DEF 14A of Argan Inc, Apr 30, 2024

DEF 14A of Argan Inc

Filed Apr 30, 2024 · FY20240001558370-24-006163

Open on EDGAR

  1. Board Skills and Qualifications

    Board Skills and Qualifications

  2. Board Skills and Qualifications

    | | | | | | | | | | ACCOUNTING AND FINANCE | INDUSTRY | STRATEGIC PLANNING AND EXECUTION | RISK MANAGEMENT | TALENT MANAGEMENT AND COMPENSATION | CORPORATE GOVERNANCE | | RAINER H. BOSSELMANN Director Since: 2003 | Age: 81 | | • | • | • | | • | | CYNTHIA A. FLANDERS IND Director Since: 2009 | Age: 69 | • | | • | • | • | • | | PETER W. GETSINGER IND Director Since: 2014 | Age: 72 | • | • | • | • | | • | | WILLIAM F. GRIFFIN, JR. Director Since: 2012 | Age: 69 | | • | • | • | • | | | JOHN R. JEFFREY, JR. IND Director Since: 2017 | Age: 70 | • | | • | • | • | • | | WILLIAM F. LEIMKUHLER IND Director Since: 2007 | Age: 72 | • | • | • | • | • | • | | W.G. CHAMPION MITCHELL IND Director Since: 2003 | Age: 77 | | | • | • | • | • | | JAMES W. QUINN IND Director Since: 2003 | Age: 66 | • | | • | • | • | • | | KAREN A. SWEENEY IND Director Nominee | Age: 66 | | • | • | • | • | | | DAVID H. WATSON Director Since: 2022 | Age: 48 | • | • | • | • | • | • |

  3. Board Skills and Qualifications

    • = Skill

  4. Directors/Nominees

    Directors/Nominees The names of the nominees, their ages as of April 30, 2024, and certain other information about them are set forth below:

  5. Directors/Nominees

    | RAINER H. BOSSELMANN AGE: 81 DIRECTOR SINCE: 2003 COMMITTEES: ● Executive | Mr. Bosselmann has been a director since May 2003 and served as Chairman of the Board of Directors of the Company from May 2003 to August 2022. He also served as the Company’s Chief Executive Officer from October 2003 until his retirement in August 2022. Mr. Bosselmann was chairman of the board, chief executive officer and a director of Arguss Communications, Inc. ("Arguss”), a telecommunications infrastructure company listed on the NYSE, from 1996 through 2002 and president of Arguss from 1997 through 2002. Mr. Bosselmann served as an independent director of The Roberts Company, Inc., formerly a privately owned firm, from 2008 until December 2015 when it was acquired by us. QUALIFICATIONS Mr. Bosselmann’s experience positions him to share his extensive knowledge of the Company with the Board during its deliberations, including its history and development, and to provide critical continuity. As chief executive officer of Arguss and then the Company, he developed substantial expertise in managing public companies with diverse and remotely-located business operations, and in identifying, executing and integrating acquisitions. |

  6. Directors/Nominees

    | CYNTHIA A. FLANDERS INDEPENDENT  AGE: 69 DIRECTOR SINCE: 2009 COMMITTEES: ● Audit ● Compensation | Ms. Flanders has been a member of our Board of Directors since April 2009. Ms. Flanders currently serves as Chairwoman of the Risk Committee and member of the Audit Committee on the board of directors of Forbright Bank (formerly known as Congressional Bank), a full service, privately-held bank in Chevy Chase, Maryland. Since October 2013, she has served as a senior advisor for Verit Advisors LLC, an independent investment bank advisory firm that specializes in ESOPs and other ownership transitions. In April 2021, Ms. Flanders co-founded The Profitable Idea, LLC, an online business workshop and educational space for entrepreneurs and business owners to learn how to make their businesses sustainably profitable. Ms. Flanders is also founder of Manage Fearlessly, an organization that provides business training and career coaching resources to a number of company executives, senior managers, and entrepreneurs. From 1975 through 2009, Ms. Flanders held a series of positions of increasing responsibility with Bank of America and its predecessor organizations (the "Bank”). Ultimately, she served as the Global Commercial Banking Executive for the Bank’s Mid-Atlantic region overseeing eight commercial banking markets and over 80 client teams delivering a full array of financial services to over 6,000 small, middle market and micro-cap clients in the region. Ms. Flanders served as our chief financial officer during the calendar year 2015. During the year ended January 31, 2019, the Board membership of Ms. Flanders was restored to "independent” pursuant to the requirements of the NYSE. QUALIFICATIONS With her long banking and management career, Ms. Flanders brings to the Board her considerable experience in executive management and strategic planning, as well as expertise in financial analysis, capital structuring and due diligence investigations. Her many years of lending to businesses in the Mid-Atlantic region of the United States (the "U.S.”) have provided her with a unique understanding of our business and the construction industry. In addition, she represents an important resource for consultation regarding commercial banking matters. |

  7. Directors/Nominees

    | PETER W. GETSINGER INDEPENDENT  AGE: 72 DIRECTOR SINCE: 2014 COMMITTEES: ● Audit ● Responsible Business | Mr. Getsinger has been a member of our Board of Directors since his appointment in November 2014. Mr. Getsinger retired in 2018 from Nexstar Capital Partners LLC (a SEC registered firm), a firm that he founded in 2004 as an alternative investment management firm focused on investing in emerging markets with a primary concentration in Latin America, where he was managing partner and chief investment officer. In 2005, his firm acquired an ownership interest in Electro Dunas S.A. ("Dunas,” an electricity distributor servicing the southwest of Peru and one of four privatized distribution companies in that country). Mr. Getsinger served as a board member of Dunas until 2016. From 2012 to 2014, he was chairman of its board of directors. Prior to forming Nexstar, Mr. Getsinger was head of global investment banking for Latin America at Deutsche Bank. He held the same role at Bankers Trust Company in addition to running the global project finance business. He previously served as the senior vice president and head of fixed income sales for the United Kingdom, continental Europe, and the Middle East at Lehman Brothers. Mr. Getsinger is also a former director and owner of GPU Argentina Holdings, Inc. QUALIFICATIONS Mr. Getsinger brings a significant amount of business experience to our Board along with deep financial and diverse banking expertise. Because of his experience with Dunas, he provides additional power industry knowledge. Mr. Getsinger has a strong background in international markets and his leadership in providing global investment banking services is valuable to us in matters relating to strategic planning and potential overseas expansion. |

  8. Directors/Nominees

    | WILLIAM F. GRIFFIN, JR. AGE: 69 DIRECTOR SINCE: 2012 COMMITTEES: ● Executive | Mr. Griffin was appointed to the Board of Directors in April 2012. He is a co-founder of Gemma Power Systems, LLC ("Gemma”) which was acquired by Argan in December 2006 along with its affiliated companies. Mr. Griffin is a veteran of power plant construction with over 40 years of related experience. He now holds the position of Non-Executive Chairman of Gemma. Mr. Griffin served as Vice Chairman of Gemma from November 2007 to November 2019 and as Chief Executive Officer of Gemma from September 2008 to November 2019. Under Mr. Griffin’s leadership, Gemma grew to become one of the nation’s leading providers of engineering, procurement and construction services to the power generation market. Over the past two years, Mr. Griffin has evolved into an important leadership mentor for the heads of both Gemma and our overseas energy project construction firm, Atlantic Projects Company Limited ("APC”). QUALIFICATIONS Mr. Griffin has significant senior executive experience in the energy-related construction sector. Based on his long length of service as the leader of our largest operating company, Mr. Griffin contributes an in-depth understanding of our business that may not be easily attainable by an outside member of our Board. Based on the extent of his experience, the Board of Directors benefits from Mr. Griffin making important contributions to its decision making regarding our strategic direction, our commitment to certain business development efforts, the identification of future construction project opportunities, contract negotiations and project execution. |

