Exhibit 10.53

THE HILLMAN GROUP, INC.

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made as of April 21, 2010, by
and between The Hillman Group, Inc., a Delaware corporation (the “Company”), and
George Heredia (“Executive”).

WHEREAS, upon the consummation of the transactions contemplated by the Agreement
and Plan of Merger (the “Merger Agreement”), dated as of April 21, 2010, by and
among The Hillman Companies, Inc., a Delaware corporation and the indirect
parent of the Company (“Hillman”), OHCP HM Acquisition Corp., a Delaware
corporation (the “Purchaser”), and certain other parties thereto, the Purchaser
shall acquire 100% of the issued and outstanding capital stock of Hillman in a
reverse subsidiary merger pursuant to which Hillman shall be the surviving
corporation (the “Merger”); and

WHEREAS, in connection with and subject to the consummation of the Merger, the
Company desires to enter into this Agreement with Executive pursuant to which
the Company will employ Executive as its Senior Vice President Engraving/GM
Tempe on the terms set forth in this Agreement, and following the consummation
of the Merger Executive is willing to serve the Company in such capacity for the
period and upon such terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

1. Employment. The Company shall employ Executive, and Executive hereby accepts
employment with the Company, upon the terms and conditions set forth in this
Agreement for the period beginning on the consummation of the Merger (the date
of such consummation, the “Effective Date”) and ending as provided in
Section 4(a) hereof (the “Employment Period”). This Agreement shall
automatically terminate without any action on the part of any Person and be void
ab initio if the Merger Agreement is terminated in accordance with its terms and
neither the Company, the Purchaser nor any other Person shall have any liability
to Executive under this Agreement if the Merger is not consummated.

2. Position and Duties.

(a) During the Employment Period, Executive shall serve as the Senior Vice
President Engraving/GM Tempe of the Company and shall have the normal duties,
responsibilities, functions and authority of the Senior Vice President
Engraving/GM Tempe, subject to the power and authority of the Board or the Chief
Executive Officer to expand or limit such duties, responsibilities, functions
and authority and to overrule actions of officers of the Company. During the
Employment Period, Executive shall render such administrative, financial and
other executive and managerial services to Hillman and its Subsidiaries which
are consistent with Executive’s position as the Board or the Chief Executive
Officer may from time to time direct.

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(b) During the Employment Period, Executive shall report to the Board and the
Chief Executive Officer and shall devote his best efforts and his full business
time and attention (except for permitted vacation periods and reasonable periods
of illness or other incapacity) to the business and affairs of Hillman and its
Subsidiaries. Executive shall perform his duties, responsibilities and functions
to Hillman and its Subsidiaries hereunder to the best of his abilities in a
diligent, trustworthy, professional and efficient manner and shall comply with
the Company’s and its Subsidiaries’ policies and procedures in all material
respects. During the Employment Period, Executive shall not serve as an officer
or director of, or otherwise perform services for compensation for, any other
entity without the prior written consent of the Board; provided that Executive
may serve as an officer or director of, or otherwise participate in, purely
educational, welfare, social, religious or civic organizations so long as such
activities do not interfere with Executive’s employment.

(c) For purposes of this Agreement, “Subsidiaries” shall mean, with respect to
any Person, any corporation, limited liability company, partnership,
association, or business entity of which (i) if a corporation, a majority of the
total voting power of shares of stock entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers, or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof, or (ii) if a limited liability company, partnership, association, or
other business entity (other than a corporation), a majority of partnership or
other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of the Person
or a combination thereof. For purposes hereof, a Person or Persons shall be
deemed to have a majority ownership interest in a limited liability company,
partnership, association, or other business entity (other than a corporation) if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or control any managing director or member or general partner of such
limited liability company, partnership, association, or other business entity.
For purposes of this Agreement, “Person” shall mean an individual, a
partnership, a corporation, a limited liability company, an association, a joint
stock company, a trust, a joint venture, an unincorporated organization, or a
governmental entity or any department, agency, or political subdivision thereof.

3. Compensation and Benefits.

(a) During the Employment Period, Executive’s base salary shall be $243,000 per
annum or such higher rate as the Board may determine from time to time (such
amount, as may be increased from time to time, and not decreased after any such
increase, based on no less frequent than an annual review by the Board, the
“Base Salary”), which Base Salary shall be payable by the Company in regular
installments in accordance with the Company’s general payroll practices in
effect from time to time. During the period beginning on the Effective Date and
ending December 31, 2010, the

 

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Base Salary shall be pro rated on an annualized basis. In addition, during the
Employment Period, Executive shall be entitled to participate in employee
benefit programs and receive perquisites reasonably comparable to those in
effect as of the date hereof and as determined by the Board, including, without
limitation, participation in group health insurance and disability insurance,
life insurance, MERP benefits (up to $2,500 of out–of–pocket medical expenses
per annum), participation in the Company’s 401K plan, vacation and paid holidays
and participation in the Company’s deferred compensation plan (provided that any
participation in such deferred compensation plan is funded solely by the
Executive other than match by the Company of $.25 per $1.00 up to $2,500).
During the Employment Period, the Company shall reimburse Executive for
reasonable expenses incurred by Executive in connection with leasing an
automobile (including lease payments, licenses and insurance) not to exceed $700
per month (or, if Executive seeks to purchase an automobile, reimbursement of
reasonable expenses incurred in connection with such purchase, including car
loan payments, licenses and insurance), subject to the Company’s requirements
with respect to reporting and documentation of such expenses. Executive shall
bear the cost of gas, cost of repairs on the automobile, and costs of any
tickets, traffic offenses or fines of any kind.

