SEC Form DEF 14A filed by ALJ Regional Holdings Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.           )

Filed by the Registrant x

Filed by a Party other than the Registrant ☐

Check the appropriate box:

☐           Preliminary Proxy Statement

☐         Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x          Definitive Proxy Statement

☐           Definitive Additional Materials

☐           Soliciting Material Pursuant to §240.14a-12

ALJ Regional Holdings, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

x           No fee required

☐           Fee paid previously with preliminary materials

☐           Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

ALJ Regional Holdings, Inc.

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 19, 2022

July 15, 2022

Dear Stockholder:

You are invited to attend the Annual Meeting of Stockholders of ALJ Regional Holdings, Inc. (the “Company”, “we” or “our”), which will be held at the offices of Shearman & Sterling LLP, 599 Lexington Ave., New York, NY 10022 on August 19, 2022, at 9:00 a.m. Eastern Time. We discuss the matters to be acted upon at the meeting in more detail in the attached notice of annual meeting and proxy statement (the “Proxy Statement”). There are four specific items for which you are being asked to vote:

Our Board of Directors recommends that you vote:

We encourage you to read our annual report on Form 10-K for the year ended September 30, 2021, (the “Annual Report”) filed with the SEC on December 20, 2021, which may be found on the SEC’s EDGAR database at www.sec.gov. It includes our audited financial statements and information about our operations, markets and products.

You can vote by following the instructions included in the Proxy Statement and the enclosed proxy card. Please read these instructions carefully.

We hope that you can attend the Annual Meeting. You may be requested to present valid, government issued photo identification to gain admission to the Annual Meeting. Whether or not you plan to attend, you can be sure that your shares are represented at the meeting by promptly voting by one of the methods provided. Any record stockholder attending the Annual Meeting may vote in person, even if that stockholder has returned a proxy or voted by telephone or the Internet. Your vote is important, whether you own a few shares or many. Thank you for your continued support of ALJ Regional Holdings, Inc.

Very truly yours,

/s/ Jess M. Ravich

Jess M. Ravich, Chief Executive Officer and Chairman of the Board

This document is dated July 15, 2022 and is being first mailed to stockholders of ALJ Regional Holdings, Inc. on or about July 15, 2022.

244 Madison Avenue, PMB #358

New York, NY 10016

Telephone: (888) 486-7775

www.aljregionalholdings.com 

ALJ Regional Holdings, Inc.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON aUGUST 19, 2022

TO THE STOCKHOLDERS OF ALJ REGIONAL HOLDINGS, INC.:

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of ALJ Regional Holdings, Inc., a Delaware corporation (the “Company”, “we” or “our”), will be held on August 19, 2022, at 9:00 a.m. Eastern Time (the “Annual Meeting”) at the offices of Shearman & Sterling LLP, 599 Lexington Ave., New York, NY 10022 for the following purposes:

1.To elect Jess M. Ravich, Hal G. Byer, Rae Ravich, John Scheel and Robert Scott Fritz as directors to hold office until the Company’s 2023 Annual Meeting of Stockholders or until their respective successors are elected and duly qualified, or until their respective earlier resignation or removal.

2.To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2022.

3.To approve, on a non-binding advisory basis, our executive compensation, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the U.S. Securities and Exchange Commission.

4.To approve, on a non-binding advisory basis, the preferred frequency of stockholder advisory votes on our executive compensation, referred to as “say-on-frequency.”

5.To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

The foregoing items of business are more fully described in the Proxy Statement accompanying this notice (the “Proxy Statement”).

The Board of Directors of the Company has fixed the close of business on July 13, 2022, as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting and at any adjournment or postponement thereof. For ten days prior to the Annual Meeting, a complete list of stockholders entitled to vote at the Annual Meeting will be available for examination by any stockholder, for any purpose relating to the Annual Meeting, during ordinary business hours at the offices of Shearman & Sterling LLP, 599 Lexington Ave., New York, NY 10022.

All stockholders are cordially invited to attend the Annual Meeting in person. Whether or not you expect to attend the Annual Meeting in person, please vote as promptly as possible by following the instructions included in the Proxy Statement and the enclosed proxy card in order to ensure your representation and the presence of a quorum at the Annual Meeting. If you send in your proxy card or vote by telephone or the Internet, you may still decide to attend the Annual Meeting and vote your shares in person.

By Order of the Board of Directors,

/s/ Jess M. Ravich

Chief Executive Officer and Chairman of the Board

Los Angeles, CA

July 15, 2022

PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held on AUGUST 19, 2022

INFORMATION CONCERNING SOLICITATION AND VOTING

General

The Board of Directors (the “Board”) of ALJ Regional Holdings, Inc., a Delaware corporation (the “Company”), is soliciting proxies for use at the Annual Meeting of Stockholders to be held on August 19, 2022 at 9:00 a.m. Eastern Time (the “Annual Meeting”), or at any adjournment or postponement thereof, for the purposes set forth in this proxy statement (the “Proxy Statement”) and in the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting will be held at the offices of Shearman & Sterling LLP, 599 Lexington Ave., New York, NY 10022.

Important Notice Regarding the Availability of Proxy Materials for the Stockholders’ Meeting to Be Held on August 19, 2022

Our Annual Report and Proxy Statement are available at www.voteproxy.com, the SEC’s EDGAR database at www.sec.gov and www.aljregionalholdings.com. You are encouraged to access and review all of the important information contained in the proxy materials before voting.

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND OUR ANNUAL MEETING

Whether or not you expect to attend the Annual Meeting in person, please vote as promptly as possible by following the instructions included in this Proxy Statement and the enclosed proxy card. This will not limit your rights to attend or vote at the Annual Meeting.

PROPOSAL 1
ELECTION OF DIRECTORS

The number of directors constituting the entire Board is currently fixed at nine (9), with two (2) vacancies. Effective as of immediately prior to the opening of the polls at the Annual Meeting, the number of directors constituting the entire Board shall be reduced to five (5).

At the Annual Meeting, five (5) directors will be elected by the stockholders to serve until the 2023 Annual Meeting of Stockholders or until their respective successors are elected and duly qualified, or until their respective earlier resignation or removal. Jess M. Ravich, Robert Scott Fritz, Hal G. Byer, Rae Ravich and John Scheel have been nominated by the Board for election as directors. If any nominee is unable or unwilling to serve as a director, proxies may be voted for a substitute nominee designated by the present Board. The Board has no reason to believe that the nominees will be unable or unwilling to serve as a nominee or as a director if elected. Proxies received will be voted “FOR” the election of the nominees unless otherwise directed.

Directors are elected by a plurality vote. The five (5) director nominees who receive the most votes cast in their favor will be elected to serve as directors. If no contrary indication is made, proxies in the accompanying form are to be voted for the election of Jess M. Ravich, Robert Scott Fritz, Hal G. Byer, Rae Ravich and John Scheel as the Board’s nominees or, in the event any such nominee is not a candidate or is unable to serve as a director at the time of the election (which is not currently expected), for any nominee who shall be designated by the Board to fill such vacancy.

Information Regarding Directors

Certain information as of July 1, 2022 concerning each of the current directors whose term as director will expire at the Annual Meeting and the director nominees for election at the Annual Meeting is set forth below.

* Assuming reelection at the Annual Meeting.

