Document:

exv10w2

Exhibit 10.2

FORM OF AMENDED AND RESTATED AWARD AGREEMENT

     THIS AMENDED AND RESTATED AWARD AGREEMENT is entered into as of this 12th day of February,
2009 by and between Lawson Products, Inc. (“Lawson”) and                     (“Participant”).

     WHEREAS, the Compensation Committee of the Board of Directors of Lawson (the
“Committee”) has selected Participant to receive an award under the Long-Term Capital
Accumulation Plan of Lawson (as amended from time to time, the “Plan”);

     WHEREAS, Participant wishes to accept that award, subject to the terms and conditions of the
Plan and this Agreement; and

     WHEREAS, in the event that Participant has previously received an award under the Plan, it is
the intention of Lawson and Participant that this Agreement shall memorialize and govern all awards
made to Participant under the Plan;

     NOW, THEREFORE, Lawson and Participant hereby agree as follows:

     1. The award evidenced by this Agreement (the “Award”) consists of                      (___) Shareholder
Value Appreciation Rights (“SVARs”) with an effective date of February 12, 2009. This
Agreement supersedes and replaces all previous oral or written communications between Lawson and
Participant about any award to Participant under the Plan, including but not limited to any prior
award agreement.

     2. All aspects of the SVARs evidenced by this Agreement (including but not limited to vesting,
valuation, payment and possible forfeiture) shall be governed by this Agreement and by the Plan, a
copy of which has been provided to Participant and is hereby acknowledged by Participant, and the
terms and conditions of which are incorporated into this Agreement by reference.

     3. Without limiting the scope of Section 2, above, Participant acknowledges that:

     (a) As a condition to retaining the SVARs constituting the Award, Participant shall be
required to enter into an employment agreement with Lawson including confidentiality and other
restrictive covenants, as described in Section 14 of the Plan;

     (b) Any amount that would otherwise be payable to Participant or his/her beneficiaries with
respect to the SVARs constituting the Award shall be subject to reduction in accordance with
Section 13 of the Plan as a result of the special excise tax rules described in Section 13 of the
Plan; and

     (c) The Committee may amend or terminate any or all of the provisions of the Plan and any or
all of the provisions this Agreement in accordance with Section 24 of the Plan.

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     IN WITNESS WHEREOF, Participant and Lawson have executed this Agreement as of the date set
forth above.

	 	 	 	 	 	 	 
	 	 	LAWSON PRODUCTS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Participant	 	 

2exv10w3

Exhibit 10.3

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     This Amended and Restated Employment Agreement (the “Agreement”) is made and entered into as
of February 12, 2009 (the “Effective Date”), by and between Lawson Products, Inc., a Delaware
corporation (the “Company”) and Thomas Neri (the “Executive”).

     1. Term of Employment. The Company hereby employs Executive for a term of 3 years,
commencing as of the Effective Date, unless sooner terminated by either party in accordance with
the terms of Sections 4 and 5 below. The term of this Agreement will automatically extend for an
additional year from year to year, unless either party provides written notice of non-renewal to
the other party at least six months prior to the date of the expiration of the initial term or any
extended term of this Agreement, or unless this Agreement is otherwise terminated pursuant to the
provisions of Sections 4 and 5 of this Agreement.

     2. Position and Duties. During the term of this Agreement, Executive will serve as
President and Chief Executive Officer of the Company, or in such other capacity mutually agreed
between Executive and the Company by written amendment of this Agreement. Executive’s duties and
authorities will consist of all duties and authority customarily performed and held by persons
holding equivalent positions in companies similar in nature and size to the Company as such duties
and authority are reasonably defined, modified and delegated from time to time by the Board of
Directors of the Company (the “Board”). Executive will report solely to the Board as to his
fiduciary duties and on other matters as requested by the Board. Executive hereby acknowledges
that he has a fiduciary responsibility and duty of loyalty to the Company hereunder. For so long
as Executive remains employed, Executive shall, on a full-time basis, devote his best efforts and
his entire business time, energy, attention, knowledge and skill solely and exclusively to advance
the interests, products and goodwill of the Company. Executive shall diligently, competently and
faithfully perform the duties assigned to him by the Company from time to time.

          The duties and services to be performed by Executive hereunder shall be substantially rendered
at the Company’s principal offices, except for travel on the Company’s business incident to the
performance of Executive’s duties. Executive will not, without the written consent of the Board,
which consent shall not be unreasonably withheld: (i) render service to others for compensation,
or (ii) serve on any board or governing body of another entity. Executive may continue to serve on
the Lake Forest High School Board of Education. If an outside activity subsequently creates a
conflict with the Company’s business or prospective business, Executive agrees to cease engaging in
such activity at such time. Executive will observe and adhere to all applicable written Company
policies and procedures adopted from time to time, such as they now exist or hereafter are
supplemented, amended, modified or restated.