(b) During the Employment Period, the Company shall reimburse Executive for all
ordinary and reasonable business expenses incurred by him in the course of
performing his duties and responsibilities under this Agreement which are
consistent with the Company’s policies in effect from time to time with respect
to travel, entertainment and other business expenses, subject to the Company’s
requirements with respect to reporting and documentation of such expenses.

(c) In addition to the Base Salary, the Company shall pay to Executive cash
bonus compensation pursuant to the terms of a performance–based bonus plan. The
bonus plan will provide for performance–based targets to be agreed to annually
by the Chief Executive Officer of the Company and the Board. If 100% of such
bonus targets are met in a year, Executive shall be entitled to a bonus equal to
35% of his Base Salary for that year. If the Company and its Subsidiaries
perform at a level in excess of 100% of the bonus targets, the Executive shall
be entitled to a proportionately higher amount of bonus compensation up to a
maximum of 70% of his Base Salary for that year, i.e., with each 1% increase
above 100% of the bonus target, Executive shall be entitled to an additional
0.35% of his Base Salary for that year. Executive shall be entitled to bonus
compensation in a proportionately reduced amount if the Company and its
Subsidiaries perform at a level that is less than 100% of the bonus targets but
in excess of 85% of the bonus targets, i.e., with each 1% decrease below 100% of
the bonus target, Executive’s bonus shall be reduced from the bonus he would
have received had the Company and its Subsidiaries met 100% of the bonus target
by 0.35% of his Base Salary for that year. Executive shall not be entitled to a
bonus if 85% or less of the bonus targets are met. Bonuses shall be paid in the
calendar year immediately following the calendar year that contains the end of
the relevant performance period and in accordance with the Company’s general
payroll practices (in effect from time to time).

 

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4. Term.

(a) The Employment Period shall be three years beginning on the Effective Date
(the “Initial Term”) and shall automatically be renewed on the same terms and
conditions set forth herein as modified from time to time by the parties hereto
for additional one–year periods unless the Company gives Executive written
notice of the election not to renew the Employment Period (a “Notice of
Non–Renewal”) at least 90 days prior to any such renewal date or Executive gives
the Company a Notice of Non–Renewal at least 180 days prior to any such renewal
date (the end of the Initial Term or the end of an effective one–year extension
period being referred to herein as the “Expiration Date”); provided that (i) the
Employment Period shall terminate prior to its Expiration Date immediately upon
Executive’s resignation (with or without Good Reason, as defined below), death
or Disability, and (ii) the Employment Period may be terminated by the Company
at any time prior to its Expiration Date for Cause (as defined below) or without
Cause. Except as otherwise provided herein, any termination of the Employment
Period by the Company shall be effective as specified in a written notice from
the Company to Executive. Notwithstanding anything to the contrary herein, the
termination of the employment of the Executive as a result of the Company
providing the Executive a Notice of Non–Renewal shall be treated as a
termination of the Executive without Cause.

(b) In the event of Executive’s death or Disability, or upon the Expiration
Date, Executive shall be entitled to payment of (i) all accrued and unpaid Base
Salary through the date of termination or expiration of the Employment Period,
(ii) all accrued and unused vacation, and (iii) expense reimbursement pursuant
to Section 3(b) of this Agreement (collectively, the “Accrued Payments”), and a
pro rated portion (based on the number of days that have elapsed from the
beginning of the bonus period until the date of termination or expiration of the
Employment Period) of the bonus for the year in which termination or expiration
of the Employment Period occurs as determined pursuant to Section 3(c) above
(the “Prorated Bonus”). In addition, in the event of Executive’s Disability, the
Company shall use commercially reasonable efforts to allow Executive to
participate in the Company’s group health coverage, to the extent permitted by
its insurers and under the same terms and conditions that generally apply to
Company employees; provided that Executive pays all of the premiums and similar
costs and expenses for such coverage. Executive shall not be entitled to any
other salary, bonuses, employee benefits, perquisites or other compensation from
the Company or its Subsidiaries for periods after the termination or expiration
of the Employment Period, except as otherwise specifically provided for under
the Company’s employee benefit plans or as otherwise expressly required by
applicable law.

(c) If the Employment Period is terminated by the Company for Cause, or if
Executive resigns without Good Reason, Executive shall be entitled to payment of
the Accrued Payments. In addition, the Company shall use commercially reasonable
efforts to allow Executive to participate in the Company’s group health
coverage, to the extent permitted by its insurers and under the same terms and
conditions that generally apply to Company employees; provided that Executive
pays all of the premiums and similar costs and expenses for such coverage.
Executive shall not be

 

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entitled to any other salary, bonuses, employee benefits, perquisites or other
compensation from the Company or its Subsidiaries for periods after the
termination or expiration of the Employment Period, except as otherwise
specifically provided for under the Company’s employee benefit plans or as
otherwise expressly required by applicable law.

(d) If the Employment Period is terminated by the Company without Cause or if
Executive resigns with Good Reason, then Executive shall be entitled to receive
severance compensation in an amount as determined below:

(i) If the Employment Period is terminated by the Company without Cause or if
Executive resigns with Good Reason, then Executive shall be entitled to receive
(A) an amount equal to his then applicable Base Salary, (B) the Termination
Bonus Amount (as defined in Section 4(d)(ii)), if such termination is during the
Initial Term, or 50% of the Termination Bonus Amount, if such termination is
after the Initial Term, and (C) health continuation coverage during the period
beginning on the date of the termination of the Employment Period and ending
twelve months thereafter, at the Company’s expense. For purposes of determining
Executive’s rights to COBRA continuation coverage, the date of termination of
the Employment Period shall be the date of the COBRA qualifying event. In
addition, Executive shall be permitted to participate, during the period
beginning on the date of the termination of the Employment Period and ending six
months thereafter, in the Company’s group life and disability coverages, to the
extent permitted by its insurers and under the same terms and conditions that
generally apply to Company employees, at the Company’s expense.

(ii) The severance payments outlined in (i) of this Section 4(d) are in addition
to the Accrued Payments and Prorated Bonus. In addition, the Company shall use
commercially reasonable efforts to allow Executive to participate in the
Company’s group health coverage, to the extent permitted by its insurers and
under the same terms and conditions that generally apply to Company employees;
provided that, if not a part of the severance payments outlined in
Section 4(d)(i)(C) above, Executive pays all of the premiums and similar costs
and expenses for such coverage. Severance payments will be paid and benefit
coverage will be provided pursuant to this Section 4(d) only if Executive
delivers to the Company an executed Release Agreement in the form of Exhibit A
attached hereto and only so long as Executive has not breached the provisions of
Sections 6 and 7 hereof. Severance payments under Section 4(d)(i)(A) above shall
be paid by continuation of regular payroll compensation payments beginning on
the date of termination of the Employment Period but in no event less frequently
than monthly and continuing in the case of Section 4(d)(i)(A), for one year
commencing as provided in Section 5. The severance payment under
Section 4(d)(i)(B) above shall be paid in a lump sum in the year following the
date of termination of the Employment Period at the same time that annual
bonuses are paid to other senior executives of the Company. For purposes of
Section 4(d) hereof, “Termination Bonus Amount” shall mean an amount equal to
the greater of: (A) the annual average of Executive’s annual bonuses for the
preceding three years and (B) the amount of Executive’s last annual bonus
received prior to the termination of the Employment Period.

 

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(e) If a Change of Control occurs, and within 90 days after such Change of
Control, the Employment Period is terminated by the Company without Cause or
Executive resigns with Good Reason, Executive shall be entitled to a lump sum
payment payable 30 days after such termination or resignation in an amount equal
to the amount payable pursuant to Sections 4(d)(i)(A) and (B). In addition,
Executive shall be entitled to receive the Accrued Payments and Prorated Bonus.
In addition, the Company shall use commercially reasonable efforts to allow
Executive to participate in the Company’s group health coverage, to the extent
permitted by its insurers and under the same terms and conditions that generally
apply to Company employees; provided that Executive pays all of the premiums and
similar costs and expenses for such coverage. Payments will not be paid under
this Section 4(e) unless Executive delivers to the Company an executed Release
Agreement in the form of Exhibit A attached hereto. A “Change of Control” means
any transaction or series of transactions pursuant to which any Person(s) or a
group of related Persons (other than the investors purchasing shares in Hillman
and/or its Subsidiaries as of the date hereof and their affiliates) in the
aggregate acquire(s) (i) capital stock of Hillman possessing the voting power
(other than voting rights accruing only in the event of a default, breach or
event of noncompliance) to elect a majority of the board of Hillman (whether by
merger, consolidation, reorganization, combination, sale or transfer of
Hillman’s capital stock, shareholder or voting agreement, proxy, power of
attorney or otherwise) or (ii) all or substantially all of Hillman’s assets
determined on a consolidated basis; provided, that a Change of Control shall not
include a Public Offering or the consummation of the Merger; provided, further,
that such Change of Control also constitutes a change in control event for
purposes of Code Section 409A (as defined below) (a “409A Change of Control”). A
“Public Offering” means an underwritten initial public offering and sale,
registered under the Securities Act, of shares of Hillman’s common stock. In the
event the Change of Control is not a 409A Change in Control, the payments
described in this Section 4(e) shall still be paid, but the schedule of such
payments shall be the schedules described in Section 4(d).

(f) The amounts payable pursuant to Sections 4(d) and 4(e) are mutually
exclusive, and under no circumstances shall Executive be entitled to receive
payments under both Sections.

(g) Executive agrees and acknowledges that Executive shall be responsible for
the payment of any and all taxes arising from continued coverage under the
Company’s benefit plans.

(h) Upon the expiration of the Employment Period, to the extent permitted under
the terms of any applicable life insurance policy, Executive shall be permitted
to purchase from the Company life insurance policies issued in his name;
provided that Executive pays the purchase price of any such life insurance
policies, including any fees and expenses associated with such a transfer.

(i) For purposes of this Agreement, “Cause” is defined as (i) willful failure to
substantially perform duties hereunder, other than due to Disability;
(ii) willful act which constitutes gross misconduct or fraud and which is
injurious to Hillman or its Subsidiaries; (iii) conviction of, or plea of guilty
or no contest, to a felony or (iv)

 

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material breach of confidentiality, non-compete or non-solicitation agreements
(including Sections 6 and 7 hereof) with the Company which is not cured within
ten (10) days after written notice from the Company.

(j) For purposes of this Agreement, “Good Reason” means termination of this
Agreement by Executive due to (i) any material diminution in Executive’s
position, authority or duties with the Company, (ii) the Company reassigning
Executive to work at a location that is more than seventy–five (75) miles from
his current work location, (iii) any amendment to the Company’s bylaws which
results in a material and adverse change to the officer and director
indemnification provisions contained therein or (iv) a material breach of
Sections 3 or 4 of this Agreement by the Company, which in each case of
(i) through (iv) is not cured within 10 days following written notice from
Executive. Executive must provide notice of resignation for Good Reason within
ninety (90) days following Executive’s knowledge of the event or facts
constituting Good Reason, otherwise such event or facts shall not constitute
Good Reason under this Agreement.

(k) For purposes of this Agreement, “Disability” shall mean Executive’s
inability to perform the essential duties, responsibilities and functions of his
position with the Company and its Subsidiaries for more than 26 weeks in any
12–month period as a result of any mental or physical disability or incapacity
as defined in the Americans with Disabilities Act or as otherwise determined by
the Board in its reasonable good faith judgment.

5. Section 409A Compliance.

(a) The intent of the parties is that payments and benefits under this Agreement
comply with Internal Revenue Code Section 409A and the regulations and guidance
promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to
the maximum extent permitted, this Agreement shall be interpreted to be in
compliance therewith. In no event whatsoever shall the Company be liable for any
additional tax, interest or penalty that may be imposed on Executive by Code
Section 409A or damages to Executive for failing to comply with Code
Section 409A.

(b) A termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.”

 

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(c) To the extent that severance payments or benefits pursuant to this Agreement
are conditioned upon the execution and delivery by Executive of a release of
claims, Executive shall forfeit all rights to such payments and benefits unless
such release is signed and delivered (and no longer subject to revocation, if
applicable) within sixty (60) days following the date of Executive’s termination
of employment. If the foregoing release is executed and delivered and no longer
subject to revocation as provided in the preceding sentence, then the following
shall apply:

(i) To the extent any such cash payment or continuing benefit to be provided is
not “deferred compensation” for purposes of Code Section 409A, then such payment
or benefit shall commence upon the first scheduled payment date immediately
after the date the release is executed and no longer subject to revocation (the
“Release Effective Date”). The first such cash payment shall include payment of
all amounts that otherwise would have been due prior to the Release Effective
Date under the terms of this Agreement applied as though such payments commenced
immediately upon Executive’s termination of employment, and any payments made
thereafter shall continue as provided herein. The delayed benefits shall in any
event expire at the time such benefits would have expired had such benefits
commenced immediately following Executive’s termination of employment.

(ii) To the extent any such cash payment or continuing benefit to be provided is
“deferred compensation” for purposes of Code Section 409A, then such payments or
benefits shall be made or commence upon the sixtieth (60) day following
Executive’s termination of employment. The first such cash payment shall include
payment of all amounts that otherwise would have been due prior thereto under
the terms of this Agreement had such payments commenced immediately upon
Executive’s termination of employment, and any payments made thereafter shall
continue as provided herein. The delayed benefits shall in any event expire at
the time such benefits would have expired had such benefits commenced
immediately following Executive’s termination of employment.

The Company may provide, in its sole discretion, that Executive may continue to
participate in any benefits delayed pursuant to this section during the period
of such delay, provided that Executive shall bear the full cost of such benefits
during such delay period. Upon the date such benefits would otherwise commence
pursuant to this Section, the Company may reimburse Executive the Company’s
share of the cost of such benefits, to the extent that such costs would
otherwise have been paid by the Company or to the extent that such benefits
would otherwise have been provided by the Company at no cost to Executive, in
each case had such benefits commenced immediately upon Executive’s termination
of employment. Any remaining benefits shall be reimbursed or provided by the
Company in accordance with the schedule and procedures specified herein.

(d) To the extent that this Agreement provides for the reimbursement of expenses
or the provision of in–kind benefits that constitute “non–qualified deferred
compensation” under Code Section 409A, the following shall apply: (i) All such
reimbursements under shall be made on or prior to the last day of the taxable
year following the taxable year in which such expenses were incurred by the
Employee; (ii) Any right to reimbursement or in kind benefits shall not be
subject to liquidation or exchange for another benefit; and (iii) No such
reimbursement, expenses eligible for reimbursement, or in–kind benefits provided
in any taxable year shall in any way affect the expenses eligible for
reimbursement, or in–kind benefits to be provided, in any other taxable year.

 

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(e) For purposes of Code Section 409A, Executive’s right to receive any
installment payment pursuant to this Agreement shall be treated as a right to
receive a series of separate and distinct payments.

(f) Whenever a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within thirty
(30) days following the date of termination”), the actual date of payment within
the specified period shall be within the sole discretion of the Company.

(g) Notwithstanding any other provision of this Agreement to the contrary, in no
event shall any payment under this Agreement that constitutes “deferred
compensation” for purposes of Code Section 409A be subject to offset by any
other amount unless otherwise permitted by Code Section 409A.

6. Confidential Information.

(a) Obligation to Maintain Confidentiality. Executive acknowledges that the
information, observations and data (including trade secrets) obtained by him
during the course of his employment with the Company and its Subsidiaries
concerning the business or affairs of Hillman or any its Subsidiaries
(“Confidential Information”) are the property of Hillman or such Subsidiary.
Therefore, Executive agrees that he shall not at any time during the Employment
Period or thereafter disclose to any person or entity or use for his own
purposes any Confidential Information without the prior written consent of the
Board, unless and to the extent that the Confidential Information becomes
generally known to and available for use by the public other than as a result of
Executive’s acts or omissions. Executive shall deliver to the Company at the
termination or expiration of the Employment Period, or at any other time the
Company may request in writing, all memoranda, notes, plans, records, reports,
computer files, disks and tapes, printouts and software and other documents and
data (and copies thereof) embodying or relating to Confidential Information,
Third Party Information (as defined in Section 6(b) below), Work Product (as
defined in Section 6(c) below) or the business of Hillman or any other
Subsidiaries which he may then possess or have under his control.

(b) Third Party Information. Executive understands that Hillman and its
Subsidiaries and Affiliates will receive from third parties confidential or
proprietary information (“Third Party Information”) subject to a duty on
Hillman’s and its Subsidiaries’ and affiliates’ part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. During the Employment Period and thereafter, and without in any way
limiting the provisions of Section 6(a) above, Executive will hold Third Party
Information in the strictest confidence and will not disclose to anyone (other
than personnel of Hillman or its Subsidiaries and affiliates who need to know
such information in connection with their work for Hillman or such Subsidiaries
and affiliates) or use, except in connection with his work for Hillman or its
Subsidiaries and affiliates, Third Party Information unless expressly authorized
by a member of the Board in writing.

 

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(c) Intellectual Property, Inventions and Patents. Executive acknowledges that
all discoveries, concepts, ideas, inventions, innovations, improvements,
developments, methods, designs, analyses, drawings, reports, patent
applications, copyrightable work and mask work (whether or not including any
confidential information) and all registrations or applications related thereto,
all other proprietary information and all similar or related information
(whether or not patentable) which relate to Hillman’s or any of its
Subsidiaries’ actual or anticipated business, research and development or
existing or future products or services and which are conceived, developed or
made by Executive (whether alone or jointly with others) while employed by the
Company and its Subsidiaries, whether before or after the date of this Agreement
(“Work Product”), belong to the Company or such Subsidiary. Executive shall
promptly disclose such Work Product to the Board and, at the Company’s expense,
perform all actions reasonably requested by the Board (whether during or after
the Employment Period) to establish and confirm such ownership (including,
without limitation, assignments, consents, powers of attorney and other
instruments). Executive acknowledges that all Work Product shall be deemed to
constitute “works made for hire” under the U.S. Copyright Act of 1976, as
amended.

7. Non–Compete, Non–Solicitation.

(a) Non–Compete. In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that during the course of his
employment with the Company and its Subsidiaries he has and shall become
familiar with the Company’s trade secrets and with other Confidential
Information and that his services have been and shall continue to be of special,
unique and extraordinary value to the Company and its Subsidiaries. Therefore,
Executive agrees that, during the Employment Period and for one year following
either the date of termination of the Employment Period for any reason or the
Expiration Date, Executive shall not, directly or indirectly own any interest
in, manage, control, participate in, consult with, render services for, be
employed in an executive, managerial or administrative capacity by, or in any
manner engage in any business competing with the businesses of the Company or
its Subsidiaries, as such businesses exist or are in the process of being
implemented during the Employment Period or on the date of the termination or
expiration of the Employment Period, within any geographical area in which the
Company or its Subsidiaries engage or plan to engage in such businesses.
Executive acknowledges (i) that the business of the Company and its Subsidiaries
will be conducted throughout the United States, (ii) notwithstanding the state
of incorporation or principal office of the Company or any of its Subsidiaries,
or any of its executives or employees (including the Executive), it is expected
that the Company and its Subsidiaries will have business activities and have
valuable business relationships within its industry throughout the United States
and (iii) as part of his responsibilities, Executive will be traveling
throughout the United States in furtherance of the business and relationships of
the Company and its Subsidiaries. Nothing herein shall prohibit Executive from
being a passive owner of not more than 2% of the outstanding stock of any class
of a corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation.

 

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(b) Non–Solicitation. During the Employment Period and for two years following
either the date of termination of the Employment Period or the Expiration Date,
Executive shall not directly or indirectly through another person or entity
(i) induce or attempt to induce any employee of the Company or any Subsidiary to
leave the employ of the Company or such Subsidiary, or in any way interfere with
the relationship between the Company or any Subsidiary and any employee thereof,
(ii) hire any person who was an employee of the Company or any Subsidiary at any
time during the Employment Period or (iii) induce or attempt to induce any
customer, supplier, licensee, licensor, franchisee or other business relation of
the Company or any Subsidiary to cease doing business (or materially reduce the
amount of business done) with the Company or such Subsidiary, or in any way
interfere with the relationship between any such customer, supplier, licensee or
business relation and the Company or any Subsidiary (including, without
limitation, making any negative or disparaging statements or communications
regarding the Company or its Subsidiaries).

(c) Scope of Restrictions. If, at the time of enforcement of this Section 7, a
court shall hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law.

(d) Equitable Relief. In the event of the breach or a threatened breach by
Executive of any of the provisions of this Section 7, the Company would suffer
irreparable harm, and in addition and supplementary to other rights and remedies
existing in its favor, the Company shall be entitled to specific performance
and/or injunctive or other equitable relief from a court of competent
jurisdiction in order to enforce or prevent any violations of the provisions
hereof (without posting a bond or other security). In addition, in the event of
a breach or violation by Executive of this Section 7, the time periods
referenced in this Section 7 shall be automatically extended by the amount of
time between the initial occurrence of the breach or violation and when such
breach or violation has been duly cured.

8. Executive’s Representations. Executive hereby represents and warrants to the
Company that (i) the execution, delivery and performance of this Agreement by
Executive do not and shall not conflict with, breach, violate or cause a default
under any contract, agreement, instrument, order, judgment or decree to which
Executive is a party or by which he is bound, (ii) Executive is not a party to
or bound by any employment agreement, noncompete agreement or confidentiality
agreement with any other person or entity and (iii) upon the execution and
delivery of this Agreement by the Company, this Agreement shall be the valid and
binding obligation of Executive, enforceable in accordance with its terms.
Executive hereby acknowledges that the provisions of Section 7 above are in
consideration of (i) employment with the Company, and (ii) additional good and
valuable consideration as set forth in this Agreement. In

 

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addition, Executive agrees and acknowledges that the restrictions contained in
Section 7 above are reasonable, do not preclude him from earning a livelihood,
that he has reviewed his rights and obligations under this Agreement with his
legal counsel and that he fully understands the terms and conditions contained
herein. In addition, Executive agrees and acknowledges that the potential harm
to the Company of the non–enforcement of Section 7 outweighs any potential harm
to Executive of its enforcement by injunction or otherwise. Executive
acknowledges that he has carefully read this Agreement and has given careful
consideration to the restraints imposed upon Executive by this Agreement, and is
in full accord as to their necessity for the reasonable and proper protection of
confidential and proprietary information of the Company now existing or to be
developed in the future. Executive expressly acknowledges and agrees that each
and every restraint imposed by this Agreement is reasonable with respect to
subject matter, time period and geographical area.

9. Survival. Sections 4(b) through 22, inclusive, shall survive and continue in
full force in accordance with their terms notwithstanding the expiration or
termination of the Employment Period.

10. Notices. Any notice provided for in this Agreement shall be in writing and
shall be either personally delivered, sent by reputable overnight courier
service or mailed by first class mail, return receipt requested, to the
recipient at the address below indicated:

Notices to Executive:

At the last known address in the Company’s personnel records.

Notices to the Company:

The Hillman Group, Inc.

10590 Hamilton Avenue

Cincinnati, OH 45231

Attn: Chief Executive Officer

and

Oak Hill Capital Partners

One Stamford Plaza

263 Tresser Blvd., 15th Floor

Stamford, CT 06901

Fax: (203) 724–2815

Attn: Tyler J. Wolfram

With copies, which shall not constitute notice, to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019

Fax: (212) 492-0570

Attn: Angelo Bonvino

 

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or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so
delivered, sent or mailed.

11. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or any action in any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.

12. Complete Agreement. This Agreement and those documents expressly referred to
herein and other documents of even date herewith embody the complete agreement
and understanding among the parties and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.

13. No Strict Construction. The language used in this Agreement shall be deemed
to be the language chosen by the parties hereto to express their mutual intent,
and no rule of strict construction shall be applied against any party.

14. Counterparts. This Agreement may be executed in separate counterparts, each
of which is deemed to be an original and all of which taken together constitute
one and the same agreement.

15. Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive, the Company and their respective
heirs, successors and assigns, except that Executive may not assign his rights
or delegate his duties or obligations hereunder without the prior written
consent of the Company.

16. Choice of Law. All issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement and the exhibits and
schedules hereto shall be governed by, and construed in accordance with, the
laws of the State of Delaware, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.

17. Amendment and Waiver. The provisions of this Agreement may be amended or
waived only with the prior written consent of the Company (as approved by the
Board) and Executive, and no course of conduct or course of dealing or failure
or delay by any party hereto in enforcing or exercising any of the provisions of
this Agreement (including, without limitation, the Company’s right to terminate
the Employment Period for Cause) shall affect the validity, binding effect or
enforceability of this Agreement or be deemed to be an implied waiver of any
provision of this Agreement.

 

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18. Insurance. The Company may, at its discretion, apply for and procure in its
own name and for its own benefit life and/or disability insurance on Executive
in any amount or amounts considered advisable. Executive agrees to cooperate in
any medical or other examination, supply any information and execute and deliver
any applications or other instruments in writing as may be reasonably necessary
to obtain and constitute such insurance. Executive hereby represents that he has
no reason to believe that his life is not insurable at rates now prevailing for
healthy men of his age.

19. Indemnification and Reimbursement of Payments on Behalf of Executive. The
Company and its Subsidiaries shall be entitled to deduct or withhold from any
amounts owing from the Company or any of its Subsidiaries to Executive any
federal, state, local or foreign withholding taxes, excise tax, or employment
taxes (“Taxes”) imposed with respect to Executive’s compensation or other
payments from the Company or any of its Subsidiaries or Executive’s ownership
interest, if any, in the Company (including, without limitation, wages, bonuses,
dividends, the receipt or exercise of equity options and/or the receipt or
vesting of restricted equity). In the event the Company or any of its
Subsidiaries does not make such deductions or withholdings, Executive shall
indemnify the Company and its Subsidiaries for any amounts paid with respect to
any such Taxes, together with any interest, penalties and related expenses
thereto.

20. MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN
OR AMONG ANY OF THE PARTIES HERETO, WHETHER ARISING IN CONTRACT, TORT, OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY AND/OR THE RELATIONSHIP
ESTABLISHED AMONG THE PARTIES HEREUNDER.

21. Corporate Opportunity. During the Employment Period, Executive shall submit
to the Board all business, commercial and investment opportunities or offers
presented to Executive or of which Executive becomes aware which relate to the
areas of business engaged in by the Company at any time during the Employment
Period (“Corporate Opportunities”). Unless approved by the Board, Executive
shall not accept or pursue, directly or indirectly, any Corporate Opportunities
on Executive’s own behalf.

 

14

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22. Executive’s Cooperation. During the Employment Period and thereafter,
Executive shall cooperate with the Company and its Subsidiaries in any internal
investigation, any administrative, regulatory or judicial proceeding or any
dispute with a third party as reasonably requested by the Company (including,
without limitation, Executive being available to the Company upon reasonable
notice for interviews and factual investigations, appearing at the Company’s
request to give testimony without requiring service of a subpoena or other legal
process, volunteering to the Company all pertinent information and turning over
to the Company all relevant documents which are or may come into Executive’s
possession, all at times and on schedules that are reasonably consistent with
Executive’s other permitted activities and commitments). In the event the
Company requires Executive’s cooperation in accordance with this paragraph, the
Company shall reimburse Executive solely for reasonable travel expenses
(including lodging and meals) upon submission of receipts.

23. Directors’ and Officers’ Liability Insurance. Executive shall be a
beneficiary of any directors’ and officers’ liability insurance policy
maintained by the Company so long as Executive remains an officer or director of
the Company.

 

15

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

 

THE HILLMAN GROUP, INC. By:  

/s/ Max W. Hillman

Name:   Max W. Hillman Title:   CEO

/s/ George Heredia

George Heredia

 

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EXHIBIT A

GENERAL RELEASE

I, George Heredia, in consideration of and subject to the performance by The
Hillman Companies, Inc., a Delaware corporation (together with its subsidiaries,
the “Company”), of its obligations under the Employment Agreement, dated as of
April    , 2010, (the “Agreement”), do hereby release and forever discharge as
of the date hereof the Company and its affiliates and all present and former
directors, officers, agents, representatives, employees, successors and assigns
of the Company and its affiliates and the Company’s direct or indirect owners
(collectively, the “Released Parties”) to the extent provided below.

 

1. I understand that any payments or benefits paid or granted to me under
Sections 4(d) and 4(e) of the Agreement represent, in part, consideration for
signing this General Release and are not salary, wages or benefits to which I
was already entitled. I understand and agree that I will not receive the
payments and benefits specified in paragraph Sections 4(d) and 4(e) of the
Agreement unless I execute this General Release and do not revoke this General
Release within the time period permitted hereafter or breach this General
Release. I also acknowledge and represent that I have received all payments and
benefits that I am entitled to receive (as of the date hereof) by virtue of any
employment by the Company.

 

2.

Except as provided in paragraph 4 below and except for the provisions of my
Agreement which expressly survive the termination of my employment with the
Company, I knowingly and voluntarily (for myself, my heirs, executors,
administrators and assigns) release and forever discharge the Company and the
other Released Parties from any and all claims, suits, controversies, actions,
causes of action, cross–claims, counter–claims, demands, debts, compensatory
damages, liquidated damages, punitive or exemplary damages, other damages,
claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in
law and in equity, both past and present (through the date this General Release
becomes effective and enforceable) and whether known or unknown, suspected, or
claimed against the Company or any of the Released Parties which I, my spouse,
or any of my heirs, executors, administrators or assigns, may have, which arise
out of or are connected with my employment with, or my separation or termination
from, the Company (including, but not limited to, any allegation, claim or
violation, arising under: Title VII of the Civil Rights Act of 1964, as amended;
the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967,
as amended (including the Older Workers Benefit Protection Act); the Equal Pay
Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family
and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification
Act; the Employee Retirement Income Security Act of 1974; any applicable
Executive Order Programs; the Fair Labor Standards Act; or their state or local
counterparts; or under any other federal, state or local civil or human rights
law, or under any other local, state, or federal law, regulation or ordinance;
or under any public policy, contract or tort, or under common law; or

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  arising under any policies, practices or procedures of the Company; or any
claim for wrongful discharge, breach of contract, infliction of emotional
distress, defamation; or any claim for costs, fees, or other expenses, including
attorneys’ fees incurred in these matters) (all of the foregoing collectively
referred to herein as the “Claims”).

 

3. I represent that I have made no assignment or transfer of any right, claim,
demand, cause of action, or other matter covered by paragraph 2 above.

 

4. I agree that this General Release does not waive or release any rights or
claims that I may have under the Age Discrimination in Employment Act of 1967
which arise after the date I execute this General Release. I acknowledge and
agree that my separation from employment with the Company in compliance with the
terms of the Agreement shall not serve as the basis for any claim or action
(including, without limitation, any claim under the Age Discrimination in
Employment Act of 1967).