Jess M. Ravich. Mr. Ravich has served as a director since June 2006 and Chairman of the Board of Directors since August 2006.  He served as the Executive Chairman and senior executive officer of the Company from December 2012 through July 2019, at which time he became the Company’s fulltime Chief Executive Officer.  Mr. Ravich was a Group Managing Director at The TCW Group from December 2012 until July 2019. From 2009 to 2012, Mr. Ravich was Managing Director at Houlihan Lokey. In 1991 Mr. Ravich founded Libra Securities, LLC (“Libra Securities”), a Los Angeles-based investment banking firm that focused on capital raising and financial advisory services for middle-market corporate clients and the sales and trading of debt and equity securities for institutional investors, and served as its Chairman and Chief Executive Officer from 1991 until 2009.  Prior to founding Libra Securities, Mr. Ravich was an Executive Vice President at Jefferies & Co., Inc. and a Senior Vice President at Drexel Burnham Lambert.

Mr. Ravich was a member of the board of directors of Apex Global Brands (Nasdaq: APEX), formerly known as Cherokee Inc. (Nasdaq: CHKE) from 1995 until 2020, and served as its Chairman of the Board from 2011 until 2017. Mr. Ravich has also served on the board of directors of A-Mark International since 2014.  In addition to his professional responsibilities, Mr. Ravich has also served on the Undergraduate Executive Board of the Wharton School and the Board of Trustees of the Archer School for Girls. Mr. Ravich earned both a B.S and M.S. from the Wharton School and a J.D. from Harvard University. Among other qualifications, Mr. Ravich brings to the Board

executive leadership experience, experience serving on the board of a public company, extensive financial expertise and a financial services industry background. Mr. Ravich is the father of Rae Ravich, a director of the Company.

Michael Borofsky. Mr. Borofsky has served as a director since September 2013.  Mr. Borofsky is currently managing director and general counsel for Gryphon Investors.  From 2019 to mid-2020, Mr. Borofsky was the Chief Operating and Strategy Officer for The Pohland Company.  Prior to that, Mr. Borofsky was a Senior Vice President of MacAndrews & Forbes Holdings Inc. Mr. Borofsky earned a B.A. from Yale University and a J.D. from Columbia University School of Law. Mr. Borofsky brings to the Board a valuable perspective due to his dual background in business and law.

Robert Scott Fritz. Mr. Fritz has served as a director since January 2003. Since May 1982, Mr. Fritz has served as the President of Robert L. Fritz and Sons Sales Company, a New Jersey-based food broker and paper distributor that he owns. Mr. Fritz earned a B.S. in Business from Fairleigh Dickinson University. Mr. Fritz brings to the Board his executive leadership experience and financial expertise.

Hal G. Byer. Mr. Byer has served as a director since January 2003. Mr. Byer joined Houlihan Lokey as a Senior Vice President in its Financial Sponsors Coverage Group in December 2009.   He was a director for Houlihan Lokey from 2011 to 2017 and a senior advisor during 2017 until his retirement in November 2017.  From May 2001 to November 2009, Mr. Byer was a Senior Vice President of Libra Securities, a broker-dealer registered with the SEC and an NASD member. From 1995 to 2003, Mr. Byer was Chief Executive Officer of Byer Distributing Co., a snack food distribution company. From 2000 to 2003, Mr. Byer was also the Chief Operating Officer of eGreatcause.com, an internet start-up involved in fundraising for charitable and non-profit organizations that is no longer active. Mr. Byer brings to the Board executive leadership experience, financial expertise and a background in corporate strategy and operations.

Julie Cavanna-Jerbic. Ms. Cavanna-Jerbic has served as a director since July 2020. Ms. Cavanna-Jerbic is currently the principal and founder of Iron Butterfly LLC, a consulting firm providing business advisory services, which she founded in 2012. Since November 2012, Ms. Cavanna-Jerbic has been a member of the Supervisory (Audit) Committee of First Tech Federal Credit Union, and since August 2012, Ms. Cavanna-Jerbic has given back to her community as a member of the Board of Trustees, Morrissey Compton Educational Center, helping children with learning differences regardless of their ability to pay. Prior to this, Ms. Cavanna-Jerbic held various positions at Hewlett Packard during a 28-year career, including as the Chief Financial Officer & Vice President of Global Information Technology and the Chief Information Officer & Vice President of Information Technology and Integrations. Ms. Cavanna-Jerbic earned a B.A. from University of California at Berkeley and a Master of Business Administration from the University of Southern California. Ms. Cavanna-Jerbic brings to the Board extensive executive leadership, financial expertise and a financial services industry background.

Rae Ravich. Ms. Ravich has served as a director since June 2014. Ms. Ravich is currently the founder of a startup engaged in the health and wellness space, which she founded in July 2016.  From July 2013 until June 2016, Ms. Ravich was an Associate in the direct lending group at TCW Financial Planning LLC. Previously, Ms. Ravich was a Financial Analyst at Houlihan Lokey, which she joined in July 2013. Ms. Ravich has dual B.S. degrees from the Wharton School and the Nursing School at the University of Pennsylvania. Ms. Ravich is the daughter of Jess Ravich, ALJ’s CEO and Chairman of the Board. Ms. Ravich brings to the Board her expertise and background in the financial services industry.

John Scheel. Mr. Scheel has served as a director since September 2006 and our Vice Chairman since December 2016. From August 2006 to February 2013, Mr. Scheel was the President and Chief Executive Officer of the Company. He served as the plant manager for the Company’s former subsidiary Kentucky Electric Steel’s (“KES”) steel mini-mill in Ashland, Kentucky (the “Mill”) and managed the operations of KES on our behalf from January 2004 until its sale in February 2013 to Optima Specialty Steel (“Optima”).  Following such sale, Mr. Scheel not only continued to manage the Mill for Optima as its general manager, but also managed the melt shop and caster for Warren Steel Holdings EAF in Warren, Ohio, which was also managed by Optima. He is now the Senior Vice President of Manufacturing and Supply Chain at Easy Gardener, Inc, a fertilizer and landscape fabric supplier.  Prior to managing KES, Mr. Scheel held various positions of increased responsibility at AK Steel, Nucor Corporation, and Birmingham Steel Management. Mr. Scheel holds both B.S. and M.S. degrees in Metallurgical Engineering from Purdue University and a Master of Business Administration in Finance and International Business from Xavier University. Mr. Scheel brings to the Board his executive leadership experience and financial expertise.

Board Independence

The Board has determined that the below directors have met the requirements for independence under the applicable rules and regulations of the SEC and the NASDAQ Global Market (“NASDAQ”), as applicable:

Board Leadership Structure

Our Board retains flexibility to select its Chairman of the Board and our Chief Executive Officer in the manner that it believes is in the best interests of our stockholders. Accordingly, the Chairman of the Board and the Chief Executive Officer positions may be filled by one individual or two. The Board currently believes that having Mr. Ravich serve as both Chief Executive Officer and Chairman of the Board is in the best interests of the stockholders given Mr. Ravich’s extensive knowledge of, years of service to and experience with, the Company. The Board does not currently have a lead independent director, but has appointed Mr. Scheel, an independent director, as Vice Chairman of the Board.

Board Committees

The Board has a standing audit committee (the “Audit Committee”) and compensation, nominating and corporate governance committee (the “Compensation, Nominating and Corporate Governance Committee”). The composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by the Board.

The Board has determined that the composition and functioning of the Board and all of our committees comply with all applicable requirements of the Sarbanes-Oxley Act, and NASDAQ and SEC rules and regulations. The Audit Committee and the Compensation, Nominating and Corporate Governance Committee each operate under a written charter approved by the Board. Each committee will review and reassess the adequacy of its charter periodically. The charters of both committees are available in the Corporate Governance section of the Company’s website, www.aljregionalholdings.com.

