CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement (the “Agreement”) is made and entered into as
of October 15, 2015 (the “Effective Date”), by and between Lawson Products,
Inc., an Illinois corporation (the “Company”), and Shane McCarthy (the
“Executive”).
WHEREAS, the Company wishes to assure itself of the continuity of the
Executive’s services and has determined that it is appropriate that the
Executive receive certain payments in the event that the Executive’s employment
is terminated under specified circumstances as more fully described below; and
WHEREAS, the Company and the Executive accordingly desire to enter into this
Agreement on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the parties hereto agree as follows:
1.    Agreement Term. The “Term” of this Agreement shall begin on the Effective
Date and shall continue through the one-year anniversary of the Effective Date;
provided, however, that as of the one-year anniversary of the Effective Date and
on each one-year anniversary thereafter, the Term shall automatically be
extended for one additional year unless, not later than 30 days prior to such
applicable anniversary date, either party shall have given written notice to the
other party that it does not wish to extend the Term; provided, further, that if
a Change in Control shall have occurred on or prior to the date that this
Agreement would otherwise terminate, and notwithstanding any prior notice from
one party to the other party to the contrary, the Term of this Agreement shall
automatically be deemed extended and shall continue until the one-year
anniversary of the date on which the Change in Control occurs.
2.    Certain Definitions. In addition to terms otherwise defined herein, the
following capitalized terms used in this Agreement shall have the meanings
specified below:
(a)    Accrued Compensation. The term “Accrued Compensation” shall mean:
(i)
any accrued and unpaid base salary and any accrued and unused vacation pay
through the effective date of Executive’s termination;

(ii)
any annual incentive bonus earned with respect to a prior year and unpaid as of
the effective date of Executive’s termination;

(iii)
any additional payments, awards, or benefits, if any, which Executive is
eligible to receive pursuant to the terms of any applicable Benefit Plans; and

(iv)
all post-employment benefits required under applicable law.

(b)    Benefit Plans. The term “Benefit Plans” means the following standard
benefits, and any other benefit plans in which Executive may participate
pursuant to such plan’s terms, it being understood and agreed that the Company
or Parent may modify or terminate such benefits from time to time to the extent
and on such terms as the Company or Parent shall determine in its sole
discretion:

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(i)
coverage under the Company’s group health plan on such terms as provided to
other Company officers;

(ii)
long-term disability insurance coverage;

(iii)
group term life insurance;

(iv)
accidental death insurance; and

(v)
participation in the Company’s 401(k) plan, profit-sharing retirement plan and
executive deferral plan.

(c)    Board. The term “Board” shall mean the Board of Directors of Parent.
(d)    Cause. The term “Cause” shall mean any of the following:
(i)
violation by Executive of any agreement between Executive and the Company or any
law relating to non-competition, trade secrets, inventions, non-solicitation or
confidentiality;

(ii)
material breach or default of any of Executive’s duties or other obligations or
covenants under this Agreement, which has not been cured within 30 days of
written notice thereof to Executive;

(iii)
Executive’s gross negligence, dishonesty or willful misconduct;

(iv)
any act or omission by Executive which has a material adverse effect on the
Company’s business, reputation, goodwill or customer relations;

(v)
conviction of or pleading nolo contendere to a crime by Executive (other than
traffic related offenses);

(vi)
any act or omission by Executive which, at the time it occurs, is in material
violation of any Company policy, such as they now exist or hereafter are
supplemented, amended, modified or restated; or

(vii)
an act of fraud or embezzlement or the misappropriation of property by
Executive.

(e)    Change in Control. The term “Change in Control” shall mean the occurrence
of any of the following:
(i)
any “person” or “group” of “persons” (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended, and the rules
promulgated thereunder) is or becomes the beneficial owner, directly or
indirectly, of securities representing voting power, as of the date of
determination, of then outstanding voting securities representing 40% or more of
the combined voting power of Parent’s then outstanding securities as of such
date of determination; or

(ii)
there is a merger, consolidation or reorganization involving Parent, or any
direct or indirect subsidiary of Parent, unless:

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(A)
the stockholders of Parent immediately before such merger, consolidation or
reorganization will own, directly or indirectly, immediately following such
merger, consolidation or reorganization, at least fifty percent (50%) of the
combined voting power of the outstanding voting securities of the corporation
resulting from such merger, consolidation or reorganization (the “Surviving
Corporation”) or any parent thereof in substantially the same proportion as
their ownership of the voting securities of Parent immediately before such
merger, consolidation or reorganization; and

(B)
the individuals who were members of the Board immediately prior to the execution
of the agreement providing for such merger, consolidation or reorganization
constitute a majority of the members of the board of directors of the Surviving
Corporation (or parent thereof); and

(C)
no “person” or “group” of “persons” as defined above is the beneficial owner of
forty percent (40%) or more of the combined voting power of the then outstanding
voting securities of the Surviving Corporation (or parent thereof); or

(iii)
there is a sale or other disposition of all or substantially all of the assets
of Parent to an entity other than an entity:

(A)
of which at least fifty percent (50%) of the combined voting power of the
outstanding voting securities are owned, directly or indirectly, by stockholders
of Parent in substantially the same proportion as their then current ownership
of the voting securities of Parent; and

(B)
of which a majority of the board of directors is comprised of the individuals
who were members of the Board immediately prior to the execution of the
agreement providing for such sale or disposition; and

(C)
of which no “person” or “group” of “persons” as defined above is the beneficial
owner of forty percent (40%) or more of the combined voting power of the then
outstanding voting securities of such entity (or parent thereof); or

(iv)
Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the
effective date hereof whose election, or nomination for election by Parent
stockholders, was approved by a vote of at least four-fifths (4/5) of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, unless any such individual’s
initial assumption of office occurs as a result of either an actual or
threatened election contest (including, but not limited to, a consent
solicitation).

