##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
 Form 10-K/A
 (Amendment
    No. 1)
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file
    number: 0-10546
  
 (Exact Name of Registrant as
    Specified in Charter)
  Delaware


36-2229304(State or other jurisdiction
    of
    incorporation or organization)


(I.R.S. Employer
    Identification No.
)   1666 East
    Touhy Avenue, Des Plaines, Illinois 60018 (Address
    of principal executive offices)
  Registrants telephone number, including area code:
 (847) 827-9666
 Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which
    RegisteredCommon Stock, $1.00 par value

The NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
 (Title of class)
  o þ
  o þ
  þ o
  o o
  Regulation S-K Form 10-K Form 10-K. þ
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ




---



##### 





EXPLANATORY
    NOTE
  Form 10-K/A Form 10-K Form 10-K. Form 10-K Form 10-K
  INDEX TO
    FORM 10-K/A
  
 PART IIIItem 10.


Directors, Executive Officers and Corporate Governance


3Item 11.


Executive Compensation


5Item 12.


Security Ownership of Certain Beneficial Owners and Management
    and Related Stockholder Matters


25Item 13.


Certain Relationships and Related Transactions, and Director
    Independence


27Item 14.


Principal Accounting Fees and Services


28PART IVItem 15


Exhibits, Financial Statement Schedules


29EX-31.1EX-31.2EX-32    Safe Harbor Statement under the Securities
    Litigation Reform Act of 1995: Form 10-K
   2




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##### Table of Contents



PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.  Directors
    Year FirstElectedName

Age

Principal Occupation

DirectorJames T. Brophy


81


Private Investor, certified public accountant and certified
    financial analyst. Investment banker for more than
    30 years. Retired from Stifel Nicolaus, an investment
    banking firm, as a Vice President in 1985.


1971James S. Errant


60


Managing Partner of Gore Range Brewery from 1997 to the present.
    Managing Partner of Frites, LLC from 2004 to the present.
    President of Prima Corporation from 1973 to 2006. The companies
    listed above are in the business of operating restaurants.


2007Lee S. Hillman


53


Since 2003, Mr. Hillman has served as President of Liberation
    Investment Advisory Group and Liberation Management Services,
    both private management consulting firms. Since January 2009,
    Mr. Hillman has served as Chief Executive Officer of Performance
    Health Systems, LLC, an early-stage business distributing
    BioDensity branded, specialty health and exercise equipment.
    From February 2006 to May 2008, Mr. Hillman served as Executive
    Chairman and Chief Executive Officer of Power Plate
    International, a global business manufacturing and distributing
    high-tech, Power Plate branded health and exercise equipment.
    From 2005 to February 2006, he was President of Power Plate
    North America, the exclusive, independent distributor of Power
    Plate International in the United States. Mr. Hillman
    serves as a director of RCN Corporation and as a Trustee of the
    Adelphia Recovery Trust.


2004Thomas J. Neri


57


President and Chief Executive Officer of Lawson Products, Inc.
    since April 2007. Mr. Neri was elected to the Board of Directors
    in December 2007. Mr. Neri was elected President and Chief
    Operating Officer in January 2007. Mr. Neri was elected
    Executive Vice President, Finance, Planning and Corporate
    Development; Chief Financial Officer and Treasurer in 2004. He
    also served as Chief Financial Officer and Treasurer from 2004
    to January 2006. Mr. Neri joined the Company in October 2003 as
    Executive Vice President, Finance and Corporate Planning.


2007Ronald B. Port, M.D.


68


Chairman of the Board of Directors since April 2007. Retired
    Physician.


1984Thomas S. Postek


67


Certified public accountant and chartered financial analyst
    currently affiliated with Geneva Investment Management of
    Chicago since January 2005. Mr. Postek was a partner and
    principal of William Blair & Company, LLC, a Chicago-based
    investment firm, from 1986 to 2001. During his tenure at William
    Blair, Mr. Postek covered various business services as an
    analyst, including industrial distribution. Mr. Postek is also a
    director of UniFirst Corporation.


2005Robert G. Rettig


79


Consultant. Retired Executive Vice President of Illinois Tool
    Works, Inc., a global industrial company.


1989Mitchell H. Saranow


63


Chairman of The Saranow Group, L.L.C., a family investment
    company since 1984.  Mr. Saranow was Chairman of the Board and
    co-Chief Executive Officer of Navigant Consulting, Inc. from
    November 1999 to June 2000. Prior thereto, he was Chairman and
    Managing General Partner of Fluid Management, L.P., a
    specialized machinery manufacturer, for more than five years.
    Mr. Saranow served as the Chief Executive officer of Lenteq C.V.
    and two related Dutch companies which were sold under Dutch
    insolvency laws in 2008.  Mr. Saranow is also a director of
    Telephone and Data Systems, Inc.