The following chart details the current membership of each committee:

Following the Annual Meeting, assuming the reelection of all the director nominees, the membership of each committee shall be as follows:

Audit Committee

Our Audit Committee currently consists of Ms. Cavanna-Jerbic and Messrs. Scheel, Borofsky and Fritz, with Mr. Scheel chairing this committee. Following the Annual Meeting, assuming the reelection of all the director nominees, our Audit Committee will consist of Messrs, Byer, Fritz and Scheel, with Mr. Scheel continuing to chair this committee. All members of our Audit Committee currently meet and will continue to meet the requirements for financial literacy under the applicable rules and regulations of the SEC and NASDAQ. Our Board has determined that Ms. Cavanna-Jerbic and Mr. Scheel each are an “audit committee financial expert” as defined under the applicable rules of the SEC and has the requisite financial sophistication as defined under the applicable rules and regulations of NASDAQ. All the members of our Audit Committee are, and continue to be, independent directors as defined under the applicable rules and regulations of the SEC and NASDAQ. The Audit Committee operates under a written charter that satisfies the applicable standards of the SEC and NASDAQ.

The Audit Committee’s responsibilities include, among other responsibilities:

AUDIT COMMITTEE REPORT

The following is the report of the Audit Committee of the Board.

Notwithstanding anything to the contrary set forth in any of the Company’s previous or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate filings made by the Company, including this Proxy Statement, in whole or in part, the following Audit Committee Report shall not be deemed to be “soliciting material” or to be incorporated by reference into any prior or future filings made by the Company.

The Audit Committee has reviewed and discussed with management the Company’s audited financial statements for the fiscal year ended September 30, 2021. In addition, the Audit Committee has discussed with the Company’s independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (Communications with Audit Committee). The Audit Committee also has received the written disclosures and the letter as required by the Public Company Accounting Oversight Board

Rule 3526 “Communications with Audit Committees Concerning Independence” and the Audit Committee has discussed with the independent auditors the independence of that firm.

Based on the Audit Committee’s review of the matters noted above and its discussions with the Company’s independent auditors and management, the Audit Committee recommended to the Board that the financial statements be included in the Company’s Annual Report.

Respectfully submitted by:

Members of the Audit Committee

John Scheel (Chair)

Michael C. Borofsky

Julie Cavanna-Jerbic

Robert Scott Fritz

Compensation, Nominating and Corporate Governance Committee

Our Compensation, Nominating and Corporate Governance Committee currently consists of Ms. Cavanna-Jerbic and Messrs. Borofsky and Byer, with Mr. Borofsky chairing this committee. Following the Annual Meeting, assuming reelection of all the director nominees, our Compensation, Nominating and Corporate Governance Committee will consist of Messrs, Byer, Fritz and Scheel, with Mr. Byer chairing this committee. All members of this committee currently meet and will continue to meet the requirements for independence under the applicable rules and regulations of the SEC, NASDAQ and the Internal Revenue Code of 1986, as amended (the “Code”), including the rules applicable to members of a listed company’s compensation committee. The Compensation, Nominating and Corporate Governance Committee operates under a written charter that satisfies the applicable standards of the SEC and NASDAQ.

The committee’s responsibilities include:

Board’s Role in Risk Oversight

Both the full Board and its committees oversee the various risks faced by the Company. Management is responsible for the day-to-day management of the Company’s risks and provides periodic reports to the Board and its committees relating to those risks and risk-mitigation efforts.

Board oversight of risk is conducted primarily through the standing committees of the Board, the members of which are independent directors. The Audit Committee takes a lead role on overseeing financial risks and in interfacing with management on significant risks or exposures and assessing the steps management has taken to minimize such risks. The Audit Committee also is charged with, among other tasks, oversight of management on the Company’s guidelines and policies with respect to risk monitoring, assessment and management. Members of the Company’s management periodically report to the Audit Committee regarding risks overseen by the Audit Committee, including quarterly reports with respect to the Company’s internal controls over financial reporting.

Director Nominations

The Compensation, Nominating and Corporate Governance Committee evaluates and recommends to the Board director nominees for each election of directors.

In fulfilling its responsibilities, the Compensation, Nominating and Corporate Governance Committee considers the following factors:

The Compensation, Nominating and Corporate Governance Committee’s goal is to assemble a group of directors that brings to the Company a variety of perspectives and skills derived from high quality business and professional experience. In doing so, the Compensation, Nominating and Corporate Governance Committee also considers candidates with appropriate non-business backgrounds.

Other than the foregoing factors, there are no stated minimum criteria for director nominees. However, the Compensation, Nominating and Corporate Governance Committee may also consider such other factors as it may deem are in the best interests of the Company and its stockholders.

The Compensation, Nominating and Corporate Governance Committee identifies nominees by first evaluating the willingness of the current members of the Board to continue in service. Current members of the Board with skills and experience that are relevant to the Company’s business and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of the Board with that of obtaining a new perspective. If any member of the Board up for re-election at an upcoming annual meeting of stockholders does not wish to continue in service, the Compensation, Nominating and Corporate Governance Committee identifies the desired skills and experience of a new nominee in light of the criteria above. Current members of the Board will be polled for suggestions as to individuals meeting the criteria of the Board. Research may also be performed to identify qualified individuals. If the Compensation, Nominating and Corporate Governance Committee believes that it requires additional candidates for nomination, the Compensation,

Nominating and Corporate Governance Committee may explore alternative sources for identifying additional candidates. This may include engaging, as appropriate, a third party search firm to assist in identifying qualified candidates.

The Compensation, Nominating and Corporate Governance Committee will evaluate any recommendation for a director nominee proposed by a stockholder who gives timely written notice to the Corporate Secretary of the Company. In order to be timely, the notice must be delivered by a nationally recognized courier service or mailed by first class United States mail, postage or delivery charges prepaid, and received by the Company at 244 Madison Avenue, PMB #358, New York, NY 10016 not less than fifty (50) days or more than eighty (80) days prior to the scheduled date of the annual meeting, provided, however, that if fewer than sixty (60) days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so delivered or mailed and received not later than the close of business on the tenth (10th) day following the earlier of (a) the day on which such notice of the date of the meeting was mailed or (b) the day on which such public disclosure was made. Additionally, the Company’s bylaws require that all stockholder notices for director nominations contain the following information:

The Board will evaluate recommendations for director nominees submitted by directors, management or qualifying stockholders in the same manner, using the criteria stated above.

All directors and director nominees will submit a completed form of directors’ and officers’ questionnaire as part of the nominating process. The process may also include interviews and additional background and reference checks for non-incumbent nominees, at the discretion of the Board.

Board Meetings

During the fiscal year ended September 30, 2021, the Board met five times and took action by written consent on three occasions. During the fiscal year ended September 30, 2021, all directors attended at least 75% of the aggregate number of meetings of the Board. The Board encourages the directors to attend the annual meetings of stockholders.

Communications with Directors

If a stockholder wishes to communicate with the Board, they may send their communication in writing to: Corporate Secretary, ALJ Regional Holdings, Inc., 244 Madison Avenue, PMB #358, New York, NY 10016. Such stockholder must include their name and address in the written communication and indicate whether they are a stockholder of the Company. The Corporate Secretary will review any communication received from a stockholder, and all material communications from stockholders will be forwarded to the appropriate director or directors or the Board based on the subject matter.

Director Compensation

In December 2015, the Board approved a non-employee director compensation package comprised of (i) an annual retainer of $40,000 in cash, (ii) an annual grant of common stock with a value of $40,000, (iii) an additional $12,500 for the chair and $5,000 for each other member of the Audit Committee, and (iv) an additional $10,000 for the chair and $4,000 for each other member of the Compensation, Nominating and Corporate Governance Committee. Effective July 1, 2017, each non-employee director was given the option of how to allocate the payment between cash and common stock. Effective as of the date of the Annual Meeting, the Board approved an amended non-employee director representation package comprised of an annual retainer of $30,000 in cash, payable quarterly in arrears.

