Item 1.01 Entry into a Material Definitive Agreement.




On December 29, 2021, Lawson Products, Inc., a Delaware corporation ("Lawson"),
entered into:



        •    an Agreement and Plan of Merger (the "TestEquity Merger Agreement") by
             and among (i) LKCM TE Investors, LLC, a Delaware limited liability
             company (the "TestEquity Equityholder"), (ii) TestEquity Acquisition,
             LLC, a Delaware limited liability company and an indirect wholly-owned
             subsidiary of the TestEquity Equityholder ("TestEquity"), (iii) Lawson
             and (iv) Tide Sub, LLC, a Delaware limited liability company and a
             wholly-owned subsidiary of Lawson ("Merger Sub 1"), pursuant to the
             terms and subject to the conditions of which Merger Sub 1 will merge
             with and into TestEquity, with TestEquity surviving the merger as a
             wholly-owned subsidiary of Lawson (the "TestEquity Merger"); and




        •    an Agreement and Plan of Merger (the "Gexpro Services Merger
             Agreement" and, together with the TestEquity Merger Agreement, the
             "Merger Agreements") by and among (i) 301 HW Opus Investors, LLC, a
             Delaware limited liability company (the "Gexpro Services
             Stockholder"), (ii) 301 HW Opus Holdings, Inc., a Delaware corporation
             and a wholly-owned subsidiary of the Gexpro Services Stockholder
             ("Gexpro Services"), (iii) Lawson and (iv) Gulf Sub, Inc., a Delaware
             corporation and a wholly-owned subsidiary of Lawson ("Merger Sub 2"),
             pursuant to the terms and subject to the conditions of which Merger
             Sub 2 will merge with and into Gexpro Services, with Gexpro Services
             surviving the merger as a wholly-owned subsidiary of Lawson (the
             "Gexpro Services Merger" and, together with the TestEquity Merger, the
             "Mergers").

The Mergers, if completed, will be consummated substantially concurrently.

As more fully described below, pursuant to the Merger Agreements, Lawson has agreed to issue up to an aggregate of 12,000,000 shares of Lawson common stock, par value $1.00 per share ("Lawson common stock"), in consideration for the Mergers as follows:





        •    TestEquity Merger: In connection with the TestEquity Merger, 3,300,000
             shares of Lawson common stock would be issued to the TestEquity
             Equityholder upon the closing of the TestEquity Merger, and up to an
             additional 700,000 shares of Lawson common stock would potentially be
             issuable to the TestEquity Equityholder on or after the closing date
             of the TestEquity Merger upon satisfaction of the conditions of, and
             in accordance with, two earnout mechanisms contained in the TestEquity
             Merger Agreement and summarized below.




        •    Gexpro Services Merger: In connection with the Gexpro Services Merger,
             7,000,000 shares of Lawson common stock would be issued to the Gexpro
             Services Stockholder upon the closing of the Gexpro Services Merger,
             and up to an additional 1,000,000 shares of Lawson common stock would
             potentially be issuable to the Gexpro Services Stockholder on or after
             the closing date of the Gexpro Services Merger upon satisfaction of
             the conditions of, and in accordance with, two earnout mechanisms
             contained in the Gexpro Services Merger Agreement and summarized
             below.

Entities affiliated with Luther King Capital Management Corporation ("LKCM") and J. Bryan King (the Chairman of the Lawson board of directors), including private investment partnerships for which LKCM serves as investment manager, beneficially own a majority of the ownership interests in the TestEquity Equityholder (which will be entitled to receive all of the shares of Lawson common stock issued by Lawson as consideration in the TestEquity Merger). Entities affiliated with LKCM and Mr. King,

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including private investment partnerships for which LKCM serves as investment manager, beneficially own a majority of the ownership interests in the Gexpro Services Stockholder (which will be entitled to receive all of the shares of Lawson common stock issued by Lawson as consideration in the Gexpro Services Merger).

As of December 31, 2021, entities affiliated with LKCM and Mr. King beneficially owned approximately 48% of the 9,112,304 shares of Lawson common stock outstanding as of that date. After giving pro forma effect to the issuance of the minimum aggregate number of shares of Lawson common stock issuable in connection with the Mergers (which minimum number is 10,300,000 shares), entities affiliated with LKCM and Mr. King (including the TestEquity Equityholder and the Gexpro Services Stockholder) would beneficially own in the aggregate approximately 75% of the outstanding shares of Lawson common stock. After giving pro forma effect to the issuance of the maximum aggregate number of shares of Lawson common stock issuable in connection with the Mergers (which maximum number is 12,000,000 shares), entities affiliated with LKCM and Mr. King (including the TestEquity Equityholder and the Gexpro Services Stockholder) would beneficially own in the aggregate approximately 77% of the outstanding shares of Lawson common stock.

