Document:

ex1025msutrgtunitsroicun

LAWSON PRODUCTS, INC. AWARD AGREEMENT This award agreement (this “Agreement”) is entered into this 5th day of January, 2021, by and between Lawson Products, Inc. (the “Company”) and [NAME] (the “Participant”). WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”) has selected the Participant to receive awards under the Lawson Products, Inc. 2009 Equity Compensation Plan (as Amended and Restated Effective May 14, 2019) (the “Equity Plan”); and WHEREAS, the Participant wishes to accept those awards, subject to the terms and conditions of the Equity Plan and this Agreement; NOW, THEREFORE, the Company and the Participant hereby agree as follows: 1. The awards evidenced by this Agreement are effective as of January 5, 2021 (the “Grant Date”) and consist of: (a) A target award of Market Stock Units (“MSU Target Units”) equal to [NUMBER] ( ) MSU Target Units (the “MSU Target Unit Award”) under the Equity Plan. (b) A target award of ROIC Stock Units (“ROIC Target Units”) equal to [NUMBER] ( ) ROIC Target Units (the “ROIC Target Unit Award”) under the Equity Plan. (c) A restricted award of Stock Units (“Restricted Units”) equal to [NUMBER] ([ ]) Restricted Units (the “Restricted Unit Award”) under the Equity Plan. 2. Except as otherwise provided in Sections 3 through 5 below: (a) The MSU Target Units shall vest in the proportions set forth below, based on weighted average closing price of the Company’s common stock (the “Common Stock”) for 60 trading days as of December 31, 2023 (the “Final Stock Price”): (i) 0% of the MSU Target Unit Award if the Final Stock Price is less than $61.50 (the “Threshold Price”); (ii) 50% of the MSU Target Unit Award if the Final Stock Price is (x) equal to or greater than the Threshold Price, and (y) less than $71.50 (the “Target Price”); (iii) 100% of the MSU Target Unit Award if the Final Stock Price is (x) equal to or greater than the Target Price and (y) less than $81.00 (the “Maximum Price”); or (iv) 150% of the MSU Target Unit Award if the Final Stock Price is equal to or greater than the Maximum Price. 

 

2 If the Final Stock Price is between the Threshold Price and the Target Price or between the Target Price and the Maximum Price, then the number of vested MSU Target Units shall be calculated using straight-line interpolation. The Participant will be entitled to receive one share of the Common Stock for each vested MSU Target Unit as soon as practicable after December 31, 2023. (b) The ROIC Target Units shall vest in the proportions set forth below, based on the Company’s Average ROIC (as defined below) during the period commencing on January 1, 2021 and ending on December 31, 2023 (the “ROIC Performance Period”). The payout of the ROIC Target Units will be calculated based on the Company’s aggregate of the ROIC achieved during each calendar year of the ROIC Performance Period (i.e., 2021, 2022 and 2023) divided by 3. A threshold, target and maximum performance level will be set at the commencement of each calendar year consistent with the Company’s approved operating plan. The award payout will be calculated based on the Company’s 3-year cumulative Average ROIC results relative to the cumulative 3-year average ROIC performance goal. The Participant will receive: (i) 0% of the ROIC Target Unit Award if the Average ROIC is less than the cumulative average of the Company’s “Threshold ROIC” for the three fiscal years during the ROIC Performance Period (such average, the “Average Threshold ROIC”); (ii) 50% of the ROIC Target Unit Award if the Average ROIC is (x) equal to or greater than the Average Threshold ROIC, and (y) less than the cumulative average of the Company’s “Target ROIC” for the three fiscal years during the ROIC Performance Period (the “Average Target ROIC”); (iii) 100% of the ROIC Target Unit Award if the Average ROIC is (x) equal to or greater than the Average Target ROIC and (y) less than the cumulative average of the Company’s “Maximum ROIC” for the three fiscal years during the ROIC Performance Period (the “Average Maximum ROIC”); or (iv) 150% of the ROIC Target Unit Award if the cumulative Average ROIC is equal to or greater than the Average Maximum ROIC. If the Average ROIC is between the Average Threshold ROIC and the Average Target ROIC or between the Average Target ROIC and the Average Maximum ROIC, then the number of vested ROIC Target Units shall be calculated using straight-line interpolation. The Participant will be entitled to receive one share of the Common Stock or an equivalent cash amount for each vested ROIC Target Unit as soon as practicable after December 31, 2023. For purposes of this Agreement, (x) “Average ROIC” means the Company’s cumulative ROIC for each of the three fiscal years of the Company during the ROIC Performance Period divided by 3 and (y) “ROIC” means, with respect to each fiscal year of the Company during the ROIC Performance Period, (A) the Company’s earnings before interest and taxes, as adjusted to exclude the impact of non-recurring items such as stock-based compensation, accounting changes, severance, fluctuations in currency 

 

3 exchange and other non-recurring items divided by (B) the Company’s average invested capital, as determined by the Company’s book equity value in accordance with U.S. Generally Accepted Accounting Principles plus debt less cash and cash equivalents, as adjusted to exclude the impact of real estate transactions, lease obligations, stock-based compensation payments, acquisition costs and other non-recurring items. The Committee, in its sole discretion, shall establish the Threshold ROIC, Target ROIC and Maximum ROIC goals for each fiscal year during the ROIC Performance Period as soon as practicable following the commencement of such fiscal year and, following such determination, notify the Participant of such Threshold ROIC, Target ROIC and Maximum ROIC goals. Any and all determinations as to Average ROIC and ROIC shall be made by the Committee in its sole discretion and shall be final and binding on the Company and the Participant. (c) The Restricted Units shall vest in full on December 31, 2023, and one share of the Common Stock shall be distributed to the Participant for each vested Restricted Unit, provided that the Participant remains continuously employed by the Company through such date. (d) In the event of the termination of the Participant’s employment with the Company and all of its affiliates for any reason other than by the Company without Cause (as defined in Section 1.5 of the Equity Plan) or upon the Participant’s death or Disability (as defined in Section 1.12 of the Equity Plan), the unvested portions of the MSU Target Unit, ROIC Target Unit and Restricted Unit awards evidenced by this Agreement shall be immediately forfeited and cancelled. 3. In the event of the termination of the Participant’s employment with the Company and all of its affiliates by the Company without Cause or upon the Participant’s death or Disability, then the Participant (or the Participant’s beneficiary or legal representative) shall be entitled to receive, as soon as is practicable after the aforementioned triggering event, a pro rata portion of the MSU Target Unit, ROIC Target Unit, and Restricted Unit awards equal to the MSU Target Unit Award, the ROIC Target Unit Award, and the total number of Restricted Units granted under this Agreement, respectively, multiplied by a fraction, the numerator of which is the number of calendar days elapsed between the Grant Date and the Participant’s date of termination and the denominator of which is the number of calendar days between the Grant Date and December 31, 2023. 4. In the event of the termination of the Participant’s employment with the Company and all of its affiliates for Cause (as defined in Section 1.5 of the Equity Plan), then all unvested portions of the awards evidenced by this Agreement shall immediately be forfeited, and any previously paid or released portion of those awards (including any cash payments made with respect to such awards) shall be promptly returned to the Company by the Participant (or any successor in interest) in accordance with the procedure set forth in Section 14.2 of the Equity Plan. 5. Upon the consummation of a Change in Control (as defined in Section 1.6 of the Equity Plan), (i) the number of MSU Target Units earned based on (x) the formula specified in Section 2(a) above, and (y) the greater of the Target Price or the transaction price with respect to the Common Stock on the effective date of the Change of Control, shall automatically become 