  9. Directors/Nominees

    | JOHN R. JEFFREY, JR. INDEPENDENT  AGE: 70 DIRECTOR SINCE: 2017 COMMITTEES: ● Audit ● Responsible Business | Mr. Jeffrey has been a member of our Board of Directors since June 2017. Mr. Jeffrey accumulated 40 years of experience with Deloitte & Touche LLP ("Deloitte”), which included 30 years as a partner serving several of Deloitte’s largest audit clients, before retiring in 2017. Mr. Jeffrey was Managing Partner of Deloitte’s Global Japanese Services Group from 2003 to 2015, and he was a member of Deloitte’s United States Chairman and CEO Nominating Committee in 2010. Currently, Mr. Jeffrey serves as a board member for two non-profit entities based in New York offering educational and enrichment programs dedicated to improving the education of children. In 2023, Mr. Jeffrey joined Clara Vista Fund I, LP, a media and emerging technology investment entity, as an advisory member of its Board of Directors. QUALIFICATIONS Mr. Jeffrey provides our Board with significant expertise in the areas of public accounting, risk management, mergers and acquisitions, and related regulatory matters, which he developed over a long career with Deloitte, a leading public accounting firm. He brings to the Board viable experience with operational and governance issues faced by complex organizations, including extensive international expertise. He also brings to our Board valuable experience in dealing with long-term construction projects. Mr. Jeffrey is a certified public accountant with an active license. |

  10. Directors/Nominees

    | WILLIAM F. LEIMKUHLER INDEPENDENT  AGE: 72 DIRECTOR SINCE: 2007 COMMITTEES: ● Executive ● Compensation ● Nominating/Corporate Governance | Mr. Leimkuhler has been a member of our Board of Directors since June 2007 and he was appointed as Chairman of the Board in August 2022. Currently, Mr. Leimkuhler serves as a senior vice president of Mutualink, Inc. ("Mutualink”), a privately owned provider of communications interoperability solutions for public safety and critical infrastructure organizations. From November 2017 to January 31, 2021, Mr. Leimkuhler served as the chief financial officer of Mutualink. He has been the general counsel and director of business development to Paice Corporation, a privately held developer of hybrid electric powertrains, since 1999. He also advises a number of technology-based companies on business, financial and legal matters, including corporate and commercial transactions and intellectual property matters. From 1994 through 1999, he held various positions with Allen & Company LLC ("Allen”), a New York investment banking firm, initially serving as the firm’s general counsel. From 2012 to September 2019, Mr. Leimkuhler was a member of the board of directors of Northern Power Systems Corp., which designed, manufactured and serviced wind turbines. He served as chairman of the board from December 2013. He also served on the audit and compensation committees of this board. Mr. Leimkuhler also serves on the board of U.S. Neurosurgical Holdings, Inc. (OTC: USNU), which holds interests in radiological treatment facilities and is developing a managed care business. QUALIFICATIONS The leadership experience that Mr. Leimkuhler has developed as a legal executive with an investment banking firm, a securities law firm partner and a board and associated committee member for public companies makes him a valuable member of our Board. He is a respected source of legal guidance to the members of the executive management team and the members of our Board of Directors and provides special insight to them on matters relating to financial reporting and corporate governance requirements. |

  11. Directors/Nominees

    | W.G. CHAMPION MITCHELL INDEPENDENT  AGE: 77 DIRECTOR SINCE: 2003 COMMITTEES: ● Executive ● Nominating/Corporate Governance | Mr. Mitchell has been a member of our Board of Directors since October 2003. From January 2003 until March 2008, Mr. Mitchell was chairman of the board and chief executive officer of Network Solutions, Inc. which was engaged in the creation, marketing and management of digital identity and web presence products. Mr. Mitchell currently serves as a director of two privately-held companies, Direct Brands, Inc. and The 41st Parameter, Inc. He is also a member of the board of governors for RTI International, a leading independent, nonprofit research and development organization, and for the University of North Carolina system that controls all state-owned universities and operates the largest hospital system in the state. QUALIFICATIONS Mr. Mitchell possesses business leadership skills which were honed as a former chief executive officer for a series of companies. This background makes him a valuable source of advice and consultation for the management team and the other members of the Board as we address the contemporary issues facing public companies today. His many years of experience as a corporate executive and his length of service on our Board provide him with a unique capability to assess the needs of the Board and to evaluate the value of potential Board members, with substantial insight into management, operational and financial matters, and with knowledge of market conditions and trends. |

  12. Directors/Nominees

    | JAMES W. QUINN INDEPENDENT  AGE: 66 DIRECTOR SINCE: 2003 COMMITTEES: ● Executive ● Compensation ● Nominating/Corporate Governance | Mr. Quinn has been a member of our Board of Directors since May 2003. Mr. Quinn is currently a managing director of Allen & Company LLC. Since 1982, Mr. Quinn has served in various capacities at Allen and its affiliates, including head of the Corporate Syndicate Department and chief financial officer for approximately ten years. Mr. Quinn served as a director of Arguss from 1999 through 2002. He also serves as a director on the boards of several privately held companies in connection with Allen’s investment in the companies and of several charitable organizations. QUALIFICATIONS Mr. Quinn’s experience with financial and investment banking matters at Allen and his terms of service on the boards of the Company and Arguss make him a valued member of our Board and well-qualified to be the chair of the Board’s Compensation Committee. His many years of experience allow him to counsel the Board on matters such as executive compensation, mergers and acquisitions, capital structure, financings and strategic planning and to provide insightful views on public company reporting matters and general business trends. |

  13. Directors/Nominees

    | KAREN A. SWEENEY INDEPENDENT  AGE: 66 DIRECTOR NOMINEE COMMITTEES: ● Responsible Business | Ms. Sweeney is standing for election as a new member of Argan’s Board of Directors beginning in June 2024. Ms. Sweeney first joined Turner Construction Company (“Turner”), an international construction services company, in 1980 as a field engineer. Throughout her tenure, she worked in estimating and engineering, special projects, and project management on number commercial construction projects throughout the U.S. In 2000, she was appointed as vice president and general manager of the Cleveland business unit, taking on the responsibilities of overseeing both field and business development operations. She was the first woman to head a Turner office. In 2009, she was named Turner’s vice president of diversity and inclusion, and in 2014 was promoted to senior vice president, inclusion and community. She has served as a director of the Penn State Engineering Alumni Society since 2004 and served as its president from 2012 to 2014. Ms. Sweeney is also a founding member of In Counsel With Women, a professional network for women in Northeast Ohio, and a member of the Society of Women Engineers. QUALIFICATIONS Ms. Sweeney’s extensive 43-year career in construction engineering and operations will make her a valuable member of our Board, providing expertise in sales, contracts, field operations and client relationships. Her background in leading company initiatives focused on diversity and inclusion also make her a trusted resource to lead the Board’s Responsible Business Committee. |

  14. Directors/Nominees

    | DAVID H. WATSON AGE: 48 DIRECTOR SINCE: 2022 COMMITTEES: ● Executive ● Responsible Business | Mr. Watson was appointed President and Chief Executive Officer of the Company and a member of the Board of Directors, effective August 2022. Previously, Mr. Watson served as our Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary since he joined the Company in October 2015. Mr. Watson has held senior financial positions with public companies for over 15 years. Mr. Watson was the Chief Financial Officer of Gladstone Investment Corporation (NASDAQ: GAIN) from 2010 until 2015, and also served as its Treasurer from 2012 until 2015. In addition, Mr. Watson was the Chief Financial Officer of Gladstone Capital Corporation (NASDAQ: GLAD) from 2011 until 2013 and served as its Treasurer from 2012 until 2015. Gladstone Investment Corporation and Gladstone Capital Corporation are closed-end, non-diversified management investment companies. Prior to his Gladstone positions, Mr. Watson served as a director of Portfolio Accounting of the publicly-traded MCG Capital Corporation from 2007 until 2010. QUALIFICATIONS Mr. Watson has extensive knowledge and experience in our business and has obtained an in-depth knowledge of our employees, culture and competitors. As chief financial officer of the Company, he developed important relationships with the leaders now running our subsidiary operations, and he has a deep understanding of the financial accounting and risk management disciplines. He possesses the leadership skills, the energy and the problem-solving capabilities that are important to the Board and the Company. |

  15. Compensation of Directors

    Compensation of Directors The following table summarizes the fees and other compensation for the non-employee members of our Board of Directors for Fiscal 2024. Each non-employee member of our Board of Directors received an annual fee of $35,000 and the Chairman of the Board received an additional annual fee of $65,000. The members of the Audit Committee received an additional annual fee of $5,000 and the Audit Committee Chair received an additional annual fee of $10,000. Directors were reimbursed for reasonable expenses actually incurred in connection with attending each formal meeting of the Board of Directors or the meeting of any committee thereof. Directors were also eligible to receive awards of options to purchase shares of our Common Stock and of restricted stock units.

  16. Compensation of Directors

    | | | Stock Option | Restricted Stock | All Other | Total | | Name | Fees | Awards(1) | Unit Awards(1) | Compensation | Compensation | | Cynthia A. Flanders | $40,000 | $13,727 | $109,250 | $– | $162,977 | | Peter W. Getsinger | 40,000 | 13,727 | 109,250 | – | 162,977 | | John R. Jeffrey, Jr. | 50,000 | 13,727 | 109,250 | – | 172,977 | | Mano S. Koilpillai | 35,000 | 13,727 | 109,250 | – | 157,977 | | William F. Leimkuhler | 100,000 | 13,727 | 109,250 | – | 222,977 | | W.G. Champion Mitchell | 35,000 | 13,727 | 109,250 | – | 157,977 | | James W. Quinn | 35,000 | 13,727 | 109,250 | – | 157,977 |

  17. Compensation of Directors

    | (1) Amounts represent the aggregate award-date fair values computed for financial reporting purposes reflecting the assumptions discussed in the section “Share-Based Payments” of Note 1 – Description of the Business and Basis of Presentation and in Note 11 – Stock-Based Compensation of our consolidated financial statements that are included in Item 8 of our Annual Report on Form 10-K for the year ended January 31, 2024. |

  18. Compensation of Directors

    Effective February 1, 2024, the Company revised the compensation structure for the independent Board members by increasing the annual fee to $40,000 and increasing the annual Audit Committee fee membership to $6,000.

  19. PROPOSAL NO. 2 APPROVAL OF EXECUTIVE COMPENSATION (THE “SAY-ON-PAY” PROPOSAL)

    We are seeking stockholder approval of the compensation of our NEOs as described in the “Executive Compensation Discussion and Analysis” section, the compensation tables and the other narrative compensation disclosures of this Proxy Statement, all of which are included below. This non-binding advisory proposal, commonly known as a “say-on-pay” proposal, is required under Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This vote represents our twelfth annual advisory say-on-pay vote. Last year, the stockholders approved our executive compensation with 74% of the vote in favor of our program. Based on management’s recommendation and the results of voting by the stockholders at the 2019 Annual Meeting, the Board of Directors determined that we will hold an advisory vote on our executive compensation every year. Because this is an advisory vote, the results will not be binding on the Board of Directors and it will not directly affect or otherwise limit any existing compensation or award arrangement of any of our NEOs. However, our Compensation Committee does consider the outcome of the annual votes when determining executive compensation arrangements. The Compensation Committee has conducted comprehensive stockholder outreach which commenced during our fiscal year ended January 31, 2018. During Fiscal 2024 and shortly thereafter, the members of the Compensation Committee continued to engage in meaningful contacts with certain stockholders, as we proactively contacted all of our top 25 stockholders, who collectively represented approximately 64% of our outstanding shares, as described further in the “Executive Compensation Discussion and Analysis” section below. The purpose of the outreach practice is to deepen our understanding of the perspectives of our stockholders with respect to our compensation practices, and to evaluate and to address any concerns or reactions we receive. Based on feedback we have received in the past, we increased the vesting period for stock option awards, introduced the use of performance-based long-term incentive equity compensation, instituted a cap on annual cash incentive awards and committed to a policy prohibiting the future negotiation of single-trigger change-in-control provisions, among other changes. These changes led to enhancements of the disclosures regarding executive compensation, which are reflected in the discussion of our executive compensation included in our Proxy Statement for the current year. The Board of Directors has adopted several other policies to improve accountability and further encourage an alignment of stockholder and executive officer interests. These policies, which are also described in further detail below in the “Executive Compensation Discussion and Analysis” section, include a stock ownership policy for NEOs and non-employee members of our Board, a no pledging policy, an anti-hedging policy, and a clawback policy, which we amended in October 2023. In April 2023, we introduced a new restricted stock award for certain executive officers in order to provide incentives for the growth of our diluted EPS over a three-year measurement period. Consistent with past efforts to increase compensation transparency for our stockholders, we developed specific performance metrics for use in the determination of the amount of non-equity cash incentive compensation that may be earned each year by the CEO of Gemma. The metrics were used to confirm the amounts of such compensation earned by him for Fiscal 2024. In April 2021, we introduced the use of a new restricted stock award in order to provide incentives for the growth in the number and value of renewable energy construction projects awarded to Gemma over the ensuing three-year period. In summary, our executive compensation program has been structured by the Compensation Committee to retain and incentivize our core management team through challenging business environments. Concurrently we provide incentives to drive profitable growth and to deliver value to our stockholders. In considering how to vote on this advisory proposal, we urge our stockholders to study all the relevant information in the “Executive Compensation Discussion and Analysis” section below, and the compensation tables and the other narrative disclosures regarding our executive compensation program that are included herein.

  20. PRINCIPAL STOCKHOLDERS

    | (1) Each applicable percentage of ownership is based on 13,242,520 shares of Common Stock outstanding as of January 31, 2024, together with applicable stock options for each stockholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of Common Stock subject to options that are currently exercisable or exercisable within 60 days of January 31, 2024 are deemed to be beneficially owned by the person holding such stock options for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise noted in the footnotes below, the address for each of the individuals listed in the table above is c/o Argan, Inc., One Church Street, Suite 201, Rockville, Maryland 20850. |

  21. Summary of Our Executive Compensation Principles and Objectives

    Overall levels of executive compensation are established based on an assessment of our performance as a whole. Individual executive compensation is determined based on an assessment of the experience and performance of each NEO, as well as the compensation levels of comparable positions in our peer group and general market practices. Variation in compensation among the NEOs reflects the different roles, responsibilities, and performance of the NEOs, as compared to similar positions in the peer group with which we compete for talent. The holding company NEOs perform substantially different functions from operating subsidiary NEOs, and are thus compensated with relatively lower base salaries and generally receive a meaningful mix of stock-based compensation.

  22. BALANCE SHEET DATA

    | ($s in millions) | January 31, 2024 | January 31, 2023 | | Cash, cash equivalents and short-term investments | $412 | $325 | | Net liquidity(1) | $245 | $236 | | Debt | Nil | Nil | | Stockholders' equity | $291 | $281 | | Shares outstanding | 13,243,000 | 13,442,000 |

  23. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

    Like last year, this comparison of the price performance of our Common Stock over the last five years versus the performance of the S&P 500 and the performance of the heavy construction company index is not favorable on an overall basis. However, our share price performance has been stronger over the last two years, and we are encouraged by the positive trend of our share price which has outperformed the S&P 500 since January 31, 2022, providing a return of 26% as compared to the S&P 500 share price return of 11% over the same period. Furthermore, we note that since January 31, 2024, the price of our stock has increased by approximately 40% through April 26, 2024 as compared to the S&P 500, which has increased by approximately 5% over the same period. The following table presents our annualized one-year, three-year and five-year total stockholder returns, or “TSR” (defined as total stock market value appreciation plus dividends paid for the relevant period), and the comparable average TSR percentages for a group of peer companies. The peer group consists of 12 publicly traded companies selected by us and identified below in the “Competitive Market Positioning” section of this Proxy Statement. The table also presents the ranking of our performance compared to the peer group for each TSR period.

  24. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

    | | Total Stockholder Return: Argan v. Peer Group(1) | | | | TSR | Argan | Peer Group Average | Peer Group Percentile Rank | | 1-year TSR | 61.5% | 111.1% | 33% | | 3-year TSR | 10.1% | 26.7% | 33% | | 5-year TSR | 8.5% | 23.8% | 50% |

  25. Fiscal 2024 Compensation Deliberations

    Fiscal 2024 Compensation Deliberations This section of the discussion and analysis of our executive compensation covers Fiscal 2024 compensation deliberations and associated compensation decisions made by the Compensation Committee. Pay for Holding Company Named Executives Is "At Risk” and Aligned with Performance. The compensation program for holding company executives, our CEO and CFO, is designed to maintain a strong link between pay and performance. "At risk” compensation for these executives includes discretionary annual cash bonuses and long-term equity incentive awards (stock options and restricted stock units) through which the performance of each of the individual officers is rewarded. It is important to differentiate between the NEOs who are officers of Argan, a holding company, and the NEO who is the Chief Executive Officer of Gemma, our principal operating company. Our CEO, Mr. Watson, and our CFO, Mr. Deily (together, the “Holding Company NEOs”), are employees of the holding company and are responsible for the following important activities:

  26. Fiscal 2024 Compensation Deliberations

    | | BASE SALARY | Provides a fixed amount of cash compensation for completing day-to-day responsibilities. The Compensation Committee reviews the base salary of each officer annually and periodically approves increases based on competitive reviews of peer group compensation amounts, general market practices and the particular officer’s level of responsibility, experience and individual performance. | | SHORT-TERM INCENTITIVE | | | | | ANNUAL CASH BONUS COMPENSATION | Provides discretionary annual cash bonus awards for successful short-term financial performance and other achievements that are aligned with our business strategy. | | | LONG-TERM EQUITY-BASED INCENTIVE COMPENSATION | Provides executives with stock option and certain restricted stock unit awards that represent opportunities for them to participate in, and be rewarded for, the growth in the value of the Company’s Common Stock. Awards may also facilitate executive stock ownership. Both stock options and restricted stock units vest based on the satisfaction of service requirements. The stock options expire on the ten-year anniversary of the award date. | | LONG-TERM INCENTITIVE | | | | | PERFORMANCE-BASED, LONG-TERM, EQUITY- BASED INCENTIVE COMPENSATION | Provides performance-based components to our equity-based long-term incentive award program. Certain performance-based restricted stock units vest over a three-year period based our total shareholder returns relative to our peer group. Other performance-based awards vest based on the growth of our diluted EPS over a three-year measurement period. |

  27. Fiscal 2024 Compensation Deliberations

    We believe that the deferred compensation plan, as amended during Fiscal 2022, which covers a targeted set of managers and other key employees at Gemma, augmented by the award of TRSUs covering 12,250 shares, 15,500 shares and 15,500 shares of our Common Stock in April 2024, April 2023 and September 2021, respectively, encourage long-term retention of employees who are significant contributors to the operational excellence of Gemma and its contributions to the success of the Company. In order to enhance our ability to retain the experienced staff and managers who are leading the growth of our industrial construction services segment, we have introduced a deferred compensation plan to match similar plans established elsewhere in our Company. Additionally, in April 2024, 2023 and 2022, we made targeted investments in our other leadership teams by awarding TRSUs covering 11,500, 13,300 and 15,000 shares of our Common Stock, respectively. We believe that our efforts to retain the core groups of management and other key employees at Gemma and our other operating companies were effective during Fiscal 2024, as we believe that turnover of management and key employees continues to be low relative to industry standards. Compensation for Mr. Collins. As the CEO of Gemma, Mr. Collins has had the specific responsibility for the leadership and management of our largest subsidiary, Gemma, and its ongoing operations and financial performance. The Compensation Committee reviewed the incentive compensation calculation for Mr. Collins, and confirmed that it was determined pursuant to the terms of the employment agreement which was entered into on November 15, 2019. The employment agreement has four performance-based criteria for each fiscal year: (1) Gemma’s achievement of certain levels of adjusted EBITDA, (2) Gemma’s achievement of certain levels of adjusted EBITDA, expressed as a percent of corresponding revenues, (3) Gemma’s meeting certain safety targets, and (4) the amount of increase in the active contract backlog of Gemma. For the first criterion, if the adjusted EBITDA, expressed as a percentage of revenues, of Gemma (as defined in the employment agreement) for any fiscal year equals or exceeds $30 million, Mr. Collins shall be entitled to receive a cash payment in an amount between 1% and 2% of the adjusted EBITDA of Gemma based on a sliding scale. For Fiscal 2024, the adjusted EBITDA of Gemma, as defined, was $44.1 million. For the second criterion, if the adjusted EBITDA, expressed as a percent of revenues of Gemma, for any fiscal year equals or exceeds ten percent (10%), Mr. Collins shall be entitled to a payment in an amount between 0.2% and 1% of adjusted EBITDA of Gemma based on a sliding scale. For Fiscal 2024, the adjusted EBITDA, expressed as a percent of the revenues of Gemma, as defined, was 16.4%. For the third criterion, if the project safety performance on Gemma’s projects, as measured by the OSHA Recordable Incident Rate ("RIR”), for any calendar year during Mr. Collins’ employment term is between 0.0 and 1.5, he shall be entitled to receive a performance-based compensation payment of up to $200,000 based on a sliding scale. If the RIR for any calendar year during his employment term is greater than 1.5, the overall performance-based compensation shall be reduced based on a sliding scale. Because Gemma’s RIR was less than 0.50 for calendar year 2023, Mr. Collins earned $200,000 for Fiscal 2024. For the fourth criteria, if the change from the beginning of the fiscal year to the end in the amount of remaining unsatisfied performance obligations plus revenues of Gemma during the year ("change in active contract work”) exceeds zero, Mr. Collins shall be entitled to performance-based compensation equal to 0.05% of the change in active contract work, subject to a maximum of $250,000. For Fiscal 2024, the change in active contract work increased by approximately $315 million. The total amount of performance-based cash compensation for any fiscal year earned by Mr. Collins as a result of Gemma’s attainment of one or more of the performance goals described above may not exceed a total amount of $2,500,000. Mr. Collins earned non-equity incentive plan cash compensation in the amount of $1,150,000 for Fiscal 2024 pursuant to the terms of his employment agreement. In addition, based on his considerable efforts to support APC on certain projects, business development efforts, and overall leadership actions, Mr. Collins was awarded a discretionary cash bonus of $350,000 during Fiscal 2024. The nonqualified deferred compensation plan for key employees of Gemma was approved by our Board on April 6, 2017 (see Exhibit 10.7 to our Annual Report on Form 10-K for the year ended January 31, 2017 that was filed with the SEC on April 11, 2017) with the objective of keeping the management team of Gemma in place for the long term. The unfunded, cash-based plan, as amended, now has four-to-six-year vesting periods with a continuous employment requirement (see Exhibit 10.12 to our Quarterly Report on Form 10-Q for the three-month period ended October 31, 2020 that was filed with the SEC on December 9, 2020). Based on the performance of certain key employees of Gemma for the year just ended, a dollar amount may be contributed to the deferred compensation plan, as amended, for each such employee. Of each annually awarded amount, 50% vests on the fourth anniversary of the date of award and 25% vests on each of the fifth and sixth anniversary dates. Except in the event of disability or death, vesting is dependent on continuous employment with Gemma up to the applicable vesting date. Mr. Collins participates in the plan, with a deferred compensation balances at January 31, 2024 of $300,000 that was established in prior years. Mr. Collins received a distribution of $150,000 during Fiscal 2024, and he did not earn deferred compensation related to Fiscal 2024. IRC Section 409A regulates the income tax treatment of most forms of nonqualified deferred compensation. We believe we are in compliance with IRC Section 409A and the regulations promulgated thereunder. Compensation Decisions. As a result of the recent deliberations of the Compensation Committee and based on the factors outlined above, on April 11, 2024, the Compensation Committee recommended that the following awards be made, which were subsequently ratified or approved by the independent members of the Board:

  28. Fiscal 2024 Compensation Deliberations

    | | Approved the payment of annual cash bonuses to Mr. Watson, Mr. Deily and Mr. Collins in the amounts of $575,000, $300,000 and $350,000, respectively, related to performance during Fiscal 2024. | | | Approved the payment of non-equity incentive plan compensation to Mr. Collins in the amount of $1,150,000 related to achievements during Fiscal 2024. | | | Approved the award of non-qualified stock options, PRSUs, EPRSUs and TRSUs to Mr. Watson covering 3,000 shares, 4,000 target shares, 8,000 target shares and 10,000 shares of Common Stock, respectively. | | | Approved the award of non-qualified stock options, PRSUs, EPRSUs, RRSUs and TRSUs to Mr. Collins covering 1,500 shares, 1,000 target shares, 2,000 target shares, up to 5,000 shares and 4,000 shares of Common Stock, respectively. |

  29. Fiscal 2024 Compensation Deliberations

    The stock-based awards identified above were made to Messrs. Watson and Collins in April 2024. Accordingly, the values of these awards will be included in the "Summary Compensation Table” in the amounts of compensation to be reported for the fiscal year ending January 31, 2025. The fair value amounts of the stock options and restricted stock units awarded to NEOs during the fiscal years ended January 31, 2024, 2023 and 2022 are set forth in the “Summary Compensation Table” that is presented below. Additional information regarding stock options and restricted stock units awarded to NEOs during Fiscal 2024 is presented in the “Grants of Plan-Based Awards Tables” section of this Proxy Statement that is included below. For Fiscal 2024, over 67% and 47% of all cash and equity incentive compensation, respectively, was "At Risk” for our NEOs. As discussed above, the decisions of the Compensation Committee were based on recommendations received from our CEO, the Compensation Committee’s own evaluations of each executive’s performance, the overall achievements accomplished by Gemma and the Company during Fiscal 2024 and our overall executive compensation strategy. The Compensation Committee approved the cash bonus and non-equity incentive compensation payments described above and made its recommendations for stock option and restricted stock unit awards to the Board of Directors for approval. These recommendations were approved by the independent directors of the Board of Directors in April 2024.

  30. Competitive Market Positioning

    Competitive Market Positioning Although the Compensation Committee has the authority under its charter to hire outside advisors to provide it with information as needed in making compensation decisions, it has not used the services of any external advisor in connection with the exercise of its responsibilities or completion of any of its initiatives. In view of the holding company structure and special factors relating to our business, the Compensation Committee believes that the engagement of a compensation consultant would not provide significant information beyond that which is already available to us at this time. The Compensation Committee seeks to achieve executive compensation that is aligned with the program’s pay-for-performance principles and is competitive with compensation provided by a peer group of selected publicly traded companies. In determining executive compensation, the Compensation Committee considers a number of factors and data from a market-relevant group of peer companies that are potential competitors for executive talent and each NEO’s performance and experience. The Compensation Committee periodically reviews the composition of each annual peer group and updates it based on available market information when appropriate. For Fiscal 2024, the peer group consisted of the following 12 companies from the specialty construction and engineering services industry (the “2024 Peer Group”).

  31. Competitive Market Positioning

    | | 2024 PEER GROUP | | | | Expro Group Holdings N.V. | | Limbach Holdings, Inc. | Primoris Services Corporation | | Granite Construction Incorporated | | Matrix Service Company | Orion Marine Group, Inc. | | Gulf Island Fabrication, Inc. | | MYR Group Inc. | Sterling Construction Company, Inc. | | Integrated Electrical Services Corporation | | Newpark Resources, Inc. | Team, Inc. |

  32. Competitive Market Positioning

    We do not view benchmarking as a stand-alone tool for setting compensation due to the aspects of our business and objectives that may be unique to us, but we believe that gathering and reviewing this information should be a part of our compensation-related decision-making process. In exercising its collective judgment in the assessment of executive pay, the Compensation Committee uses benchmarking as one consideration. We do not target executive compensation at any specific percentile or ranking within a peer group.

  33. Our Executive Compensation Program

    | EXECUTIVE COMPENSATION | | ● Performance-based cash and equity compensation. ● Multiple performance metrics for incentive-based compensation. ● Three-year vesting periods for equity compensation. ● No income tax gross-ups on stock-based compensation. ● Stock ownership guidelines for NEOs and directors. ● Clawback policy for executive gross negligence, misconduct, fraud, or financial restatement. ● Anti-pledging and anti-hedging policies. ● No single-trigger change-in-control provisions. ● All directors on Compensation Committee are independent. |

  34. Our Executive Compensation Program

    Based on the feedback we received during our outreach efforts over the years, the Compensation Committee took action. We have enhanced the disclosures included in our proxy statements by providing discussion of our executive compensation program with greater clarity while attempting to identify for stockholders the specific factors that influence the annual decisions of the Compensation Committee on executive compensation. We changed our standard stock option vesting period to three years from the one-year period used historically. The longer vesting period has been included in all stock option awards since January 2018. The Compensation Committee also reduced the number of shares of our Common Stock covered by annual stock option awards typically made to our CEO and CFO. The lower stock option awards are now complemented with the awards of restricted stock units which are intended to introduce a stronger performance-based equity component to our long-term incentive awards. PRSUs have typically been awarded to our CEO and CFO annually, usually each April, since 2018. These awards vest over three-year periods based on our total stockholder return relative to the return of each award’s designated peer group of companies. We believe that this type of incentive award is more consistent with market practice. We also believe that the measurement of total stockholder return is an appropriate performance metric as the Holding Company NEOs are considered to have greater direct influence on these results. The investors expressed support for our use of restricted stock units as an element of our executive compensation program and the use of this metric-scheme specifically. Additionally, in April 2021, we further reduced the number of shares covered by stock option awards and added TRSUs as a component of the overall executive compensation program. Most recently, in April 2023, we added EPRSUs to augment the overall executive compensation program, again reducing the number of stock option shares. EPRSU awards focus on the growth of the Company’s diluted EPS, a metric that we believe is a meaningful measurement of value provided to stockholders. These changes were made, in part, to address the negative impacts of stock options on dividend distributions, to encourage increased holdings of our stock, and to retain talent over the long-term.

  35. Cash and Long-Term Equity Awards

    Cash and Long-Term Equity Awards Cash Bonus Payments. The amounts of annual cash bonuses awarded to our holding company employees have typically been modest and have varied within a fairly narrow range. However, after considering the concerns of one institutional investor, the Compensation Committee adopted a policy that caps the annual cash incentive awards for the CEO and CFO to the equivalent of 200% of the amount of base salary. We believe that this policy mitigates the risk of excessive windfall awards, while not limiting our ability to adequately reward them for their performance. The employment agreements for Messrs. Watson and Deily provide for annual target bonus payments of 100% and 75% of base salary, respectively, subject to the satisfaction of reasonable performance criteria as established each year at the discretion of the Board of Directors. After reviewing the recommendations of the CEO, the Fiscal 2024 financial performance of the Company as a whole, the increase in revenues and EBITDA, the sustained levels of a diverse project backlog, the strong safety record, the successful tax savings, applicable employee contract performance calculations and the individual performances of Messrs. Watson, Deily and Collins, the Compensation Committee approved an aggregate amount of $1,225,000 in annual cash bonus awards for Fiscal 2024. The amounts of the cash bonus awards earned by each NEO for the fiscal years ended January 31, 2024, 2023 and 2022 are set forth in the “Bonus” column of the “Summary Compensation Table” presented below. The amount of the cash award determined pursuant to the non-equity incentive compensation plan included in the employment agreement of the CEO of Gemma in the amount of $1,150,000 is presented in the corresponding column of the “Summary Compensation Table.” The cash awards related to Fiscal 2024 performance were paid to executives in April 2024. Non-Qualified Stock Options. In April 2024, the Compensation Committee recommended the award of non-qualified stock options to purchase 3,000 shares of our Common Stock to Mr. Watson, having a grant date fair value of approximately $41,670. Additionally, Mr. Collins was awarded non-qualified stock options to purchase 1,500 shares of Common Stock, having a grant date fair value of approximately $20,835. The fair values were determined based on the Black-Scholes valuation model, and an option exercise price equal to the price of the underlying Common Stock on the date of award ($61.22 per share). In April 2023 and 2022, the independent members of the Board awarded to Mr. Watson options to purchase 5,000 shares and 10,000 shares of our Common Stock, respectively. In April 2023 and 2022, the independent members of the Board awarded to Mr. Collins options to purchase 2,500 shares and 5,000 shares of our Common Stock, respectively. In April 2023, the independent members of the Board awarded to Mr. Deily options to purchase 2,500 shares of our Common Stock. The vesting for each stock option occurs ratably over three years. These options will expire on the ten-year anniversary of the award date. Time-Based Restricted Stock Units. In April 2024, the Compensation Committee recommended the award of TRSUs to Mr. Watson covering 10,000 shares of Common Stock, having an award date fair value of approximately $612,200. Additionally, Mr. Collins was awarded TRSUs covering 4,000 shares of Common Stock, having an award date fair value of approximately $244,880. In April 2023 and 2022, the independent members of the Board approved the awards of TRSUs covering 12,000 shares and 10,000 shares, respectively, to Mr. Watson. In April 2023 and 2022, the independent members of the Board approved the awards of TRSUs covering 5,000 shares and 10,000 shares, respectively, to Mr. Collins. In September 2022, when Mr. Deily was promoted to the position of CFO, he was awarded TRSUs covering 12,500 shares. The vesting for these TRSUs occurs ratably over three years. Performance-Based Restricted Stock Units. In April 2024, the Compensation Committee recommended the award of PRSUs with the targeted number of shares available for issuance equal to 4,000 shares of Common Stock to Mr. Watson, having an award date fair value of $216,625. Additionally, Mr. Collins was awarded PRSUs with the targeted number of shares available for issuance equal to 1,000 shares of Common Stock, having an award date fair value of $54,156. In April 2023 and 2022, the independent members of the Board awarded to Mr. Watson PRSUs with the targeted number of shares available for issuance equal to 5,000 shares and 10,000 shares of our Common Stock, respectively. In September 2022, when Mr. Deily was promoted to the position of CFO, he was awarded PRSUs with the number of issuable shares targeted at 2,500 shares. Additionally, in April 2023, and April 2022, in part to continue to encourage Gemma’s collaboration with our three other subsidiaries, the independent members of the Board awarded PRSUs to Mr. Collins, with the targeted number of shares available for issuance equal to 1,000 shares of Common Stock for each award. Each PRSU award vests on the third anniversary of the award, with the number of issuable shares based on the price performance of our Common Stock compared to the price performance of the common stock of each award’s designated Peer Group. Depending on the price performance of our Common Stock compared with the respective year’s Peer Group, the numbers of shares of Common Stock (percentage of the target number of shares) that an awardee may earn over the three-year stock price performance period of the PRSUs, plus adjustments for cash dividends, are determined based on the stock-earning scale presented below:

  36. Cash and Long-Term Equity Awards

    | Rank | 13th | 12th | 11th | 10th | 9th | 8th | 7th | 6th | 5th | 4th | 3rd | 2nd | 1st | | Percentile | –% | 8.3% | 16.6% | 25.0% | 33.3% | 41.6% | 50.0% | 58.3% | 66.6% | 75.0% | 83.3% | 91.6% | 100.0% | | Payout | –% | –% | –% | –% | –% | –% | 100% | 100% | 150% | 200% | 200% | 200% | 200% |

  37. Cash and Long-Term Equity Awards

    EPS Performance-Based Restricted Stock Units. In April 2024, the Compensation Committee recommended the award of EPRSUs with the targeted number of shares available for issuance equal to 8,000 shares of Common Stock to Mr. Watson, having an award date fair value of $244,880. Additionally, Mr. Collins was awarded EPRSUs with the targeted number of shares available for issuance equal to 2,000 shares of Common Stock, having an award date fair value of $61,220. In April 2023, the independent members of the Board awarded EPRSUs to Messrs. Watson, Deily, and Collins with the targeted number of shares available for issuance equal to 10,000 shares, 2,500 shares and 2,500 shares of our Common Stock, respectively. The number of shares issuable pursuant to each EPRSU award will be determined on the three-year anniversary of award. The performance criteria for the EPRSUs awarded in April 2024 will be based on the sum of our diluted EPS for the fiscal years ending January 31, 2025, 2026 and 2027 compared to target compounded growth diluted EPS amounts. The number of shares of Common Stock (percent of the target number of shares) that an awardee may earn over the three-year measurement periods for the April 2024 and April 2023 EPRSUs, plus adjustments for cash dividends, are determined based on the diluted EPS compounded growth sliding scale presented below:

  38. Cash and Long-Term Equity Awards

    | 2024 EPRSU Award | | | | | | | | | | | Diluted EPS Compound Growth Rate | < 7.5% | 7.5% | 10.0% | 15.0% | 20.0% | 25.0% | 30.0% | 35.0% | > 40% | | Payout | –% | 25% | 50% | 75% | 100% | 125% | 150% | 175% | 200% | | 2023 EPRSU Award | | | | | | | | | | | Diluted EPS Compound Growth Rate | < 5.0% | 5.0% | 7.5% | 10.0% | 15.0% | 20.0% | 25.0% | > 30% | | | Payout | –% | 25% | 50% | 75% | 100% | 125% | 150% | 200% | |

  39. Cash and Long-Term Equity Awards

    Renewable Performance-Based Restricted Stock Units. In April 2021, in response to stockholder feedback and to incentivize Mr. Collins, the CEO of Gemma, to increase the number and value of renewable energy projects awarded to Gemma over the ensuing three years, we introduced RRSUs as a new component of his executive compensation package. Pursuant to the RRSU Awards, shares of Common Stock are earned based on Gemma’s success in increasing the amount of New Renewable Adjusted RUPO, as defined, during certain periods within the three-year term of the RRSU agreement. Renewable energy projects are defined as profitable projects awarded to Gemma related to solar, wind, hydrogen or other renewable-related technologies. The values of these latter two types of contract awards will receive multipliers of 200% and 150%, respectively. “RUPO” is defined as the value of the Remaining Unsatisfied Performance Obligations in contracts with customers, determined in accordance with accounting principles generally accepted in the U.S., which represents the amount of unrecognized revenues for active contracts with customers. In April 2024, the Compensation Committee recommended the award of RRSUs to Mr. Collins covering 5,000 shares of our Common Stock, having an award date fair value of approximately $122,440. In April 2023, the independent members of the Board awarded RRSUs to Mr. Collins covering 7,500 shares of our Common Stock, plus adjustments for cash dividends. The $100 million New Renewable Adjusted RUPO hurdle was achieved for Fiscal 2024, resulting in the issuance of 826 net settled shares of Common Stock, including a portion related to cash dividends, in April 2024. In April 2022, the independent members of the Board awarded RRSUs to Mr. Collins covering 7,500 shares of our Common Stock, plus adjustments for cash dividends. The actual amount of renewable energy project awards failed to reach the $150 million New Renewable Adjusted RUPO hurdle for Fiscal 2023, resulting in the forfeiture of RRSUs covering 1,500 shares of Common Stock. The $225 million New Renewable Adjusted RUPO hurdle was achieved for Fiscal 2024, resulting in the issuance of 848 net settled shares of Common Stock, including portions related to cash dividends, in April 2024. In April 2021, the independent members of the Board awarded RRSUs to Mr. Collins covering 5,000 shares of our Common Stock, plus adjustments for cash dividends. The actual value of renewable energy projects awarded to Gemma failed to reach any of the New Renewable Adjusted RUPO hurdles during the three-year measurement period ended March 31, 2024, resulting in the forfeiture of the RRSUs covering all 5,000 shares of Common Stock. The amounts of the annual New Renewable Adjusted RUPO hurdles are presented below. The reduced value of the hurdles beginning with the 2022 RRSU Award compared to the higher hurdle values applicable to the 2021 RRSU Award reflect an acknowledgement that the current market for utility-scale renewable projects that meet the requirements of Gemma is not yet robust.

  40. Cash and Long-Term Equity Awards

    | | 2024 RRSU Award | | 2023 RRSU Award | | 2022 RRSU Award | | 2021 RRSU Award | | | | RUPO | Payout | RUPO | Payout | RUPO | Payout | RUPO | Payout | | | Hurdle | Shares | Hurdle | Shares | Hurdle | Shares | Hurdle | Shares | | Year 1 | $100,000,000 | 1,000 | $100,000,000 | 1,500 | $150,000,000 | 1,500 | $325,000,000 | 1,000 | | Year 2 | 175,000,000 | 1,000 | 175,000,000 | 1,500 | 225,000,000 | 1,500 | 425,000,000 | 1,000 | | Year 3 | 250,000,000 | 1,000 | 250,000,000 | 1,500 | 300,000,000 | 1,500 | 550,000,000 | 1,000 | | Year 3 Cumulative | 525,000,000 | 2,000 | 525,000,000 | 3,000 | 675,000,000 | 3,000 | 1,300,000,000 | 2,000 |

  41. Changes Implemented by the Compensation Committee

    Included in the number of shares held by each NEO presented above are 25% of the target number of shares of Common Stock that may be issued to each officer pursuant to outstanding restricted stock units even though such shares are not considered beneficially owned for purposes of the “Principal Stockholders” table included herein. Until the applicable ownership requirement is achieved, each individual is required to retain shares of Common Stock with a total value of at least 50% of the intrinsic value, net of taxes, of any shares that he or she acquires under a Company stock plan. Excluding sales of shares related to taxes associated with the exercising of stock options or vesting of stock awards, no sales of existing stockholdings are permitted until the applicable required stock ownership quantity is attained. Once the applicable ownership requirement is attained, the individual may sell any shares that exceed the applicable minimum requirement. Each non-employee member of our Board of Directors shall own a minimum of 10,000 shares of our Common Stock, and most members of the Board have either exceeded the stock ownership threshold or are generally making satisfactory progress toward achieving the ownership requirement. In case where the ownership requirement has not been achieved, the individual has determined not to stand for re-election. Clawback Policy. In October 2023, as required by the NYSE and the SEC, the Company adopted a revised clawback policy covering incentive-based compensation. Under this policy, if the Company is required to restate its financial statements due to material noncompliance with any financial reporting requirement under federal securities laws and if incentive-based compensation was paid, awarded or issued due to an incorrect calculation of any related financial performance metric, the Board shall promptly require reimbursement to the Company of the erroneously awarded incentive-based compensation. No Pledging Policy. As an element of the new stock ownership guidelines, no officer or director of the Company may pledge, hypothecate, or create any lien or security interest on, or enter into a margin contract secured by, any shares, options to purchase shares, or any other interest in shares of our Common Stock. Anti-Hedging Policy. Our Board also approved an anti-hedging policy which prohibits all of our directors, employees, and agents from (i) speculative trading in our securities; (ii) engaging in hedging transactions using our securities; (iii) “short selling” our securities; or (iv) trading derivative securities, such as put options, call options, swaps, or collars related to our Common Stock.

  42. Major Elements of Executive Compensation and Analysis of Compensation Decisions

    Major Elements of Executive Compensation and Analysis of Compensation Decisions Annually, the Compensation Committee considers each of the elements of executive compensation that are discussed below, individually and in the aggregate, when making decisions regarding the ratification and/or approval of compensation amounts for each NEO. The Compensation Committee has reviewed the structure of the Company’s executive compensation program for imprudent risks and it has discussed the findings of this risk assessment with management. The members of the Compensation Committee believe that our executive compensation program does not motivate employees to take risks that are reasonably likely to have a material adverse effect on us. Annual Base Salaries. Each NEO is paid an annual base salary which amount reflects the value of the executive’s skills to the Company, experience with the Company and prior, the record of achievement, expectations of future accomplishments and other factors considered important to the Company. Base salary levels are established in order to attract quality executives, to provide a fixed base of cash compensation, and to recognize the challenges and varied skill requirements of different positions. Base salaries are reviewed annually and from time to time in connection with a promotion or other change in responsibilities. In making individual salary recommendations to the Compensation Committee, our CEO evaluates the performance of the other NEOs, reviews market compensation levels for comparable positions, and considers the particular executive’s potential attractiveness to other companies while mindful of the overall financial health and performance of the Company. The Compensation Committee reviews the salary recommendations of the CEO and, together with impressions formed based on the observations of the members, approves base salaries for NEOs. The Compensation Committee sets the base salary for the CEO. In so doing, the Compensation Committee members annually review the performance of the CEO and other relevant information. The base salary amounts paid to each NEO for the fiscal years ended January 31, 2024, 2023 and 2022 are set forth in the “Salary” column of the “Summary Compensation Table” presented below. Annual Cash Bonuses. The Compensation Committee may award cash bonus payments to NEOs in order to recognize and to reward individual performance that has meaningfully enhanced the operations and financial results of the Company during the most recently completed fiscal year. Awards are intended to convey to executives that good performance is recognized and valued by the Board. Furthermore, we believe that annual cash bonus awards strongly encourage executives to continue to improve their efforts in delivering annual results that are aligned with our long-term goals. At the conclusion of each fiscal year, the CEO submits recommended annual cash bonus award amounts for each of the other NEOs to the Compensation Committee for consideration, modification at their discretion, and, ultimately, for approval. Long-Term Equity-Based Compensation. NEOs are eligible to receive long-term equity-based compensation awards under our 2020 Stock Plan. The long-term equity-based compensation awarded to executives is largely a combination of PRSUs, EPRSUs, RRSUs and TRSUs. Over the past several years, we have reduced the number of shares of Common Stock covered by new non-qualified stock option awards. The Compensation Committee members believe that the current combinations of these types of long-term equity-based awards respond to the objectives of our executive compensation program which encourage the accomplishment of the following:

  43. Major Elements of Executive Compensation and Analysis of Compensation Decisions

    | ● | Link incentive compensation to the Company’s long-term performance; |

  44. Major Elements of Executive Compensation and Analysis of Compensation Decisions

    | ● | Create long-term stockholder value; |

  45. Major Elements of Executive Compensation and Analysis of Compensation Decisions

    | ● | Reward actions that enhance long-term stockholder returns. |

  46. Major Elements of Executive Compensation and Analysis of Compensation Decisions

    The vesting related to the PRSU awards depends on the price performance of our Common Stock measured against the price performance of a designated peer group of common stocks over a three-year period. The vesting related to EPRSUs depends on the growth of the Company’s diluted EPS over a three-year period. We believe these types of measurements utilize appropriate performance metrics that incentivize actions that create value for stockholders. The vesting period for TRSUs is three years. We believe that TRSU awards encourage increased holdings of our stock by our executives and help to retain talent over the long-term. Additionally, the Company began to award RRSUs in response to stockholder feedback and to incentivize the CEO of Gemma to add new business that grows the number and value of renewable energy projects awarded to Gemma. The award of options to purchase shares of our Common Stock have become a less significant portion of our executive composition program over recent years. As noted previously, awards of stock options that are made include the elongated three-year vesting period that the Compensation Committee adopted as Company policy in January 2018. Stock options are typically used as incentives to align the priorities of NEOs with those of our stockholders because stock options provide value to holders only when our stock price increases from the date of grant to the date of exercise. In addition, except with respect to certain terminations following a change in control of the Company, the continued employment of a stock option holder is required for the vesting of each stock option to occur. Thus, the potential realization of the value of outstanding but unvested stock options meaningfully encourages executives to remain with the Company, as leaving the Company results in the forfeiture of the value and potential gain associated with any unvested stock option awards.

