CHANGE IN CONTROL AGREEMENT

This Change in Control Agreement (the “Agreement”) is made and entered into as
of January 29, 2010 (the “Effective Date”), by and between Lawson Products,
Inc., a Delaware corporation (the “Company”), and Ronald J. Knutson (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 six-month
anniversary of the date on which the Change in Control occurs.

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

  (iii)   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
may modify or terminate such benefits from time to time to the extent and on
such terms as the Company shall determine in its sole discretion:

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

     
(ii)
(iii)
(iv)
  long-term disability insurance coverage;
group term life insurance;
accidental death insurance;

  (v)   participation in the Company’s 401(k) and profit-sharing retirement
plans; and

  (vi)   participation in the Company’s Executive Deferral Plan, if any.

(c) Board. The term “Board” shall mean the Board of Directors of the Company.

(d) Cause. The term “Cause” shall mean:

  (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 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), other than Ronald B. Port and Roberta Washlow, or
any of them and/or their respective spouses, children, heirs, assigns or
affiliates (who shall collectively be referred to as the “Port Group”), is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing voting power of the then outstanding voting securities of
the Company greater than the voting power of the Port Group; or

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

  (A)   the stockholders of the Company 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 the Company
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, other than the
Port Group, is the beneficial owner of twenty percent (20%) 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 the Company 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 the Company in substantially the same proportion as their then
current ownership of the voting securities of the Company; 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, other
than the Port Group, is the beneficial owner of twenty percent (20%) or more of
the combined voting power of the then outstanding voting securities of the
Surviving Corporation (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
Company 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).

(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;

  (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; and

  (iii)   has been identified to Executive by the Lawson Entities as
confidential, either orally or in writing.

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; 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,
shareholder value appreciation rights or other 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:

  (i)   a material diminution in Executive’s base compensation;

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

  (iii)   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 the Company and any
entity owned by the Company or related to or affiliated with the Company,
directly or indirectly, in whole or in part, now or at any time during
Executive’s employment with the Company and during the Restriction Period,
including, but not limited to, Assembly Component Systems, Inc., Automatic Screw
Machine Products Company, Lawson Products, Inc. (Illinois), Lawson Products,
Inc. (Ontario), Lawson Products de Mexico, Rutland Tool & Supply Company, 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) Restriction Period. The term “Restriction Period” shall mean the period of
time in which Executive is employed by the Company and a period of eighteen
months after the effective date of Executive’s termination.

(o) 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 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”, in each case within six months
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 and one-half
times Executive’s then current annual base salary, and (y) an amount equal to
the bonus Executive received in the 365-day period prior to the effective date
of Executive’s termination, if any, or, in the event Executive was not a
participant in the Company’s annual incentive bonus plan for the most recent
full fiscal year prior to the occurrence of the Change in Control, an amount
equal to Executive’s target bonus for the fiscal year in which the Change in
Control occurs. Subject to Section 3(b), such amounts shall be paid in a lump
sum, to the extent they may be so paid without triggering taxes and other
penalties under Code Section 409A no later than 30 days after the effective date
of Executive’s termination, or to the extent such amounts cannot be paid in a
lump sum, they shall be paid in 12 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 two years after
the effective date of Executive’s termination, 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 at least 90 days to exercise any 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 to the contrary, the
following 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.

(c) Release. As a condition of receiving any and all payments and benefits
(except Accrued Compensation) due to Executive (or if applicable, Executive’s
beneficiaries and/or estate) pursuant to Section 3 of this Agreement and/or any
Benefit Plans in the event of termination, Executive (or if applicable,
Executive’s beneficiaries and/or estate) shall execute and deliver to the
Company a general release substantially in the form attached hereto as
Exhibit A.

(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 90 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 six
months of the initial occurrence of such condition constituting Good Reason.

(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, in the United States, Canada and Mexico, Executive shall not, 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 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 Lawson Entities. 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.

(c) Non-Solicitation. During the Restriction Period, 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,
Executive shall not, directly or indirectly, on behalf of 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 and servicing 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 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 are extremely
valuable to it, are generally the result of substantial time and effort devoted
by the Lawson Entities, and tend to be near permanent. Therefore, during the
Restriction Period, Executive shall not, directly or indirectly, on behalf of
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 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 no party
hereto must 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 Agreement. Following termination of
Executive’s employment, regardless of the reason for termination, Executive will
reasonably cooperate with the Company in the prosecution or defense of any
claims, controversies, suits, arbitrations or proceedings involving events
occurring prior to the termination of this Agreement. 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 acknowledges that any such
confidences and privileges belong solely to the Company and can only be waived
by the Company, 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, Executive agrees that: (a) he will
promptly notify the Company of any subpoena, summons or other request to testify
or to provide information of any kind no later than three 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 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, unless otherwise required by law.
The parties agree that the Company shall be responsible for all reasonable
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 six months
following a Change in Control; provided, however, 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. For example, a change in control under this Agreement may not
constitute a change in control under the Lawson Products, Inc. Capital
Accumulation Plan. 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. 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). 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 the Lawson Products, Inc. Long-Term Capital Accumulation 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. In the event that such Accounting Firm is
serving as accountant or auditor for the individual, entity or group acting as
the acquirer in a Change in Control, the Company shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to herein as the
Accounting Firm). 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, 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) 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 the business of the
Company. Upon such assignment or transfer, any such business entity 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.

(h) 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.

(i) Executive Acknowledgment. Executive acknowledges that Executive has read and
understands this Agreement and is entering into this Agreement knowingly and
voluntarily.

(j) 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.

(k) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.

(l) 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.

(m) 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:

Ronald J. Knutson
At the address on file with the Company

Lawson Products, Inc.
1666 East Touhy Avenue
Des Plaines, IL 60018
Attention: Chief Executive Officer
Fax: 847-296-1949

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\ Ronald J. Knutson
Ronald J. Knutson

LAWSON PRODUCTS, INC.

By \s\ Thomas J. Neri

Thomas J. Neri

President & Chief Executive Officer

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 Ronald J. Knutson (hereinafter the “Executive”) and Lawson
Products, Inc. (hereinafter the “Employer”) on (date) , 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; 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 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, 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 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 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 claims specified herein 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.

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.

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:
 

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