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(f)    Code. The term “Code” shall mean the Internal Revenue Code of 1986, as
amended.
(g)    Code Section 409. The term “Code Section 409A” shall mean Section 409A of
the Code and all regulations issued thereunder and applicable guidance thereto.
(h)    Competitive Products, Systems and Services. The term “Competitive
Products, Systems and Services” shall mean products, systems or services in
existence or under development during Executive’s employment with the Company
which are the same as or substantially similar to or functional equivalents of
those of the Lawson Entities including, without limitation, those which are or
may be provided to the Lawson Entities’ customers on behalf of the Lawson
Entities by employees, agents, or sales representatives of the Lawson Entities.
(i)    Confidential Information. The term “Confidential Information” shall mean
all information, including, but not limited to, trade secrets disclosed to
Executive or known by Executive as a consequence of or through Executive’s
employment by the Company, concerning the products, services, systems, customers
and agents of the Lawson Entities, and specifically including without
limitation: computer programs and software, unpatented inventions, discoveries
or improvements; marketing, organizational and product research and development;
marketing techniques; promotional programs; compensation and incentive programs;
customer loyalty programs; inventory systems; business plans; sales forecasts;
personnel information, including but not limited to the identity of employees
and agents of the Lawson Entities, their responsibilities, competence,
abilities, and compensation; pricing and financial information; customer lists
and information on customers or their employees, or their needs and preferences
for the Lawson Entities’ Products, Systems and Services; information concerning
planned or pending acquisitions or divestitures; and information concerning
purchases of major equipment or property, and which:
(i)
has not been made generally available to the public; and

(ii)
is useful or of value to the current or anticipated business or research or
development activities of the Lawson Entities, or of any customer or supplier of
the Lawson Entities.

Confidential Information shall not include information which:
(x)    is in or hereafter enters the public domain through no fault of
Executive;

(y)
is obtained by Executive from a third party having the legal right to use and to
disclose the same without restriction; or

(z)
was in the possession of Executive prior to receipt from the Lawson Entities (as
evidenced by Executive’s written records predating the first date of employment
with the Company).

Confidential Information also does not include Executive’s general skills and
experience as defined under the governing law of this Agreement.
(j)    Equity Awards. The term “Equity Awards” shall mean the stock options,
restricted stock, stock awards, phantom stock units, stock appreciation units,
stock performance rights, shareholder value appreciation rights or other such
equity-based compensation as shall have been granted to Executive on or before
the effective date of the termination of Executive’s employment.
(k)    Good Reason. The term “Good Reason” shall mean any of the following:
(i)
a material diminution in Executive’s base compensation;

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(ii)
a material diminution in Executive’s authority, duties or responsibilities;

(iii)
a material change (with such change to be not less than 50 miles) in the
geographic location at which Executive must perform Executive’s services; or

(iv)
any other action or inaction that constitutes a material breach by the Company
of this Agreement.

(l)    Lawson Entities. The term “Lawson Entities” shall mean Parent, any
Subsidiary of Parent and any other entity in which any one or more of them has
an ownership interest at any time during Executive’s employment with the Company
and during the Restriction Period whether such entity is in the United States or
elsewhere.
(m)    Lawson Entities’ Products, Systems and Services. The term “Lawson
Entities’ Products, Systems and Services” shall mean:
(i)
the acquisition for and the distribution and sale of fasteners, parts, hardware,
pneumatics, hydraulic and other flexible hose fittings, tools, safety items and
electrical and shop supplies, automotive and vehicular products, chemical
specialties, maintenance chemicals and other chemical products, welding products
and related items, all as more particularly described in the Lawson Entities’
sales kits and manuals;

(ii)
the sale and distribution and the providing of systems and services related to
the items described in clause (i);

(iii)
the manufacture, sale and distribution of production and specialized parts and
supplies described in clause (i);

(iv)
the provision of just-in-time inventories of component parts described in clause
(i) to original equipment manufacturers and of maintenance and repair parts
described in clause (i) to a wide variety of users; and

(v)
the provision of in-plant inventory systems and of electronic vendor-managed,
inventory systems to various customers, related to the items described in clause
(i).

(n)    Parent. The term “Parent” shall mean Lawson Products, Inc., a Delaware
corporation.
(o)    Restriction Period. The term “Restriction Period” shall mean the period
of time in which Executive is employed by the Company and a period of twelve
months after the effective date of Executive’s termination.
(p)    Section 409A Change in Control. The term “Section 409A Change in Control”
means any “change in control event” within the meaning of Code Section 409A
determined in accordance with the uniform methodology and procedures adopted by
the Company.
(q)    Subsidiary. The term “Subsidiary” means, with respect to any person or
entity, any corporation, association or other entity of which more than 50% of
the combined voting power is owned, directly or indirectly, by such person or
entity and one or more other Subsidiaries of such person or entity.

