What changed in this filing

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Item 9A. Controls and Procedures

2022-02-24 compared with 2021-02-26 · 79 added, 62 removed, 122 unchanged (54% of the section changed)

17 unchanged sentences

The Company’s independent registered public accounting firm, BDO USA, LLP, has audited and issued a report on the Company’s internal controls over financial reporting as set forth in this annual report.

The Company is in the process of integrating Partsmaster, which was acquired from NCH Corporation on August 31, 2020, into its overall internal control over financial reporting.

Management elected to exclude the internal controls of Partsmaster from its assessment of the effectiveness of internal controls over financial reporting for the year ended December 31, 2020, as permitted by the SEC's interpretive guidance.

Partsmaster constituted 15.8% and 0.9% of total assets and net assets, respectively, as of December 31, 2020 and 6.4% of total revenue and 5.2% of net income for 2020.

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Stockholders and Board of Directors

Lawson Products, Inc.

3 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of income and comprehensive income, changes in stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2020, and the related notes and financial statement schedule listed in the accompanying index and our report dated February 26, 2021 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of income and comprehensive income, changes in stockholders’ equity, and cash flows for each of the years then ended, and the related notes and financial statement schedule listed in the accompanying index and our report dated February 24, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

8 unchanged sentences

We believe that our audit provides a reasonable basis for our opinion.

As indicated in the accompanying “Item 9A, Management’s Report on Internal Control over Financial Reporting,” management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Partsmaster, which was acquired on August 31, 2020, and which is included in the consolidated balance sheet of the Company as of December 31, 2020, and the related consolidated statements of income and comprehensive income, changes in stockholders’ equity, and cash flows for the year then ended.

Partsmaster constituted 15.8% and 0.9% of total assets and net assets, respectively, as of December 31, 2020, and 6.4% and 5.2% of revenues and net income, respectively, for the year then ended.

Management did not assess the effectiveness of internal control over financial reporting of Partsmaster because of the timing of the acquisition which was completed on August 31, 2020.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Partsmaster.

Definition and Limitations of Internal Control over Financial Reporting

10 unchanged sentences

There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The Company is in the process of integrating Partsmaster, which was acquired from NCH Corporation on August 31, 2020, into its overall internal control over financial reporting.

Partsmaster constituted 15.6% and 0.9% of total assets and net assets, respectively, as of December 31, 2020 and 6.4% of total revenue and 5.2% of net income for 2020.

OTHER INFORMATION.

DISCLOSURES REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

33 unchanged sentences

The information required under this Item is set forth in the Company’s Proxy Statement for the Annual Meeting of Stockholders to be held on May 10, 2022 under the caption “Fees Paid to Independent Auditors” which information is incorporated herein by reference.

Lawson Products, Inc.

Notes to Consolidated Financial Statements

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

3 unchanged sentences

Description of Exhibit

Asset Purchase Agreement dated August 31, 2020, between the Company and NCH Corporation and NCH Canada, Inc., incorporated herein by reference to Exhibit 2.1 to the Company's Cur r ent Report on Form 8-K dated August 31, 2020.

3.1 Certificate of Incorporation of the Company, as amended, incorporated herein by reference to Exhibit 3(a) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1988.

Amended and Restated By-laws of the Company, incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K dated October 20, 2009.

Agreement and Plan of Merger, dated as of December 29, 2021, by and among LKCM TE Investors, LLC, TestEquity Acquisition, LLC, the Company and Tide Sub, LLC, incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K (File No.

000-10546) filed January 4, 2022.

Agreement and Plan of Merger, dated as of December 29, 2021, by and among 301 HW Opus Investors, LLC, 301 HW Opus Holdings, Inc., the Company and Gulf Sub, Inc., incorporated herein by reference to Exhibit 2.2 to the Company's Current Report on Form 8-K (File No.

000-10546) filed January 4, 2022.

Amended and Restated Certificate of Incorporation of the Company, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No.

000-10546) filed May 18, 2020.

Amended and Restated By-laws of the Company, incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No.

000-10546) filed May 18, 2020.

Description of common stock

10.1* Amended and Restated Executive Deferral Plan, incorporated herein by reference from Exhibit 10(c)(7) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995.

Credit Agreement dated October 11, 2019, among the Company and JP Morgan Chase Bank, N.A.

as administrative agent, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.

000-10546) filed October 16, 2019.

