EXECUTIVE EMPLOYMENT AGREEMENT LAWSON PRODUCTS, INC.

EXECUTIVE EMPLOYMENT AGREEMENT

This Agreement is made and effective as of this 14th day of September 2005, between LAWSON PRODUCTS, INC., a Delaware corporation “Lawson”), and Kenneth E. Malik (“Executive”).

WHEREAS, Lawson wishes to continue to employ Executive as an officer of Lawson; and

WHEREAS, Executive wishes to continue employment with Lawson in such position; and

WHEREAS, Company (as defined in paragraph 14.1 below) is engaged in: (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 Company’s sales kits and manuals; (ii) the sale and distribution and the providing of systems and services related thereto; and (iii) the manufacture, sale and distribution of production and specialized parts and supplies; and (iv) the provision of just-in-time inventories of component parts to original equipment manufacturers and of maintenance and repair parts 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 (collectively “Company’s Products, Systems and Services”). Company’s independent sales agents or other representatives employed or retained by Company (“Agents”), solicit orders for Company’s Products, Systems and Services, in the territories assigned to them and also maintain, on behalf of Company, frequent contact for such purposes with customers; and

WHEREAS, Lawson’s officers are responsible for duties inherent to their offices relating to the management and operation of the Company, including but not limited to assisting Company in the development of its product line, the marketing, sale and distribution of Company’s Products, Systems and Services to Company’s customers, assisting in the cross-marketing and cross-selling of products of Company, and for Company’s sales activities, including but not limited to its sales management and management of its employees, agents and other representatives; and

WHEREAS, Lawson’s officers interact, cooperate, assist and confer with executives, employees, officers, directors, agents, representatives, consultants and others within the Company in the regular course of business and regularly engage in management, sales, distribution and operational activities, and activities relating thereto or in connection therewith; and

WHEREAS, Lawson reposes great trust and confidence in its officers.

NOW THEREFORE, in recognition of the needs of Company and its employees, and in consideration of Executive’s position with and employment or continued employment by Lawson, the rights and benefits provided hereunder and in any plan or program which requires as

a condition to participation therein or receipt of benefits thereunder by Executive’s, execution of this Agreement, and of the mutual agreements, promises and undertakings herein set forth, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties hereto, Lawson and Executive mutually agree as follows:

Lawson hereby agrees to employ Executive as Group President, OEM and International (or with such other title as mutually agreed upon) and as a member of its Corporate Management Committee, on a full-time basis, and Executive hereby accepts such employment. Executive shall report to the Chief Operating Officer, or to such other person as designated by the Chief Executive Officer (the “Reporting Person”).

Executive hereby acknowledges that he has a fiduciary responsibility and duty of loyalty to 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 Company. Executive shall diligently, competently and faithfully perform the duties assigned to him by Company from time to time.

(a)          An annual salary in the amount of $230,000, which amount may be increased by the Chief Executive Officer of Lawson subject to approval of the Compensation Committee of the Board of Directors, in its sole discretion, from time to time, which salary shall be payable in substantially equal semi-monthly installments (“Salary”).

(b)          Commencing with the year 2005, an annual incentive bonus, if any, determined by the Compensation Committee of the Board of Directors of Lawson in its sole discretion based upon the overall growth and profitability of the Company as compared to the prior year (the “Incentive Bonus”). The Incentive Bonus, if any, shall be payable not later than April 15 of the following year, provided Executive’s employment hereunder has not been terminated by Lawson for cause prior to such date. The terms, conditions and provisions of the Incentive Bonus shall be in conformance with the incentive bonus program applicable to executive officers generally and particularly to such office as is held by Executive.

(c)          Eligibility to participate in the Long-Term Capital Accumulation Plan if and as recommended by Lawson’s Chief Executive Officer and if and as determined in the sole discretion of the Compensation Committee of the Board of Directors of Lawson.

2.2          Executive shall receive the following standard benefits; provided, however, Lawson may modify or terminate such benefits from time to time to the extent and on such terms as Lawson modifies or terminates such benefits as provided to other officers:

(a)          Coverage under Lawson’s group health plan on such terms as provided to Lawson’s officers.