 

4 100% vested, (ii) the number of ROIC Target Units earned based on (x) the formula specified in Section 2(b) above, and (y) the greater of the Average Target ROIC or the Average ROIC for the period ending on the effective date of the Change of Control, as determined by the Committee in its discretion, shall automatically become 100% vested and (iii) Restricted Units shall automatically become 100% vested. 6. Each cash payment or vesting of MSU Target Units, ROIC Target Units or Restricted Units pursuant to any of the awards evidenced by this Agreement shall be subject to compliance with all applicable tax withholding requirements, in accordance with Article 15 of the Equity Plan, as applicable. 7. The MSU Target Units, ROIC Target Units Restricted Units under this Agreement are intended to be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder (“Section 409A”); and the terms and conditions of the Equity Plan and/or this Agreement shall be deemed automatically amended to the extent necessary to produce such compliance, so that neither the Company nor the Participant (nor any successor in interest) shall have at any time a right or power that would cause the compensation in question to become subject to the special tax consequences provided for by Section 409A. References in this Agreement to “termination of employment” and similar terms shall mean a “separation from service” within the meaning of Section 409A. Any payment subject to Section 409A that is to be made upon a “separation from service” on any date when the Participant is a “specified employee” as defined under Section 409A shall not be paid before the date that is six (6) months following the Participant’s “separation from service” or, if earlier, the Participant’s death. 8. All aspects of the awards evidenced by this Agreement (including but not limited to vesting, valuation, payment and possible forfeiture) shall be governed by this Agreement and by the Equity Plan, copies of which plans have been provided to the Participant and are hereby acknowledged by the Participant, and the terms and conditions of which are incorporated into this Agreement by reference. Each initially capitalized word used in this Agreement shall have the meaning set forth in the Equity Plan, except as otherwise specified in this Agreement. In the event of any inconsistency between this Agreement and the Equity Plan, the terms of the Equity Plan shall control. 9. Without limiting the scope of the other provisions of this Agreement, the Participant acknowledges and agrees that: (a) If any cash payment or vesting of rights with respect to an award evidenced by this Agreement would constitute an “excess parachute payment” for the purposes of Section 280G of the Internal Revenue Code, then such payment or vesting shall be subject to reduction or other adjustment in accordance with the terms of any employment agreement between the Participant and the Company, or of any other agreement between the Participant and the Company, which address the tax treatment of such a payment. (b) The Committee may amend or terminate any or all of the provisions of the Equity Plan and any or all of the provisions this Agreement in accordance with Article 17 of the Equity Plan. No course of conduct or failure or delay in enforcing the provisions 

 

5 of this Agreement shall affect the validity, binding effect or enforceability of this Agreement. (c) Any notices required or permitted under this Agreement or the Equity Plan will be delivered in accordance with the requirements of the applicable plan. (d) The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party. (e) This Agreement supersedes and replaces any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. (f) Notwithstanding anything in this Agreement to the contrary, the MSU Target Units, ROIC Target Units, and Restricted Units covered by this Agreement shall be subject to the Company’s Recovery of Funds Policy, as it may be in effect from time to time, including, without limitation, the provisions of any such policy required by Section 10D of the Exchange Act and any applicable rules or regulations issued by the U.S. Securities and Exchange Commission or any national securities exchange or national securities association on which the Common Stock may be traded. (g) This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois without regard to its conflict of laws rules. Any action or proceeding against the parties relating in any way to this Agreement must be brought and enforced in the federal courts in the state of Illinois, county of Cook, and the parties irrevocably submit to the jurisdiction of such courts in respect of any such action or proceeding. (h) The parties may execute this Agreement in one or more counterparts, all of which together shall constitute but one Agreement. [signature page follows] 

 

IN WITNESS WHEREOF, the Participant and the Company have executed this Agreement as of the date set forth above. _______________________________ Participant LAWSON PRODUCTS, INC. By: __________________________________ Its: President and CEO 

 

LAWSON PRODUCTS, INC. AWARD AGREEMENT This award agreement (this “Agreement”) is entered into this 5th day of January, 2021, by and between Lawson Products, Inc. (the “Company”) and [NAME] (the “Participant”). WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”) has selected the Participant to receive awards under the Lawson Products, Inc. 2009 Equity Compensation Plan (as Amended and Restated Effective May 14, 2019) (the “Equity Plan”); and WHEREAS, the Participant wishes to accept those awards, subject to the terms and conditions of the Equity Plan and this Agreement; NOW, THEREFORE, the Company and the Participant hereby agree as follows: 1. The awards evidenced by this Agreement are effective as of January 5, 2021 (the “Grant Date”) and consist of: (a) A target award of Market Stock Units (“MSU Target Units”) equal to [NUMBER] ( ) MSU Target Units (the “MSU Target Unit Award”) under the Equity Plan. (b) A target award of ROIC Stock Units (“ROIC Target Units”) equal to [NUMBER] ( ) ROIC Target Units (the “ROIC Target Unit Award”) under the Equity Plan. (c) A restricted award of Stock Units (“Restricted Units”) equal to [NUMBER] ([ ]) Restricted Units (the “Restricted Unit Award”) under the Equity Plan. 2. Except as otherwise provided in Sections 3 through 5 below: (a) The MSU Target Units shall vest in the proportions set forth below, based on weighted average closing price of the Company’s common stock (the “Common Stock”) for 60 trading days as of December 31, 2023 (the “Final Stock Price”): (i) 0% of the MSU Target Unit Award if the Final Stock Price is less than $61.50 (the “Threshold Price”); (ii) 50% of the MSU Target Unit Award if the Final Stock Price is (x) equal to or greater than the Threshold Price, and (y) less than $71.50 (the “Target Price”); (iii) 100% of the MSU Target Unit Award if the Final Stock Price is (x) equal to or greater than the Target Price and (y) less than $81.00 (the “Maximum Price”); or (iv) 150% of the MSU Target Unit Award if the Final Stock Price is equal to or greater than the Maximum Price. 