     3. Compensation.

          (a) Base Salary. Executive will receive a base salary of $500,000 per annum (the
"Base Salary”), as modified pursuant to the next sentence, payable in accordance with the Company’s
customary payroll practices (including, but not limited to, practices regarding timing and
withholding) as may be in effect from time to time during the term of this Agreement. The Base
Salary will be subject to periodic review by the Compensation Committee of the Board (the

 

 

“Committee”), and may be increased or decreased by the Committee at any time; provided, however,
that Executive’s Base Salary may not be decreased to less than $450,000.

          (b) Bonuses. Executive will also be eligible for additional performance based
compensation based upon Executive’s ability to meet or exceed the targeted expectations applicable
to his position, as the Committee in its sole discretion determines with input from the Executive
and in accordance with and subject to the terms of the Senior Management Annual Incentive Plan, or
any other applicable performance based compensation plan or program. If Executive is determined to
have met the treshold, target or stretch targets set, Executive will receive the following
percentages of his then current Base Salary in bonus: (i) threshold — 50%; (ii) target — 100%; or
(iii) stretch — 150%.

          (c) LTCAP. Executive will also be eligible to continue to participate (or continue
participation) in the Lawson Products, Inc. Long-Term Capital Accumulation Plan (the “CAP”) as
determined by the terms of the CAP and this Agreement, except as provided in Section 11(d).
Executive’s CAP awards for 2007 and 2008 shall be granted as previously scheduled.

          (d) Equity Awards. Executive will be eligible for 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 opportunities from time to time
during his employment as determined in the sole discretion of the Committee (“Equity Awards”);
provided such grants and awards shall be on a basis no less favorable than grants and awards made
to other senior executives of the Company. To the extent so provided, such equity-based
compensation shall be subject to the terms of any applicable equity-based compensation plan,
program and/or agreement.

          (e) Benefit Plans. Executive shall receive the following standard benefits; provided,
however, the Company may modify or terminate such benefits from time to time to the extent and on
such terms as the Company modifies or terminates such benefits as provided to other officers:

	 	(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 with a death benefit
amount of not less than $50,000, with additional double indemnity
coverage;
	 
	 	(iv)	 	accidental death insurance;
	 
	 	(v)	 	participation in the Company’s 401(k) and
profit-sharing retirement plans;
	 
	 	(vi)	 	four weeks annual vacation under the terms of
the Company’s vacation policy for officers; and

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

     The items in Sections 3(b), 3(c), 3(d) and 3(e)(i)-(vii) referred to above, and any other
benefit plans in which Executive may participate pursuant to such plan’s terms, are collectively
referred to herein as “Benefit Plans”.

          (f) Business Expenses. The Company will reimburse Executive for authorized business
expenses necessarily and reasonably incurred on behalf of the Company and which are documented in
accordance with the applicable Company expense reimbursement policies and procedures in effect from
time to time with respect to employees of the Company. Executive will cause a summary of such
expenses to be submitted to the Audit Committee of the Board annually.

     4. Termination of Employment.

          (a) Termination for Cause. The Company may terminate Executive’s employment for
"Cause”, where “Cause” means 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 (except where such breach or default is due to Executive
becoming Disabled (as defined in Section 4(d)) which shall be governed
by Section 4(d)), 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.

     For purposes of this Agreement, Executive’s employment shall be deemed not to have been
terminated for Cause unless and until there shall have been delivered to Executive a copy of a
resolution of the Board finding that the termination is for Cause, duly adopted by the Board at a

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meeting called and held in accordance with the Company’s bylaws (with Executive to receive notice
of the meeting at the same time as the members of the Board, in the event that Executive is not on
the Board at that time), at which Executive, together with Executive’s counsel, shall have the
right to participate or to present a written response to the Board’s intention to terminate for
Cause. Subject to the preceding sentence, the Company may terminate Executive’s employment under
this Agreement for Cause (as defined above) at any time, and Executive’s termination for Cause will
be effective immediately upon the Company mailing or transmitting written notice of such
termination to Executive.

          (b) Termination for Good Reason. Executive may terminate Executive’s employment for
“Good Reason”, where “Good Reason” means any of the following:

	 	(i)	 	a decrease in Executive’s Base Salary to less
than $450,000;
	 
	 	(ii)	 	a material diminution in Executive’s authority,
duties or responsibilities;
	 
	 	(iii)	 	a material change (with such change not to be
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.

Executive is entitled to terminate Executive’s employment for Good Reason only if:

	 	(w)	 	one or more of the conditions constituting Good
Reason occurs without Executive’s written consent;
	 
	 	(x)	 	Executive provides notice to the Company of the
existence of a condition constituting Good Reason within 90 days of the
initial occurrence of such condition;
	 
	 	(y)	 	the Company fails to remedy such condition
constituting Good Reason within 30 days of being provided notice of
such condition by Executive; and
	 
	 	(z)	 	Executive voluntarily terminates Executive’s
employment within six months of the initial occurrence of such
condition constituting Good Reason.