1998Wilma J. Smelcer


60


Ms. Smelcer was a member of the Board of Governors of the
    Chicago Stock Exchange from 2001 until April 2004. Also from
    2001 through 2006, Ms. Smelcer was a trustee of Goldman Sachs
    Mutual Fund Complex (a registered investment company). Ms.
    Smelcer served as Chairman of Bank of America, Illinois from
    1998 to 2001.


2004  3




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##### Table of Contents



son-in-law
    Executive
    Officers
    Name

Age

PositionThomas J. Neri


57


Chief Executive Officer and DirectorF. Terrence Blanchard


55


Chief Financial OfficerNeil E. Jenkins


59


Executive Vice President, Secretary and General CounselHarry Dochelli


49


Executive Vice President Sales and MarketingWilliam Holmes


49


Vice President and TreasurerStewart Howley


47


Senior Vice President Strategic Business DevelopmentMichelle Russell


47


Senior Vice President Operations and Supply Chain ManagementMary Ellen Schopp


46


Senior Vice President, Human Resources     Mr. Neri
  Mr. Blanchard
  Mr. Jenkins
  Mr. Dochelli
  Mr. Holmes
  Mr. Howley
 4




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##### Table of Contents



Ms. Russell
  Ms. Schopp
  Audit
    Committee
    Code of
    Business Conduct
  www.lawsonproducts.com
  Section 16(a)
    Beneficial Ownership Reporting Compliance
    ITEM 11.
    EXECUTIVE
    COMPENSATION.  Compensation
    Discussion and Analysis (CD&A)
  Compensation
    Philosophy and Objectives
   5




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##### Table of Contents



Talent Acquisition &
    Retention.
  Accountability for Lawsons Business
    Performance.
  Accountability for Individual
    Performance.
    
    Targets base salaries at the 50th percentile (median) of
    the market;
    Targets annual incentive opportunities at the median of the
    market with upside potential for exceeding established targets;
    and,
    Provides objective-based, long-term incentive opportunities that
    provide for payouts significantly above market levels if stretch
    goals are met.    Named
    Executive Officers
    Executive Name

TitleThomas J. Neri

Chief Executive OfficerF. Terrence Blanchard(1)

Chief Financial OfficerNeil E. Jenkins

Executive Vice President, Secretary & General CounselHarry Dochelli

Executive Vice President, Sales & MarketingStewart A. Howley

Senior Vice President Strategic Business DevelopmentMichael W. Ruprich(2)

Former Group President, MRO & New ChannelsScott F. Stephens(3)

Former Senior Vice President & Chief Financial Officer     (1)
    
    Mr. Blanchard is employed as CFO of Lawson on an interim
    basis under a contract between the Company and Tatum, LLC, a
    financial consultancy firm, of which Mr. Blanchard is a
    partner.(2)
    
    Mr. Ruprich, former Group President, MRO and New Channels,
    left the Company in May 2008. 6




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##### Table of Contents



(3)
    
    Mr. Stephens, former Chief Financial Officer, resigned from
    the Company in June 2008.  Determining
    Competitive Practices
  Peer
    Group for Compensation Benchmarking
    and/or
     APAC Customer Services, Inc

   Keystone Automotive Industries, Inc.   Bandag, Inc.

   Markwest Hydrocarbon, Inc.   Books-a-Million,
    Inc.

   Newpark Resources, Inc.   Crawford & Company

   Nu Horizons Electronics. Corporation   DXP Enterprises, Inc.

   Olympic Steel, Inc.   Empire Resources, Inc.

   PAM Transportation Services, Inc.   Farmer Brothers Company

   RPC, Inc.   H&E Equipment Services, Inc.

   Tessco Technologies, Inc.   Industrial Distribution Group, Inc.

   Universal Truckload Services, Inc.     Other
    Competitive Benchmarks
          Elements
    of Total Compensation
  Base
    Salary
    
    Competitive market data;
    The experience, skills and competencies of the individual; 7




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##### Table of Contents




    The compensation of the individual relative to other members of
    the executive team; and
    Individual performance of the executive in the prior year.    2008


2007


%Executive Name

Salary


Salary


IncreaseThomas J. Neri

$
500,000


$
450,000



11
%F. Terrence Blanchard(1)


386,400







Neil E. Jenkins


365,000



325,000



12Harry Dochelli(2)


400,000







Stewart A. Howley


295,610



275,000



7     (1)
    
    Contractually agreed upon base salary(2)
    