 

2 If the Final Stock Price is between the Threshold Price and the Target Price or between the Target Price and the Maximum Price, then the number of vested MSU Target Units shall be calculated using straight-line interpolation. The Participant will be entitled to receive one share of the Common Stock for each vested MSU Target Unit as soon as practicable after December 31, 2023. Notwithstanding anything in the Equity Plan or this Agreement to the contrary, the Participant is required to hold (and not transfer or otherwise dispose of) one-hundred percent (100%) of the MSU Target Units, ROIC Target Units, if applicable, and Restricted Units that vest and convert to shares of Common Stock, net of taxes (“Net Shares”), until two (2) years after December 31, 2023 [the conversion date with respect to such Net Shares]; provided, that this requirement shall lapse in the event of the Participant’s death, Disability or a Change in Control. (b) The ROIC Target Units shall vest in the proportions set forth below, based on the Company’s Average ROIC (as defined below) during the period commencing on January 1, 2021 and ending on December 31, 2023 (the “ROIC Performance Period”). The payout of the ROIC Target Units will be calculated based on the Company’s aggregate of the ROIC achieved during each calendar year of the ROIC Performance Period (i.e., 2021, 2022 and 2023) divided by 3. A threshold, target and maximum performance level will be set at the commencement of each calendar year consistent with the Company’s approved operating plan. The award payout will be calculated based on the Company’s 3-year cumulative Average ROIC results relative to the cumulative 3-year average ROIC performance goal. The Participant will receive: (i) 0% of the ROIC Target Unit Award if the Average ROIC is less than the cumulative average of the Company’s “Threshold ROIC” for the three fiscal years during the ROIC Performance Period (such average, the “Average Threshold ROIC”); (ii) 50% of the ROIC Target Unit Award if the Average ROIC is (x) equal to or greater than the Average Threshold ROIC, and (y) less than the cumulative average of the Company’s “Target ROIC” for the three fiscal years during the ROIC Performance Period (the “Average Target ROIC”); (iii) 100% of the ROIC Target Unit Award if the Average ROIC is (x) equal to or greater than the Average Target ROIC and (y) less than the cumulative average of the Company’s “Maximum ROIC” for the three fiscal years during the ROIC Performance Period (the “Average Maximum ROIC”); or (iv) 150% of the ROIC Target Unit Award if the cumulative Average ROIC is equal to or greater than the Average Maximum ROIC. If the Average ROIC is between the Average Threshold ROIC and the Average Target ROIC or between the Average Target ROIC and the Average Maximum ROIC, then the number of vested ROIC Target Units shall be calculated using straight-line interpolation. The Participant will be entitled to receive one share of the Common Stock 

 

3 or an equivalent cash amount for each vested ROIC Target Unit as soon as practicable after December 31, 2023. For purposes of this Agreement, (x) “Average ROIC” means the Company’s cumulative ROIC for each of the three fiscal years of the Company during the ROIC Performance Period divided by 3 and (y) “ROIC” means, with respect to each fiscal year of the Company during the ROIC Performance Period, (A) the Company’s earnings before interest and taxes, as adjusted to exclude the impact of non-recurring items such as stock-based compensation, accounting changes, severance, fluctuations in currency exchange and other non-recurring items divided by (B) the Company’s average invested capital, as determined by the Company’s book equity value in accordance with U.S. Generally Accepted Accounting Principles plus debt less cash and cash equivalents, as adjusted to exclude the impact of real estate transactions, lease obligations, stock-based compensation payments, acquisition costs and other non-recurring items. The Committee, in its sole discretion, shall establish the Threshold ROIC, Target ROIC and Maximum ROIC goals for each fiscal year during the ROIC Performance Period as soon as practicable following the commencement of such fiscal year and, following such determination, notify the Participant of such Threshold ROIC, Target ROIC and Maximum ROIC goals. Any and all determinations as to Average ROIC and ROIC shall be made by the Committee in its sole discretion and shall be final and binding on the Company and the Participant. (c) The Restricted Units shall vest in full on December 31, 2023, and one share of the Common Stock shall be distributed to the Participant for each vested Restricted Unit, provided that the Participant remains continuously employed by the Company through such date. (d) In the event of the termination of the Participant’s employment with the Company and all of its affiliates for any reason other than by the Company without Cause (as defined in Section 1.5 of the Equity Plan) or upon the Participant’s death or Disability (as defined in Section 1.12 of the Equity Plan), the unvested portions of the MSU Target Unit, ROIC Target Unit and Restricted Unit awards evidenced by this Agreement shall be immediately forfeited and cancelled. 3. In the event of the termination of the Participant’s employment with the Company and all of its affiliates by the Company without Cause or upon the Participant’s death or Disability, then the Participant (or the Participant’s beneficiary or legal representative) shall be entitled to receive, as soon as is practicable after the aforementioned triggering event, a pro rata portion of the MSU Target Unit, ROIC Target Unit, and Restricted Unit awards equal to the MSU Target Unit Award, the ROIC Target Unit Award, and the total number of Restricted Units granted under this Agreement, respectively, multiplied by a fraction, the numerator of which is the number of calendar days elapsed between the Grant Date and the Participant’s date of termination and the denominator of which is the number of calendar days between the Grant Date and December 31, 2023. 4. In the event of the termination of the Participant’s employment with the Company and all of its affiliates for Cause (as defined in Section 1.5 of the Equity Plan), then all unvested portions of the awards evidenced by this Agreement shall immediately be forfeited, and any 

 

4 previously paid or released portion of those awards (including any cash payments made with respect to such awards) shall be promptly returned to the Company by the Participant (or any successor in interest) in accordance with the procedure set forth in Section 14.2 of the Equity Plan. 5. Upon the consummation of a Change in Control (as defined in Section 1.6 of the Equity Plan), (i) the number of MSU Target Units earned based on (x) the formula specified in Section 2(a) above, and (y) the greater of the Target Price or the transaction price with respect to the Common Stock on the effective date of the Change of Control, shall automatically become 100% vested, (ii) the number of ROIC Target Units earned based on (x) the formula specified in Section 2(b) above, and (y) the greater of the Average Target ROIC or the Average ROIC for the period ending on the effective date of the Change of Control, as determined by the Committee in its discretion, shall automatically become 100% vested and (iii) Restricted Units shall automatically become 100% vested. 6. Each cash payment or vesting of MSU Target Units, ROIC Target Units or Restricted Units pursuant to any of the awards evidenced by this Agreement shall be subject to compliance with all applicable tax withholding requirements, in accordance with Article 15 of the Equity Plan, as applicable. 7. The MSU Target Units, ROIC Target Units Restricted Units under this Agreement are intended to be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder (“Section 409A”); and the terms and conditions of the Equity Plan and/or this Agreement shall be deemed automatically amended to the extent necessary to produce such compliance, so that neither the Company nor the Participant (nor any successor in interest) shall have at any time a right or power that would cause the compensation in question to become subject to the special tax consequences provided for by Section 409A. References in this Agreement to “termination of employment” and similar terms shall mean a “separation from service” within the meaning of Section 409A. Any payment subject to Section 409A that is to be made upon a “separation from service” on any date when the Participant is a “specified employee” as defined under Section 409A shall not be paid before the date that is six (6) months following the Participant’s “separation from service” or, if earlier, the Participant’s death. 8. All aspects of the awards evidenced by this Agreement (including but not limited to vesting, valuation, payment and possible forfeiture) shall be governed by this Agreement and by the Equity Plan, copies of which plans have been provided to the Participant and are hereby acknowledged by the Participant, and the terms and conditions of which are incorporated into this Agreement by reference. Each initially capitalized word used in this Agreement shall have the meaning set forth in the Equity Plan, except as otherwise specified in this Agreement. In the event of any inconsistency between this Agreement and the Equity Plan, the terms of the Equity Plan shall control. 9. Without limiting the scope of the other provisions of this Agreement, the Participant acknowledges and agrees that: (a) If any cash payment or vesting of rights with respect to an award evidenced by this Agreement would constitute an “excess parachute payment” for the 

 