          (c) Termination Due to Death. Executive’s employment under this Agreement will
terminate upon the death of Executive.

          (d) Termination Due to Disability. If Executive becomes “Disabled” as such is defined
under the Company’s long term disability insurance policy, the Company may terminate Executive’s
employment. Executive agrees that if Executive becomes “Disabled”, Executive will be unable to
perform the essential functions of Executive’s position and that there

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would be no reasonable
accommodation which would not constitute an undue hardship to the Company. Executive’s termination
due to Disability will be effective immediately upon Executive’s receipt of written notice of such
termination from the Company. Such written notice shall be deemed received, if mailed first class
through the U. S. Postal System, three business days after mailing such written notice to
Executive.

          (e) Termination Without Cause by the Company. The Company may terminate Executive’s
employment without Cause upon written notice to Executive. Executive’s termination without Cause
will be effective on the date of termination specified by the Company, but not prior to receipt of
the written notice by Executive. Such written notice shall be deemed received, if mailed first
class through the U. S. Postal System, three business clays after mailing such written notice to
Executive.

          (f) Voluntary Termination by Executive. Executive may voluntarily terminate his
employment upon 60 days written notice to the Company. The Company, at its sole discretion, may
relieve Executive of his active duties at any time during the notice period. The Company may also
waive such notice, and/or set an earlier termination date upon receipt of such notice, in which
event Executive’s employment will terminate on the earlier termination date, and no pay in lieu of
notice will be due.

          (g) Termination Due to Non-Renewal by Executive or the Company. Either Executive or
the Company may terminate this Agreement by providing written notice of intent not to renew this
Agreement, as described in Section 1 of this Agreement. Executive’s termination due to non-renewal
will be effective at the end of the applicable initial or extended term in which notice is given.

          (h) Simultaneous Termination of Director/Officer Positions. Upon the effective date
of termination of Executive’s employment, for any reason whatsoever, Executive will be deemed to
have resigned from any office Executive may hold as a director and/or officer of the Company and
any Company affiliate. The Company is hereby irrevocably authorized to appoint a nominee to act on
Executive’s behalf to execute all documents and do all tasks necessary to effectuate this Section
4(h).

     5. Payments Due Upon Termination.

          (a) Payments Due Upon Termination for Cause by the Company, or Voluntary Termination by
Executive. If the Company terminates Executive’s employment for “Cause” pursuant to Section
4(a) above, or Executive terminates his employment voluntarily pursuant to Section 4(f) above, the
Company shall have no obligation to Executive, except:

	 	(i)	 	the Company shall pay Executive no later than
the next regularly scheduled payroll day any accrued and unpaid Base
Salary and any accrued and unused vacation pay through the effective
date of Executive’s termination;
	 
	 	(ii)	 	the Company shall pay Executive any additional
payments, awards, or benefits, if any, which Executive is eligible to
receive pursuant to the terms of any applicable Benefit Plans; and

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	 	(iii)	 	Executive shall be entitled to all
post-employment benefits required under applicable law.

The payments set forth in Sections 5(a)(i)-(iii) are collectively referred to herein as “Accrued
Compensation”.

          (b) Payments Due Upon Termination Without Cause by the Company or for Good Reason by
Executive. Except as provided in Section 5(c) below, if the Company terminates Executive’s
employment without “Cause” pursuant to Section 4(e) above or if Executive terminates Executive’s
employment for “Good Reason” pursuant to Section 4(b) above, the Company shall have no obligation
to Executive, except:

	 	(i)	 	the Company shall pay Executive any Accrued
Compensation;
	 
	 	(ii)	 	the Company shall pay Executive, subject to
Section 5(g), in monthly installments commencing one month after the
effective date of Executive’s termination at the rate of 100% of his
then current Base Salary for the period which is the greater of two (2)
years, or the remainder of the applicable initial term or extended term
in which Executive is terminated (the “Severance Period”);
	 
	 	(iii)	 	the Company shall pay Executive, subject to
Section 5(g), in equal monthly installments, commencing one month after
the effective date of Executive’s termination and continuing until the
end of the Severance Period, an amount equal to the bonus Executive
received in the 365 day period prior to the effective date of
Executive’s termination, if any, multiplied by a fraction, the
numerator of which is the number of days from the beginning of the
calendar year in which Executive’s termination occurs through the
effective date of Executive’s termination, and the denominator of which
is 365 (the “Pro Rata Bonus”); and
	 
	 	(iv)	 	Executive shall continue to be covered under
the Company’s group health plan pursuant to Section 3(e)(i) above,
including any
spousal and dependent coverage, at active employee rates, for two (2)
years after the effective date of Executive’s termination, and,
thereafter, Executive shall be eligible to exercise his 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.

