which is made, conceived, either solely or jointly with others, during his employment with the Company. The Executive agrees promptly to disclose to the Company all such Inventions. The Executive will, if requested, promptly execute and deliver to the Company a specific assignment of title for an Invention and will, at the expense of the Company, take all reasonably required action by the Company to patent, copyright or otherwise protect the Invention.

5.6 Non-Competition . The Executive agrees that, while employed by the Company and for a period equal to eighteen (18) months following the Date of Resignation (the “Restricted Period”), Executive shall comply with the non-competition restrictions attached hereto as Exhibit B.

5.7 Non-Solicitation of Customers/Suppliers . The Executive agrees that, during the course of his employment with the Company, and for a period equal to the Restricted Period thereafter, the Executive will not directly or indirectly (i) divert or attempt to divert any person, concern or entity which is furnished products or services by the Company from doing business with the Company or otherwise change its relationship with the Company; or (ii) induce or attempt to induce any customer, supplier or service provider to cease being a customer, supplier or service provider of the Company or to otherwise change its relationship with the Company.

5.8 Non-Solicitation of Employees . The Executive agrees that, during the course of employment with the Company, and for a period equal to the Restricted Period thereafter, the Executive shall not, directly or indirectly, whether on behalf of the Executive or others, solicit, lure or attempt to solicit or lure away from employment by the Company any person employed by the Company. The provision of this paragraph shall only apply to those persons employed by the Company at the time of solicitation or attempted solicitation.

5.9 Injunctive Relief . Executive acknowledges that if he breaches or threatens to breach any of the provisions of this Section 5, his actions may cause irreparable harm and damage to the Company which could not be compensated by damages alone. Accordingly, if Executive breaches or threatens to breach any of the provisions of this Section 5, the Company shall be entitled to seek injunctive relief, in addition to any other rights or remedies the Company may have. Executive hereby waives the requirement for a bond or other security by the Company as a condition to seeking injunctive relief. The existence of any claim or cause of action by Executive against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of Executive’s agreements under this Section 5.

5.10 Provisions Severable . If any provision in this Section 5 is determined to be in violation of any law, rule or regulation or otherwise unenforceable, and cannot be modified to be enforceable, such determination shall not affect the validity of any other provisions of this Agreement, but such other provisions shall remain in full force and effect. Each and every provision, paragraph and subparagraph of this Section 5 is severable from the other provisions, paragraphs and subparagraphs and constitutes a separate and distinct covenant.

5.11 Definitions . For purposes of this Section 5, the following definitions shall apply:

a. “Confidential Information” means:

(i) information relating to the Company’s Business (as defined in Exhibit B hereto) (A) which Executive develops, helps develop in conjunction with others, creates, or becomes aware as a consequence of or through Executive’s employment with the Company or any other arrangement or relationship with the Company; (B) which has value to the Company, actual or potential, from not being generally known by others who can obtain economic value from its disclosure or use (whether or not such material or information is marked “confidential”). For purposes of this Agreement, subject to the foregoing, and according to terminology commonly used by the Company, the Company’s Confidential Information shall include, but not be limited to, information pertaining to: (1) Business Opportunities (as defined below); (2) data and compilations of data relating to the Company’s Business; (3) compilations of information about, and communications and agreements with, customers and potential customers of the Company; (4) computer software, hardware, network and internet technology utilized, modified or enhanced by the Company or by Executive in furtherance of Executive’s duties with the Company; (5) compilations of data concerning Company products, services, customers, and end users including but not limited to co