5 purposes of Section 280G of the Internal Revenue Code, then such payment or vesting shall be subject to reduction or other adjustment in accordance with the terms of any employment agreement between the Participant and the Company, or of any other agreement between the Participant and the Company, which address the tax treatment of such a payment. (b) The Committee may amend or terminate any or all of the provisions of the Equity Plan and any or all of the provisions this Agreement in accordance with Article 17 of the Equity Plan. No course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement. (c) Any notices required or permitted under this Agreement or the Equity Plan will be delivered in accordance with the requirements of the applicable plan. (d) The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party. (e) This Agreement supersedes and replaces any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. (f) Notwithstanding anything in this Agreement to the contrary, the MSU Target Units, ROIC Target Units, and Restricted Units covered by this Agreement shall be subject to the Company’s Recovery of Funds Policy, as it may be in effect from time to time, including, without limitation, the provisions of any such policy required by Section 10D of the Exchange Act and any applicable rules or regulations issued by the U.S. Securities and Exchange Commission or any national securities exchange or national securities association on which the Common Stock may be traded. (g) This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois without regard to its conflict of laws rules. Any action or proceeding against the parties relating in any way to this Agreement must be brought and enforced in the federal courts in the state of Illinois, county of Cook, and the parties irrevocably submit to the jurisdiction of such courts in respect of any such action or proceeding. (h) The parties may execute this Agreement in one or more counterparts, all of which together shall constitute but one Agreement. [signature page follows] 

 

IN WITNESS WHEREOF, the Participant and the Company have executed this Agreement as of the date set forth above. _______________________________ Participant LAWSON PRODUCTS, INC. By: __________________________________ Its: President and CEOex107changeincontrolagre

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

 

    benefits from time to time to the extent and on such terms as the Company or Parent shall  determine in its sole discretion:  (i) coverage under the Company’s group health plan on such terms as  provided to other Company officers;  (ii) long-term disability insurance coverage;  (iii) group term life insurance;  (iv) accidental death insurance; and  (v) participation in the Company’s 401(k) plan, profit-sharing  retirement plan and executive deferral plan.  (c) Board.  The term “Board” shall mean the Board of Directors of Parent.   (d) Cause.  The term “Cause” shall mean any of the following:  (i) violation by Executive of any agreement between Executive and  the Company or any law relating to non-competition, trade secrets,  inventions, non-solicitation or confidentiality;  (ii) material breach or default of any of Executive’s duties or other  obligations or covenants under this Agreement, which has not been  cured within 30 days of written notice thereof to Executive;  (iii) Executive’s gross negligence, dishonesty or willful misconduct;  (iv) any act or omission by Executive which has a material adverse  effect on the Company’s business, reputation, goodwill or  customer relations;  (v) conviction of or pleading nolo contendere to a crime by Executive  (other than traffic related offenses);  (vi) any act or omission by Executive which, at the time it occurs, is in  material violation of any Company policy, such as they now exist  or hereafter are supplemented, amended, modified or restated; or  (vii) an act of fraud or embezzlement or the misappropriation of  property by Executive.  (e) Change in Control.  The term “Change in Control” shall mean the  occurrence of any of the following:  (i) any “person” or “group” of “persons” (as such terms are used in  Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,  as amended, and the rules promulgated thereunder) is or becomes  

 

    the beneficial owner, directly or indirectly, of securities  representing voting power, as of the date of determination, of then  outstanding voting securities representing 50% or more of the  combined voting power of Parent’s then outstanding securities as  of such date of determination; or  (ii) there is a merger, consolidation or reorganization involving Parent,  or any direct or indirect subsidiary of Parent, unless:  (A) the stockholders of Parent immediately before such  merger, consolidation or reorganization will own,  directly or indirectly, immediately following such  merger, consolidation or reorganization, at least  fifty percent (50%) of the combined voting power  of the outstanding voting securities of the  corporation resulting from such merger,  consolidation or reorganization (the “Surviving  Corporation”) or any parent thereof in  substantially the same proportion as their ownership  of the voting securities of Parent immediately  before such merger, consolidation or reorganization;  and  (B) the individuals who were members of the Board  immediately prior to the execution of the agreement  providing for such merger, consolidation or  reorganization constitute a majority of the members  of the board of directors of the Surviving  Corporation (or parent thereof); and  (C) no “person” or “group” of “persons” as defined  above is the beneficial owner of forty percent (40%)  or more of the combined voting power of the then  outstanding voting securities of the Surviving  Corporation (or parent thereof); or  (iii) there is a sale or other disposition of all or substantially all of the  assets of Parent to an entity other than an entity:  (A) of which at least fifty percent (50%) of the  combined voting power of the outstanding voting  securities are owned, directly or indirectly, by  stockholders of Parent in substantially the same  proportion as their then current ownership of the  voting securities of Parent; and  

 

    (B) of which a majority of the board of directors is  comprised of the individuals who were members of  the Board immediately prior to the execution of the  agreement providing for such sale or disposition;  and  (C) of which no “person” or “group” of “persons” as  defined above is the beneficial owner of forty  percent (40%) or more of the combined voting  power of the then outstanding voting securities of  such entity (or parent thereof); or  (iv) Individuals who, as of the date hereof, constitute the Board (the  “Incumbent Board”) cease for any reason to constitute at least a  majority of the Board; provided, however, that any individual  becoming a director subsequent to the effective date hereof whose  election, or nomination for election by Parent stockholders, was  approved by a vote of at least four-fifths (4/5) of the directors then  comprising the Incumbent Board shall be considered as though  such individual were a member of the Incumbent Board, unless  any such individual’s initial assumption of office occurs as a result  of either an actual or threatened election contest (including, but not  limited to, a consent solicitation).  (f) Code.  The term “Code” shall mean the Internal Revenue Code of 1986,  as amended.   (g) Code Section 409.  The term “Code Section 409A” shall mean Section  409A of the Code and all regulations issued thereunder and applicable guidance thereto.   (h) Competitive Products, Systems and Services.  The term “Competitive  Products, Systems and Services” shall mean products, systems or services in existence or under  development during Executive’s employment with the Company which are the same as or  substantially similar to or functional equivalents of those of the Lawson Entities including,  without limitation, those which are or may be provided to the Lawson Entities’ customers on  behalf of the Lawson Entities by employees, agents, or sales representatives of the Lawson  Entities.   (i) Confidential Information.  The term “Confidential Information” shall  mean all information, including, but not limited to, trade secrets disclosed to Executive or known  by Executive as a consequence of or through Executive’s employment by the Company,  concerning the products, services, systems, customers and agents of the Lawson Entities, and  specifically including without limitation:  computer programs and software, unpatented  inventions, discoveries or improvements; marketing, organizational and product research and  development; marketing techniques; promotional programs; compensation and incentive  programs; customer loyalty programs; inventory systems; business plans; sales forecasts;  personnel information, including but not limited to the identity of employees and agents of the  

 

    Lawson Entities, their responsibilities, competence, abilities, and compensation; pricing and  financial information; customer lists and information on customers or their employees, or their  needs and preferences for the Lawson Entities’ Products, Systems and Services; information  concerning planned or pending acquisitions or divestitures; and information concerning  purchases of major equipment or property, and which:  (i) has not been made generally available to the public; and  (ii) is useful or of value to the current or anticipated business or  research or development activities of the Lawson Entities, or of  any customer or supplier of the Lawson Entities.  Confidential Information shall not include information which:  (x) is in or hereafter enters the public domain through no fault of  Executive;  (y) is obtained by Executive from a third party having the legal right to  use and to disclose the same without restriction; or   (z) was in the possession of Executive prior to receipt from the  Lawson Entities (as evidenced by Executive’s written records  predating the first date of employment with the Company).  Confidential Information also does not include Executive’s general skills and experience as  defined under the governing law of this Agreement.  (j) Equity Awards.  The term “Equity Awards” shall mean the stock options,  restricted stock, stock awards, phantom stock units, stock appreciation units, stock performance  rights, shareholder value appreciation rights or other such equity-based compensation as shall  have been granted to Executive on or before the effective date of the termination of Executive’s  employment.  (k) Good Reason.  The term “Good Reason” shall mean any of the following:  (i) a material diminution in Executive’s base compensation;  (ii) a material diminution in Executive’s authority, duties or  responsibilities;  (iii) a material change (with such change to be not less than 50 miles)  in the geographic location at which Executive must perform  Executive’s services; or  (iv) any other action or inaction that constitutes a material breach by  the Company of this Agreement.  

 

    (l) Lawson Entities.  The term “Lawson Entities” shall mean Parent, any  Subsidiary of Parent and any other entity in which any one or more of them has an ownership  interest at any time during Executive’s employment with the Company and during the Restriction  Period whether such entity is in the United States or elsewhere.  (m) Lawson Entities’ Products, Systems and Services.  The term “Lawson  Entities’ Products, Systems and Services” shall mean:  (i) the acquisition for and the distribution and sale of fasteners, parts,  hardware, pneumatics, hydraulic and other flexible hose fittings,  tools, safety items and electrical and shop supplies, automotive and  vehicular products, chemical specialties, maintenance chemicals  and other chemical products, welding products and related items,  all as more particularly described in the Lawson Entities’ sales kits  and manuals;  (ii) the sale and distribution and the providing of systems and services  related to the items described in clause (i);  (iii) the manufacture, sale and distribution of production and  specialized parts and supplies described in clause (i);  (iv) the provision of just-in-time inventories of component parts  described in clause (i) to original equipment manufacturers and of  maintenance and repair parts described in clause (i) to a wide  variety of users; and  (v) the provision of in-plant inventory systems and of electronic  vendor-managed, inventory systems to various customers, related  to the items described in clause (i).   (n) Parent.  The term “Parent” shall mean Lawson Products, Inc., a Delaware  corporation.  (o) Restriction Period.  The term “Restriction Period” shall mean the period  of time in which Executive is employed by the Company and a period of twelve months after the  effective date of Executive’s termination.   (p) Section 409A Change in Control.  The term “Section 409A Change in  Control” means any “change in control event” within the meaning of Code Section 409A  determined in accordance with the uniform methodology and procedures adopted by the  Company.  (q) Subsidiary.  The term “Subsidiary” means, with respect to any person or  entity, any corporation, association or other entity of which more than 50% of the combined  voting power is owned, directly or indirectly, by such person or entity and one or more other  Subsidiaries of such person or entity.  

 

    (r) Unauthorized Person or Entity.  The term “Unauthorized Person or  Entity” shall mean any individual or entity who or which has not signed an appropriate secrecy  or confidentiality agreement with the Lawson Entities, or is not a current or target customer with  whom Confidential Information is shared in the mutual interest of that person or entity and the  Lawson Entities.  3. Payments Due Upon Specified Terminations.  (a) Payments Due Upon Termination Without Cause by the Company or for  Good Reason by Executive After a Change in Control.  In lieu of the payments and other benefits  due under any other severance policy maintained by or on behalf of the Company in which  Executive is otherwise entitled to participate, in the event the Company terminates Executive’s  employment without “Cause” or if the Executive terminates Executive’s employment for “Good  Reason”, but only in each case within one year following a Change in Control, the Company  shall have no obligation to Executive, except:  (i) the Company shall pay Executive any Accrued Compensation;  (ii) the Company shall pay Executive (x) an amount equal to one times  Executive’s then current annual base salary, and (y) an amount  equal to the greater of (A) Executive’s target annual incentive  bonus with respect to the year in which Executive’s termination  occurs or (B) the annual incentive bonus most recently paid to  Executive.  Subject to Section 3(b), such amounts shall be paid in a  lump sum, to the extent a Section 409A Change in Control has  occurred contemporaneously with the Change in Control (or  anytime in the calendar year prior to the effective date of  Executive’s termination) no later than 30 days after the effective  date of Executive’s termination, or to the extent a Section 409A  Change in Control has not occurred during such period, they shall  be paid in twelve equal monthly installments commencing one  month after the effective date of Executive’s termination;  (iii) Executive shall continue to be covered under the Company’s group  health plan as set forth in the definition of “Benefit Plans”,  including any spousal and dependent coverage, at active employee  rates, for twelve months after the effective date of Executive’s  termination (which coverage may result in imputed income), and,  thereafter, Executive shall be eligible to exercise Executive’s rights  to COBRA continuation coverage with respect to such group  health plan for Executive, and, where applicable, Executive’s  spouse and eligible dependents, at Executive’s expense; and  (iv) all of Executive’s outstanding Equity Awards, if any, shall  immediately vest upon the effective date of Executive’s  termination to the extent not already vested, and Executive shall  have until the earlier of (A) ninety (90) days following the  

 

    effective date of Executive’s termination (or such longer exercise  period that may be provided in an award agreement evidencing  such Equity Award) and (B) the term of such equity Award to  exercise any vested Equity Award that is subject to being  exercised.  (b) Six (6) Month Delay.  If, at the time Executive becomes entitled to  payments and benefits under Section 3(a) of this Agreement (“Severance Payment”), Executive  is a Specified Employee (within the meaning of Code Section 409A and using the identification  methodology selected by the Company from time to time), then, notwithstanding any other  provision in Section 3(a) to the contrary, the following provision shall apply.  No Severance  Payment considered by the Company in good faith to be deferred compensation under Code  Section 409A that is payable upon Executive’s separation from service (as defined and  determined under Code Section 409A), and not subject to an exception or exemption thereunder,  shall be paid to Executive until the date that is six (6) months after Executive’s effective date of  termination.  Any such Severance Payment that would otherwise have been paid to Executive  during this six-month period shall instead be aggregated and paid to Executive on or as soon as  administratively feasible after the date that is six (6) months after Executive’s effective date of  termination, but not later than 60 days after such date.  Any Severance Payment to which  Executive is entitled to be paid after the date that is six (6) months after Executive’s effective  date of termination shall be paid to Executive in accordance with the terms of Section 3(a).  (c) Release.  Executive shall not be entitled to receive any of the payments or  benefits set forth in this Section 3 (except Accrued Compensation), and said payments and  benefits shall be forfeited without further action by the Company, unless Executive (or if  applicable, Executive’s beneficiaries and/or estate) executes a general release substantially in the  form of Exhibit A (the “General Release”) and, on or prior to the 60th day following the date of  termination (or such shorter period as set forth therein), such General Release becomes effective  and irrevocable in accordance with the terms thereof.  With respect to any of the payments or  benefits pursuant to this Section 3 considered by the Company in good faith to be deferred  compensation under Code Section 409A, any amounts that would otherwise be payable during  the 60-day period in the absence of the preceding General Release requirement shall be payable  and effective on the 60th day after Executive’s termination of employment.   (d) Additional Provisions for Termination for Good Reason.  Executive is  entitled to terminate Executive’s employment for Good Reason only if:  (i) one or more of the conditions constituting Good Reason occurs  without Executive’s written consent;  (ii) Executive provides notice to the Company of the existence of a  condition constituting Good Reason within 15 days of the initial  occurrence of such condition;   (iii) the Company fails to remedy such condition constituting Good  Reason within 30 days of being provided notice of such condition  by Executive; and   

 

    (iv) Executive voluntarily terminates Executive’s employment within  15 days of the expiration of the remedy period specified in clause  (iii).   (e) Other Events of Employment Termination.  If the Company terminates  Executive’s employment with “Cause” or if Executive terminates Executive’s employment for  any reason not constituting “Good Reason”, the Company shall have no obligation to Executive,  except that the Company shall pay Executive any Accrued Compensation.  4. Protection of Company Assets.  (a) Non-Competition.  Executive expressly agrees that, during the Restriction  Period, provided that there shall not have occurred and be continuing any material non- compliance by the Company with its obligations under this Agreement, Executive shall not, in  the United States, Canada and Mexico, directly or indirectly, as an owner, officer, director,  employee, agent, advisor, financier, or in any other form or capacity, on behalf of Executive or  any other person, firm or other business entity, engage in or be concerned with any Competitive  Products, Systems and Services, or any other duties or pursuits for monetary gain which interfere  with or restrict Executive’s activities on behalf of the Lawson Entities or constitute competition  with the business of the Lawson Entities as conducted or proposed to be conducted during the  term of this Agreement or, with respect to applicable periods following Executive’s termination,  as conducted or proposed to be conducted as of the date of Executive’s termination.  The  foregoing notwithstanding, nothing herein contained shall be deemed to prevent Executive from  investing Executive’s money in the capital stock or other securities of any corporation whose  stock or securities are publicly-owned or are regularly traded on any public exchange, provided  that Executive does not own more than a one percent (1%) interest therein.  (b) Confidentiality.  Executive hereby acknowledges that, during the course of  Executive’s employment, Executive has and will learn or develop Confidential Information in  trust and confidence.  Executive agrees to use the Confidential Information solely for the purpose  of performing Executive’s duties on behalf of the Lawson Entities and not for Executive’s own  private use or commercial purposes.  Executive acknowledges that unauthorized disclosure or  use of Confidential Information, other than in discharge of Executive’s duties, will cause the  Lawson Entities irreparable harm.  Executive shall maintain Confidential Information in strict  confidence at all times and shall not divulge Confidential Information to any Unauthorized  Person or Entity, or use in any manner, or knowingly allow another to use, any Confidential  Information, without the Company’s prior written consent, during the term of employment or  thereafter, for as long as such Confidential Information remains confidential.  Executive further  acknowledges that the Lawson Entities operate and compete internationally and that the Lawson  Entities will be harmed by the unauthorized disclosure or use of Confidential Information  regardless of where such disclosure or use occurs, and that therefore this confidentiality  agreement is not limited to any single state or other jurisdiction.  Nothing in this Agreement shall  be construed to prohibit Executive from reporting possible violations of law or regulation to any  governmental agency or entity, including but not limited to the Department of Justice, the  Securities and Exchange Commission and any agency inspector general, or making other  disclosures that are protected under the whistleblower provisions of law or regulation.  

 

    (c) Non-Solicitation.  During the Restriction Period, provided that there shall  not have occurred and be continuing any material non-compliance by the Company with its  obligations under this Agreement, Executive shall not, directly or indirectly, for himself or on  behalf of any person, firm, or other entity, solicit, induce or encourage any person to leave  her/his employment, agency or office with the Lawson Entities.  During the Restriction Period,  provided that there shall not have occurred and be continuing any material non-compliance by  the Company with its obligations under this Agreement, Executive shall not, directly or  indirectly, for Executive or on behalf of any person, firm or other entity, hire or retain or  participate in hiring or retaining any person who then is an employee of or agent for the Lawson  Entities or any person who has been an employee of or agent for the Lawson Entities at any time  in the ninety (90) days prior to termination of Executive’s employment, unless the Company is  informed and gives its approval in writing prior to the hiring or retention.  Given Executive’s office and Executive’s participation in the development, sales,  marketing, servicing and provision of the Lawson Entities’ Products, Systems and Services,  Executive acknowledges that Executive has and will learn or develop Confidential Information  relating to the development, sales, marketing, servicing or provision of the Lawson Entities’  Products, Systems and Services, and the Lawson Entities’ customers and prospective customers.   Executive further acknowledges that the Lawson Entities’ relationships with its customers have  substantial value to the Lawson Entities.  Therefore, during the Restriction Period, provided that  there shall not have occurred and be continuing any material non-compliance by the Company  with its obligations under this Agreement, Executive shall not, directly or indirectly, for  Executive or on behalf of any person, firm, or other entity, solicit or sell, attempt to sell, or  supervise, participate in, or assist the sale or solicitation of Competitive Products and Systems to  any person, firm or other entity to which the Lawson Entities sold any of the Lawson Entities’  Products, Systems and Services during the last two (2) years of Executive’s employment with the  Company prior to the effective date of termination.  However, this Section 4(c) shall not prohibit  the solicitation of any actual or potential customer of the Lawson Entities which does not fall  within the preceding description.  This Section 4(c) is independent of the obligations of  confidentiality under this Agreement and the non-compete provisions of this Agreement.  (d) Return of Property.  All notes, lists, reports, sketches, plans, data  contained in computer hardware or software, memoranda or other documents concerning or  related to the Lawson Entities’ business which are or were created, developed, generated or held  by Executive during employment, whether containing or relating to Confidential Information or  not, are the property of the Lawson Entities and shall be promptly delivered to the Company  upon termination of Executive’s employment for any reason whatsoever.  During the course of  employment, Executive shall not remove any of the above property, including but not limited to,  Confidential Information, or reproductions or copies thereof, or any apparatus containing any  such property or Confidential Information, from the Company’s premises without prior written  authorization from the Company, other than in the normal execution of Executive’s duties.  (e) Assignment of Intellectual Property Rights.  Executive agrees to assign to  the Company any and all intellectual property rights including patents, trademarks, copyrights  and business plans or systems developed, authored or conceived by Executive, whether alone or  jointly, while employed by and relating to the business of the Lawson Entities.  Executive agrees  to cooperate with the Company to perfect ownership rights thereof in the Company.  This  

 

    agreement does not apply to an invention for which no equipment, supplies, facility or  Confidential Information was used and which was developed entirely on Executive’s own time,  unless:  (1) the invention relates to the business of the Lawson Entities or to actual or anticipated  research or development of the Lawson Entities; or (2) the invention results from any work  performed by Executive for the Lawson Entities.  (f) Unfair Trade Practices.  During the term of this Agreement and at all times  thereafter, Executive shall not, directly or indirectly, engage in or assist others in engaging in any  unfair trade practices with respect to the Lawson Entities.  (g) Remedies.  Executive acknowledges that failure to comply with the terms  of this Section 4 will cause irreparable loss and damage to Company.  Therefore, Executive  agrees that, in addition and cumulative to any other remedies at law or equity available to the  Company for Executive’s breach or threatened breach of this Agreement, the Company is entitled  to specific performance or injunctive relief against Executive to prevent such damage or breach,  and a temporary restraining order and preliminary injunction may be granted to the Company for  this purpose immediately at its request upon commencement of any suit, without prior notice and  without posting any bond.  The existence of any claim or cause of action Executive may have  against the Company will not constitute a defense thereto.  In addition, the Company will be  relieved of any obligation to provide to Executive any and all termination payments and benefits  (excepting Accrued Compensation) which would otherwise occur, be continued, or become due  and payable under this Agreement following such breach or threatened breach, except that such  payments and benefits shall accrue during the period of alleged threatened breach or alleged  breach and shall be due and payable to Executive immediately upon either (a) a determination by  the Company or arbitrator or court, or (b) agreement of the parties, that Executive was not in  breach.  Each party agrees that all remedies expressly provided for in this Agreement are  cumulative of any and all other remedies now existing at law or in equity.  In addition to the  remedies provided in this Agreement, the parties will be entitled to avail themselves of all such  other remedies as may now or hereafter exist at law or in equity for compensation, and for the  specific enforcement of the covenants contained in this Agreement.  Resort to any remedy  provided for in this Section 4 or provided for by law will not prevent the concurrent or  subsequent employment of any other appropriate remedy or remedies, or preclude a recovery of  monetary damages and compensation.  Each party agrees that no party hereto shall be required to  post a bond or other security to seek an injunction.  In the event that a court of competent  jurisdiction declares that any of the remedies outlined in this Section 4(g) are unavailable as a  matter of law, the remainder of the remedies outlined in this Section 4(g) shall remain available  to the Company.  (h) Enforceability.  If any of the provisions of this Section 4 are deemed by a  court or arbitrator having jurisdiction to exceed the time, geographic area, or activity limitations  the law permits, the limitations will be reduced to the maximum permissible limitation, and  Executive and the Company authorize a court or arbitrator having jurisdiction to reform the  provisions to the maximum time, geographic area, and activity limitations the law permits;  provided, however, that such reductions apply only with respect to the operation of such  provision in the particular jurisdiction in which such adjudication is made.  

 

    (i) Sufficiency of Consideration.  Executive acknowledges that the  consideration that Executive will receive pursuant to this Agreement serves as sufficient  consideration for Executive’s promises to abide by the restrictive covenants set forth in this  Section 4.  5. Governing Law and Disputes.  (a) This Agreement shall be interpreted and enforced in accordance with the  laws of the State of Illinois, without regard to its conflict of law principles.  (b) The Company and Executive agree to attempt to resolve any dispute  between them related to this Agreement quickly and fairly, and in good faith.  Should such a  dispute remain unresolved, the Company and Executive irrevocably and unconditionally agree to  submit to the exclusive jurisdiction of the courts of the State of Illinois and of the United States  located in Chicago, Illinois over any suit, action or proceeding arising out of or relating to this  Agreement.  The Company and Executive irrevocably and unconditionally agree to personal  jurisdiction and venue of any such suit, action or proceeding in the courts of the State of Illinois  or of the United States located in Chicago, Illinois.  6. Cooperation After Termination of Employment.  Following termination of  Executive’s employment, regardless of the reason for termination, Executive will reasonably  cooperate with the Company and Parent in the prosecution or defense of any claims,  controversies, suits, arbitrations or proceedings involving events occurring prior to the  termination of employment.  Executive acknowledges that in light of Executive’s position with  the Company, Executive is in the possession of Confidential Information that may be privileged  under the attorney-client and/or work product privileges.  Executive agrees to maintain the  confidences and privileges of the Company and Parent and acknowledges that any such  confidences and privileges belong solely to the Company and Parent and can only be waived by  the Company or Parent, as applicable, not Executive.  In the event Executive is subpoenaed to  testify or otherwise requested to provide information in any matter, including without limitation,  any court action, administrative proceeding or government audit or investigation, relating to the  Company or Parent, Executive agrees that:  (a) he will promptly notify the Company and Parent  of any subpoena, summons or other request to testify or to provide information of any kind no  later than three (3) days after receipt of such subpoena, summons or request and, in any event,  prior to the date set for him to provide such testimony or information; (b) he will cooperate with  the Company and Parent with respect to such subpoena, summons or request for information; (c)  he will not voluntarily provide any testimony or information without permission of the Company  unless otherwise required by law; and (d) he will permit the Company to be represented by an  attorney of the Company’s choosing at any such testimony or with respect to any such  information to be provided, and will follow the instructions of the attorney designated by the  Company with respect to whether testimony or information is privileged by the attorney-client  and/or work product privileges of the Company or Parent, unless otherwise required by law.  The  parties agree that the Company shall be responsible for all reasonable expenses of Executive  incurred in connection with the fulfillment of Executive’s obligations under this Section 6.  The  parties agree and acknowledge that nothing in this Section 6 is meant to preclude Executive from  fully and truthfully cooperating with any government investigation.  

 

    7. Miscellaneous.  (a) Superseding Effect.  The Agreement supersedes all prior or  contemporaneous negotiations, commitments, agreements, and writings, and expresses the entire  agreement between the parties with respect to the payment of benefits upon a termination of  Executive’s employment with the Company within one year following a Change in Control;  provided, however, that the terms of any Benefit Plans will remain applicable to the particular  Benefit Plan, except as expressly modified herein.  All such other negotiations, commitments,  agreements and writings will have no further force or effect, and the parties to any such other  negotiation, commitment, agreement or writing will have no further rights or obligations  thereunder.  The parties agree and acknowledge that the definitions of terms applicable to this  Agreement may be different than the definitions of those same terms in Benefit Plans and may  result in seemingly contradictory results.  The parties agree and acknowledge that such  seemingly contradictory results are intended, and that this Agreement shall be governed solely by  the terms and definitions set forth herein and that the Benefit Plans shall be governed solely by  the terms and definitions set forth in the Benefit Plans, except as expressly modified herein.  (b) Amendment and Modification.  Except as provided in Section 7(c), neither  Executive nor the Company may modify, amend, or waive the terms of this Agreement other  than by a written instrument signed by Executive and the Company.  Either party’s waiver of the  other party’s compliance with any specific provision of this Agreement is not a waiver of any  other provision of this Agreement or of any subsequent breach by such party of a provision of  this Agreement.  No delay on the part of any party in exercising any right, power or privilege  hereunder will operate as a waiver thereof,  (c) Section 409A.  It is also the intention of this Agreement that all income tax  liability on payments made pursuant to this Agreement or any Benefit Plans be deferred until  Executive actually receives such payment to the extent Code Section 409A applies to such  payments, and this Agreement shall be interpreted in a manner consistent with this intent.   Therefore, if any provision of this Agreement or any Benefit Plans is found not to be in  compliance with any applicable requirements of Code Section 409A, that provision will be  deemed amended and will be construed and administered, insofar as possible, so that this  Agreement and any Benefit Plans, to the extent permitted by law and deemed advisable by the  Company, do not trigger taxes and other penalties under Code Section 409A; provided, however,  that Executive will not be required to forfeit any payment otherwise due without Executive’s  consent.  In the event that, despite the parties’ intentions, any amount hereunder becomes taxable  prior to the date that it would otherwise be paid, the Company shall pay to the Executive (which  payment may be made in whole or in part by way of direct remittance to appropriate tax  authorities) the portion of such amount needed to pay applicable income and excise taxes and  any interest or other penalties on such amounts.  Any remaining portion of such amount shall be  paid to Executive at the time otherwise specified in this Agreement, subject to Section 3(b).    Solely for purposes of determining the time and form of payments due under this  Agreement or otherwise in connection with his termination of employment with the Company  and that are subject to Code Section 409A, Executive shall not be deemed to have incurred a  termination of employment unless and until he shall incur a “separation from service” within the  meaning of Code Section 409A.  It is intended that each payment or installment of a payment  