     During the Severance Period under this Section 5(b), Executive shall, upon request of the
Company, make himself reasonably available on a limited basis from time to time to consult with the
Company regarding the business affairs of the Company, not more than twenty-four (24) hours in any
calendar quarter, and at times that do not interfere with Executive’s employment time commitments
with any successor employer.

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          (c) 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 due under Section 5(b) above, in
the event the Company terminates Executive’s employment without “Cause” pursuant to Section 4(e)
above or if Executive terminates Executive’s employment for “Good Reason” pursuant to Section 4(b)
above, but only in each case within 12 months following a Change in Control as defined in Section 7
below, the Company shall have no obligation to Executive, except:

	 	(i)	 	the Company shall pay Executive any Accrued
Compensation;
	 
	 	(ii)	 	the Company shall pay Executive an amount equal
to two times Executive’s then current annual Base Salary, and two times
the bonus Executive received in the 365-day period prior to the
effective date of Executive’s termination, if any. Subject to Section
5(g), such amount shall be paid in a lump sum, to the extent it may be
so paid without triggering taxes and other penalties under Code Section
409A, no later than 30 days after the effective date of Executive’s
termination, or to the extent such amount cannot be paid in a lump sum,
it shall be paid in 24 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 pursuant to Section 3(e)(i) above,
including any spousal and dependant coverage, at active employee rates,
for two (2) years after the effective date of Executive’s termination,
and, thereafter, Executive shall be eligible to exercise his rights to
COBRA continuation coverage with respect to such group health plan for
Executive, and, where applicable, Executive’s spouse and eligible
dependents, at Executive’s expense; and
	 
	 	(iv)	 	all of Executive’s outstanding Equity Awards,
if any, shall immediately vest upon the effective date of Executive’s
termination to the extent not already vested, and Executive shall
have at least 90 days to exercise any Equity Award that is subject to
being exercised.

          (d) Payments Due Upon Termination Due to Death. If Executive’s employment is
terminated due to death pursuant to Section 4(c) above, the Company shall have no obligation to
Executive, except:

	 	(i)	 	the Company shall pay Executive any Accrued
Compensation;
	 
	 	(ii)	 	the Company shall pay to the beneficiary(ies)
identified in writing by Executive from time to time an amount equal to
(A) two times Executive’s then current annual Base Salary, plus (B) the
Pro Rata

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	 	 	 	Bonus (if any), in 24 equal monthly installments commencing
one month after the date of Executive’s death; and
	 
	 	(iii)	 	Executive’s spouse and dependents shall
continue to be covered under the Company’s group health plan pursuant
to Section 3(e)(i) above, at active employee rates for dependent
coverage, for two (2) years after the date of Executive’s death, and,
thereafter, Executive’s spouse and dependents shall be eligible to
exercise their rights to COBRA coverage with respect to such group
health plan at their expense.

          (e) Payments Due Upon Termination Due to Disability. If the Company terminates
Executive’s employment due to “Disability” pursuant to Section 4(d) above, the Company shall have
no obligation to Executive, except:

	 	(i)	 	the Company shall pay Executive any Accrued
Compensation;
	 
	 	(ii)	 	the Company shall continue to pay Executive,
subject to Section 5(g), in monthly installments commencing one month
after the effective date of termination: (A) for 12 months at the rate
of 100% of his then current Base Salary; and (B) for 24 months
thereafter at the rate of 60% of his then current Base Salary. The
Company will be entitled to receive in payment from Executive or by
taking a credit against the payments to be made under this Section
5(e)(ii) a sum equal to any Company provided long-term disability
insurance benefit paid to or for the benefit of Executive during such
36 month period; and
	 
	 	(iii)	 	Executive shall continue to be covered under
the Company’s group health plan pursuant to Section 3(e)(i) above,
including any spousal and dependent coverage, at active employee rates
for five and one-half (5 1/2) years after the effective date of
Executive’s termination, and, thereafter, Executive shall be eligible
to exercise his 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.

          (f) Payments Due Upon Termination due to Non-Renewal of this Agreement. If Executive
or the Company terminates Executive’s employment pursuant to non-renewal of this Agreement pursuant
to Sections 1 and 4(g) above, the effective date of Executive’s termination pursuant to such
non-renewal shall be the last day of the applicable initial term or extended term in which notice
is given. Prior to the effective date of Executive’s termination, Executive shall continue to be
paid his Base Salary in accordance with the Company’s customary payroll practices (including, but
not limited, to practices regarding timing and withholding) as may be in effect from time to time
during the term of this Agreement. On or after the effective date of Executive’s termination, the
Company shall have no obligation to Executive, except:

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	 	(i)	 	the Company shall pay Executive any Accrued
Compensation;
	 
	 	(ii)	 	if the Company terminates Executive’s
employment by providing notice of non-renewal on or after the second
anniversary of the Effective Date: (A) the Company shall pay
Executive, subject to Section 5(g), in monthly installments commencing
one month after the effective date of Executive’s termination for one
(1) year at the rate of 100% of his Base Salary in effect immediately
prior to such termination; and (B) Executive shall continue to be
covered under the Company’s group health plan pursuant to Section
3(e)(i), including any spousal and dependent coverage, at active
employee rates, for one (1) year after the effective date of
Executive’s termination, and, thereafter, Executive shall be eligible
to exercise his rights to COBRA coverage with respect to such group
health plan for Executive, and, where applicable, Executive’s spouse
and eligible dependents, at Executive’s expense.

     Notwithstanding the foregoing, if the effective date of a termination due to nonrenewal
initiated by the Company occurs on or within six months following a Change in Control, the
Company’s obligations to Executive shall be as set forth under Section 5(c) (in lieu of the
obligations set forth in Section 5(f)).

          (g) Six (6) Month Delay. If, at the time Executive becomes entitled to payments and
benefits under Section 5 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 5 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 no 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 5.

          (h) Release. As a condition of receiving any and all payments and benefits (except
Accrued Compensation) due to Executive (or if applicable, Executive’s beneficiaries and/or estate)
pursuant to Section 5 of this Agreement and/or any Benefit Plans in the event of termination,
Executive (or if applicable, Executive’s beneficiaries and/or estate) shall execute and deliver to
the Company a general release substantially in the form attached hereto as Exhibit A.

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     6. Indemnification.

          (a) During the term of this Agreement and thereafter throughout all applicable limitation
periods, the Company shall provide Executive (including his heirs, personal representatives,
executors and administrators) with such coverage, as will be generally available to senior officers
of the Company under the Company’s then current directors and officers liability insurance policy
at the Company’s sole expense.

          (b) In addition to the insurance coverage provided for in Section 6(a) above, the Company
shall defend, hold harmless and indemnify Executive (and his heirs, personal representatives,
executors and administrators) to the fullest extent permitted under applicable law, against all
expenses and liabilities reasonably incurred by him in connection with or arising out of any
action, suit or proceeding in which Executive may be involved by reason of his having been an
officer, director or employee of the Company (whether or not he continues to be an officer,
director or employee of the Company at the time such expenses or liabilities are incurred), such
expenses and liabilities to include, but not be limited to, judgments, court costs, attorneys’ fees
and the cost of reasonable settlements. The Company shall maintain bylaws authorizing such
indemnification of Executive to the fullest extent permitted by law.

          (c) In the event Executive becomes a party, or is threatened to be made a party, to any
action, suit or proceeding for which the Company has agreed to provide insurance coverage or
indemnification under this Section, the Company shall, to the fullest extent permitted under
applicable law, advance all expenses (including the reasonable attorneys’ fees, related fees and
expenses, judgments, fines and amounts paid in settlement (collectively “Expenses”)) incurred by
Executive in connection with the investigation, defense, settlement or appeal of any threatened,
pending or completed action, suit or proceeding. Executive agrees to reimburse the Company for the
amount of all of the Expenses actually paid by the Company to or on behalf of Executive in the
event the Company determines that Executive is not entitled to indemnification by the Company for
such Expenses. Executive also agrees to assign to the Company all rights of Executive to insurance
proceeds under any policy of directors and officers liability insurance to the extent of the amount
of the Expenses actually paid by the Company to or on behalf of Executive.

     7. Certain Definitions.

          (a) The term “Lawson Entities” shall mean the Company and any entity owned by the Company or
related to or affiliated with the Company, directly or indirectly, in whole or in part, now or at
any time during Executive’s employment with the Company and during the Restriction Period,
including, but not limited to, Assembly Component Systems, Inc., Cronatron Welding Systems, Inc.,
Drummond American Corporation, Automatic Screw Machine Products Company, C.B. Lynn Company, Lawson
Products, Inc. (Ontario), Lawson Products de Mexico, Rutland Tool & Supply Company, and any other
entity in which any one or more of them has an ownership interest at any time during Executive’s
employment with the Company and during the Restriction Period whether such entity is in the United
States or elsewhere.

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          (b) The term “Restriction Period” means the period of time in which Executive is employed by
the Company and a period of two (2) years after the effective date of Executive’s termination.

          (c) The term “Lawson Entities’ Products, Systems and Services” means:

	 	(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 Section
7.1(c)(i);
	 
	 	(iii)	 	the manufacture, sale and distribution of
production and specialized parts and supplies described in Section
7.1(c)(i);
	 
	 	(iv)	 	the provision of just-in-time inventories of
component parts described in Section 7.1(c)(i) to original equipment
manufacturers and of maintenance and repair parts described in Section
7.1(c)(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 Section 7.1(c)(i).

          (d) 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.