First Amendment to Credit Agreement dated August 31, 2020, between the Company and JP Morgan Chase Bank, N.A.

as administrative agent, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.

000-10546) filed September 2, 2020.

Lawson Products, Inc.

Stock Performance Plan, incorporated herein by reference from Exhibit 10(c)(8) to the Company’' Annual Report on Form 10-K for the fiscal year ended December 31, 2000.

Form Letter regarding Stock Performance Rights, incorporated by reference to Exhibit 10(c)(16) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2004.

Executive Deferral Plan (as Amended and Restated Effective November 1, 2015), incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q (File No.

000-10546) for the quarter ended September 30, 2021.

Lawson Products, Inc.

Long-Term Incentive Plan, incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated May 13, 2008.

Form of Indemnification Agreement for Directors and Officers incorporated herein by reference to Exhibit 10.01 to the Company's Current Report on Form 8-K dated September 15, 2008.

Form of Amended and Restated Award Agreement, incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated February 12, 2009.

Amended Stock Performance Plan (as Amended and Restated Effective January 24, 2017), incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q (File No.

000-10546) for the quarter ended September 30, 2021.

Amendment of the Lawson Products, Inc.

Amended Stock Performance Plan (as Amended and Restated Effective January 24, 2017), dated December 23, 2020, incorporated by reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K (File No.

000-10546) for the fiscal year ended December 31, 2020.

Form Letter regarding Stock Performance Rights, incorporated by reference to Exhibit 10(c)(16) to the Company's Annual Report on Form 10-K (File No.

000-10546) for the fiscal year ended December 31, 2004.

Lawson Products, Inc.

2009 Equity Compensation Plan, incorporated by reference to Appendix A to the Company's Proxy Statement on Schedule 14A Information dated November 4, 2009.

Employment Agreement dated as of August 29, 2012 by and between Lawson Products, Inc., an Illinois corporation, and Neil E.

Jenkins, incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated August 29, 2012.

Employment Agreement dated as of August 29, 2012 by and between Lawson Products, Inc., an Illinois corporation, and Ron Knutson, incorporated herein by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K dated August 29, 2012.

Agreement of Lease dated June 30, 2014 between the Company and KTR Property Trust III incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 30, 2014.

2009 Equity Compensation Plan (as Amended and Restated Effective May 14, 2019), incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.

000-10546) filed May 3, 2019.

First Amendment to the Lawson Products, Inc.

2009 Equity Compensation Plan (as Amended and Restated Effective May 14, 2019), incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K (File No.

000-10546) filed May 3, 2019.

Amendment to the Lawson Products, Inc.

2009 Equity Compensation Plan (as Amended and Restated Effective May 14, 2019), dated December 23, 2020, incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K (File No.

000-10546) for the fiscal year ended December 31, 2020.

Form of Award Agreement under the 2009 Equity Compensation Plan (Target Units, SPRs and Restricted Units), incorporated by reference to Exhibit 10.11 to the Company's Quarterly Report on Form 10-Q (File No.

000-10546) for the quarter ended September 30, 2021.

Form of Award Agreement under the 2009 Equity Compensation Plan (MSU Target Units, ROIC Target Units and Restricted Units), incorporated by reference to Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q (File No.

000-10546) for the quarter ended September 30, 2021.

Form of Award Agreement under the 2009 Equity Compensation Plan (MSU Target Units, ROIC Target Units and Restricted Units), incorporated by reference to Exhibit 10.13 to the Company's Quarterly Report on Form 10-Q (File No.

000-10546) for the quarter ended September 30, 2021.

Lawson Products, Inc.

Notes to Consolidated Financial Statements

Change in Control Agreement effective October 16, 2015 by and between the Company and Shane McCarthy, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October 16, 2015.

2021 Annual Incentive Plan Summary, incorporated by reference to Exhibit 10.14 to the Company's Quarterly Report on Form 10-Q (File No.

000-10546) for the quarter ended September 30, 2021.

Form of Indemnification Agreement for Directors and Officers, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.

000-10546) filed September 19, 2008.

Form of Change in Control Agreement for Officers, incorporated by reference to Exhibit 10.16 to the Company's Quarterly Report on Form 10-Q (File No.

000-10546) for the quarter ended September 30, 2021.

Employment Agreement dated as of August 14, 2017 by and between Lawson Products, Inc., an Illinois corporation, and Michael G.