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(r)    Unauthorized Person or Entity. The term “Unauthorized Person or Entity”
shall mean any individual or entity who or which has not signed an appropriate
secrecy or confidentiality agreement with the Lawson Entities, or is not a
current or target customer with whom Confidential Information is shared in the
mutual interest of that person or entity and the Lawson Entities.
3.    Payments Due Upon Specified Terminations.
(a)    Payments Due Upon Termination Without Cause by the Company or for Good
Reason by Executive After a Change in Control. In lieu of the payments and other
benefits due under any other severance policy maintained by or on behalf of the
Company in which Executive is otherwise entitled to participate, in the event
the Company terminates Executive’s employment without “Cause” or if the
Executive terminates Executive’s employment for “Good Reason”, but only in each
case within one year following a Change in Control, the Company shall have no
obligation to Executive, except:
(i)
the Company shall pay Executive any Accrued Compensation;

(ii)
the Company shall pay Executive (x) an amount equal to one times Executive’s
then current annual base salary, and (y) an amount equal to the greater of (A)
Executive’s target annual incentive bonus with respect to the year in which
Executive’s termination occurs or (B) the annual incentive bonus most recently
paid to Executive. Subject to Section 3(b), such amounts shall be paid in a lump
sum, to the extent a Section 409A Change in Control has occurred
contemporaneously with the Change in Control (or anytime in the calendar year
prior to the effective date of Executive’s termination) no later than 30 days
after the effective date of Executive’s termination, or to the extent a Section
409A Change in Control has not occurred during such period, they shall be paid
in twelve equal monthly installments commencing one month after the effective
date of Executive’s termination;

(iii)
Executive shall continue to be covered under the Company’s group health plan as
set forth in the definition of “Benefit Plans”, including any spousal and
dependent coverage, at active employee rates, for twelve months after the
effective date of Executive’s termination (which coverage may result in imputed
income), and, thereafter, Executive shall be eligible to exercise Executive’s
rights to COBRA continuation coverage with respect to such group health plan for
Executive, and, where applicable, Executive’s spouse and eligible dependents, at
Executive’s expense; and

(iv)
all of Executive’s outstanding Equity Awards, if any, shall immediately vest
upon the effective date of Executive’s termination to the extent not already
vested, and Executive shall have until the earlier of (A) ninety (90) days
following the effective date of Executive’s termination (or such longer exercise
period that may be provided in an award agreement evidencing such Equity Award)
and (B) the term of such equity Award to exercise any vested Equity Award that
is subject to being exercised.

(b)    Six (6) Month Delay. If, at the time Executive becomes entitled to
payments and benefits under Section 3(a) of this Agreement (“Severance
Payment”), Executive is a Specified Employee (within the meaning of Code Section
409A and using the identification methodology selected by the Company from time
to time), then, notwithstanding any other provision in Section 3(a) to the
contrary, the following

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provision shall apply. No Severance Payment considered by the Company in good
faith to be deferred compensation under Code Section 409A that is payable upon
Executive’s separation from service (as defined and determined under Code
Section 409A), and not subject to an exception or exemption thereunder, shall be
paid to Executive until the date that is six (6) months after Executive’s
effective date of termination. Any such Severance Payment that would otherwise
have been paid to Executive during this six-month period shall instead be
aggregated and paid to Executive on or as soon as administratively feasible
after the date that is six (6) months after Executive’s effective date of
termination, but not later than 60 days after such date. Any Severance Payment
to which Executive is entitled to be paid after the date that is six (6) months
after Executive’s effective date of termination shall be paid to Executive in
accordance with the terms of Section 3(a).
(c)    Release. Executive shall not be entitled to receive any of the payments
or benefits set forth in this Section 3 (except Accrued Compensation), and said
payments and benefits shall be forfeited without further action by the Company,
unless Executive (or if applicable, Executive’s beneficiaries and/or estate)
executes a general release substantially in the form of Exhibit A (the “General
Release”) and, on or prior to the 60th day following the date of termination (or
such shorter period as set forth therein), such General Release becomes
effective and irrevocable in accordance with the terms thereof. With respect to
any of the payments or benefits pursuant to this Section 3 considered by the
Company in good faith to be deferred compensation under Code Section 409A, any
amounts that would otherwise be payable during the 60-day period in the absence
of the preceding General Release requirement shall be payable and effective on
the 60th day after Executive’s termination of employment.
(d)    Additional Provisions for Termination for Good Reason. Executive is
entitled to terminate Executive’s employment for Good Reason only if:
(i)
one or more of the conditions constituting Good Reason occurs without
Executive’s written consent;

(ii)
Executive provides notice to the Company of the existence of a condition
constituting Good Reason within 15 days of the initial occurrence of such
condition;

(iii)
the Company fails to remedy such condition constituting Good Reason within 30
days of being provided notice of such condition by Executive; and

(iv)
Executive voluntarily terminates Executive’s employment within 15 days of the
expiration of the remedy period specified in clause (iii).