          (e) 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

11

 

pending acquisitions or divestitures; and information concerning purchases of
major equipment or property, and which:

	 	(i)	 	has not been made generally available to the
public;
	 
	 	(ii)	 	is useful or of value to the current or
anticipated business or research or development activities of the
Lawson Entities, or of any customer or supplier of the Lawson Entities;
and
	 
	 	(iii)	 	has been identified to Executive by the Lawson
Entities as confidential, either orally or in writing.

Confidential Information shall not include information which:

	 	(x)	 	is in or hereafter enters the public domain
through no fault of Executive;
	 
	 	(y)	 	is obtained by Executive from a third party
having the legal right to use and to disclose the same; or
	 
	 	(z)	 	was in the possession of Executive prior to
receipt from the Lawson Entities (as evidenced by Executive’s written
records predating the first date of employment with the Company).

     Confidential Information also does not include Executive’s general skills and experience as
defined under the governing law of this Agreement.

          (f) 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.

          (g) For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred if:

	 	(i)	 	any “person” or “group” of “persons” (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended, and the rules promulgated thereunder), other
than Ronald B. Port and Roberta Washlow, or any of them and/or their
respective spouses, children, heirs, assigns or affiliates (who shall
collectively be referred to as the “Port Group”), is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing voting power, as of the date of determination, of the then
outstanding voting securities of the Company greater than the voting
power of the Port Group as of such date of determination; or

12

 

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

	 	(A)	 	the stockholders
of the Company immediately before such merger,
consolidation or reorganization will own, directly or
indirectly, immediately following such merger,
consolidation or reorganization, at least fifty percent
(50%) of the combined voting power of the outstanding
voting securities of the corporation resulting from such
merger, consolidation or reorganization (the “Surviving
Corporation”) or any parent thereof in substantially the
same proportion as their ownership of the voting
securities of the Company immediately before such
merger, consolidation or reorganization; and
	 
	 	(B)	 	the individuals
who were members of the Board immediately prior to the
execution of the agreement providing for such merger,
consolidation or reorganization constitute a majority of
the members of the board of directors of the Surviving
Corporation (or parent thereof); and
	 
	 	(C)	 	no “person” or
“group” of “persons” as defined above, other than the
Port Group, is the beneficial owner of twenty percent
(20%) or more of the combined voting power of the then
outstanding voting securities of the Surviving
Corporation (or parent thereof); or

	 	(iii)	 	there is a sale or other disposition of all or
substantially all of the assets of the Company to an entity other than
an entity:

	 	(A)	 	of which at least
fifty percent (50%) of the combined voting power of the
outstanding voting securities are owned, directly or
indirectly, by stockholders of the Company in
substantially the same proportion as their then current
ownership of the voting securities of the Company; and
	 
	 	(B)	 	of which a
majority of the board of directors is comprised of the
individuals who were members of the Board immediately
prior to the execution of the agreement providing for
such sale or disposition; and

13

 

	 	(C)	 	of which no
“person” or “group” of “persons” as defined above, other
than the Port Group, is the beneficial owner of twenty
percent (20%) or more of the combined voting power of
the then outstanding voting securities of the Surviving
Corporation (or parent thereof); or

	 	(iv)	 	Individuals who, as of the date hereof,
constitute the Board (the “Incumbent Board”), cease for any reason to
constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the effective date
hereof whose election, or nomination for election by Company
stockholders, was approved by a vote of at least four-fifths (4/5) of
the directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, unless
any such individual’s initial assumption of office occurs as a result
of either an actual or threatened election contest (including, but not
limited to, a consent solicitation).

          (h) The term “Code” shall mean the Internal Revenue Code of 1986, as amended.

          (i) The term “Code Section 409A” shall mean Section 409A of the Code and all regulations
issued thereunder and applicable guidance thereto.

     8. 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, he 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 himself 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 his
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 his duties hereunder and not for his own private use or commercial purposes.

14

 

Executive
acknowledges that unauthorized disclosure or use of Confidential Information, other than in
discharge of Executive’s duties, will cause the Lawson Entities irreparable harm. Executive shall
maintain Confidential Information in strict confidence at all times and shall not divulge
Confidential Information to any Unauthorized Person or Entity, or use in any manner, or knowingly
allow another to use, any Confidential Information, without the Company’s prior written consent,
during the term of employment or thereafter, for as long as such Confidential Information remains
confidential. Executive further acknowledges that the Lawson Entities operate and compete
internationally and that the Lawson Entities will be harmed by the unauthorized disclosure or use
of Confidential Information regardless of where such disclosure or use occurs, and that therefore
this confidentiality agreement is not limited to any single state or other jurisdiction.