    Hired in 2008    Annual
    Incentive Plan (AIP)
          
    Thomas J. Neri  50% of his AIP opportunity was based
    on objectives set to develop and begin to implement sales
    strategies, corporate leadership and develop the senior
    management team.
    Neil E. Jenkins  60% of his AIP opportunity was based
    on objectives set to manage legal affairs, develop and expand
    investor relations and advise and serve as liaison for the Board
    of Directors.
    Harry Dochelli  60% of his AIP opportunity was based
    on objectives set to achieve sales goals in the MRO unit,
    develop and implement sales strategy and recruit and reorganize
    the sales organization.
    Stewart Howley  60% of his AIP opportunity was based
    on objectives set to develop operating and sales strategies,
    business development and the development of pricing strategies.   8




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IndividualTotal Target


Component TargetExecutive

Bonus


Bonus


Bonus AwardedThomas Neri

$
500,000


$
250,000


$
225,000Neil Jenkins


182,500



109,500



120,000Harry Dochelli


176,393



105,836



100,000Stewart Howley


147,805



88,683



50,000     Bonus AwardedExecutive

2008


2007Thomas Neri

$
225,000


$
345,000Neil Jenkins


120,000



93,750Harry Dochelli


100,000



Stewart Howley


50,000



85,332     Long-Term
    Incentive Plans
      2004-2008
    Long-Term Capital Accumulation Plan
    (LTCAP)
       9




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Target Value of AllocatedExecutive Name

Units


2008 LTCAP PayoutThomas J. Neri

$
4,053,000


$
2,395,000Neil E. Jenkins


2,748,000



1,624,000Stewart A. Howley


746,000



441,000Michael Ruprich


1,504,000



889,000   2008-2009
    Long-Term Incentive Plan (Current
    LTIP)
   10




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2008-2009
  Threshold


Target


StretchEBITDA

$
103,394


$
107,295


$
112,172ROIC


6.9
%


7.3
%


7.9
%   2008-2009
  2009-2011
    Long-Term Incentive Plan (New LTIP)
    Stock
    Performance Rights (SPRs)
    Benefits
     11




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Perquisites
    Severance
    Protection & Other Potential Payments Upon a
    Separation from the Company
  Employment
    Contracts
      Change-in-Control/Sale
    of the Company
  Change-in-control change-in-control, change-in-control change-in-control change-in-control
  Separation
    of Named Executive Officers in 2008
     12




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Role of
    the Compensation Committee
          and/or
      Compensation
    Committee Interlocks and Insider Participation
    Role of
    Executives in Setting Compensation
    Role of
    the Compensation Consultant
    and/or
    Compensation
    Recovery Policy
   13




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
    contributed to the need for a restatement of all or a portion of
    Lawsons financial statements filed with the SEC; or
    contributed to inaccurate operating metrics being used to
    calculate incentive compensation.    Tax &
    Accounting Considerations
  409A
    162(m)
  2008-13,
  SFAS 123(R)
    280G
    and 4999
  change-in-control, change-in-control change-in-control gross-up
 14




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Report of
    the Compensation Committee
  Regulation S-K
          COMPENSATION
    AGREEMENTS
    Mr. Thomas
    J. Neri
        change-in-control,
       15




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Mr. F.
    Terrence Blanchard
    Mr. Neil
    E. Jenkins
        change-in-control,
         16




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##### Table of Contents



Mr. Harry
    Dochelli
      Mr. Stewart
    A. Howley
     17




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##### Table of Contents



2008
    SUMMARY COMPENSATION TABLE(1)
    Option Awards(Stock


Non-EquityPerformance


Incentive Plan


All OtherSalary


Bonus


Rights)


Compensation


Compensation


TotalName and Principal Position

Year


($)(2)


($)(3)


($)(4)


($)(5)


($)(6)


($)Thomas J. Neri


2008



485,417



2,395,000



(21,720
)


225,000



26,471



3,110,168Chief Executive Officer


2007



432,500







2,609



345,000



37,882



817,9912006



314,583







48,255



107,540



29,726



500,104F. Terrence Blanchard(7)


2008



200,631















10,032



210,663Chief Financial OfficerNeil E. Jenkins(8)


2008



342,370



1,624,000



(63,644
)


120,000



18,327



2,041,053Executive Vice President,


2007



277,022







(52,544
)


93,750



25,055



343,283Secretary and General CounselHarry Dochelli(9)


2008



294,103



100,000



42,403



100,000



14,705



551,211Executive Vice President 
    Sales and MarketingStewart A. Howley(10)


2008



293,818



441,000







50,000



14,691



799,507Senior Vice President


2007



282,000











85,332



52,689



420,021Strategic Business DevelopmentScott F. Stephens(11)