(e)    Other Events of Employment Termination. If the Company terminates
Executive’s employment with “Cause” or if Executive terminates Executive’s
employment for any reason not constituting “Good Reason”, the Company shall have
no obligation to Executive, except that the Company shall pay Executive any
Accrued Compensation.
4.    Protection of Company Assets
(a)    Non-Competition. Executive expressly agrees that, during the Restriction
Period, provided that there shall not have occurred and be continuing any
material non-compliance by the Company with its obligations under this
Agreement, Executive shall not, in the United States, Canada and Mexico,
directly or indirectly, as an owner, officer, director, employee, agent,
advisor, financier, or in any other form or capacity, on behalf of Executive or
any other person, firm or other business entity, engage in or be concerned

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with any Competitive Products, Systems and Services, or any other duties or
pursuits for monetary gain which interfere with or restrict Executive’s
activities on behalf of the Lawson Entities or constitute competition with the
business of the Lawson Entities as conducted or proposed to be conducted during
the term of this Agreement or, with respect to applicable periods following
Executive’s termination, as conducted or proposed to be conducted as of the date
of Executive’s termination. The foregoing notwithstanding, nothing herein
contained shall be deemed to prevent Executive from investing Executive’s money
in the capital stock or other securities of any corporation whose stock or
securities are publicly-owned or are regularly traded on any public exchange,
provided that Executive does not own more than a one percent (1%) interest
therein.
(b)    Confidentiality. Executive hereby acknowledges that, during the course of
Executive’s employment, Executive has and will learn or develop Confidential
Information in trust and confidence. Executive agrees to use the Confidential
Information solely for the purpose of performing Executive’s duties on behalf of
the Lawson Entities and not for Executive’s own private use or commercial
purposes. Executive acknowledges that unauthorized disclosure or use of
Confidential Information, other than in discharge of Executive’s duties, will
cause the Lawson Entities irreparable harm. Executive shall maintain
Confidential Information in strict confidence at all times and shall not divulge
Confidential Information to any Unauthorized Person or Entity, or use in any
manner, or knowingly allow another to use, any Confidential Information, without
the Company’s prior written consent, during the term of employment or
thereafter, for as long as such Confidential Information remains confidential.
Executive further acknowledges that the Lawson Entities operate and compete
internationally and that the Lawson Entities will be harmed by the unauthorized
disclosure or use of Confidential Information regardless of where such
disclosure or use occurs, and that therefore this confidentiality agreement is
not limited to any single state or other jurisdiction. Nothing in this Agreement
shall be construed to prohibit Executive from reporting possible violations of
law or regulation to any governmental agency or entity, including but not
limited to the Department of Justice, the Securities and Exchange Commission and
any agency inspector general, or making other disclosures that are protected
under the whistleblower provisions of law or regulation.
(c)    Non-Solicitation. During the Restriction Period, provided that there
shall not have occurred and be continuing any material non-compliance by the
Company with its obligations under this Agreement, Executive shall not, directly
or indirectly, for himself or on behalf of any person, firm, or other entity,
solicit, induce or encourage any person to leave her/his employment, agency or
office with the Lawson Entities. During the Restriction Period, provided that
there shall not have occurred and be continuing any material non-compliance by
the Company with its obligations under this Agreement, Executive shall not,
directly or indirectly, for Executive or on behalf of any person, firm or other
entity, hire or retain or participate in hiring or retaining any person who then
is an employee of or agent for the Lawson Entities or any person who has been an
employee of or agent for the Lawson Entities at any time in the ninety (90) days
prior to termination of Executive’s employment, unless the Company is informed
and gives its approval in writing prior to the hiring or retention.
Given Executive’s office and Executive’s participation in the development,
sales, marketing, servicing and provision of the Lawson Entities’ Products,
Systems and Services, Executive acknowledges that Executive has and will learn
or develop Confidential Information relating to the development, sales,
marketing, servicing or provision of the Lawson Entities’ Products, Systems and
Services, and the Lawson Entities’ customers and prospective customers.
Executive further acknowledges that the Lawson Entities’ relationships with its
customers have substantial value to the Lawson Entities. Therefore, during the
Restriction Period, provided that there shall not have occurred and be
continuing any material non-compliance by the Company with its obligations under
this Agreement, Executive shall not, directly or indirectly, for Executive or on
behalf of any person, firm, or other entity, solicit or sell, attempt to sell,
or supervise, participate in, or assist the sale or solicitation of Competitive
Products and Systems to any person, firm or