          (c) Non-Solicitation. During the Restriction Period, provided that there shall not
have occurred and be continuing any material non-compliance by the Company with its obligations
under this Agreement, Executive shall not, directly or indirectly, for himself or on behalf of any
person, firm, or other entity, solicit, induce or encourage any person to leave her/his employment,
agency or office with the Lawson Entities. During the Restriction Period, provided that there
shall not have occurred and be continuing any material non-compliance by the Company with its
obligations under this Agreement, Executive shall not, directly or indirectly, for himself 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 his participation in the development, sales, marketing and
servicing of the Lawson Entities’ Products, Systems and Services, Executive acknowledges that
Executive has and will learn or develop Confidential Information relating to the development,
sales, marketing or provision of the Lawson Entities’ Products, Systems and Services, and the
Lawson Entities’ customers and prospective customers. Executive further acknowledges that the
Lawson Entities’ relationships with its customers are extremely valuable to it, are generally
the result of substantial time and effort devoted by the Lawson Entities, and tend to be near
permanent. Therefore, during the Restriction Period, Executive shall not, directly or indirectly,
for himself 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 8(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 8(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

15

 

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 8 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 8 or
provided for by law will not prevent the concurrent or subsequent employment of any other
appropriate remedy or remedies, or preclude a recovery of monetary damages and compensation. Each
party agrees that no party hereto must post a bond or other security to seek an injunction. In the
event that a court of competent jurisdiction declares that any of the remedies outlined in this
Section 8(g) are unavailable as a matter of law,

16

 

the remainder of the remedies outlined in this
Section 8(g) shall remain available to the Company.

          (h) Enforceability. If any of the provisions of this Section 8 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 8.

     9. 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 employment related dispute
between them 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.

     10. Cooperation After Termination of Agreement. Following termination of this
Agreement, regardless of the reason for termination, Executive will reasonably cooperate with the
Company in the prosecution or defense of any claims, controversies, suits, arbitrations or
proceedings involving events occurring prior to the termination of this Agreement. Executive
acknowledges that in light of his position as Chief Executive Officer of the Company, he is in the
possession of confidential information that may be privileged under the attorney-client and/or work
product privileges. Executive agrees to maintain the confidences and privileges of the Company and
acknowledges that any such confidences and privileges belong solely to the Company and can only be
waived by the Company, not Executive. In the event Executive is subpoenaed to testify or otherwise
requested to provide information in any matter, including without limitation, any court action,
administrative proceeding or government audit or investigation, relating to the Company, Executive
agrees that: (a) he will promptly notify the Company of any subpoena, summons or other request to
testify or to provide information of any kind no later than three days after receipt of such
subpoena, summons or request and, in any event, prior to the date set for him to provide such
testimony or information; (b) he will cooperate with the Company with respect to such subpoena,
summons or request for information; (c) he will not voluntarily provide any testimony or
information without permission of the

17

 

Company unless otherwise required by law; and (d) he will
permit the Company to be represented by an attorney of the Company’s choosing at any such testimony
or with respect to any such information to be provided, and will follow the instructions of the
attorney designated by the Company with respect to whether testimony or information is privileged
by the attorney-client and/or work product privileges of the Company, unless otherwise required by
law. The parties agree that the Company shall be responsible for all reasonable expenses of
Executive incurred in connection with the fulfillment of Executive’s obligations under this Section
10. The parties agree and acknowledge that nothing in this Section 10 is meant to preclude
Executive from fully and truthfully cooperating with any government investigation.

     11. Miscellaneous.

          (a) Superseding Effect. This Agreement supersedes all prior or contemporaneous
negotiations, commitments, agreements, and writings, and expresses the entire agreement between the
parties with respect to Executive’s employment by the Company, provided, however, that the terms of
any Benefit Plans will remain applicable to the particular Benefit Plan, except as expressly
modified herein, and that Executive’s rights to indemnification under Section 6 of this Agreement
shall be without limitation of any other rights to indemnification to which Executive may be
entitled, whether by statute, contract, the Company’s certificate of incorporation or bylaws, or
otherwise. All such other negotiations, commitments, agreements, and writings will have no further
force or effect, and the parties to any such other negotiation, commitment, agreement, or writing
will have no further rights or obligations thereunder. The parties agree and acknowledge that the
definitions of terms applicable to this Agreement may be different than the definitions of those
same terms in Benefit Plans and may result in seemingly contradictory results. For example, a
change in control under this Agreement may not constitute a change in control under the CAP. 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 11(c), neither
Executive nor the Company may modify, amend, or waive the terms of this Agreement other than by a
written instrument signed by Executive and the Company. Either party’s waiver of the other party’s
compliance with any specific provision of this Agreement is not a waiver of any other provision of
this Agreement or of any subsequent breach by such party of a provision of this Agreement. No
delay on the part of any party in exercising any right, power or privilege hereunder will operate
as a waiver thereof,

          (c) Section 409A. It is also the intention of this Agreement that all income tax
liability on payments made pursuant to this Agreement or any Benefit Plans be deferred until
Executive actually receives such payment to the extent Code Section 409A applies to such payments.
Therefore, if any provision of this Agreement or any Benefit Plans is found not to be in compliance
with any applicable requirements of Code Section 409A, that provision will be deemed amended and
will be construed and administered, insofar as possible, so that this Agreement and any Benefit
Plans, to the extent permitted by law and deemed advisable by the Company, do not trigger taxes and
other penalties under Code Section 409A; provided, however,

18

 

that Executive will not be required to
forfeit any payment otherwise due without his written 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 5(g). Nothing in this Section 11(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 11(d) shall override and control any inconsistent provision in the Lawson Products,
Inc. Long-Term Capital Accumulation Plan.

     All determinations required to be made under this Section 11(d), including whether reduction
is required, the amount of such reduction and the assumptions to be utilized in arriving at such
determination, shall be made in good faith by an independent accounting firm selected by the
Company in accordance with applicable law (the “Accounting Firm”), in consultation with tax counsel
reasonably acceptable to Executive. In the event that such Accounting Firm is serving as
accountant or auditor for the individual, entity or group acting as the acquirer in a Change in
Control, the Company shall appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred to herein as the
Accounting Firm). All fees and expenses of the Accounting Firm shall be borne solely by the
Company. If the Accounting Firm determines that no excise tax under Section 4999 of the Code is
payable by Executive, the Company shall request that the Accounting Firm furnish Executive with
written guidance that failure to report such excise tax on

19

 

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) Mitigation. Executive shall not be required to seek employment or otherwise
mitigate Executive’s damages in order to be entitled to the benefits and payments to which
Executive is entitled under this Agreement.

          (h) Enforcement. In connection with any dispute, arbitration or legal proceeding
under this Agreement or relating to Executive’s termination of employment, the Company shall pay
Executive’s reasonable attorney’s fees and expenses on a current basis (either directly or by
reimbursing Executive); provided, that Executive shall repay any such amounts paid or reimbursed if
Executive is not the prevailing party in such dispute, arbitration or legal proceeding.

          (i) 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.

          (j) 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.

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

          (l) 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

20

 

Sections 5, 6, 8,
9, and 10, 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.

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

          (n) 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.

          (o) 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:

Thomas Neri

At the address on file with the Company

Lawson Products, Inc.

166 East Touhy Avenue

Des Plaines, IL 60018

Attention: Corporate Secretary

Fax: 847-296-1949

Notice will be deemed received on the third business day following the day on which it was mailed,
postage prepaid.

[SIGNATURE LINES ON NEXT PAGE]

21

 

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

	 	 	 	 	 
	EXECUTIVE:	 	 
	 
	 	 	 	 
	 	 	 
	Thomas Neri	 	 
	 
	 	 	 	 
	LAWSON PRODUCTS, INC.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Lee Hillman, Chairman,	 	 
	Compensation Committee of the

Board of Directors of Lawson Products, Inc.	 	 

22

 

EXHIBIT A

CONFIDENTIAL GENERAL RELEASE 

In consideration of the payments and other benefits set forth in Section 5 of the Amended and
Restated Employment Agreement (hereinafter the “Agreement”) made and entered into by and between
Thomas Neri (hereinafter the “Executive”) and Lawson Products, Inc. (hereinafter the “Employer”) as
of February 12, 2009, Executive hereby executes this Confidential General Release (hereinafter the
"Release”):

     1. Executive hereby releases Employer, its past and present parents, subsidiaries, affiliates,
predecessors, successors, assigns, related companies, entities or divisions, its or their past and
present employee benefit plans, trustees, fiduciaries and administrators, and any and all of its
and their respective past and present officers, directors, partners, insurers, agents,
representatives, attorneys and employees (all collectively included in the term the “Employer” for
purposes of this release), from any and all claims, demands or causes of action which Executive, or
Executive’s heirs, executors, administrators, agents, attorneys, representatives or assigns (all
collectively included in the term “Executive” for purposes of this release), have, had or may have
against Employer, based on any events or circumstances arising or occurring prior to and including
the date of Executive’s execution of this Release to the fullest extent permitted by law,
regardless of whether such claims are now known or are later discovered, including but not limited
to any claims relating to Executive’s employment or termination of employment by Employer, any
rights of continued employment, reinstatement or reemployment by Employer, and any costs or
attorneys’ fees incurred by Executive (collectively, the “Released Claims”); provided, however,
Executive is not waiving, releasing or giving up any rights Executive may have to workers’
compensation benefits, to vested benefits under any pension or savings plan, to payment of earned
and accrued but unused vacation pay, to continued benefits in accordance with the Consolidated
Omnibus Budget Reconciliation Act of 1985, to unemployment insurance, to any vested Equity Awards,
to any vested awards or benefits under the CAP or any Benefit Plan, to indemnification provided by
the Delaware General Corporation Law, the certificate of incorporation or bylaws of Employer, the
Agreement or the Indemnification Agreement dated as of                     , 2008 between Employer and Executive, each
as they exist on the date of Executive’s termination of employment, 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

23

 

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 5 of the Agreement.

24

 

	 	 	 	 	 	 	 
	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 

25

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