A special committee (the "Special Committee") of independent and disinterested Lawson directors negotiated and evaluated the Merger Agreements on behalf of Lawson. The Special Committee was comprised of Andrew B. Albert, I. Stephen Edelson and Lee S. Hillman. On December 28, 2021, the Special Committee, acting with the advice of the Special Committee's legal and financial advisors, unanimously (1) determined that the terms of the Merger Agreements, the related agreements contemplated by the Merger Agreements and the transactions contemplated thereby are fair to and in the best interests of Lawson and its stockholders (other than LKCM, Mr. King and certain entities and persons affiliated with LKCM and Mr. King and the entities or persons in which any of the foregoing have a pecuniary interest or in the name of which the shares of Lawson common stock of any of the foregoing are registered or beneficially held (the "Excluded Company Parties")), (2) approved the execution, delivery and performance of the Merger Agreements, the related agreements contemplated by the Merger Agreements and the transactions contemplated thereby and (3) recommended that the Lawson board of directors approve, and recommend that Lawson's stockholders approve, the Merger Agreements, the related agreements contemplated by the Merger Agreements and the transactions contemplated thereby, including the Mergers and the issuance of shares of Lawson common stock in connection with the Mergers.

Thereafter, on December 28, 2021, the Lawson board of directors (acting on the recommendation of the Special Committee) by unanimous vote of the Lawson directors (except for Mr. King and Mark F. Moon, who recused themselves from the vote) (1) determined that the terms of the Merger Agreements, the related agreements contemplated by the Merger Agreements and the transactions contemplated thereby are fair to and in the best interests of Lawson and its stockholders (other than the Excluded Company Parties), (2) approved the execution, delivery and performance of the Merger Agreements, the related agreements contemplated by the Merger Agreements and the transactions contemplated thereby, (3) directed that the Merger Agreements, the related agreements contemplated by the Merger Agreements and the transactions contemplated thereby, including the Mergers and the issuance of shares of Lawson common stock in connection with the Mergers, be submitted to Lawson's stockholders for approval at a stockholders meeting and (4) resolved to recommend that Lawson's stockholders approve those matters at such stockholders meeting.

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TestEquity Merger Agreement

TestEquity Merger; TestEquity Merger Consideration

Upon the terms and subject to the conditions set forth in the TestEquity Merger Agreement, at the effective time of the TestEquity Merger, Merger Sub 1 will be merged with and into TestEquity, with TestEquity continuing as the surviving company and as a wholly-owned subsidiary of Lawson. The TestEquity Merger Agreement provides that, at the effective time of the TestEquity Merger:





        (a) the limited liability company interests of Merger Sub 1 issued and
            outstanding immediately prior to the effective time of the TestEquity
            Merger shall be automatically converted into and exchanged for all of
            the limited liability company interests of TestEquity; and




        (b) all of the limited liability company membership interests of
            TestEquity issued and outstanding immediately prior to the effective
            time of the TestEquity Merger shall no longer be outstanding and shall
            automatically be canceled and shall cease to exist, and the holder of
            the limited liability company membership interests of TestEquity shall
            cease to have any rights with respect thereto and shall not be
            entitled to receive any consideration therefor, except that the
            TestEquity Equityholder (and only the TestEquity Equityholder) will
            have the right to receive 4,000,000 shares of Lawson common stock (the
            "TestEquity Merger Consideration") (provided that the TestEquity
. . .

Item 3.02 Unregistered Sales of Equity Securities.

The shares of Lawson common stock issuable in connection with the Mergers will not be registered under the Securities Act of 1933, as amended (the "Securities Act"). Such shares will be issued in reliance on an exemption from such registration requirements contained in Section 4(a)(2) of the Securities Act or Regulation D promulgated by the SEC thereunder.

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The information contained in Item 1.01 of this Current Report is incorporated into this Item 3.02 by reference.

Item 9.01 Financial Statements and Exhibits.




(d) Exhibits



Exhibit No.       Exhibit Description

2.1*                Agreement and Plan of Merger, dated as of December 29, 2021, by
                  and among LKCM TE Investors, LLC, TestEquity Acquisition, LLC,
                  Lawson Products, Inc. and Tide Sub, LLC.

2.2*                Agreement and Plan of Merger, dated as of December 29, 2021, by
                  and among 301 HW Opus Investors, LLC, 301 HW Opus Holdings, Inc.,
                  Lawson Products, Inc. and Gulf Sub, Inc.

10.1                Voting Agreement, dated as of December 29, 2021, by and among
                  Lawson Products, Inc. and Luther King Capital Management
                  Corporation.

104               Cover Page Interactive Data 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. Lawson agrees

to furnish supplementally a copy of any omitted schedule or exhibit to the SEC

upon request.