 

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

 

    under Section 4999 of the Code is payable by Executive, the Company shall request that the  Accounting Firm furnish Executive with written guidance that failure to report such excise tax on  Executive’s applicable federal income tax return would not result in the imposition of a  negligence or similar penalty.  (e) Withholding.  The Company will reduce its compensatory payments to  Executive hereunder for withholding and FICA and Medicare taxes and any other withholdings  and contributions required by law.  (f) Severability.  If the final determination of an arbitrator or a court of  competent jurisdiction declares, after the expiration of the time within which judicial review (if  permitted) of such determination may be perfected, that any term or provision of this Agreement  is invalid or unenforceable, the remaining terms and provisions will be unimpaired, and the  invalid or unenforceable term or provision will be deemed replaced by a term or provision that is  valid and enforceable and that comes closest to expressing the intention of the invalid or  unenforceable term or provision.  Any prohibition or finding of unenforceability as to any  provision of this Agreement in any one jurisdiction will not invalidate or render unenforceable  such provision in any other jurisdiction.   (g) Legal Fees.  Each of the Company and Executive will bear its own  expenses in connection with the negotiation of this Agreement and the resolution of any disputes  hereunder.  (h) Binding Agreement; Assignment.  The Agreement is binding upon and  shall inure to the benefit of Executive’s heirs, executors, administrators or other legal  representatives, upon the successors of the Company and upon any entity into which the  Company merges or consolidates.  The Company shall assign or otherwise transfer this  Agreement and all of its rights, duties, obligations, or interests under it or to any successor to all  or substantially all of its assets.  Upon such assignment or transfer, any such successor will be  deemed to be substituted for the Company for all purposes.  Executive may not assign or  delegate the obligations of Executive under this Agreement.  (i) Interpretation.  This Agreement will be interpreted without reference to  any rule or precept of law that states that any ambiguity in a document be construed against the  drafter.  (j) Executive Acknowledgment.  Executive acknowledges that Executive has  read and understands this Agreement and is entering into this Agreement knowingly and  voluntarily.  (k) Continuing Obligations.  Notwithstanding the termination of Executive’s  employment hereunder for any reason or anything in this Agreement to the contrary, all post- employment rights and obligations of the parties, including but not limited to those set forth in  Sections 3, 4, 5 and 6, and any provisions necessary to interpret or enforce those rights and  obligations under any provision of this Agreement, will survive the termination or expiration of  this Agreement and remain in full force and effect for the applicable periods.  

 

    (l) Descriptive Headings.  The descriptive headings of this Agreement are  inserted for convenience only and do not constitute a part of this Agreement.  (m) Counterparts.  This Agreement may be executed in two or more  counterparts, each of which shall be deemed an original, but all of which together shall constitute  one and the same instrument.  (n) Notice.  Any notice by any party to the other party must be mailed by  registered or certified mail, postage prepaid, to the address specified below, or to any change of  address indicated by either party upon receipt of written notice of same:  First Last  Address  City, State Zip Code      Lawson Products, Inc.   8770 W. Bryn Mawr Avenue  Suite 900   Chicago, IL 60631  Attention:  General Counsel  Notice will be deemed received on the third business day following the day on which it was  mailed, postage prepaid.  [SIGNATURE LINES ON NEXT PAGE]  

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first  written above.  EXECUTIVE:           Shane McCarthy      LAWSON PRODUCTS, INC.    By            Michael G. DeCata       President and Chief Executive Officer  

 

    EXHIBIT A    CONFIDENTIAL GENERAL RELEASE   In consideration of the payments and other benefits set forth in Section 3 of the Change in  Control Agreement (hereinafter the “Agreement”) made and entered into by and between  [Executive] (hereinafter the “Executive”) and Lawson Products, Inc. (hereinafter the  “Employer”) on __________ __, 2015, Executive hereby executes this Confidential General  Release (hereinafter the “Release”):   1. Executive hereby releases Employer, its past and present parents, subsidiaries,  affiliates, predecessors, successors, assigns, related companies, entities or divisions, its or their  past and present employee benefit plans, trustees, fiduciaries and administrators, and any and all  of its and their respective past and present officers, directors, partners, insurers, agents,  representatives, attorneys and employees (all collectively included in the term the “Employer”  for purposes of this release), from any and all claims, demands or causes of action which  Executive, or Executive’s heirs, executors, administrators, agents, attorneys, representatives or  assigns  (all collectively included in the term “Executive” for purposes of this release), have, had  or may have against Employer, based on any events or circumstances arising or occurring prior  to and including the date of Executive’s execution of this Release to the fullest extent permitted  by law, regardless of whether such claims are now known or are later discovered, including but  not limited to any claims relating to Executive’s employment or termination of employment by  Employer, any rights of continued employment, reinstatement or reemployment by Employer,  and any costs or attorneys’ fees incurred by Executive (collectively, the “Released Claims”);  provided, however, Executive is not waiving, releasing or giving up any rights Executive may  have to workers’ compensation benefits, to vested benefits under any pension or savings plan, to  payment of earned and accrued but unused vacation pay, to continued benefits in accordance  with the Consolidated Omnibus Budget Reconciliation Act of 1985, to unemployment insurance,  to any vested Equity Awards, to any vested awards or benefits under any Benefit Plan, to  indemnification provided by applicable law, the certificate of incorporation or bylaws of Parent  to the extent applicable, the articles of incorporation or bylaws of Employer or the  Indemnification Agreement dated as of   , 20__ between [Parent/Employer] and  Executive, each as they exist on the date of Executive’s termination, or to enforce the terms of  the Agreement, or any other right which cannot be waived as a matter of law.  In the event any  claim or suit is filed on Executive’s behalf with respect to a Released Claim, Executive waives  any and all rights to receive monetary damages or injunctive relief in favor of Executive.     2. Executive agrees and acknowledges: that this Release is intended to be a general  release that extinguishes all Released Claims by Executive against Employer; that Executive is  waiving any claims arising under Title VII of the Civil Rights Act of 1964, the Civil Rights Act  of 1991, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the  Employee Retirement Income Security Act, the Family and Medical Leave Act, the  Rehabilitation Act, the Illinois Human Rights Act, and all other federal, state and local statutes,  ordinances and common law, including but not limited to any and all claims alleging personal  injury, emotional distress or other torts, to the fullest extent permitted by law; that Executive is  waiving all Released Claims against Employer, known or unknown, arising or occurring prior to  and including the date of Executive’s execution of this Release; that the consideration that  

 

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

 

    EXECUTIVE:             Name:         Date:

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