2008



163,720



















163,720Former Senior Vice


2007



236,667











96,251



19,525



352,443President and Chief


2006



220,000











47,850



19,250



287,100Financial OfficerMichael W. Ruprich(12)


2008



147,436



889,000











459,000



1,495,436Former Group President,


2007



300,000











91,046



24,751



415,797MRO and New Channels     (1)
    
    The Stock Awards, Change in Pension Value and Non-qualified
    Deferred Compensation Earnings columns have been deleted from
    the Summary Compensation Table as such compensation was not
    granted in 2008.(2)
    
    The amounts listed in this column show the base salary paid to
    the named executive officer in 2008, 2007 and 2006.(3)
    
    Amounts earned under the LTCAP plan of $2,395,000, $1,624,000,
    441,000 and 889,000 by Mr. Neri, Mr. Jenkins,
    Mr. Howley and Mr. Ruprich, respectively, will be paid
    out 50% in 2009, 25% in 2010 and 25% in 2011. These amounts were
    determined to be non-deductible for purposes of 162(m);
    accordingly they are being reported in the Bonus column rather
    the Non-Equity Incentive Plan column. Additionally,
    Mr. Dochelli received a $100,000 sign-on bonus.(4)
    
    The amounts in this column represent the (benefit) expense
    recognized for financial statement reporting purposes for the
    years ended December 31, 2008, 2007 and 2006, in accordance
    with FAS 123(R) for cash-settled stock performance rights
    (SPRs). The Black-Scholes option valuation model
    assumptions used in calculating the fair value are included in
    Note M to our audited financial statements for the year
    ended December 31, 2008, included in our Annual Report on
    Form 10-K
    filed with the SEC on March 11, 2009. These amounts reflect
    our accounting (benefit) expense for these awards, and may not
    correspond to the actual value that will be recognized by the
    named executive officer. In some cases benefits were generated
    due to the decline in fair value of certain SPR grants and,
    therefore, reduced the Total compensation amount.(5)
    
    Amounts represent AIP bonuses earned (rather than paid) in the
    respective year. The AIP bonuses awarded in 2008 were paid out
    in 2009.(6)
    
    See All Other Compensation below for details regarding the
    amounts in this column for 2008.(7)
    
    Mr. Blanchard joined the Company as Chief Financial Officer
    in June 2008. 18




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(8)
    
    Mr. Jenkins became a named executive officer in 2007.(9)
    
    Mr. Dochelli joined the Company in April 2008.(10)
    
    Mr. Howley became a named executive officer in 2007.(11)
    
    Mr. Stephens resigned from the Company in June 2008.(12)
    
    Mr. Ruprich separated from the Company in May 2008. The
    total amount of severance benefits to be paid to
    Mr. Ruprich upon separation was $1,359,823.  ALL OTHER
    COMPENSATION IN 2008
  DeferredCompensation


FinancialProfit Sharing


Plan


Counseling


Severance


Total All OtherContribution


Contributions


Payments


Payments


CompensationName

($)(1)


($)(2)


($)


($)


($)Thomas J. Neri


11,500



12,771



2,200







26,471F. Terrence Blanchard


10,032















10,032Neil E. Jenkins


11,500



6,827











18,327Harry Dochelli


11,500



3,205











14,705Stewart A. Howley


11,500



3,191











14,691Scott F. Stephens


















Michael W. Ruprich(3)














459,000



459,000     (1)
    
    The Company made a profit sharing contribution of 5.00% of base
    salary up to the 2008 IRS annual compensation limit of $230,000.(2)
    
    For executives with base salaries above the IRS annual
    compensation limit, the Company paid 5.00% on excess
    above the IRS annual compensation limit into the Executive
    Deferred Compensation Plan. Please see the Non-Qualified
    Deferred Compensation Table.(3)
    
    Severance payments consist of an 18 month salary
    continuation agreement ($178,500 was paid in 2008 and an
    additional $280,500 will be paid in 2009). Mr. Ruprich is
    also eligible for health, dental, vision and life insurance
    during the salary continuation period which is not included in
    the total. 19




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GRANTS OF
    PLAN-BASED AWARDS IN 2008(1)
  All OtherOption





Grant DateAwards:


Exercise


Fair Value ofNumber of


Price of


Stock andEffective


Estimated Future Payouts Under
    Non-Equity
    Incentive Plan Awards


Securities


Option


OptionNamed

Grant


Threshold


Target


Maximum


Underlying


Awards


AwardsExecutive Officer

Date


($)


($)


($)


Options(#)(2)


