Exhibit 10.5
CHANGE IN CONTROL AGREEMENT
     This Change in Control Agreement (the “Agreement”) is made and entered into
as of February 12, 2009 (the “Effective Date”), by and between Lawson Products,
Inc., a Delaware corporation (the “Company”), and Harry Dochelli (the
“Executive”).
     WHEREAS, the Company wishes to assure itself of the continuity of the
Executive’s services and has determined that it is appropriate that the
Executive receive certain payments in the event that the Executive’s employment
is terminated under specified circumstances as more fully described below; and
     WHEREAS, the Company and the Executive accordingly desire to enter into
this Agreement on the terms and conditions set forth below;
     NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties hereto agree as follows:
     1. Agreement Term. The “Term” of this Agreement shall begin on the
Effective Date and shall continue through the one-year anniversary of the
Effective Date; provided, however, that as of the one-year anniversary of the
Effective Date and on each one-year anniversary thereafter, the Term shall
automatically be extended for one additional year unless, not later than 30 days
prior to such applicable anniversary date, either party shall have given written
notice to the other party that it does not wish to extend the Term; provided,
further, that if a Change in Control shall have occurred on or prior to the date
that this Agreement would otherwise terminate, and notwithstanding any prior
notice from one party to the other party to the contrary, the Term of this
Agreement shall automatically be deemed extended and shall continue until the
one-year anniversary of the date on which the Change in Control occurs.
     2. Certain Definitions(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:

 

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  (i)   coverage under the Company’s group health plan on such terms as provided
to other Company officers;     (ii)   long-term disability insurance coverage;  
  (iii)   group term life insurance;     (iv)   accidental death insurance;    
(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

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      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, as of the
date of determination, of the then outstanding voting securities of the Company
greater than the voting power of the Port Group as of such date of
determination; 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

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      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, to Executive’s knowledge, 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

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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, stock performance rights, 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

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  (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., Cronatron
Welding Systems, Inc., Drummond American Corporation, Automatic Screw Machine
Products Company, C.B. Lynn Company, 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

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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”, but only in each case within one year
following a Change in Control, the Company shall have no obligation to
Executive, except:

  (i)   the Company shall pay Executive any Accrued Compensation;     (ii)   the
Company shall pay Executive (x) an amount equal to one 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 eighteen 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 eighteen months 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.

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          (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.

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     4. Protection of Company Assets.
          (a) Non-Competition. Executive expressly agrees that, during the
Restriction Period, provided that there shall not have occurred and be
continuing any material non-compliance by the Company with its obligations under
this Agreement, Executive shall not, in the United States, Canada and Mexico,
directly or indirectly, as an owner, officer, director, employee, agent,
advisor, financier, or in any other form or capacity, on behalf of Executive or
any other person, firm or other business entity, engage in or be concerned with
any Competitive Products, Systems and Services, or any other duties or pursuits
for monetary gain which interfere with or restrict Executive’s activities on
behalf of the Lawson Entities or constitute competition with the business of the
Lawson Entities as conducted or proposed to be conducted during the term of this
Agreement or, with respect to applicable periods following Executive’s
termination, as conducted or proposed to be conducted as of the date of
Executive’s termination. The foregoing notwithstanding, nothing herein contained
shall be deemed to prevent Executive from investing Executive’s money in the
capital stock or other securities of any corporation whose stock or securities
are publicly-owned or are regularly traded on any public exchange, provided that
Executive does not own more than a one percent (1%) interest therein.
          (b) Confidentiality. Executive hereby acknowledges that, during the
course of Executive’s employment, Executive has and will learn or develop
Confidential Information in trust and confidence. Executive agrees to use the
Confidential Information solely for the purpose of performing Executive’s duties
on behalf of the Lawson Entities and not for Executive’s own private use or
commercial purposes. Executive acknowledges that unauthorized disclosure or use
of Confidential Information, other than in discharge of Executive’s duties, will
cause the Lawson Entities irreparable harm. Executive shall maintain
Confidential Information in strict confidence at all times and shall not divulge
Confidential Information to any Unauthorized Person or Entity, or use in any
manner, or knowingly allow another to use, any Confidential Information, without
the Company’s prior written consent, during the term of employment or
thereafter, for as long as such Confidential Information remains confidential.
Executive further acknowledges that the Lawson Entities operate and compete
internationally and that the Lawson Entities will be harmed by the unauthorized
disclosure or use of Confidential Information regardless of where such
disclosure or use occurs, and that therefore this confidentiality agreement is
not limited to any single state or other jurisdiction.
          (c) Non-Solicitation. During the Restriction Period, provided that
there shall not have occurred and be continuing any material non-compliance by
the Company with its obligations under this Agreement, Executive shall not,
directly or indirectly, for himself or on behalf of any person, firm, or other
entity, solicit, induce or encourage any person to leave her/his employment,
agency or office with the Lawson Entities. During the Restriction Period,
provided that there shall not have occurred and be continuing any material
non-compliance by the Company with its obligations under this Agreement,
Executive shall not, directly or indirectly, 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.