The following table provides information regarding all compensation awarded to, earned by or paid to each person who served as a non-employee director of the Company for the year ended September 30, 2021. Other than as set forth in the table and described more fully below, the Company did not pay any fees, make any equity or non-equity awards, or pay any other compensation, to its non-employee directors. All compensation paid to its employee directors is set forth in the tables summarizing executive officer compensation below.

The following table shows the number of shares subject to outstanding and unexercised stock and option awards held by each non-employee director as of September 30, 2021:

Board Diversity Matrix

In accordance with Nasdaq’s recently adopted board diversity listing standards, we are also disclosing aggregated statistical information about our Board’s self-identified gender and racial characteristics and LGBTQ+ status as voluntarily confirmed to us by each of our directors.

Required Vote

The five (5) director nominees receiving the highest number of affirmative votes of the shares present and voting at the Annual Meeting in person or by proxy will be elected as directors. Each proxy cannot be voted for a greater number of persons than seven.

the BOARD RECOMMENDS A VOTE
“FOR” the election of each nominee listed above.

Proposal 2

RATIFICATION OF Appointment OF

Independent Registered Public Accounting Firm

The Audit Committee of ALJ’s Board has engaged Deloitte & Touche LLP (“Deloitte”) as the independent registered public accounting firm for the Company and its subsidiaries for the fiscal year ended September 30, 2022. The Audit Committee regularly reviews and determines whether any non-audit services provided by Deloitte potentially affects its independence with respect to the Company. The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by Deloitte. Pre-approval is generally provided by the Audit Committee for up to one year, is detailed as to the particular service or category of services to be rendered and is generally subject to a specific budget. The Audit Committee may also pre-approve additional services or specific engagements on a case-by-case basis. Management provides annual updates to the Audit Committee regarding the extent of any services provided in accordance with this pre-approval. To date, all services performed by Deloitte have been pre-approved by the Audit Committee in accordance with this policy. It is not expected that representatives of Deloitte will be present at the Annual Meeting.

The following table sets forth the aggregate fees billed, or expected to be billed, by Deloitte with respect to audit and non-audit services for the Company during the fiscal years ended September 30, 2021 and 2020:

As part of its duties, the Audit Committee considers whether the provision of services, other than audit services, by Deloitte is compatible with maintaining the auditor’s independence. All audit fees, including audit fees associated with the audit by Deloitte of the Company’s consolidated financial statements for the years ended September 30, 2021 and 2020, audit related fees that were billed by Deloitte, and all other fees that were billed by Deloitte were approved by the Audit Committee in accordance with SEC requirements.

The decision to appoint Deloitte as the independent registered public accounting firm for the Company and its subsidiaries for the fiscal year ended September 30, 2021, was approved by the Audit Committee. Stockholder ratification of the appointment of Deloitte as the independent registered public accounting firm for the Company and its subsidiaries is not required by the Company’s bylaws or otherwise. However, the Audit Committee is submitting the appointment of Deloitte to the stockholders for ratification as a matter of good corporate governance. If the stockholders fail to ratify the appointment of Deloitte, the Audit Committee will reconsider whether or not to retain Deloitte or engage a different firm. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in the best interests of the Company and its stockholders.

Audit Committee’s Pre-Approval Policies and Procedures

Consistent with policies of the SEC regarding auditor independence and the Audit Committee Charter, the Audit Committee has the responsibility for appointing, setting compensation and overseeing the work of the registered independent public accounting firm (the “Firm”). The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the Firm. Pre-approval is detailed as to the particular service to category of services and is generally subject to a specific budget. The Audit Committee may also pre-approve particular services on a case-by-case basis. In assessing request for services by the Firm, the Audit Committee considers whether such services are consistent with the Firm’s independence, whether the Firm is likely to provide the most effective and efficient service based upon their familiarity with the Company, and whether the service could enhance the Company’s ability to manage or control risk or improve audit quality.

Required Vote

The affirmative vote of at least a majority of the votes cast at the meeting at which a quorum is present, either in person or by proxy, is required to approve Proposal 2.

THE BOARD RECOMMENDS A VOTE “FOR” the ratification of the appointment of DELOITTE & TOUCHE LLP as the independent registered public accounting firm for the COMPANY AND ITS SUBSIDIARIES for the fiscal year ending September 30, 2022.

PROPOSAL 3

NON-BINDINg ADVISORY VOTE ON

Named EXECUTIVE OFFICER COMPENSATION

As discussed under the “Executive Compensation” section, our compensation strategy focuses on providing a total compensation package that is designed to attract and retain high-caliber executives by incentivizing them to achieve Company performance goals and closely aligning these goals with stockholder interests. Our philosophy reflects our emphasis on pay for performance and on long-term value creation for our stockholders.

As required by Section 14A of the Exchange Act, we are providing stockholders with an advisory (non-binding) vote on the compensation of our named executive officers, as described in this Proxy Statement. This Proposal 3, known as a “Say-on-Pay” proposal, is designed to give our stockholders the opportunity to endorse or not endorse our Company’s executive compensation program through the following resolution:

“Resolved, that the stockholders approve, on an advisory (non-binding) basis, the compensation of our named executive officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC (which disclosure includes the Executive Compensation section, the Summary Compensation Table for fiscal year 2021, and other related tables and disclosures).”

When you cast your vote, we urge you to consider the description of our executive compensation program contained in the Executive Compensation section in this Proxy Statement and the accompanying tables and narrative disclosures.

Required Vote

This Proposal 3 must be approved by the affirmative vote of the holders of at least a majority of the shares having voting power present in person or represented by proxy at the Annual Meeting. Abstentions and broker non-votes will have no effect on the outcome of this Proposal 3.

Because your vote is advisory, it will not be binding upon our Board of Directors, overrule any decision by our Board, or create or imply any additional fiduciary duties on our Board or any member of our Board. However, our Board and our Compensation, Nomination and Corporate Governance Committee will take into account the outcome of the vote when considering future executive compensation arrangements.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS

A VOTE “FOR” PROPOSAL 3 ON THE COMPANY’S NAMED EXECUTIVE OFFICER COMPENSATION AS DESCRIBED IN THIS PROXY STATEMENT.

PROPOSAL 4

NON-BINDINg ADVISORY VOTE ON THE PREFERRED FREQUENCY OF

STOCKHOLDER ADVISORY VOTES ON OUR EXECUTIVE OFFICER COMPENSATION

Under Section 14A of the Exchange Act, we are required to seek a non-binding advisory stockholder vote regarding the frequency of submission to stockholders of a Say-on-Pay advisory vote such as Proposal 4. The law specifies that at least once every six years we give our stockholders the opportunity to vote on the preferred frequency of future votes on our named executive officer compensation either annually, every two years or every three years, referred to as a “Say-on-Frequency” proposal. Although this vote is advisory and non-binding, our Board of Directors will review voting results and give serious consideration to the outcome of such voting. We plan to present this proposal to our stockholders at least once every six years.

You may cast your advisory vote on whether the advisory vote on named executive officer compensation will occur every one, two or three years, or you may abstain from voting on the matter.