($/Sh)(2)


($/Sh)(2)Thomas J. NeriCurrent LTIP(3)


5/13/2008



225,000



450,000



900,0002008 AIP(4)


3/01/2008



250,000



500,000



1,000,000Neil E. JenkinsCurrent LTIP(3)


5/13/2008



109,500



219,000



438,0002008 AIP(4)


3/01/2008



91,250



182,500



365,000SPRs(5)


3/17/2008















10,000



25.43



7.48Harry DochelliCurrent LTIP(3)


5/13/2008



88,683



177,366



354,7322008 AIP(4)


3/01/2008



88,197



176,393



352,787SPRs(5)


4/07/2008















25,000



27.61



8.47Stewart A. HowleyCurrent LTIP(3)


5/13/2008



160,000



320,000



640,0002008 AIP(4)


3/01/2008



73,903



147,805



295,610SPRs(5)


3/17/2008















10,000



25.43



7.48Scott F. Stephens(6)SPRs


3/17/2008















15,000



25.43



7.48Michael W. Ruprich(7)SPRs


3/17/2008















7,500



25.43



7.48     (1)
    
    The columns for Estimated Future Payments under Equity Incentive
    Plan Awards and All Other Stock Awards have been deleted.(2)
    
    Amounts represented in these columns represent awards of SPRs
    that have characteristics similar to options.(3)
    
    Any potential payouts for the
    2008-2009
    LTIP awards are expected to be made in 2010.(4)
    
    Reflects potential awards under the Lawson Products, Inc. 2008
    AIP. These awards were paid in March 2009 as described in the
    Summary Compensation Table above.(5)
    
    SPRs vest ratably over three years and have a 10 year term.(6)
    
    Mr. Stephens, former Chief Financial Officer, resigned from
    the Company in June 2008. The Company cancelled his rights under
    the
    2008-2009
    LTIP and 2008 AIP. Additionally, the 15,000 SPRs have been
    forfeited.(7)
    
    Mr. Ruprich, former Group President, MRO and New Channels,
    left the Company in May 2008. The Company cancelled his rights
    under the
    2008-2009
    LTIP and 2008 AIP. Additionally, the 7,500 SPRs have been
    forfeited. 20




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OUTSTANDING
    EQUITY AWARDS/SPRs AT DECEMBER 31, 2008
  SPR Awards (Stock Performance Rights)(1)Number of Securities Underlying


SPRUnexercised SPRs


Exercise


SPR ExpirationNamed Executive Officer

Exercisable


Unexercisable


Price ($)


DateThomas J. Neri


5,000







33.15



12/08/2013F. Terrence Blanchard














Neil E. Jenkins


400







26.50



12/13/20104,400







27.08



12/11/20117,200







26.85



08/12/2013



10,000
(2)


25.43



03/17/201812,000



10,000Stewart A. Howley






10,000
(2)


25.43



03/17/2018Harry Dochelli






25,000
(3)


27.61



04/07/2018Scott F. Stephens














Michael W. Ruprich














     (1)
    
    The columns for stock awards have been deleted as the named
    executive officers have no outstanding stock awards as of
    December 31, 2008. The data in this chart represents grants
    under the SPRs, which have characteristics similar to options as
    they are tied to performance of the Companys stock price
    but are settled in cash upon exercise.(2)
    
    Will fully vest on March 17, 2011.(3)
    
    Will fully vest on April 7, 2011.  OPTION/SPR
    EXERCISES AND STOCK VESTED IN 2008
    NONQUALIFIED
    DEFERRED COMPENSATION
  and/or
    Distributions
    from the Plan
   21




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##### Table of Contents



NONQUALIFIED
    DEFERRED COMPENSATION TABLE
  Aggregate


AggregateExecutive


Registrant


(Loss)


Withdrawals/


AggregateContributions


Contributions in


Earnings in


Distributions in


Balance atin Last FY


Last FY


Last FY


Last FY


Last FYEName

($)


($)(1)


($)


($)


($)(2)Thomas J. Neri






12,771



(22,615
)






49,508F. Terrence Blanchard


















Neil E. Jenkins






6,827



(40,157
)






63,418Harry Dochelli


18,667



3,205



(3,783
)






18,089Stewart A. Howley






3,191



66







7,959Scott F. Stephens


12,900







(25,026
)






40,375Michael W. Ruprich










1,031



60,273



     (1)
    
    Each of these amounts was also reported in column All Other
    Compensation in the 2008 Summary Compensation Table above.(2)
    