Forward Looking Statements

This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involves risks and uncertainties. The terms "aim," "anticipate," "believe," "contemplates," "continues," "could," "ensure," "estimate," "expect," "forecasts," "if," "intend," "likely," "may," "might," "objective," "outlook," "plan," "positioned," "potential," "predict," "probable," "project," "shall," "should," "strategy," "will," "would," and other words and terms of similar meaning and expression are intended to identify forward-looking statements. Forward-looking statements can also be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on current expectations and involve inherent risks, uncertainties and assumptions, including factors that could delay, divert or change any of them, and could cause actual outcomes to differ materially from current expectations. Lawson can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and Lawson cautions readers not to place undue reliance on such statements, which speak only as of the date made. Lawson undertakes no obligation to release publicly any revisions to forward-looking statements as a result of new information, future events or otherwise, unless otherwise required by law. Actual results may differ materially from those projected as a result of certain risks and uncertainties. Certain risks associated with Lawson's business are also discussed from time to time in the reports Lawson files with the SEC, including Lawson's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, Lawson's Quarterly Reports on Form 10-Q and Lawson's Current Reports on Form 8- K. In addition, the following factors, among others, could cause actual outcomes and results to differ materially from those discussed in the forward-looking statements:





        •    the possibility that the Mergers will not be consummated, or will not
             be consummated on the terms described herein, and the possibility of
             delays in consummating the Mergers;

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        •    the possibility that the closing conditions set forth in either of the
             Merger Agreements will not be satisfied, including among others
             (1) receipt of the required stockholder approvals and (2) receipt of
             the necessary regulatory approvals required to permit the Mergers;




  •   unanticipated difficulties or expenditures relating to the Mergers;




        •    the occurrence of any event, change or other circumstance that could
             give rise to the termination of the Merger Agreements;




        •    any disruption caused by the announcement of the Merger Agreements on
             employees, customers and suppliers of Lawson, TestEquity or Gexpro
             Services;




        •    the risk that shareholder litigation in connection with the Mergers
             may result in significant costs of defense, indemnification and
             liability; and




        •    any problems arising in combining the businesses of Lawson, TestEquity
             and Gexpro Services, which may result in the combined company not
             operating as effectively and efficiently as expected.

Additional Information and Where to Find It

In connection with (i) the proposed transactions between Lawson Products, Inc. ("Lawson"), TestEquity Acquisition, LLC ("TestEquity") and LKCM TE Investors, LLC (the "TestEquity Equityholder"), including the proposed merger of TestEquity with a subsidiary of Lawson, with TestEquity surviving the merger as a wholly-owned subsidiary of Lawson, and the issuance of Lawson common stock to the TestEquity Equityholder in connection therewith, and (ii) the proposed transactions between Lawson, 301 HW Opus Holdings, Inc. ("Gexpro Services") and 301 HW Opus Investors, LLC (the "Gexpro Services Stockholder"), including the proposed merger of Gexpro Services with a subsidiary of Lawson, with Gexpro Services surviving the merger as a wholly-owned subsidiary of Lawson, and the issuance of Lawson common stock to the Gexpro Services Stockholder in connection therewith, Lawson plans to file relevant materials, including a proxy statement on Schedule 14A, with the Securities and Exchange Commission (the "SEC"). The definitive proxy statement (when available) will be disseminated to stockholders of Lawson entitled to vote on the proposed transactions. LAWSON STOCKHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO AND ALL DOCUMENTS INCORPORATED BY REFERENCE THEREIN), AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR MAY BE FILED WITH THE SEC, IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain free copies of the proxy statement (when available) and other relevant documents filed by Lawson with the SEC from the SEC's website at www.sec.gov. In addition, the proxy statement (when available) and other relevant documents filed by Lawson with the SEC may also be obtained free of charge from the Investor Relations section of Lawson's website at www.lawsonproducts.com/company-info/investor-relations, or by contacting Lawson's Investor Relations Department by email at Investors@lawsonproducts.com.

Participants in the Solicitation

Lawson and its directors and executive officers may be deemed, under SEC rules, to be participants in the solicitation of proxies from Lawson's stockholders in connection with the proposed transactions. Information about Lawson's directors and executive officers and their direct and indirect interests in Lawson, by security holdings or otherwise, is included in Lawson's Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on February 26, 2021, in its proxy statement for its 2021 annual meeting of stockholders, which was filed with the SEC on April 1, 2021, and in other

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documents filed by Lawson with the SEC. To the extent holdings of Lawson's securities by such participants are not reported in, or have changed since the amounts disclosed in, the proxy statement for Lawson's 2021 annual meeting of stockholders, such changes have been reflected on Initial Statements of Beneficial Ownership of Securities on Form 3 and/or Statements of Changes in Beneficial Ownership on Form 4 subsequently filed with the SEC. Additional information regarding Lawson's directors and executive officers, including their interests in the proposed transactions, will be contained in the proxy statement and other relevant documents to be filed with the SEC when they become available. These documents may be obtained free of charge using the sources indicated above.

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