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     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, provided that there shall not have occurred and be
continuing any material non-compliance by the Company with its obligations under
this Agreement, Executive shall not, directly or indirectly, 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

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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

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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
one year 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

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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.

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     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) Legal Fees. The Company shall pay to Executive all reasonable
attorney’s fees and expenses incurred by Executive following a Change in Control
in seeking in good faith to obtain or enforce any right or benefit provided by
this Agreement; provided, however, that Executive shall not be entitled to any
such attorney’s fees or expenses should Executive not substantially prevail in
any such proceeding.
          (h) Binding Agreement; Assignment. The Agreement is binding upon and
shall inure to the benefit of Executive’s heirs, executors, administrators or
other legal representatives, upon the successors of the Company and upon any
entity into which the Company merges or consolidates. The Company shall assign
or otherwise transfer this

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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.
          (i) Interpretation. This Agreement will be interpreted without
reference to any rule or precept of law that states that any ambiguity in a
document be construed against the drafter.
          (j) Executive Acknowledgment. Executive acknowledges that Executive
has read and understands this Agreement and is entering into this Agreement
knowingly and voluntarily.
          (k) Continuing Obligations. Notwithstanding the termination of
Executive’s employment hereunder for any reason or anything in this Agreement to
the contrary, all post-employment rights and obligations of the parties,
including but not limited to those set forth in Sections 3, 4, 5 and 6, and any
provisions necessary to interpret or enforce those rights and obligations under
any provision of this Agreement, will survive the termination or expiration of
this Agreement and remain in full force and effect for the applicable periods.
          (l) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
          (m) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
          (n) Notice. Any notice by any party to the other party must be mailed
by registered or certified mail, postage prepaid, to the address specified
below, or to any change of address indicated by either party upon receipt of
written notice of same:
Harry Dochelli
At the address on file with the Company
Lawson Products, Inc.
166 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:

                  Harry Dochelli    
 
        LAWSON PRODUCTS, INC.      
 
       
By
       
 
       