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other entity to which the Lawson Entities sold any of the Lawson Entities’
Products, Systems and Services during the last two (2) years of Executive’s
employment with the Company prior to the effective date of termination. However,
this Section 4(c) shall not prohibit the solicitation of any actual or potential
customer of the Lawson Entities which does not fall within the preceding
description. This Section 4(c) is independent of the obligations of
confidentiality under this Agreement and the non-compete provisions of this
Agreement.
(d)    Return of Property. All notes, lists, reports, sketches, plans, data
contained in computer hardware or software, memoranda or other documents
concerning or related to the Lawson Entities’ business which are or were
created, developed, generated or held by Executive during employment, whether
containing or relating to Confidential Information or not, are the property of
the Lawson Entities and shall be promptly delivered to the Company upon
termination of Executive’s employment for any reason whatsoever. During the
course of employment, Executive shall not remove any of the above property,
including but not limited to, Confidential Information, or reproductions or
copies thereof, or any apparatus containing any such property or Confidential
Information, from the Company’s premises without prior written authorization
from the Company, other than in the normal execution of Executive’s duties.
(e)    Assignment of Intellectual Property Rights. Executive agrees to assign to
the Company any and all intellectual property rights including patents,
trademarks, copyrights and business plans or systems developed, authored or
conceived by Executive, whether alone or jointly, while employed by and relating
to the business of the Lawson Entities. Executive agrees to cooperate with the
Company to perfect ownership rights thereof in the Company. This agreement does
not apply to an invention for which no equipment, supplies, facility or
Confidential Information was used and which was developed entirely on
Executive’s own time, unless: (1) the invention relates to the business of the
Lawson Entities or to actual or anticipated research or development of the
Lawson Entities; or (2) the invention results from any work performed by
Executive for the Lawson Entities.
(f)    Unfair Trade Practices. During the term of this Agreement and at all
times thereafter, Executive shall not, directly or indirectly, engage in or
assist others in engaging in any unfair trade practices with respect to the
Lawson Entities.
(g)    Remedies. Executive acknowledges that failure to comply with the terms of
this Section 4 will cause irreparable loss and damage to Company. Therefore,
Executive agrees that, in addition and cumulative to any other remedies at law
or equity available to the Company for Executive’s breach or threatened breach
of this Agreement, the Company is entitled to specific performance or injunctive
relief against Executive to prevent such damage or breach, and a temporary
restraining order and preliminary injunction may be granted to the Company for
this purpose immediately at its request upon commencement of any suit, without
prior notice and without posting any bond. The existence of any claim or cause
of action Executive may have against the Company will not constitute a defense
thereto. In addition, the Company will be relieved of any obligation to provide
to Executive any and all termination payments and benefits (excepting Accrued
Compensation) which would otherwise occur, be continued, or become due and
payable under this Agreement following such breach or threatened breach, except
that such payments and benefits shall accrue during the period of alleged
threatened breach or alleged breach and shall be due and payable to Executive
immediately upon either (a) a determination by the Company or arbitrator or
court, or (b) agreement of the parties, that Executive was not in breach. Each
party agrees that all remedies expressly provided for in this Agreement are
cumulative of any and all other remedies now existing at law or in equity. In
addition to the remedies provided in this Agreement, the parties will be
entitled to avail themselves of all such other remedies as may now or hereafter
exist at law or in equity for compensation, and for the specific enforcement of
the covenants contained in this Agreement. Resort to any remedy provided for in
this Section 4 or provided for by law will not prevent the concurrent or
subsequent employment of any other appropriate remedy or remedies, or preclude a
recovery of monetary damages and compensation. Each party agrees that

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no party hereto shall be required to post a bond or other security to seek an
injunction. In the event that a court of competent jurisdiction declares that
any of the remedies outlined in this Section 4(g) are unavailable as a matter of
law, the remainder of the remedies outlined in this Section 4(g) shall remain
available to the Company.
(h)    Enforceability. If any of the provisions of this Section 4 are deemed by
a court or arbitrator having jurisdiction to exceed the time, geographic area,
or activity limitations the law permits, the limitations will be reduced to the
maximum permissible limitation, and Executive and the Company authorize a court
or arbitrator having jurisdiction to reform the provisions to the maximum time,
geographic area, and activity limitations the law permits; provided, however,
that such reductions apply only with respect to the operation of such provision
in the particular jurisdiction in which such adjudication is made.
(i)    Sufficiency of Consideration. Executive acknowledges that the
consideration that Executive will receive pursuant to this Agreement serves as
sufficient consideration for Executive’s promises to abide by the restrictive
covenants set forth in this Section 4.
5.    Governing Law and Disputes.
(a)    This Agreement shall be interpreted and enforced in accordance with the
laws of the State of Illinois, without regard to its conflict of law principles.
(b)    The Company and Executive agree to attempt to resolve any dispute between
them related to this Agreement quickly and fairly, and in good faith. Should
such a dispute remain unresolved, the Company and Executive irrevocably and
unconditionally agree to submit to the exclusive jurisdiction of the courts of
the State of Illinois and of the United States located in Chicago, Illinois over
any suit, action or proceeding arising out of or relating to this Agreement. The
Company and Executive irrevocably and unconditionally agree to personal
jurisdiction and venue of any such suit, action or proceeding in the courts of
the State of Illinois or of the United States located in Chicago, Illinois.
6.    Cooperation After Termination of Employment. Following termination of
Executive’s employment, regardless of the reason for termination, Executive will
reasonably cooperate with the Company and Parent in the prosecution or defense
of any claims, controversies, suits, arbitrations or proceedings involving
events occurring prior to the termination of employment. Executive acknowledges
that in light of Executive’s position with the Company, Executive is in the
possession of Confidential Information that may be privileged under the
attorney-client and/or work product privileges. Executive agrees to maintain the
confidences and privileges of the Company and Parent and acknowledges that any
such confidences and privileges belong solely to the Company and Parent and can
only be waived by the Company or Parent, as applicable, not Executive. In the
event Executive is subpoenaed to testify or otherwise requested to provide
information in any matter, including without limitation, any court action,
administrative proceeding or government audit or investigation, relating to the
Company or Parent, Executive agrees that: (a) he will promptly notify the
Company and Parent of any subpoena, summons or other request to testify or to
provide information of any kind no later than three (3) days after receipt of
such subpoena, summons or request and, in any event, prior to the date set for
him to provide such testimony or information; (b) he will cooperate with the
Company and Parent with respect to such subpoena, summons or request for
information; (c) he will not voluntarily provide any testimony or information
without permission of the Company unless otherwise required by law; and (d) he
will permit the Company to be represented by an attorney of the Company’s
choosing at any such testimony or with respect to any such information to be
provided, and will follow the instructions of the attorney designated by the
Company with respect to whether testimony or information is privileged by the
attorney-client and/or work product privileges of the Company or Parent, unless
otherwise required by law. The parties agree that the Company shall be
responsible for all reasonable

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expenses of Executive incurred in connection with the fulfillment of Executive’s
obligations under this Section 6. The parties agree and acknowledge that nothing
in this Section 6 is meant to preclude Executive from fully and truthfully
cooperating with any government investigation.
7.    Miscellaneous.
(a)    Superseding Effect. The Agreement supersedes all prior or contemporaneous
negotiations, commitments, agreements, and writings, and expresses the entire
agreement between the parties with respect to the payment of benefits upon a
termination of Executive’s employment with the Company within one year following
a Change in Control; provided, however, that the terms of any Benefit Plans will
remain applicable to the particular Benefit Plan, except as expressly modified
herein. All such other negotiations, commitments, agreements and writings will
have no further force or effect, and the parties to any such other negotiation,
commitment, agreement or writing will have no further rights or obligations
thereunder. The parties agree and acknowledge that the definitions of terms
applicable to this Agreement may be different than the definitions of those same
terms in Benefit Plans and may result in seemingly contradictory results. The
parties agree and acknowledge that such seemingly contradictory results are
intended, and that this Agreement shall be governed solely by the terms and
definitions set forth herein and that the Benefit Plans shall be governed solely
by the terms and definitions set forth in the Benefit Plans, except as expressly
modified herein.
(b)    Amendment and Modification. Except as provided in Section 7(c), neither
Executive nor the Company may modify, amend, or waive the terms of this
Agreement other than by a written instrument signed by Executive and the
Company. Either party’s waiver of the other party’s compliance with any specific
provision of this Agreement is not a waiver of any other provision of this
Agreement or of any subsequent breach by such party of a provision of this
Agreement. No delay on the part of any party in exercising any right, power or
privilege hereunder will operate as a waiver thereof,
(c)    Section 409A. It is also the intention of this Agreement that all income
tax liability on payments made pursuant to this Agreement or any Benefit Plans
be deferred until Executive actually receives such payment to the extent Code
Section 409A applies to such payments, and this Agreement shall be interpreted
in a manner consistent with this intent. Therefore, if any provision of this
Agreement or any Benefit Plans is found not to be in compliance with any
applicable requirements of Code Section 409A, that provision will be deemed
amended and will be construed and administered, insofar as possible, so that
this Agreement and any Benefit Plans, to the extent permitted by law and deemed
advisable by the Company, do not trigger taxes and other penalties under Code
Section 409A; provided, however, that Executive will not be required to forfeit
any payment otherwise due without Executive’s consent. In the event that,
despite the parties’ intentions, any amount hereunder becomes taxable prior to
the date that it would otherwise be paid, the Company shall pay to the Executive
(which payment may be made in whole or in part by way of direct remittance to
appropriate tax authorities) the portion of such amount needed to pay applicable
income and excise taxes and any interest or other penalties on such amounts. Any
remaining portion of such amount shall be paid to Executive at the time
otherwise specified in this Agreement, subject to Section 3(b).
Solely for purposes of determining the time and form of payments due under this
Agreement or otherwise in connection with his termination of employment with the
Company and that are subject to Code Section 409A, Executive shall not be deemed
to have incurred a termination of employment unless and until he shall incur a
“separation from service” within the meaning of Code Section 409A. It is
intended that each payment or installment of a payment and each benefit provided
under this Agreement shall be treated as a separate “payment” for purposes of
Code Section 409A. All reimbursements and in-kind benefits provided under the
Agreement shall be made or provided in accordance with the requirements of Code
Section 409A to the extent that such reimbursements or in-kind benefits are
subject to Code Section 409A, including, where

