Distribution Solutions Group, Inc.

Equity-Based Incentives

In 2025, the primary focus of the long-term incentive program continued to focus on equity awards primarily granted in the form of non-qualified stock options that were significantly "out of the money" at grant (i.e., premium priced) and will only realize value in the event of significant appreciation in the Company's stock price. We also continue to utilize RSUs as a means to attract top talent as well as a retention tool as appropriate. Accordingly, all equity awards granted to our NEOs after the strategic combination of DSG were in the form of non-qualified stock option awards, with the exception of an RSU grant to Mr. Knutson in 2023, Mr. Lanuza in 2024 and Mr. Litwin in 2025, as described below

Senior executives leading the other operating companies prior to the merger date are entitled to equity-based incentives that are separate and apart from the equity awards described herein and these incentives will not be borne by the Company.

Our equity award program is the primary vehicle for offering long-term incentives to our NEOs and other eligible executives. We grant incentive equity awards pursuant to the Distribution Solutions Group, Inc. Equity Compensation Plan, as amended and restated, which was last approved by our stockholders in 2022. As a result, a significant portion of our NEOs’ total compensation is entirely at risk, depending on long-term stock price performance.

Mr. Connors' Equity Incentives

Prior to the merger of Gexpro Services with the Company in 2022, Gexpro Services was controlled by 301 HW Opus Investors, LLC (“Gexpro Services Stockholder”), a portfolio company and affiliate of LKCM Headwater Investments III, L.P. (“HW3”). In connection with HW3’s acquisition of Gexpro Services in 2020, HW3 entered into an operating agreement for Gexpro Services Stockholder with, among others, members of Gexpro Services’ management team, including Mr. Connors. The operating agreement and other ancillary documents provided for the issuance of equity interests in Gexpro Services Stockholder to members of Gexpro Services’ management, which equity interests were subject to certain time-based and performance-based vesting hurdles. As of the date hereof, Mr. Connors has satisfied all of the time-based vesting hurdles associated with his equity grant. Mr. Connors' equity grant in Gexpro Services Stockholder is also subject to performance-based vesting hurdles, which vesting hurdles have not been satisfied to date. The performance-based vesting hurdles are tied to HW3 achieving certain investment returns based on multiples of invested capital in connection with any liquidity event or similar change-of-control transaction by Gexpro Services Stockholder. As a result of Gexpro Services' merger with the Company, Mr. Connors’ equity incentives are indirectly tied to the value of the Company’s common stock, as Gexpro Services Stockholder’s principal asset is the shares of Company common stock it received in connection with the merger, including the subsequent issuance of shares of Company common stock pursuant to the earnout provisions of the merger agreement. Any amounts ultimately paid by Gexpro Services Stockholder to its members, including HW3 and Mr. Connors, will not be borne by the Company’s stockholders as any such amounts will be paid by Gexpro Services Stockholder in accordance with the terms and provisions of its operating agreement.

Mr. Litwin's Equity Incentives

Effective as of July 14, 2025, the Board appointed Barry Litwin as Chief Executive Officer of TestEquity. In order to attract Mr. Litwin to TestEquity, a comprehensive compensation plan was developed to attract, retain and align his interests with stockholders. In connection with his initial employment, Mr. Litwin was awarded the following equity award effective August 14, 2025:

•270,000 non-qualified stock options pursuant to the Distribution Solutions Group, Inc. Equity Compensation Plan, as amended. The non-qualified stock options were granted as follows: (a) 100,000 of the options have an exercise price of $35.00, (b) 70,000 of the options have an exercise price of $45.00, (c) 50,000 of the options have an exercise price of $55.00 and d) 50,000 of the options have an exercise price of $70.00. One-fifth of each tranche of non-qualified stock options vest and become exercisable on the first, second, third, fourth and fifth anniversaries of the grant date.

•70,000 RSUs, which were 25% vested on the date of grant and will vest in 25% increments on each anniversary of the date of grant, subject to repayment of settled RSUs by Mr. Litwin in the event of certain termination events within eighteen months of his employment agreement effective date.