    Amounts reported in the aggregate balance at last fiscal year
    end that were reported as compensation to the named executive
    officer in the Summary Compensation Table for previous years
    were $59,352, $96,748, $4,702, $52,501 and $59,242 for
    Mr. Neri, Mr. Jenkins, Mr. Howley,
    Mr. Stephens and Mr. Ruprich, respectively.  SUMMARY
    TABLE OF POTENTIAL PAYMENTS UPON TERMINATION OR
    CHANGE-IN-CONTROL
  change-in-control,
  change-in-control
  Termination for








TerminationCause or








due to Non-Voluntary





Voluntary


Renewal of








TerminationTermination


Termination


Termination for


Contract by








UponWithout


without


Good Reason by


Lawson or








Change ofGood Reason


Cause


Executive


Executive


Death


Disability


ControlName

($)


($)


($)


($)


($)


($)


($)Thomas J. Neri


68,739



1,089,809



1,089,809



68,739



1,089,809



1,226,681



1,989,809F. Terrence Blanchard


























Neil E. Jenkins


77,456



828,526



828,526



77,456



828,528



865,398



1,388,854Harry Dochelli


27,828



427,828



27,828



27,828



27,828



27,828



1,146,430Stewart A. Howley


19,329



462,744



462,744



19,329



610,549



610,549



756,422    22




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##### Table of Contents



Mr. Thomas
    J. Neri
  TerminationTermination


Without Cause


Terminationfor Cause or


or Voluntary


Due to Non-Voluntary


Termination


Renewal of








TerminationTermination


for Good


Contract by








UponWithout Good


Reason by


Lawson








Change ofReason


Executive


or Executive


Death


Disability


ControlCompensation

($)


($)


($)(1)


($)


($)


($)(2)Base salary






1,000,000







1,000,000



1,100,000



1,000,000AIP






















450,000SPRs






















LTIP award






















450,000Executive deferral plan


49,508



49,508



49,508



49,508



49,508



49,508Health and welfare payments






21,070







21,070



57,942



21,070Accrued vacation


19,231



19,231



19,231



19,231



19,231



19,231Total


68,739



1,089,809



68,736



1,089,809



1,226,681



1,989,809     (1)
    
    Additional severance amounts are triggered at the two year
    anniversary of the effective date (which will be
    February 19, 2011)(2)
    
    The value of the exercise of SPRs is calculated using 135% of
    year-end share price to simulate a potential sale price premium
    for the Company. This includes any accelerated vesting upon a
    change of control.  Mr. F.
    Terrence Blanchard
  change-in-control
  Mr. Neil
    E. Jenkins
  TerminationTermination


Without Cause


Terminationfor Cause or


or Voluntary


Due to Non-Voluntary


Termination


Renewal of








TerminationTermination


for Good


Contract by








UponWithout Good


Reason by


Lawson or








Change ofReason


Executive


Executive


Death


Disability


ControlCompensation

($)


($)


($)(1)


($)


($)


($)(2)Base salary






730,000







730,000



730,000



730,000AIP






















240,000SPRs






















101,328LTIP award






















219,000Executive deferral plan


63,418



63,418



63,418



63,418



63,418



63,418Health and welfare payments






21,070







21,070



57,942



21,070Accrued vacation


14,038



14,038



14,038



14,038



14,038



14,038Total


77,456



828,526



77,456



828,526



865,398



1,388,854     (1)
    
    Additional severance amounts are triggered at the two year
    anniversary of the effective date (which will be
    February 19, 2011)(2)
    
    The value of the exercise of SPRs is calculated using 135% of
    year-end share price to simulate a potential sale price premium
    for the Company. This includes any accelerated vesting upon a
    change of control. 23




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##### Table of Contents



Mr. Harry
    Dochelli
  Termination








Terminationfor Cause or





Voluntary


Due to Non-Voluntary


Termination


Termination


Renewal of





TerminationTermination


Without


for Good


Contract by





UponWithout


Cause by


Reason by


Lawson or


Death and


Change ofGood Reason


Lawson


Executive


Executive


Disability


ControlCompensation

($)


($)


($)


($)


($)


($)(1)Base salary






400,000















600,000AIP






















100,000SPRs






















81,000LTIP award






















320,000Executive deferral plan


18,089



18,089



18,089



18,089



18,089



18,089Health and welfare payments






















17,602Accrued vacation


9,739



9,739



9,739



9,739



9,739



9,739Total


27,828



427,828



27,828



27,828



27,828



1,146,430     (1)
    
    The value of the exercise of SPRs is calculated using 135% of
    year-end share price to simulate a potential sale price premium
    for the Company. This includes any accelerated vesting upon a
    change of control.  Mr. Stewart
    A. Howley
  TerminationTermination


without Cause


Terminationfor Cause or


or Voluntary


Due to Non-Voluntary


Termination


Renewal  of








TerminationTermination


for Good


Contract by








UponWithout Good


Reason by


Lawson or








Change ofReason


Executive


Executive


Death


Disability


ControlCompensation

($)


($)(1)


($)


($)


($)


($)(2)Base salary






443,415







591,220



591,220



443,415AIP






















50,000SPRs






















54,200LTIP award






















177,366Executive deferral plan


7,959



7,959



7,959



7,959



7,959



7,959Health and welfare payments






















12,112Accrued vacation


11,370



11,370



11,370



11,370



11,370



11,370Total


19,329



462,744



19,329



610,549



610,540



756,422     (1)
    
    Includes consulting fees equal to 18 months of salary.(2)
    
    The value of the exercise of SPRs is calculated using 135% of
    year-end share price to simulate a potential sale price premium
    for the Company. This includes any accelerated vesting upon a
    change of control.  DIRECTOR
    COMPENSATION
     24




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##### Table of Contents



Stock performance plan Form 10-K
  Director
    Compensation Table(1)
  Fees Earned or Paid


SPR Awards


TotalName

in Cash ($)


($)(2)


($)James T. Brophy


95,000



(120,885
)


(25,885
)James S. Errant


75,000



6,675



81,675Lee S. Hillman


85,000



(24,128
)


60,872Ronald B. Port, M.D.


100,000



(120,885
)


(20,885
)Thomas S. Postek


110,000



(27,500
)


82,500Robert G. Rettig


95,000



(120,885
)


(25,885
)Mitchell H. Saranow


85,000



(90,613
)


(5,613
)Wilma J. Smelcer


100,000



(24,128
)


75,872     (1)
    
    The Stock Awards, Non-equity Incentive Plan Compensation, the
    Change in Pension Value and Nonqualified Deferred Compensation
    Earnings and All Other Compensation columns have been eliminated
    as the Company does not have any compensation to report in these
    columns. Mr. Neri is not listed in the table because he was
    an employee of the Company and received no additional
    compensation to serve as a Director.(2)
    
    The amounts in this column reflect the (benefit) expense
    recognized for financial statement purposes for the year ended
    December 31, 2008. The SPR benefit is due to the decline in
    fair value of certain SPR grants. As of December 31, 2008,
    each director had the following aggregate number of SPRs or
    options outstanding: James T. Brophy, 28,000 SPRs; James S.
    Errant, 10,000 SPRs; Lee S. Hillman, 20,000 SPRs; Ronald B.
    Port, M.D., 29,000 SPRs, 2,500 options; Thomas S. Postek,
    15,000 SPRs; Robert G. Rettig, 29,000 SPRs; Mitchell H. Saranow,
    29,000 SPRs and 2,500 options; and Wilma J. Smelcer, SPRs 20,000
    SPRs.  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS.  Equity
    Compensation Plan Information
    Number of SecuritiesRemaining Availablefor Future IssuanceNumber of Securities


Weighted-Average


Under Equityto be Issued Upon


Exercises Price of


Compensation PlansExercise of


Outstanding


(Excluding SecuritiesOutstanding Options,


Options, Warrants


Reflected in thePlan Category

Warrants and Rights


and Rights


First Column)Equity compensation plans approved by security holders


5,000


$
23.11



Equity compensation plans not approved by security holders










Total


5,000


$
23.11



  25




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##### Table of Contents



Security
    Ownership of Certain Beneficial Owners and Management
    Sole Voting or


Shared


SharedDispositive Power


Dispositive


Voting


Percent ofName of Beneficial Owner

(1)(2)


Power


Power


ClassFive Percent Shareholders:Roberta Port Washlow(3)(4)


22,471



3,011,436



240,000



38.4
%Sidney L. Port Trust, dated


1,170,389











13.7
%July 22, 1970 (the 1970 Trust)(5)Royce & Associates LLC(6)


877,614











10.3
%1414 Avenue of the Americas 
    New York, NY 10019H. George Mann, Trustee(7)


2,345,000











27.5
%1186 Linden Ave. 
    Highland Park, Il 60035Directors and Director Nominees:James T. Brophy


4,439











*James S. Errant(8)


19,204



12,378







*Lee S. Hillman


2,289











*Ronald B. Port, M.D.(3)(4)


18,904



3,011,436



240,000



38.4
%Thomas S. Postek


12,585











*Robert G. Rettig


6,289











*Mitchell H. Saranow


2,289



8,000







*Wilma J. Smelcer


2,289











*Named Executive Officers:Thomas J. Neri














*F. Terrence Blanchard














*Neil E. Jenkins














*Harry Dochelli














*Stewart A. Howley














*Scott F. Stephens(9)