Our Board of Directors recommends that stockholders vote in favor of holding an advisory vote on named executive officer compensation every 3 years. In formulating its recommendation, our Board considered that an advisory vote occurring once every three years will provide stockholders with a sufficient amount of time to evaluate the effectiveness of our compensation policies.  Specifically, the three year interval will allow stockholders to gauge our compensation policies in the context of our long-term business results and will minimize the impact of short-term variations in our compensation and business results.  Holding an advisory vote every three years will also give us more time to evaluate and implement appropriate changes to our compensation policies between votes, to the extent that changes are appropriate.  We understand that our stockholders may have different views as to what is the best approach for the Company, and we look forward to hearing from our stockholders on this Proposal.

Required Vote

The frequency that receives the affirmative vote of the holders of a majority of the voting power of the shares present in person or represented by proxy at the Annual Meeting, or if no frequency receives the foregoing vote, the frequency that received the highest number of votes cast, shall be considered the frequency recommended by the stockholders. Abstentions and broker non-votes will have no effect on the outcome of this Proposal 4.

Because your vote is advisory, it will not be binding upon our Board of Directors, overrule any decision by our Board, or create or imply any additional fiduciary duties on our Board or any member of our Board. However, our Board will take into account the outcome of the vote when making its decision regarding the frequency of future stockholder advisory votes on named executive officer compensation.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS

A VOTE FOR “THREE YEARS” FOR PROPOSAL 4, THE FREQUENCY OF FUTURE ADVISORY VOTES ON THE COMPANY’S NAMED EXECUTIVE OFFICER COMPENSATION.

EXECUTIVE COMPENSATION

Named Executive Officers and Other Key Employees

The following table sets forth the name and position of our named executive officers and other key employees for the fiscal year ended September 30, 2021.

(1) Ms. Van Buren served as the President and Chief Executive Officer of Faneuil, Inc. until April 1, 2022.

(2) Mr. Reisch served as the Chairman and Chief Executive Officer of Phoenix Color Corp. until April 13, 2022. Effective June 14, 2022, Mr. Reisch serves as a senior advisor to the Company’s Chief Executive Officer.

The information provided below is biographical information about our non-director Named Executive Officers and other key employees. For information concerning Jess Ravich, see “Information Regarding Directors” above.

Anna Van Buren. Ms. Van Buren was appointed President and Chief Executive Officer of Faneuil in April 2009, after previously serving as President and Chief Operating Officer from 2007 to 2009, as Vice President and Managing Director of Faneuil’s Government Services Division from 2005 to 2007, and as Vice President of Business Development from 2004 to 2005. Prior to her association with Faneuil, Ms. Van Buren founded Capital Initiatives, a consulting service for clients seeking visibility among federal lawmakers with the objective of encouraging legislative action, and operated numerous government services and marketing companies. Ms. Van Buren has served in leadership roles for many civic and business organizations including chairmanship of the United Way of the Virginia Peninsula, the Peninsula Chamber of Commerce and the NASA Aeronautics Support Team. She is the recipient of numerous awards including the Women in Business Achievement Award by Inside Business Magazine, the Presidential Citizenship Award from Hampton University and the National Conference for Community and Justice Humanitarian Award. She is a graduate of Hollins University and the University of Virginia Executive School.

In connection with the previously announced sale of the tolling and transportation verticals of Faneuil, Ms. Van Buren resigned from her position as President and Chief Executive Officer of Faneuil as well as the Board of Directors of the Company effective April 1, 2022.

Brian Hartman. Mr. Hartman has served as Chief Financial Officer since August 2017. Previously, Mr. Hartman was the Senior Vice President, Chief Financial Officer of Arcade Beauty, a manufacturer of sampling solutions for the beauty, fragrance and skincare segments, having served in such role since March 2012. From April 2005 to March 2012, Mr. Hartman was the Vice President, Corporate Controller of Visant Corporation, a specialty printing and marketing services enterprise. From January 1996 to April 2005, Mr. Hartman was the Controller for Metallurg Inc, a producer and distributor of specialty metals. Prior to this, Mr. Hartman held various accounting and auditing positions at Witco Chemical Corp., a manufacturer of specialty chemicals, and Deloitte & Touche LLP. Mr. Hartman is a certified public accountant and received a Bachelor of Business Administration degree in public accounting and a Master of Business Administration in financial management from Pace University.

Marc Reisch. Mr. Reisch was appointed Chairman of Phoenix in August 2015 and served as a director of the Company from that time until his resignation as director effective October 24, 2019. Mr. Reisch served as Chairman of the Board, Chief Executive Officer and President of Visant and Visant Holding Corp. from October 2004 to

November 2015. Prior to joining Visant, he served as Senior Advisor to Kohlberg Kravis Roberts & Co. and has over 35 years of experience in the printing and publishing industries. Mr. Reisch holds a Bachelor of Science degree and a Master of Business Administration degree from Cornell University.

In connection with the previously announced sale of Phoenix, Mr. Reisch resigned from his position as Chairman and Chief Executive Officer of Phoenix effective April 13, 2022. Effective June 14, 2022, Mr. Reisch serves as a senior advisor to the Company’s Chief Executive Officer.

Each executive officer is chosen by the Board and holds office until a successor has been elected and qualified or until such officer’s earlier death, resignation or removal.

Summary Compensation Table

The following table sets forth the total compensation paid or accrued by the Company to the named executive officers and other key employees for services rendered during the last two fiscal years ended September 30, 2021 and 2020. No other executive officers received total annual compensation exceeding $100,000 during such fiscal years.

Employment Arrangements with Named Executive Officers and Other Key Employees

Named Executive Officers

Jess M. Ravich. On July 29, 2019, the Company entered into an employment agreement with Mr. Ravich (the “Ravich Employment Agreement”). Prior to entering into the Employment Agreement, Mr. Ravich served as the Company’s Chairman of the Board. Pursuant to the Ravich Employment Agreement, Mr. Ravich assumed full-time

responsibilities as the Company’s Chief Executive Officer until September 30, 2020 (the “Initial Term”), subject to subsequent automatic two-year renewals.

Additional material terms of the Ravich Employment Agreement include:

On June 21, 2020, the Company entered into an amended and restated employment agreement with Jess M. Ravich (the “A&R Ravich Employment Agreement”). The A&R Ravich Employment Agreement amended and restated Ravich Employment Agreement, which term was to expire on September 30, 2020. Pursuant to the A&R Ravich Employment Agreement, effective July 1, 2020 (the “Effective Date”), Mr. Ravich will continue to serve as the Company’s Chief Executive Officer until September 30, 2022 (the “A&R Initial Term”), subject to subsequent automatic two-year renewals.

Additional material terms amended by the A&R Ravich Employment Agreement include:

If, as of September 30, 2021, Mr. Ravich’s employment was terminated by ALJ without cause, or by Mr. Ravich for good reason, Mr. Ravich was entitled to receive as severance: (i) the lesser of one-year base salary or pro-rated base salary for the remaining term; (ii) continuation of group health plan benefits, with the cost of the regular premium for such benefits paid in full by Faneuil; and (iii) annual bonus prorated for the period of Mr. Ravich’s service during the year of termination and calculated based on actual EBITDA (as defined in the Ravich Employment

Agreement) for the year of termination equal to full annual bonus for the year of termination if otherwise entitled to receive the bonus.

On June 14, 2022, the Company entered into an amended and restated employment agreement with Jess Ravich (the “Second A&R Employment Agreement”). The Second A&R Employment Agreement amended and restated the Ravich Employment Agreement and the A&R Ravich Employment Agreement. Pursuant to the Second A&R Employment Agreement, effective as of June 14, 2022, Mr. Ravich will continue to serve as the Company’s Chief Executive Officer until May 31, 2025, subject to subsequent automatic two-year renewals.  Mr. Ravich will also continue to serve as the Company’s Chairman of the Board.