 
  Thomas J. Neri    
 
  President and Chief Executive Officer    

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EXHIBIT A
CONFIDENTIAL GENERAL RELEASE
In consideration of the payments and other benefits set forth in Section 3 of
the Change in Control Agreement (hereinafter the “Agreement”) made and entered
into by and between Harry Dochelli (hereinafter the “Executive”) and Lawson
Products, Inc. (hereinafter the “Employer”) on February 12, 2009, Executive
hereby executes this Confidential General Release (hereinafter the “Release”):
     1. Executive hereby releases Employer, its past and present parents,
subsidiaries, affiliates, predecessors, successors, assigns, related companies,
entities or divisions, its or their past and present employee benefit plans,
trustees, fiduciaries and administrators, and any and all of its and their
respective past and present officers, directors, partners, insurers, agents,
representatives, attorneys and employees (all collectively included in the term
the “Employer” for purposes of this release), from any and all claims, demands
or causes of action which Executive, or Executive’s heirs, executors,
administrators, agents, attorneys, representatives or assigns (all collectively
included in the term “Executive” for purposes of this release), have, had or may
have against Employer, based on any events or circumstances arising or occurring
prior to and including the date of Executive’s execution of this Release to the
fullest extent permitted by law, regardless of whether such claims are now known
or are later discovered, including but not limited to any claims relating to
Executive’s employment or termination of employment by Employer, any rights of
continued employment, reinstatement or reemployment by Employer, and any costs
or attorneys’ fees incurred by Executive (collectively, the “Released Claims”);
provided, however, Executive is not waiving, releasing or giving up any rights
Executive may have to workers’ compensation benefits, to vested benefits under
any pension or savings plan, to payment of earned and accrued but unused
vacation pay, to continued benefits in accordance with the Consolidated Omnibus
Budget Reconciliation Act of 1985, to unemployment insurance, to any vested
Equity Awards, to any vested awards or benefits under any Benefit Plan, to
indemnification provided by the Delaware General Corporation Law, the
certificate of incorporation or bylaws of Employer or the Indemnification
Agreement dated as of                     , 2008 between Employer and Executive,
each as they exist on the date of Executive’s termination, or to enforce the
terms of the Agreement, or any other right which cannot be waived as a matter of
law. In the event any claim or suit is filed on Executive’s behalf with respect
to a Released Claim, Executive waives any and all rights to receive monetary
damages or injunctive relief in favor of Executive.
     2. Executive agrees and acknowledges: that this Release is intended to be a
general release that extinguishes all Released Claims by Executive against
Employer; that Executive is waiving any claims arising under Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With
Disabilities Act, the Age Discrimination in Employment Act, the Employee
Retirement Income Security Act, the Family and Medical Leave Act, the
Rehabilitation Act, the Illinois Human Rights Act, and all other federal, state
and local statutes, ordinances and common law, including but not limited to any
and all claims alleging personal injury, emotional distress or other torts, to
the fullest extent permitted by law; that Executive is waiving all Released
Claims against Employer, known or unknown, arising or occurring prior to and
including the date of Executive’s execution of this Release; that the
consideration that

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Executive will receive in exchange for Executive’s waiver of the Released Claims
exceeds anything of value to which Executive is already entitled; that Executive
has entered into this Release knowingly and voluntarily with full understanding
of its terms and after having had the opportunity to seek and receive advice
from counsel of Executive’s choosing; and that Executive has had a reasonable
period of time within which to consider this Release. Executive represents that
Executive has not assigned any claim against Employer to any person or entity.
Executive agrees not to apply for or seek employment with Employer.
     3. Executive agrees to keep the terms of this Release confidential and not
to disclose the terms of this Release to anyone except to Executive’s spouse,
attorneys, tax consultants or as otherwise required by law, and agrees to take
all steps necessary to assure confidentiality by those recipients of this
information.
     4. Executive hereby agrees and acknowledges that Executive has carefully
read this Release, fully understands what this Release means, and is signing
this Release knowingly and voluntarily, that no other promises or agreements
have been made to Executive other than those set forth in the Agreement or this
Release, and that Executive has not relied on any statement by anyone associated
with Employer that is not contained in the Agreement or this Release in deciding
to sign this Release.
     5. This Release will be governed by the laws of the State of Illinois and
all disputes arising under this Release must be submitted to a court of
competent jurisdiction in Chicago, Illinois. Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to such terms in the
Agreement.
     6. Executive may accept this Release by delivering an executed copy of the
Release to:
[NAME]
[ADDRESS]
on or before                                          [insert a date at least 21
calendar days after Executive’s receipt of this Agreement].
     7. Executive may revoke this Release within seven (7) days after it is
executed by Executive by delivering a written notice of revocation to:
[NAME]
[ADDRESS]
no later than the close of business on the seventh (7th) calendar day after this
Release was signed by Executive. This Release will not become effective or
enforceable until the eighth (8th) calendar day after Executive signs it. If
Executive revokes this Release, Employer shall have no obligation to provide the
payments and other benefits set forth Section 3 of the Agreement.

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                  EXECUTIVE:      
 
                     
 
  Name:        
 
           
 
  Date:        
 
           

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