(b)          Long-term disability insurance coverage; provided however, if Executive becomes disabled within the meaning of any long-term disability policy then in effect, Lawson will pay to Executive the Salary which would have been due but for Executive’s disability for six (6) months following such disability. For thirty (30) months thereafter, Lawson will pay to Executive sixty percent (60%) of the Salary of Executive which would have been due but for Executive’s disability. While Lawson is making such payments, Lawson will be entitled to receive in money or by credit against such payments a sum equal to any Company provided long-term disability insurance benefits paid to or for the benefit of Executive for such period.

(c)          Group term life insurance with a death benefit amount of not less than $50,000, with additional double indemnity coverage.

(f)           Four weeks annual vacation under the terms of Lawson’s vacation policy for officers.

(h)          If Executive dies while employed by Lawson under this Agreement and is not then in default or breach of this Agreement, Lawson shall pay an additional compensation amount equal to two (2) times the annual Salary being paid to Executive at the time of his death (“Additional Compensation Amount”). The Additional Compensation Amount shall be payable to the beneficiary(ies) identified in writing by Executive from time to time on forms provided by Lawson for that purpose and filed by Executive with Lawson and shall be paid in forty-eight (48) equal, semi-monthly installments made as of the 15th day and the last day of each calendar month following Executive’s death.

(i)           Reimbursement for all reasonable and approved business expenses in accordance with Lawson policy, or as otherwise approved by the Reporting Person, provided Executive submits paid receipts or other documentation acceptable to Lawson and as required by the Internal Revenue Service to qualify as ordinary and necessary business expenses under the Internal Revenue Code of 1986, as amended (the “Code”).

2.3          All compensation and benefits to become payable to Executive under subparagraphs 2.1 and 2.2 shall be subject to applicable governmental laws and regulations regarding income tax withholding and other payroll taxes and deductions.

(a)          By Lawson, without cause, effective on the date that written notice of termination is delivered to Executive or sent to him by certified or registered mail to Executive’s home address as listed on Lawson’s records (or effective on such later date as indicated in such notice).

(b)          By Lawson, for cause, effective on the date that written notice of termination is delivered to Executive or sent to him by certified or registered mail to Executive’s home address as listed on Lawson’s records. For purposes of this Agreement, cause shall mean (i) violation by Executive of any agreement between Executive and Lawson 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; (iii) Executive’s gross negligence, dishonesty or willful misconduct; (iv) any act or failure to act by Executive which has an adverse effect on the Company’s reputation, goodwill or customer relations; (v) conviction of a crime by Executive (other than traffic related offenses); or (vi) an act of fraud, embezzlement or the misappropriation of property by Executive.

(c)          By Executive effective on the expiration of sixty (60) days following written notice of resignation delivered to the Reporting Person by certified or registered mail, or hand delivery or overnight mail.

(d)          Automatically, upon Executive’s date of death or the date on which Executive is determined to be permanently “disabled” pursuant to the terms of Lawson’s long-term disability insurance policy.

3.2          Executive shall remain employed by Lawson until the effective date of termination or resignation, as the case may be, unless the parties shall otherwise agree; provided, however, following Lawson’s notice of termination without cause or Executive’s notice of resignation in accordance herewith, and until the effective date thereof, Executive shall perform only those services specifically authorized and directed by the Reporting Person, Chief Executive Officer or the Board of Directors and shall receive as compensation while so employed only the annual Salary then in effect and benefits as then in effect, subject to modifications in such benefits as may occur in the interim pertaining to such benefit programs generally affecting officers of Lawson.

3.3          Upon the effective date of termination of Executive’s employment under this Agreement:

(a)          Executive, upon notice of termination of his employment, shall immediately return to Lawson all Company property, including without limitation the property and information described in paragraphs 4 or 5 hereof, in whatever form, together with all copies thereof in his possession or under his control.

(b)          Lawson shall pay to Executive, within ninety (90) days following the effective date of termination of his employment, the sum of any compensation or benefits or other amounts due to him from Lawson as may be accrued for periods prior to the