Additional material terms amended by the Second A&R Employment Agreement include:

The Second A&R Employment Agreement also provides that if Mr. Ravich’s employment with the Company is terminated by the Company without Cause or by Mr. Ravich for Good Reason (each as defined in the Second A&R Employment Agreement), then, subject to Mr. Ravich’s compliance with certain conditions, Mr. Ravich will be entitled to (i) any earned but unpaid base salary or annual bonus; (ii) a severance payment in an amount equal to the lesser of Mr. Ravich’s base salary for a period of one year and base salary through the end of the then applicable employment term (the “Severance Period”); (iii) COBRA benefits during the Severance Period; and (iv) an annual bonus payment equal to an amount that is prorated for the period of Mr. Ravich’s service during the year of termination and calculated based on actual EBITDA.

Anna Van Buren. In October 2013, concurrent with ALJ’s acquisition of Faneuil, Faneuil entered into an employment agreement with Ms. Van Buren through December 2018. In August 2017, Faneuil and Ms. Van Buren entered into an amended employment agreement (the “Van Buren Amended Employment Agreement”), which extended the term to December 2021. Pursuant to the Van Buren Amended Employment Agreement, Ms. Van Buren receives an annual base salary of $520,000 and is eligible to earn an incentive bonus equal to 10% of Faneuil EBITDA, as defined in the Van Buren Amended Employment Agreement, before any bonus amount owed to Ms. Van Buren, in excess of $6,250,000 for calendar year 2017 and $7,500,000 thereafter, subject to further adjustment by ALJ Compensation, Nominating and Corporate Governance Committee from time to time in its discretion, with a step down to 5% of pre-bonus Faneuil EBITDA at $2,000,000 total compensation.

If, as of September 30, 2021, Ms. Van Buren’s employment was terminated by Faneuil without cause, or by Ms. Van Buren for good reason, Ms. Van Buren was entitled to receive: (i) the lesser of one-year base salary or pro-rated base salary for the remaining term; (ii) continuation of group health plan benefits, with the cost of the regular premium for such benefits paid in full by Faneuil; (iii) full annual bonus for the year of termination if otherwise entitled to receive the bonus; and (iv) the annual bonus for the previous year if such bonus has been earned but not yet paid at time of termination.

On October 20, 2021, Faneuil entered into an amended and restated employment agreement with Ms. Van Buren, which extended the term to December 2022. Ms. Van Buren’s compensation and bonus structure remained materially unchanged.

In connection with the previously announced sale of the tolling and transportation verticals of Faneuil, Ms. Van Buren resigned from her position as President and Chief Executive Officer of Faneuil effective April 1, 2022.

Brian Hartman. In connection with ALJ’s appointment of Mr. Hartman to serve as its Chief Financial Officer in August 2017, ALJ entered into an employment agreement with Mr. Hartman through August 2018, subject to one-

year renewals. Pursuant to the employment agreement, Mr. Hartman received an annual base salary of $300,000, a one-time sign-on bonus of $75,000, a cash bonus of $100,000 for the calendar year 2017, and an individual bonus target of 50% of annual base salary effective January 2018. In August 2019, the Company entered into the Second Amended and Restated Employment Agreement (the “Second A&R Employment Agreement”) with Mr. Hartman. The Second A&R Employment Agreement amended and restated the Employment Agreement, dated August 8, 2017, as amended by the First Amended and Restated Employment Agreement dated August 2, 2018, between Mr. Hartman and the Company, which term expired in August 2019. Pursuant to the Second A&R Employment Agreement, Mr. Hartman will serve as the Company’s Chief Financial Officer until September 30, 2021, subject to further one-year or two-year renewals, as determined by the Chief Executive Officer of the Company. Additional material terms changed by the Second A&R Employment Agreement include: (i) an increase in base salary from $350,000 to $375,000 effective October 2019, and (ii) Mr. Hartman’s incentive bonus structure, which was amended to include an annual bonus target of (a) up to 50% of his annual base salary based on the general quality and success of his efforts during the immediately preceding fiscal year and (b) up to 25% of his annual base salary based on certain goals agreed between the Chief Executive Officer and Mr. Hartman for the applicable fiscal year.

In August 2021, ALJ entered into the Third Amended and Restated Employment Agreement (the “Third A&R Employment Agreement”) with Mr. Hartman, which extended the term until September 30, 2023, subject to further one-year or two-year renewals, as determined by ALJ’s CEO. In connection with the Third A&R Employment Agreement, Mr. Hartman’s base salary increased from $375,000 to $400,000. Other terms remained materially unchanged.

As of September 30, 2021, if Mr. Hartman’s employment is terminated by ALJ without cause, or by Mr. Hartman for good reason, Mr. Hartman is entitled to receive: (i) ten months of base salary; (ii) continuation of group health plan benefits with the cost of the regular premium for such benefits shared in the same relative proportion by ALJ and Mr. Hartman as in effect on the date of termination; (iii) full annual bonus for the year of termination if otherwise entitled to receive the bonus; and (iv) the annual bonus for the previous year if such bonus has been earned but not yet paid at time of termination.

Other Key Employees

Marc Reisch. In August 2015, concurrent with ALJ’s acquisition of Phoenix, Phoenix entered into an employment agreement with Mr. Reisch through December 2018. In August 2018, Phoenix entered into a new employment agreement with Mr. Reisch, which superseded and terminated the August 2015 employment agreement, and extended the term to December 2021. In November 2020, Phoenix entered into a new employment agreement (the “New Reisch Agreement”) with Mr. Reisch. In connection with the entry into the New Reisch Agreement, the previous employment agreement, entered into in August 2018 (the “Old Reisch Agreement”) was superseded and terminated. Pursuant to the New Reisch Agreement, Mr. Reisch’s term was extended to September 2023. Additional material terms changed by the New Reisch Agreement as compared to the Old Reisch Agreement include:

On December 17, 2021, Phoenix entered into a new employment agreement with Mr. Reisch (“2021 Employment Agreement”) and terminated the 2020 Employment Agreement. Material terms changed by the 2021 Employment Agreement as compared to the 2020 Employment Agreement include:

(i) Removed the 22.5% Bonus, the Exit Bonus, and the Consulting Fee;

(ii) Added a $5.0 million retention bonus (the “Retention Bonus”) provided that Mr. Reisch remains continuously employed by Phoenix on the payment date, payable as follows: 20% on December 15, 2021, 40% on September 15, 2022, and 40% on September 15, 2023;

(iii) Added a bonus equal to 5% of the difference of the net sale price less $85,000,000 in the event of a Phoenix Sale during the Term (the “Sale Bonus”), to be paid to Mr. Reisch in a lump sum on the first payroll period following the closing of the Phoenix Sale;

(iv) Provided that in the event of a Phoenix Sale, a pro-rated portion of the Base Bonus and the Annual Bonus for the year in which such Phoenix Sale occurs shall be paid to Mr. Reisch at the same time and in the same manner as the Sale Bonus; and

(v) Modified Mr. Reisch’s severance payments in the event of his death, disability, termination by the Company without cause, or termination by Mr. Reisch for good reason to an amount equal to (1) any base salary earned but not paid, (2) any unpaid portion of the Retention Bonus (including any unvested portions), (3) a Base Bonus and Annual Bonus (for the prior fiscal year) if earned and not yet paid, and (4) a pro-rated portion of the Base Bonus and Annual Bonus that Mr. Reisch would have earned had he remained employed through the end of the fiscal year.

All other terms in the 2021 Employment Agreement remain materially unchanged from the terms in the 2020 Employment Agreement.

In connection with the previously announced Phoenix Sale, Mr. Reisch resigned from his position as Chairman and Chief Executive Officer of Phoenix effective April 13, 2022.

On June 14, 2022, ALJ entered into a new employment agreement with Mr. Reisch (“2022 Reisch Employment Agreement”) and terminated the 2021 Employment Agreement. The term of the 2022 ALJ Employment Agreement commences on June 14, 2022 and is set to expire on September 30, 2023. Pursuant to the 2022 ALJ Employment Agreement, Mr. Reisch will serve as senior advisor to the Chief Executive Officer and receive an annual base salary of $650,000, and a retention bonus of $5,500,000 (half of which is payable on September 15, 2022, provided that Mr. Reisch is continuously employed with the Company until September 15, 2022; and the remainder of which is payable on September 15, 2023, provided that Mr. Reisch is continuously employed with the Company until September 15, 2023). The 2022 Reisch Employment Agreement also provides that if Mr. Reisch’s employment with the Company is terminated by the Company without Cause or by Mr. Reisch for Good Reason (each as defined in the 2022 Reisch Employment Agreement), then, subject to Mr. Reisch’s compliance with certain conditions, Mr. Reisch will be entitled to (i) any earned but unpaid base salary and (ii) the unpaid retention bonus.

Outstanding Equity Awards at Fiscal 2021 Year-End

The following table sets forth certain information regarding outstanding equity awards as of September 30, 2021, by the named executive officers and other key employees.

Compensation Committee Report

The Compensation, Nominating and Corporate Governance Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management, and based on that review and discussion, the Compensation, Nominating and Corporate Governance recommended to the Board that the Executive Compensation section be included in the Company’s Proxy Statement for the 2022 Annual Meeting of Stockholders.

Respectfully submitted,

Members of the Compensation, Nominating and Corporate Governance Committee

Michael C. Borofsky (Chair)

Hal G. Byer

Julie Cavanna-Jerbic

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of the Record Date, the beneficial ownership of common stock with respect to (i) each person who was known by the Company to own beneficially more than 5% of the outstanding shares of common stock, (ii) each director, (iii) each of the Company’s current executive officers and (iv) all directors and executive officers as a group. As of the Record Date, the Company had 42,408,830 shares of common stock issued and outstanding, which was the only class of voting securities outstanding. Unless otherwise indicated, the address for each stockholder listed in the following table is c/o ALJ Regional Holdings, Inc., 244 Madison Avenue, PMB #358, New York, NY 10016.

Equity Compensation Plan Information

On July 11, 2016, ALJ shareholders approved ALJ’s Omnibus Equity Incentive Plan (the “2016 Plan”), which allows ALJ and its subsidiaries to grant securities of ALJ to officers, employees, directors or consultants. ALJ believes that equity-based compensation is fundamental to attracting, motivating and retaining highly qualified dedicated employees who have the skills and experience required to achieve business goals. Further, ALJ believes the 2016 Plan aligns the compensation of directors, officers, and employees with shareholder interest.

The 2016 Plan is administered by ALJ’s Compensation, Nominating and Corporate Governance Committee. The maximum aggregate number of common stock shares that may be granted under the 2016 Plan is 2,000,000. The 2016 Plan generally provides for the grant of qualified or nonqualified stock options, restricted stock and restricted stock units, unrestricted stock, stock appreciation rights, performance awards and other awards. The Compensation, Nominating, and Corporate Governance Committee has full discretion to set the vesting criteria. The exercise price of a stock option may not be less than 100% of the fair market value of ALJ’s common stock on the date of grant. The 2016 Plan prohibits the repricing of outstanding stock options without prior shareholder approval. The term of stock options granted under the 2016 Plan may not exceed ten years. Awards are subject to accelerated vesting upon a change in control in the event the acquiring company does not assume the awards. The Board may amend, alter, or discontinue the 2016 Plan, but shall obtain shareholder approval of any amendment as required by applicable law or stock exchange listing requirements.

The following table sets forth certain information concerning shares of our common stock authorized for issuance under the Company’s existing equity compensation plans as of September 30, 2021:

Certain Relationships and Related Transactions

Fiscal 2021 Debt 

Issuance of Convertible Promissory Notes

On June 29, 2021, the Company issued convertible promissory notes in an aggregate principal amount of $6.0 million (the “Convertible Promissory Notes”) to two investors, including the Company’s Chief Executive Officer and Chairman of the Board, Jess M. Ravich. The Convertible Promissory Notes replace and have substantially the same terms as the Company’s prior Term C Loan (as defined below), except the Convertible Promissory Notes pay interest quarterly and the Term C Loan paid interest at maturity.

The Convertible Promissory Notes accrue interest at the rate of 8.25% per year, compounded monthly with interest payable in cash quarterly in arrears on the last day of each calendar quarter on the outstanding principal balance until such principal amount is paid in full or until conversion.

The principal and accrued interest owed under the Convertible Promissory Notes are convertible, at the option of the holders, into shares of the Company’s common stock, at any time prior to November 28, 2023, at a conversion price equal to the quotient of all amounts due under each Convertible Promissory Note divided by the conversion rate of $0.54 per common share. The Convertible Promissory Notes were (i) subordinate to the Blue Torch Term Loan and the Amended PNC Revolver, (ii) unsecured, and (iii) have a maturity date of November 28, 2023, subject to extension under certain circumstances.

Fiscal 2020 Debt

Junior Participation Agreement - Term B Loan and Warrants Issued

In December 2019, in connection with the Sixth Amendment, certain trusts and other entities formed for the benefit of, or otherwise affiliated with Jess M. Ravich, the Company’s Chief Executive Officer and Chairman of the Board (“Ravich Entities”), entered into a Junior Participation Agreement with Cerberus (“Junior Participation Agreement”), pursuant to which the Ravich Entities agreed to purchase $4.1 million in junior participation interests in the Term B Loan under the Cerberus/PNC Financing Agreement (“Junior Participation” and such interests, “Junior Participation Interests”). The Junior Participation Interests were junior and subordinate to the Cerberus Term Loan in all respects and had no quarterly payments. Through March 2020, interest accrued under the Junior Participation (i) in cash, accrued at the same rate per year as the Cerberus Term Loan and paid monthly, and (ii) in kind, accrued at 4.00% per year, payable on the Cerberus/PNC Debt Maturity Date. See “Amendment to Junior Participation Agreement -Term B Loan and Warrants Issued” below for interest earned subsequent to March 2020.

In connection with the Junior Participation, the Company issued fully vested warrants to purchase 1.23 million shares of the Company’s common stock (“Junior Participation Agreement Warrants”) to the Ravich Entities, with a five-year term and an exercise price of $0.54.

Amendment to Junior Participation Agreement – Term B Loan and Warrants Issued

On March 26, 2020, in connection with the Eighth Amendment to the Financing Agreement, the Ravich Entities entered into the First Amendment to the Junior Participation Agreement (the “First Amendment to Junior Participation Agreement”). The amended terms under the First Amendment to Junior Participation Agreement include:

In March 2020, in connection with the Eighth Amendment to the Cerberus/PNC Financing Agreement, the Ravich Entities entered into the First Amendment to the Junior Participation Agreement (“First Amendment to Junior Participation Agreement”). Under the First Amendment to Junior Participation Agreement, interest was paid in kind, instead of a mixture of cash and in kind.

In connection with the First Amendment to Junior Participation Agreement, the Company issued fully vested warrants to purchase 0.4 million shares of the Company’s common stock (“First Amendment to Junior Participation Agreement Warrants”) to the Ravich Entities, with a five-year term and an exercise price of $0.62.

Amendment to the Junior Participation Agreements – Term C Loan

In May 2020, in connection with, and as a condition to, the Ninth Amendment, certain stockholders of the Company (“Term C Loan Junior Participants”), including Mr. Ravich, entered into, or amended certain Junior Participation Agreements (collectively, “Term C Loan Junior Participation Agreements”) with Cerberus. Pursuant to the Term C Loan Junior Participation Agreements (which was amended and/or restated from time to time), the Term C Loan Junior Participants acquired junior participation interests in the Term C Loan in an aggregate amount of $5.6 million on May 12, 2020 (“Term C Loan”). Mr. Ravich agreed to acquire additional junior participation interests in the Term B Loan in an aggregate amount of (i) $2.5 million on June 30, 2021 and (ii) $2.5 million on September 30, 2021 as long as Term B Loan was outstanding on such date.

The $5.6 million Term C Loan and related accrued interest was convertible, at the option of the Term C Loan Junior Participants, into shares of the Company’s common stock, at a conversion price of $0.54 per share. The $5.6 million Term C Loan was junior and subordinate to the Cerberus/PNC Debt in all respects and had no quarterly payments. From May 2020 through the Cerberus/PNC Debt Maturity Date, the Term C Loan accrued interest in kind at the same rate per year as the Cerberus Term Loan.

Although the Term C Loan was paid off as part of the Cerberus Payoff, the Term C Loan Junior Participants were issued the Convertible Promissory Notes as discussed above, under substantially identical terms as the Term C Loan, except the Convertible Promissory Notes pay interest quarterly and the Term C Loan paid interest at maturity.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) reports they file. Based upon a review of those forms and representations regarding the need for filing Forms 5, we believe that each of our directors, executive officers and 10% stockholders complied with all Section 16(a) filing requirements. In making this statement, we have relied upon examination of the copies of Forms 3, 4 and 5, and amendments thereto, provided to us and the written representations of our directors and executive officers.

OTHER MATTERS

If any other matters are properly brought before the meeting, it is the intention of the persons named in the proxy to vote on such matters in accordance with their best judgment.

All stockholders are urged to vote by following the instructions included in this Proxy Statement and the enclosed proxy card.

By Order of the Board of Directors,

/s/ Jess M. Ravich

Chief Executive Officer and Chairman of the Board

July 15, 2022

ANNUAL  MEETING  OF  STOCKHOLDERS  OF    ALJ  REGIONAL  HOLDINGS,  INC.    August19,2022PROXYVOTINGINSTRUCTIONS INTERNET  -Access “www.voteproxy.com”and followtheon-screen  instructions or scan the QR code with your smartphone. Have your  proxy card available when you access the web page.   TELEPHONE  -Call toll-free 1-800-PROXIES  (1-800-776-9437) in  theUnitedStatesor1-718-921-8500  fromforeigncountriesfromany  touch-tone telephone and follow the instructions. Have your proxy  card available when you call.   Vote online/phone until 11:59 PM EST the day before the meeting.   MAIL  -Sign, date and mail your proxy card in the envelope  provided as soon as possible.   IN  PERSON  -You may vote your shares in person by attending  the Annual Meeting.   GO  GREEN  -e-Consent makes it easy to go paperless. With  e-Consent, you can quickly access your proxy material, statements  and other eligible documents online, while reducing costs, clutter  and paper waste. Enroll today via www.astfinancial.com to enjoy  online access.    COMPANY  NUMBER  ACCOUNT  NUMBER    NOTICE  OF  INTERNET  AVAILABILITY  OF  PROXY  MATERIALS:  The Notice of Meeting, Proxy Statement, Proxy Card andAnnual Report on Form 10-K  are available at http://www.astproxyportal.com/ast/10808/    Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet.  20530304000000001000  2  081922     THEBOARDOFDIRECTORSRECOMMENDSAVOTE"FORALLNOMINEES"INPROPOSAL1, "FOR"PROPOSALS2AND3,ANDFOR“THREEYEARS”ONPROPOSAL4. PLEASESIGN,DATEANDRETURNPROMPTLYINTHEENCLOSEDENVELOPE.PLEASEMARKYOURVOTEINBLUEORBLACKINKASSHOWNHEREx  FOR  AGAINST  ABSTAIN    1. ToelectJessM.Ravich,JohnScheel,HalG.Byer,RaeG.RavichandRobertScottFritzasdirectorstoholdoffice  until the Company’s 2023Annual Meeting or until their respective successors are elected and duly qualified, or   2. ToratifytheappointmentofDeloitte&ToucheLLPastheCompany’sindependuntiltheirrespectiveearlierresignationorremoval.    ent registered public accounting firm for the fiscal year ending September 30,    2022.  FOR  ALL  NOMINEES  O  Jess M. Ravich   NOMINEES:    FOR  AGAINST  ABSTAIN    O  John Scheel   3. To approve, on an advisory (non-binding) basis, the compensation of the  WITHHOLD  AUTHORITY  O Hal G. Byer   Company’snamedexecutiveofficers.   FOR  ALL  NOMINEES  O Rae G. Ravich  O Robert Scott Fritz    FOR  ALL  EXCEPT    1  YEAR  2  YEARS  3  YEARS  ABSTAIN  (See  instructions  below)    4. To approve, on an advisory (non-binding) basis, the frequency of future  advisoryvotesonthecompensationoftheCompany’snamedexecutiveofficers.  5. TotransactsuchotherbusinessasmayproperlycomebeforetheAnnualMeetingoranyadjournmentorpostponementthereof.  INSTRUCTIONS:  To  withhold  authority  to  vote  for  any  individual  nominee(s),  mark  “FOR  ALL  EXCEPT”  and  fill  in  the  circle  next  to  each  nominee  you  wish  to  withhold,  as  shown  here:     Intheirdiscretion,theproxiesareauthorizedtovoteuponsuchotherbusinessasmayproperlycomebeforetheAnnualMeeting.Thisproxywhenproperlyexecutedwillbevotedasdirectedhereinbythe  undersignedshareholder. If  nodirectionismade,thisproxywill  bevotedFORALLNOMINEESin  Proposal  1,  FOR  Proposals  2  and  3,  and  for  3YEARS  on  Proposal  4.    MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING.  To change the address on your account, please check the box at right and  indicate your new address in the address space above. Please note that  changestotheregisteredname(s)ontheaccountmaynotbesubmittedviathis method.    Signature of Stockholder   Date:   Signature of Stockholder Date:  Note:  Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full  title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.  

0       ALJ   REGIONAL   HOLDINGS,   INC.       Proxy   for   Annual   Meeting   of   Stockholders   on   August   19,   2022       This Proxy is Solicited on Behalf of the BOARD OF DIRECTORS     As   an   alternative   to   completing   this   form,   you   may   enter   your   voting   instructions   by   telephone   at   1-800-PROXIES,   or   via   the   Internet   at   WWW.VOTEPROXY.COM   and   follow   the   simple   instructions.   Use   the   Company   Number   and   Account   Number   shown   on   your   proxy   card.       The undersigned hereby appoints Jess M. Ravich, Chief Executive Officer, with full power   of substitution, as proxy to vote all the shares of Common Stock which the undersigned would   be entitled to vote if personally present and acting at theAnnual Meeting of Stockholders ofALJ   Regional Holdings, Inc., to be held on August 19, 2022 at 9:00 a.m. Eastern Time at the   offices of Shearman & Sterling LLP, 599 Lexington Ave., New York, NY 10022, and at any   adjournments or postponements thereof, as follows:     (Continued   and   to   be   signed   on   the   reverse   side)       1.1   14475