DeCata, incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated August 14, 2017.

Award Agreement dated as of August 14, 2017 by and between Lawson Products, Inc., an Illinois corporation, and Michael G.

DeCata, incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated August 14, 2017.

Amendment No.

1 to the Amended and Restated Lawson Products, Inc.

2009 Equity Compensation Plan incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated April 11, 2018.

Amendment No.1 to the Award Agreement entered into on April 11, 2018 between the Company and Michael G.

DeCata, incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated April 11, 2018.

Amended and Restated Stock Award Agreement entered into on April 11, 2018 between the Company and Michael G.

DeCata, incorporated herein by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K dated April 11, 2018.

Award Agreement entered into on April 11, 2018 between the Company and Michael G.

DeCata, incorporated herein by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K dated April 11, 2018.

Amendment No.1 to the Employment Agreement entered into on April 11, 2018 between the Company and Michael G.

DeCata, incorporated herein by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K dated April 11, 2018.

Lawson Products, Inc.

2009 Equity Compensation Plan (as Amended and Restated Effective May 14, 2019), incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated May 3, 2019.

First Amendment to the Lawson Products, Inc.

2009 Equity compensation Plan (as Amended and Restated Effective May 14, 2019), incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated May 3, 2019.

Credit Agreement dated October 11, 2019 among the Company and JP Morgan Chase Bank, N.A.

as administrative agent, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated October 11, 2019.

First Amendment to Credit Agreement dated August 31, 2020, between the Company and JP Morgan Chase Bank, N.A.

as administrative agent, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated August 31, 2020.

Amendment of the Lawson Products, Inc.

Amended Stock Performance Plan (As Amended and Restated Effective January 24, 2017), dated December 23, 2020.

Amendment of the Lawson Products, Inc.

2009 Equity Compensation Plan (As Amended and Restated Effective , 2017), dated December 23, 2020.

DeCata, incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.

000-10546) filed August 17, 2017.

Amendment No.1 to the Employment Agreement entered into on April 11, 2018 between Lawson Products, Inc., an Illinois corporation, and Michael G.

DeCata, incorporated herein by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K (File No.

000-10546) filed April 11, 2018.

000-10546) filed September 4, 2012.

Retirement and Consulting Agreement, dated as of March 2, 2021, by and between Lawson Products, Inc., an Illinois corporation, and Neil Jenkins, incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.

000-10546) filed March 5, 2021.

Voting Agreement, dated as of December 29, 2021, by and among the Company and Luther King Capital Management Corporation, incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No.

000-10546) filed January 4, 2022.

Amended and Restated Commitment Letter, dated February 7, 2022, by and between the Company and JPMorgan Chase Bank, N.A.

Subsidiaries of the Company.

2 unchanged sentences

Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Lawson Products, Inc.

Notes to Consolidated Financial Statements

Certification of Chief Financial Officer pursuant to 18 U.S.C.

8 unchanged sentences

101.PRE** XBRL Taxonomy Extension Presentation Linkbase Document

104 Cover Page Interactive File (embedded within the Inline XBRL Document)

† Certain schedules and exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K promulgated by the U.S.

Securities and Exchange Commission.

The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

* Indicates management employment contracts or compensatory plans or arrangements.

** Filed herewith.

*** Furnished herewith.

FORM 10-K SUMMARY.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

5 unchanged sentences

/s/ Ronald J.

Executive Vice President, Chief Financial Officer, Treasurer and Controller

(principal financial and accounting officer)

Executive Vice President, Chief Financial Officer and Treasurer

(principal financial officer)

February 24, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below this twenty-sixth day of February, 2021, by the following persons on behalf of the registrant and in the capacities indicated.

Vice President, Controller and Chief Accounting Officer

(principal accounting officer)

February 24, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below this twenty-fourth day of February, 2022, by the following persons on behalf of the registrant and in the capacities indicated.

Signature Title

/s/ Michael G.

DeCata President, Chief Executive Officer and Director

(principal executive officer)

/s/ Ronald J.

Knutson Executive Vice President, Chief Financial Officer and Treasurer

(principal financial officer)

Lambert Vice President, Controller and Chief Accounting Officer

(principal accounting officer)

/s/ Andrew B.

2 unchanged sentences

Bryan King Director

/s/ Charles D.

/s/ Bianca A.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures