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Item 5.02	Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(i)	The Executive will be employed on an "at will" basis, and the Executive’s employment may be terminated at any time at the option of the Company or the Executive, on the terms and subject to the conditions set forth in the Employment Agreement.

(ii)

The Executive will be eligible to participate in the annual incentive plan with a target payout level of 100% of base salary. The Executive shall also be eligible for equity awards and for health, retirement plan and other employee benefits provided by the Registrant or the Company. On or before the tenth day following the payment of an annual incentive plan bonus, the Executive may elect to use all or a portion of his after tax bonus to purchase shares of the Registrant’s common stock, and in connection therewith shall be entitled to receive RSAs under the Equity Plan in an amount equal to the number of shares so purchased, with such RSAs to vest on the third anniversary of the grant date.

(iii)	If the Executive’s employment is terminated by the Company for Cause (as defined in the Employment Agreement) or by the Executive voluntarily, the Company shall have no obligations to the Executive except to pay Accrued Compensation (as defined in the Employment Agreement).

(iv)

If the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason (as defined in the Employment Agreement), the Executive will be entitled to receive (A) Accrued Compensation, (B) payments in an aggregate amount equal to 300% of the Executive’s then current base salary, payable in monthly installments for a period of twenty-four months (the "Severance Period"), (C) continued health plan coverage for the Executive and his spouse and dependents during the Severance Period and (D) immediate vesting of outstanding unvested equity awards that would otherwise have vested during the Severance Period had the Executive remained employed during the Severance Period.

(v)

If the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason within 24 months following a Change in Control (as defined in the Employment Agreement), then in lieu of the benefits referenced in clause (iv), the Executive shall be entitled to receive (A) Accrued Compensation, (B) an amount equal to two times the Executive’s then current base salary and two times the higher of the Executive’s target bonus with respect to the year in which the Executive’s termination occurs or the actual bonus for the prior year (or, if the target bonus has not been established as of the date of termination, two times the higher of the target bonus or the actual bonus for the prior year), payable in a lump

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(vi)

If the Executive’s employment is terminated due to the Executive’s death, (A) the Executive shall be entitled to receive Accrued Compensation, (B) the beneficiary designated by the Executive shall be entitled to receive an amount equal to two times the Executive’s then current annual base salary, payable monthly over a period of twenty-four months and (C) the Executive’s spouse and dependents shall be entitled to continued health plan coverage for a period of twenty-four months.

(vii)

If the Executive’s employment is terminated due to Disability (as defined in the Employment Agreement), the Executive shall be entitled to receive (A) Accrued Compensation, (B) an annualized amount equal to 100% of his then current base salary and target bonus for 12 months following the date of termination and an annualized amount equal to 60% of his then current base salary and target bonus for 24 months thereafter, with reductions for payments from Company-provided long-term disability coverage made during such 36-month period and (C) continued health plan coverage for the Executive and his spouse and dependents for a period of five and one-half years following the date of termination.

(viii)	The receipt of severance benefits, other than Accrued Compensation, is conditioned upon the Executive’s execution and delivery of a release in the form specified by the Employment Agreement.

(ix)	The Executive is subject to non-compete and non-solicitation obligations for a period of eighteen months following the date of the Executive’s termination of employment.

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(i)

Generally. 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” which term, for the avoidance of doubt, shall include all awards under the Equity Compensation Plan and all awards under the Stock Performance Plan). 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 award agreement.

(ii)

Special Equity Award. On the date of this Agreement, Parent is making a grant of (A) 41,000 stock performance rights (“SPRs”) to Executive pursuant to the Lawson Products, Inc. Amended Stock Performance Plan (the “Stock Performance Plan”), (B) options for 40,000 shares of common stock (the “Options”) to Executive pursuant to the Lawson Products, Inc. 2009 Equity Compensation Plan (as amended and restated effective May 13, 2014, the “Equity Compensation Plan”), (C) 57,934 market stock units (“MSUs”) to Executive pursuant to the Equity Compensation Plan, and (D) 29,083 restricted stock awards (“RSAs”) to Executive pursuant to the Equity Compensation Plan (the SPRs, Options, MSUs and RSAs being collectively referred to as the “Special Equity Award”), which Special Equity Award is subject to the following:

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(iii)