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applicable, the requirements that (i) any reimbursement is for expenses incurred
during Executive’s lifetime (or during a shorter period of time specified in
this Agreement), (ii) the amount of expenses eligible for reimbursement during a
calendar year may not affect the expenses eligible for reimbursement in any
other calendar year (except that a plan providing medical or health benefits may
impose a generally applicable limit on the amount that may be reimbursed or
paid), (iii) the reimbursement of an eligible expense will be made on or before
the last day of the calendar year following the year in which the expense is
incurred and (iv) the right to reimbursement is not subject to set off or
liquidation or exchange for any other benefit.
Nothing in this Section 7(c) increases the Company’s obligations to Executive
under this Agreement or any Benefit Plans. Executive remains solely liable for
any taxes, including but not limited to any penalties or interest due to Code
Section 409A or otherwise, on the payments made hereunder or under any Benefit
Plans. The preceding provisions shall not be construed as a guarantee by the
Company of any particular tax effect for payments made pursuant to this
Agreement or any Benefit Plans.
(d)    Parachute Payments. Notwithstanding anything to the contrary herein or in
any Benefit Plan, in the event it shall be determined that any monetary amounts
or benefits due or payable by the Company to Executive (whether paid or payable,
or due or distributed) are or will become subject to any excise tax under
Section 4999 of the Code (collectively “Excise Taxes”), then the amounts or
benefits otherwise due or payable to Executive pursuant to this Agreement or any
Benefit Plans shall be reduced to the extent necessary so that no portion of
such amounts or benefits shall be subject to the Excise Taxes, but only if (i)
the net amount of such amounts and benefits, as so reduced (and after the
imposition of the total amount of taxes under federal, state and local law on
such amounts and benefits), is greater than (ii) the excess of (A) the net
amount of such amounts and benefits, without reduction (but after imposition of
the total amount of taxes under federal, state and local law) over (B) the
amount of Excise Taxes to which Executive would be subject on such unreduced
amounts and benefits.
If it is determined that Excise Taxes will or might be imposed on Executive in
the absence of such reduction, the Company and Executive shall make good faith
efforts to seek to identify and pursue reasonable action to avoid or reduce the
amount of Excise Taxes; provided, however, that this sentence shall not be
construed to require Executive to accept any further reduction in the amount or
benefits that would be payable to him in the absence of this sentence. The
provisions of this Section 7(d) shall override and control any inconsistent
provision in any applicable Benefit Plan.
All determinations required to be made under this Section 7(d), including
whether reduction is required, the amount of such reduction and the assumptions
to be utilized in arriving at such determination, shall be made in good faith by
an independent accounting firm selected by the Company in accordance with
applicable law (the “Accounting Firm”), in consultation with tax counsel
reasonably acceptable to Executive. All fees and expenses of the Accounting Firm
shall be borne solely by the Company. If the Accounting Firm determines that no
excise tax under Section 4999 of the Code is payable by Executive, the Company
shall request that the Accounting Firm furnish Executive with written guidance
that failure to report such excise tax on Executive’s applicable federal income
tax return would not result in the imposition of a negligence or similar
penalty.
(e)    Withholding. The Company will reduce its compensatory payments to
Executive hereunder for withholding and FICA and Medicare taxes and any other
withholdings and contributions required by law.
(f)    Severability. If the final determination of an arbitrator or a court of
competent jurisdiction declares, after the expiration of the time within which
judicial review (if permitted) of such determination may be perfected, that any
term or provision of this Agreement is invalid or unenforceable,

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the remaining terms and provisions will be unimpaired, and the invalid or
unenforceable term or provision will be deemed replaced by a term or provision
that is valid and enforceable and that comes closest to expressing the intention
of the invalid or unenforceable term or provision. Any prohibition or finding of
unenforceability as to any provision of this Agreement in any one jurisdiction
will not invalidate or render unenforceable such provision in any other
jurisdiction.
(g)    Legal Fees. Each of the Company and Executive will bear its own expenses
in connection with the negotiation of this Agreement and the resolution of any
disputes hereunder.
(h)    Binding Agreement; Assignment. The Agreement is binding upon and shall
inure to the benefit of Executive’s heirs, executors, administrators or other
legal representatives, upon the successors of the Company and upon any entity
into which the Company merges or consolidates. The Company shall assign or
otherwise transfer this Agreement and all of its rights, duties, obligations, or
interests under it or to any successor to all or substantially all of its
assets. Upon such assignment or transfer, any such successor will be deemed to
be substituted for the Company for all purposes. Executive may not assign or
delegate the obligations of Executive under this Agreement.
(i)    Interpretation. This Agreement will be interpreted without reference to
any rule or precept of law that states that any ambiguity in a document be
construed against the drafter.
(j)    Executive Acknowledgment. Executive acknowledges that Executive has read
and understands this Agreement and is entering into this Agreement knowingly and
voluntarily.
(k)    Continuing Obligations. Notwithstanding the termination of Executive’s
employment hereunder for any reason or anything in this Agreement to the
contrary, all post-employment rights and obligations of the parties, including
but not limited to those set forth in Sections 3, 4, 5 and 6, and any provisions
necessary to interpret or enforce those rights and obligations under any
provision of this Agreement, will survive the termination or expiration of this
Agreement and remain in full force and effect for the applicable periods.
(l)    Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
(m)    Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(n)    Notice. Any notice by any party to the other party must be mailed by
registered or certified mail, postage prepaid, to the address specified below,
or to any change of address indicated by either party upon receipt of written
notice of same:

Shane McCarthy
737 N. Beverly Lane
Arlington Heights, IL 60004

Lawson Products, Inc.
8770 W. Bryn Mawr Avenue
Suite 900
Chicago, IL 60631

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Attention: General Counsel
Notice will be deemed received on the third business day following the day on
which it was mailed, postage prepaid.
[SIGNATURE LINES ON NEXT PAGE]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
EXECUTIVE:

\s\ Shane McCarthy         
Shane McCarthy

LAWSON PRODUCTS, INC.