 

5. In signing this General Release, I acknowledge and intend that it shall be
effective as a bar to each and every one of the Claims hereinabove mentioned or
implied. I expressly consent that this General Release shall be given full force
and effect according to each and all of its express terms and provisions,
including those relating to unknown and unsuspected Claims (notwithstanding any
state statute that expressly limits the effectiveness of a general release of
unknown, unsuspected and unanticipated Claims), if any, as well as those
relating to any other Claims hereinabove mentioned or implied. I acknowledge and
agree that this waiver is an essential and material term of this General Release
and that without such waiver the Company would not have agreed to the terms of
the Agreement. I further agree that in the event I should bring a Claim seeking
damages against the Company, or in the event I should seek to recover against
the Company in any Claim brought by a governmental agency on my behalf, this
General Release shall serve as a complete defense to such Claims. I further
agree that I am not aware of any pending charge or complaint of the type
described in paragraph 2 as of the execution of this General Release.

 

6. I agree that neither this General Release, nor the furnishing of the
consideration for this General Release, shall be deemed or construed at any time
to be an admission by the Company, any Released Party or myself of any improper
or unlawful conduct.

 

7. I agree that I will forfeit all amounts payable by the Company pursuant to
the Agreement if I challenge the validity of this General Release. I also agree
that if I violate this General Release by suing the Company or the other
Released Parties, I will pay all costs and expenses of defending against the
suit incurred by the Released Parties, including reasonable attorneys’ fees, and
return all payments received by me pursuant to the Agreement.

 

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8. I agree that this General Release is confidential and agree not to disclose
any information regarding the terms of this General Release, except to my
immediate family and any tax, legal or other counsel I have consulted regarding
the meaning or effect hereof or as required by law, and I will instruct each of
the foregoing not to disclose the same to anyone. Notwithstanding anything
herein to the contrary, each of the parties (and each affiliate and person
acting on behalf of any such party) agree that each party (and each employee,
representative, and other agent of such party) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
this transaction contemplated in the Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to such party or
such person relating to such tax treatment and tax structure, except to the
extent necessary to comply with any applicable federal or state securities laws.
This authorization is not intended to permit disclosure of any other information
including (without limitation) (i) any portion of any materials to the extent
not related to the tax treatment or tax structure of this transaction, (ii) the
identities of participants or potential participants in the Agreement, (iii) any
financial information (except to the extent such information is related to the
tax treatment or tax structure of this transaction), or (iv) any other term or
detail not relevant to the tax treatment or the tax structure of this
transaction.

 

9. Any non–disclosure provision in this General Release does not prohibit or
restrict me (or my attorney) from responding to any inquiry about this General
Release or its underlying facts and circumstances by the Securities and Exchange
Commission (SEC), the National Association of Securities Dealers, Inc. (NASD),
any other self–regulatory organization or governmental entity.

 

10. I agree to reasonably cooperate with the Company in any internal
investigation, any administrative, regulatory, or judicial proceeding or any
dispute with a third party. I understand and agree that my cooperation may
include, but not be limited to, making myself available to the Company upon
reasonable notice for interviews and factual investigations; appearing at the
Company’s request to give testimony without requiring service of a subpoena or
other legal process; volunteering to the Company pertinent information; and
turning over to the Company all relevant documents which are or may come into my
possession all at times and on schedules that are reasonably consistent with my
other permitted activities and commitments. I understand that in the event the
Company asks for my cooperation in accordance with this provision, the Company
will reimburse me solely for reasonable travel expenses, (including lodging and
meals), upon my submission of receipts.

 

11.

I agree not to disparage the Company, its past and present investors, officers,
directors or employees or its affiliates and to keep all confidential and
proprietary information about the past or present business affairs of the
Company and its affiliates confidential unless a prior written release from the
Company is obtained. I further agree that as of the date hereof, I have returned
to the Company any and all property, tangible or intangible, relating to its
business, which I possessed or

 

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  had control over at any time (including, but not limited to, company–provided
credit cards, building or office access cards, keys, computer equipment,
manuals, files, documents, records, software, customer data base and other data)
and that I shall not retain any copies, compilations, extracts, excerpts,
summaries or other notes of any such manuals, files, documents, records,
software, customer data base or other data.

 

12. Notwithstanding anything in this General Release to the contrary, this
General Release shall not relinquish, diminish, or in any way affect any rights
or claims arising out of any breach by the Company or by any Released Party of
the Agreement after the date hereof.

 

13. Whenever possible, each provision of this General Release shall be
interpreted in, such manner as to be effective and valid under applicable law,
but if any provision of this General Release is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this General Release shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

 

(a) I HAVE READ IT CAREFULLY;

 

(b) I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS,
INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED;
THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

 

(c) I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

 

(d) I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I
HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO
SO OF MY OWN VOLITION;

 

(e) I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE
SUBSTANTIALLY IN ITS FINAL FORM ON                  ,     TO CONSIDER IT AND THE
CHANGES MADE SINCE THE                  ,     VERSION OF THIS RELEASE ARE NOT
MATERIAL AND WILL NOT RESTART THE REQUIRED 21–DAY PERIOD;

 

(f) THE CHANGES TO THE AGREEMENT SINCE                  ,     EITHER ARE NOT
MATERIAL OR WERE MADE AT MY REQUEST.

 

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(g) I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO
REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL
THE REVOCATION PERIOD HAS EXPIRED;

 

(h) I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE
ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

 

(i) I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED,
WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT.

 

A-5

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IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.

 

DATE:  

 

   

 

      George Heredia

 

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