On October 6, 2009, the Compensation Committee (the "Committee") of the Board of Directors (the "Board") of Zep Inc. (the "Company") approved the following matters:

Amendment of Supplemental Deferred Savings Plan

The Committee approved an amendment (the "SDSP Amendment") to the Company's Supplemental Deferred Savings Plan (the "SDSP"), which is an unfunded, nonqualified plan under which key associates of the Company, including named executive officers (the "Named Executive Officers"), are able to defer a portion of their salary and annual incentive awards or other cash bonuses.

The SDSP Amendment modifies the SDSP by, among other things, establishing four classifications of eligible participants, with the particular eligibility criteria for each classification to be determined each plan year by the Company's Chief Executive Officer. Under the terms of the amended SDSP, classification 1 will generally include senior executive officers, classification 2 will generally include upper level officers, with classifications 3 and 4 being comprised of mid- to senior-level management and certain other associates of the Company. The Named Executive Officers will be eligible under the SDSP to defer a portion of their eligible compensation as determined by the Committee, and, unless otherwise determined by the Committee, will be eligible to receive annual matching contributions equal to 25% of their deferrals (up to a maximum deferral percentage of 5% of compensation). In addition, any Named Executive Officer that is determined to be a classification 1 participant will be eligible to receive an annual supplemental contribution of 5% of compensation, and any Named Executive Officer that is determined to be a classification 2 participant will be eligible to receive an annual supplemental contribution of 3% of compensation, unless otherwise determined by the Committee for any SDSP Plan Year. Any matching or supplemental contributions by the Company are contingent upon the participant making deferrals throughout the plan year equal to a minimum of 1% of their base salary.

Stock Matching Program

The Committee approved a stock matching program (the "Stock Matching Program") for certain executive officers of the Company, including Mr. Robert P. Collins, who is a Named Executive Officers (a "Stock Match Participant"). Pursuant to the Stock Matching Program, the Company will grant to each Stock Match Participant one or more restricted stock awards (the "Awards") in an amount that is equal to the number of shares of the Company's common stock purchased by such Stock Match Participant in the open market during a one year period beginning on October 6, 2009 and ending on October 7, 2010. Each Stock Match Participant is limited to three transactions on the open market for which he or she may receive Awards. The aggregate value of the Awards to each Stock Match Participant cannot exceed 100% of such Stock Match Participant's annual base salary in effect on January 1, 2010. The Awards will vest in three, substantially equal annual installments beginning on the first anniversary of the grant date. For all Awards, the Company will utilize a Restricted Stock Award Agreement, the form of which was attached as Exhibit 10.4 to the Company's Form 8-K filed with the Securities and Exchange Commission on September 8, 2009.

Management Compensation and Incentive Plan Rules for Fiscal Year 2010

The Committee adopted plan rules for annual incentive awards that may be earned by the Named Executive Officers for fiscal year 2010 under the Company's existing Management Compensation and Incentive Plan (the "MCIP"). The plan rules for fiscal year 2010 are substantially consistent with those from fiscal year 2009, subject to the following:

Target Bonus

The Committee established the following bonus targets for the Named Executive
Officers, which are stated as a percentage of salary paid:



     Named Executive Officer                                Bonus Target %
     John K. Morgan
     Chairman, President and Chief Executive Officer                    85 %
     Mark R. Bachmann
     Executive Vice President and Chief Financial Officer               50 %
     Robert P. Collins
     Vice President and Chief Administrative Officer                    45 %
     Jeffrey J. Sorensen
     Vice President, Chief Marketing Officer                            40 %
     C. Francis Whitaker, III
     Vice President, General Counsel and Secretary                      45 %

Company Financial Performance Measures

For 2010, the Company financial performance measures will consist of the following:

• fully diluted earnings per share (as calculated in accordance with GAAP);

• EBIT margin (to be calculated as earnings before interest and taxes divided by net sales); and

• free cash flow (to be calculated based on cash flow from operations less capital spending).

Under the plan rules for fiscal year 2010, the incentive opportunity for the Company financial performance portion of the 2010 annual incentive award will range from 0% to 600% of the target bonus opportunity, depending on the level of performance achieved for each financial goal, with each of the measures above receiving an approximately 1/3 weighting in determining the Company financial performance percentage. Achievement of performance levels is determined by the Committee following the completion of the fiscal year and amounts are subject to the application of negative discretion by the Committee.

2010 Base Salary

Based on a review conducted by the Committee's independent compensation consultant, and consideration of the fact that certain of the Named Executive Officers have not received increases in their base salary for as many as five years, the Committee approved annual base salaries for the Company's Named Executive Officers, effective as of January 1, 2010, as follows: $565,000 for John K. Morgan; $300,000 for Mark R. Bachmann; $235,000 for Robert P. Collins; $210,000 for Jeffrey J. Sorensen; and $190,000 for C. Francis Whitaker, III.

Fiscal Year 2009 Bonus Awards Pursuant to the MCIP

Pursuant to the plan rules that were adopted by the Committee in September 2008, the Committee approved bonus awards for the fiscal year ended August 31, 2009, payable on December 18, 2009 to the Named Executive Officers.

The Company's achievement of certain of the pre-established performance measures earned a payout of 28.2% of the target bonus amount for each individual, without the application of negative discretion. In addition, upon assessment of the Company's and each individual's performance during extraordinary economic times, the Committee awarded a discretionary bonus of 20.1% of the target bonus amount for each individual. Based on the foregoing, the Committee awarded executive officer bonuses as follows:

 Named Executive Officer     MCIP Bonus     Discretionary Bonus     Total Bonus Awarded
 John K. Morgan             $    119,850   $              88,825   $             208,675
 Mark R. Bachman                  40,885                  30,317                  71,202
 Robert P. Collins                27,910                  20,695                  48,605
 C. Francis Whitaker, III         22,835                  16,933                  39,768

Upon the Committee's October 6, 2009 approval and recommendation, the Board met and approved on October 7, 2009 amendments to certain employment-related agreements between the Company and John K. Morgan, the Company's Chairman, President and Chief Executive Officer, which amendments primarily involve several technical legal changes and certain other changes. A description of the material changes to those employment-related agreements is set forth below.

Amendment to Amended and Restated Letter Agreement

The Board and Committee approved an amendment (the "Letter Agreement Amendment") to the Amended and Restated Letter Agreement, by and between Mr. Morgan and the Company, dated as of July 23, 2007 (the "Letter Agreement"), in the form of the Letter Agreement Amendment, a copy which is filed herewith as Exhibit 10.1 and incorporated by reference herein. The Letter Agreement Amendment provides for, among other things: the insertion of a new Section 4.16 (with the previous . . .

On October 7, 2009, the Board declared a quarterly dividend of $0.04 per common share, payable on November 2, 2009 to stockholders of record as of October 19, 2009.

(d) Exhibits

10.1    Amendment to Amended and Restated Letter Agreement, dated as of July 23,
        2007 (Filed herewith).

10.2    Amendment No. 2 to Amended and Restated Change in Control Agreement, dated
        as of April 21, 2006 and as amended on July 23, 2007 (Filed herewith).

10.3    Amendment to Amended and Restated Severance Agreement, dated as of August
        1, 2005 (Filed herewith).