Bonus-Related Share Purchases. On or before the tenth day following the payment of an AIP bonus to Executive, Executive may elect to use all or a portion of his after tax AIP bonus to purchase shares of the Company’s common stock (“Bonus-Related Shares”), and in connection therewith shall be entitled to receive RSAs in an amount equal to the number of shares so purchased (the “Bonus-Related RSAs”); in the event that Executive is unable to purchase shares of common stock within the ten-day period as a result of the Company’s insider trading policy or other restrictions on trading, the applicable share purchases and associated RSA grant shall be made not later than the fifth day after the applicable trading restriction is lifted; the Bonus-Related RSAs shall vest on the third anniversary of the grant date and shall be forfeited if Executive sells or transfers the Bonus-Related Shares on or prior to the third anniversary of the grant date; the Bonus-Related RSAs shall be subject to the terms of the Equity Compensation Plan and the applicable award agreement.

(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 one year of Executive’s Base Salary, with additional double indemnity coverage;

(iv)	accidental death insurance;

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(v)	participation in the Company’s 401(k) plan, profit-sharing retirement plan and executive deferral plan; and

(vi)	four weeks’ annual vacation under the terms of the Company’s vacation policy for officers.

(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.

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(i)	a decrease in Executive’s Base Salary;

(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.

(x)	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;

(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 15 days of the expiration of the remedy period specified in clause (y).

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(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

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

(i)	the Company shall pay Executive any Accrued Compensation;

(ii)	the Company shall pay Executive, subject to Section 5(f), an aggregate amount equal to 300% of his then current Base Salary, payable in monthly installments, commencing one (1) month after the effective date of Executive’s termination, for a period of twenty-four (24) months (the “Severance Period”);

(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

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(iv)

all of Executive’s outstanding unvested Equity Awards that would have otherwise vested during the Severance Period had Executive remained employed during the Severance Period, if any, shall immediately vest upon the effective date of Executive’s termination, and Executive shall have until the earlier of (A) one year 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 expiration of the term of such Equity Award to exercise any vested Equity Award that is subject to being exercised. For the avoidance of doubt, this Section 5(b)(iv) shall apply only to unvested Equity Awards where vesting is solely service-based (including the SPRs and RSAs described in Section 3(d)(ii) and the RSAs described in Section 3(d)(iii)), but shall not apply to unvested Equity Awards where vesting is performance-based in whole or in part.

(i)	the Company shall pay Executive any Accrued Compensation;

(ii)

the Company shall pay Executive an amount equal to two (2) times Executive’s then current annual Base Salary, and two (2) times the higher of Executive’s target bonus with respect to the year in which Executive’s termination occurs or the actual bonus for the prior year (or, if the target bonus for such year has not been established as of the date of termination, two (2) times the higher of the target bonus or the actual bonus for the prior year). Subject to Section 5(f), such amount 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 two calendar years 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, it shall be paid in 24 equal monthly installments commencing one month after the effective date of Executive’s termination;

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(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 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 until the earlier of (A) one year 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 expiration of the term of such Equity Award to exercise any Equity Award that is subject to being exercised.

(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 two (2) times Executive’s then current annual Base Salary, in twenty-four (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 twenty-four (24) months 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.

(i)	the Company shall pay Executive any Accrued Compensation;

(ii)

the Company shall continue to pay Executive, subject to Section 5(f), in monthly installments commencing one month after the effective date of termination: (A) for 12 months at the rate of 100% of the sum of his then current Base Salary plus his target bonus with respect to the year in which the termination occurs (or, if the target bonus for such year has not been established as of the date of termination, the target bonus for the prior year); and (B) for 24 months thereafter at the rate of 60% of the sum of his then current Base Salary plus his target bonus with respect to the year in which the termination occurs (or, if the target bonus for such year has not been established as of the date of termination, the target bonus for the prior year). The Company will

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(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 (5½) 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.

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(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 6.1(c)(i);

(iii)	the manufacture, sale and distribution of production and specialized parts and supplies described in Section 6.1(c)(i);

(iv)	the provision of just-in-time inventories of component parts described in Section 6.1(c)(i) to original equipment manufacturers and of maintenance and repair parts described in Section 6.1(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 6.1(c)(i).

(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.

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(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).

(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 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

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(C)	no “person” or “group” of “persons” as defined above is the beneficial owner of fifty percent (50%) 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 fifty percent (50%) 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).

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