By \s\ Michael G. DeCata        
Michael G. DeCata
President and Chief Executive Officer

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EXHIBIT A

CONFIDENTIAL GENERAL RELEASE
In consideration of the payments and other benefits set forth in Section 3 of
the Change in Control Agreement (hereinafter the “Agreement”) made and entered
into by and between [Executive] (hereinafter the “Executive”) and Lawson
Products, Inc. (hereinafter the “Employer”) on __________ __, 2015, Executive
hereby executes this Confidential General Release (hereinafter the “Release”):
1.    Executive hereby releases Employer, its past and present parents,
subsidiaries, affiliates, predecessors, successors, assigns, related companies,
entities or divisions, its or their past and present employee benefit plans,
trustees, fiduciaries and administrators, and any and all of its and their
respective past and present officers, directors, partners, insurers, agents,
representatives, attorneys and employees (all collectively included in the term
the “Employer” for purposes of this release), from any and all claims, demands
or causes of action which Executive, or Executive’s heirs, executors,
administrators, agents, attorneys, representatives or assigns (all collectively
included in the term “Executive” for purposes of this release), have, had or may
have against Employer, based on any events or circumstances arising or occurring
prior to and including the date of Executive’s execution of this Release to the
fullest extent permitted by law, regardless of whether such claims are now known
or are later discovered, including but not limited to any claims relating to
Executive’s employment or termination of employment by Employer, any rights of
continued employment, reinstatement or reemployment by Employer, and any costs
or attorneys’ fees incurred by Executive (collectively, the “Released Claims”);
provided, however, Executive is not waiving, releasing or giving up any rights
Executive may have to workers’ compensation benefits, to vested benefits under
any pension or savings plan, to payment of earned and accrued but unused
vacation pay, to continued benefits in accordance with the Consolidated Omnibus
Budget Reconciliation Act of 1985, to unemployment insurance, to any vested
Equity Awards, to any vested awards or benefits under any Benefit Plan, to
indemnification provided by applicable law, the certificate of incorporation or
bylaws of Parent to the extent applicable, the articles of incorporation or
bylaws of Employer or the Indemnification Agreement dated as of _______, 20__
between [Parent/Employer] and Executive, each as they exist on the date of
Executive’s termination, or to enforce the terms of the Agreement, or any other
right which cannot be waived as a matter of law. In the event any claim or suit
is filed on Executive’s behalf with respect to a Released Claim, Executive
waives any and all rights to receive monetary damages or injunctive relief in
favor of Executive.

2.    Executive agrees and acknowledges: that this Release is intended to be a
general release that extinguishes all Released Claims by Executive against
Employer; that Executive is waiving any claims arising under Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With
Disabilities Act, the Age Discrimination in Employment Act, the Employee
Retirement Income Security Act, the Family and Medical Leave Act, the
Rehabilitation Act, the Illinois Human Rights Act, and all other federal, state
and local statutes, ordinances and common law, including but not limited to any
and all claims alleging personal injury, emotional distress or other torts, to
the fullest extent permitted by law; that Executive is waiving all Released
Claims against Employer, known or unknown, arising or occurring prior to and
including the date of Executive’s execution of this Release; that the
consideration that Executive will receive in exchange for Executive’s waiver of
the Released Claims exceeds anything of value to which Executive is already
entitled; that Executive has entered into this Release knowingly and voluntarily
with full understanding of its terms and after having had the opportunity to
seek and receive advice from counsel of Executive’s choosing; and that Executive
has had a reasonable period of time within which to consider this Release.
Executive represents that Executive has not assigned any claim against Employer
to any person or entity. Executive agrees not to apply for or seek employment
with Employer.

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3.    Executive agrees to keep the terms of this Release confidential and not to
disclose the terms of this Release to anyone except to Executive’s spouse,
attorneys, tax consultants or as otherwise required by law, and agrees to take
all steps necessary to assure confidentiality by those recipients of this
information.

4.    Executive hereby agrees and acknowledges that Executive has carefully read
this Release, fully understands what this Release means, and is signing this
Release knowingly and voluntarily, that no other promises or agreements have
been made to Executive other than those set forth in the Agreement or this
Release, and that Executive has not relied on any statement by anyone associated
with Employer that is not contained in the Agreement or this Release in deciding
to sign this Release.
5.    This Release will be governed by the laws of the State of Illinois and all
disputes arising under this Release must be submitted to a court of competent
jurisdiction in Chicago, Illinois. Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such terms in the
Agreement.
6.    Executive may accept this Release by delivering an executed copy of the
Release to:
[NAME]
[ADDRESS]

on or before _______________________ [insert a date at least 21 calendar days
after Executive’s receipt of this Agreement].
7.    Executive may revoke this Release within seven (7) days after it is
executed by Executive by delivering a written notice of revocation to:
[NAME]
[ADDRESS]

no later than the close of business on the seventh (7th) calendar day after this
Release was signed by Executive. This Release will not become effective or
enforceable until the eighth (8th) calendar day after Executive signs it. If
Executive revokes this Release, Employer shall have no obligation to provide the
payments and other benefits set forth Section 3 of the Agreement.

EXECUTIVE:

___________________________________________________Name:______________________________________________Date:_______________________________________________