*Michael W. Ruprich(10)














*All executive officers and directors as a group (15 persons)


68,288



3,031,814



240,000



39.2
%     *
    
    Less than 1%.(1)
    
    Does not include certain shares held by wives and minor children
    in the case of Mr. Brophy (725 shares) and
    Dr. Port (4,803 shares).(2)
    
    Stockholdings shown include shares issuable upon the exercise of
    stock options exercisable within 60 days of
    February 28, 2009 by Dr. Port (2,500 shares) and
    Mr. Saranow (2,500 shares).(3)
    
    Includes shares held in two family partnerships in the aggregate
    amount of 3,011,436 in which Dr. Ronald B. Port and Roberta
    Port Washlow (Mr. Sidney Ports daughter) are the
    managing partners. Approval of both of 26




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##### Table of Contents



the managing general partners is required for any actions with
    respect to the reported securities. 1,200,000 of the shares (the
    LP Pledged Shares) held by one of the limited
    partnerships have been pledged as collateral for loans to the
    1970 Trust in an amount of $11,625,000 (the Loans).
    Does not include shares held by the 1970 Trust as described in
    footnote (5).(4)
    
    Includes 240,000 shares held by a voting trust pursuant to
    which Ms. Washlow and Dr. Port are trustees.
    Ms. Washlow and Dr. Port together have voting power
    with respect to the shares, but have no power to dispose of the
    shares. Upon termination of the voting trust, the shares are to
    be distributed to undisclosed beneficiaries.(5)
    
    Any disposition of the 1,170,289 shares held by the 1970
    Trust must be approved by a majority of the three trustees,
    Dr. Port, Ms. Washlow and an unrelated party.
    1,155,000 of the shares (together with the LP Pledged Shares,
    the Pledged Shares) held by the 1970 Trust have been
    pledged as collateral for the Loans.(6)
    
    Based on Schedule 13G filed by Royce & Associates
    LLC with the SEC, dated January 26, 2009.(7)
    
    Shares listed as beneficially owned by George Mann consist of
    the Pledged Shares owned by one of the family limited
    partnerships and by the 1970 Trust. Due to the market price of
    Lawsons Common Stock falling below a certain level, George
    Mann, as trustee for various family trusts, has acquired the
    right, but not the obligation, to dispose of the Pledged Shares.(8)
    
    Mr. Errant is the former
    brother-in-law
    of Ms. Washlow and Dr. Port.(9)
    
    Mr. Stephens resigned from the Company effective
    June 27, 2008. The share information provided for
    Mr. Stephens is current through this date.(10)
    
    Mr. Ruprich was terminated without cause effective
    May 31, 2008. The share information provided for
    Mr. Ruprich is current through this date.  ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE.  Certain
    Relationships and Related Transactions
      Director
    Independence
     27




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##### Table of Contents



ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES.    Year Ended December 31,2008


2007Audit Services

$
1,042,600


$
1,014,600Audit-Related Fees


46,100



8,100Tax Fees


175,862



299,000All Other Fees


25,000



33,700$
1,289,562


$
1,355,400   Audit
    Fees
  Form 10-Q
  Audit-Related
    Fees
    Tax
    Fees
    All Other
    Fees
      Pre-Approval
    of Services by External Auditor
     28




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##### Table of Contents



PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES.  EXHIBIT INDEX
  ExhibitNumber

Description of Exhibit31
.1

Certification of Chief Executive Officer pursuant to
    18 U.S.C. Section 1350 as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Certification of Chief Financial Officer pursuant to
    18 U.S.C. Section 1350 as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.32


Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350 as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  29




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##### Table of Contents



SIGNATURES
      By:
    /s/  Thomas
    J. Neri   
      Signature

Title/s/  Thomas
    J. NeriThomas
    J. Neri

Chief Executive Officer and Director 
    (principal executive officer)/s/  F.
    Terrence BlanchardF.
    Terrence Blanchard

Chief Financial Officer 
    (principal financial and accounting officer)/s/  Ronald
    B. PortRonald
    B. Port

Chairman of the Board/s/  James
    T. BrophyJames
    T. Brophy

Director/s/  James
    S. ErrantJames
    S. Errant

Director/s/  Lee
    S. HillmanLee
    S. Hillman

Director/s/  Thomas
    S. PostekThomas
    S. Postek

Director/s/  Robert
    G. RettigRobert
    G. Rettig

Director/s/  Mitchell
    H. SaranowMitchell
    H. Saranow

Director/s/  Wilma
    J. SmelcerWilma
    J. Smelcer

Director  30