  47. Severance and Change in Control Benefits

    Severance and Change in Control Benefits In the event of a change in control, Mr. Watson and Mr. Deily are entitled to receive benefits based on each executive’s individual agreement negotiated with the Company. Also, in the event of employment termination, Messrs. Watson, Deily and Collins may be paid severance benefits in certain circumstances pursuant to each executive’s individual agreement negotiated with the Company. The estimated severance benefits that would be payable to each executive under the respective arrangements upon the occurrence of certain events are set forth in the chart that is included in the section “Potential Payments upon Termination” below. Providing severance and change in control benefits assists the Company in attracting and retaining executive talent. Additional details regarding the severance and change in control provisions of the employment agreement for each current NEO are also provided below in the “Summary of Employment Arrangements” section of this Proxy Statement. Each of our stock plans and the corresponding written agreements with the executives describe the effects on outstanding stock options and other stock awards of the termination of a holder’s employment with the Company under various circumstances, including the provision that all outstanding stock options and other stock awards shall generally become fully vested upon a change in control of the Company, as defined in the applicable stock plan documents.

  48. Tax Deductibility of Compensation

    Tax Deductibility of Compensation The Tax Cuts and Jobs Act, signed into law in December 2017, established additional limitation on the deduction for certain executive compensation under Section 162(m). For tax years beginning after December 31, 2017 (i.e., our Fiscal 2019), the exception for performance-based compensation was eliminated and covered employees (those subject to the deduction limitation) now include the chief financial officer. Further, once an employee qualifies as a covered employee, the limitation applies to that person as long as a company pays that person compensation (even if the employee retired or severed). As such, for Fiscal 2024, we cannot deduct compensation in excess of $1,000,000 for Mr. Collins and Mr. Griffin. The compensation amounts for the other NEOs unrelated to the exercise of non-qualified stock options and the vesting of restricted stock units generally have not exceeded the $1,000,000 excess compensation threshold.

  49. Summary of Our Executive Compensation Principles and Objectives

    | WHAT WE DO | WHAT WE DON’T DO | | Retain and motivate highly-performing executives who drive our business operations and financial performance. Support our Company's business strategies and achievement of short-term and long-term goals by encouraging profitable growth and increased stockholder value. Align interests of the NEOs with long-term interests of our stockholders. Promote Common Stock ownership of the Company. Maintain a policy that governs the required clawback of incentive-based compensation. | Encourage excessive risk-taking. Provide excessive perquisites. Permit hedging or pledging of the Company’s stock. Award restricted stock units that provide nonforfeitable dividend equivalents or permit the payment of dividend equivalents prior to the vesting date. |

  50. Summary of Our Executive Compensation Principles and Objectives

    Overall levels of executive compensation are established based, in part, on an assessment of our performance as a whole. Individual executive compensation is determined based on an assessment of the experience and performance of each NEO, as well as the compensation levels of comparable positions in our peer group and general market practices. Variation in compensation among the NEOs reflects the different roles, responsibilities, and performance of the NEOs, as compared to like positions in the peer group with which we compete for talent. As noted previously, the Holding Company NEOs perform substantially different functions from operating subsidiary NEOs, and are thus compensated with relatively lower base salaries and generally receive a greater mix of stock-based compensation.

  51. Summary Compensation Table

    Summary Compensation Table For Fiscal 2024, we are reporting compensation for three NEOs identified below, who include the Company’s CEO and CFO and the Chief Executive Officer of Gemma. The following table sets forth the total amount of compensation paid to or earned by these NEOs for the fiscal years ended January 31, 2024, 2023 and 2022.

  52. Summary Compensation Table

    | | Fiscal | | | | Stock | Non-equity | | | | | Year Ended | Salary | Bonus | Stock | Option | Incentive Plan | All Other | Total | | | January 31, | Earned | Earned | Awards(1) | Awards(1) | Compensation(2) | Compensation(3) | Compensation | | David H. Watson(4) | 2024 | $400,000 | $575,000 | $845,569 | $40,600 | $– | $6,012 | $1,867,181 | | President and Chief | 2023 | 305,444 | 330,000 | 693,162 | 66,800 | – | 3,038 | 1,398,444 | | Executive Officer | 2022 | 222,917 | 250,000 | 1,029,000 | 111,200 | – | 2,812 | 1,615,929 | | Richard H. Deily(4) | 2024 | $300,000 | $300,000 | $49,338 | $20,300 | $– | $5,281 | $674,919 | | Senior Vice President, Chief Financial Officer, Treasurer and | 2023 | 251,371 | 185,000 | 634,366 | 23,380 | – | 2,720 | 1,096,837 | | Corporate Secretary | | | | | | | | | | Charles E. Collins IV | 2024 | $481,410 | $350,000 | $400,013 | $20,300 | $1,150,000 | $46,000 | $2,447,723 | | Chief Executive Officer, Gemma | 2023 | 400,000 | 250,000 | 538,261 | 33,400 | 1,400,000 | 59,071 | 2,680,732 | | | 2022 | 333,689 | – | 457,800 | – | 816,000 | 41,200 | 1,648,689 |

  53. Summary Compensation Table

    | (1) Amounts represent the aggregate award-date fair values computed for financial reporting purposes reflecting the assumptions discussed in the section “Share-Based Payments” of Note 1 – Description of the Business and Basis of Presentation and in Note 11 – Stock-Based Compensation of our consolidated financial statements that are included in Item 8 of our Annual Report on Form 10-K for the year ended January 31, 2024. |

  54. Summary Compensation Table

    | (2) Amounts represent cash earned by Mr. Collins determined pursuant to the incentive compensation terms of his employment agreement. |

  55. Summary Compensation Table

    | (3) Amounts represent matching and profit-sharing contributions made pursuant to the applicable Company’s 401(k) plan, term life insurance premiums and car allowance payments made to Mr. Collins. |

  56. Summary Compensation Table

    | (4) On August 16, 2022, Mr. Watson was appointed CEO and Mr. Deily was appointed CFO. Prior to being appointed CEO in Fiscal 2023 and for Fiscal 2022, Mr. Watson served as Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary. |

  57. Executive Officers Who Are Not Directors

    Executive Officers Who Are Not Directors Mr. Deily, age 70, was appointed as our Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary, effective August 16, 2022. Prior to the appointment, Mr. Deily served as the Company’s Corporate Controller since October 2007 and Vice President since January 2015. Mr. Deily has over 40 years of continuous senior financial management experience with publicly traded companies in various industries including construction, commercial software, telecommunications, government contracting and electronics manufacturing. Past positions held by Mr. Deily at other companies included Chief Accounting Officer as well as Chief Financial Officer. Mr. Deily began his career as a certified public accountant and financial auditor with Arthur Andersen & Co. Mr. Collins, age 47, was promoted to the position of Chief Executive Officer of Gemma in November 2021. He had served as Co-President of Gemma since August 2018. Additionally, he served as Director of Projects at Gemma from July 2018 to July 2019. Prior to July 2018, Mr. Collins served as a Gemma Project Manager. Mr. Collins is a certified Project Management Professional and holds several state contracting licenses for Gemma.

  58. Potential Payments upon Termination

    Potential Payments upon Termination The terms of the employment agreements with our NEOs provide that we pay certain severance benefits in the event that one of them is terminated by us other than for “cause” as that term is defined in each applicable agreement. The following table presents amounts payable to the executives considered NEOs for Fiscal 2024 based on the assumption that the executives are terminated without cause on January 31, 2024. The section entitled “Summary of Employment Arrangements” above includes descriptions of the payments which shall be made to Mr. Watson and Mr. Deily upon a change in control.

  59. Potential Payments upon Termination

    | | Base | Cash Incentive | Health Care | | | Executive Officer | Salary | Payments | Benefits/Other | Totals | | David H. Watson | 400,000(1) | 575,000(2) | 26,623(1) | 1,001,623 | | Richard H. Deily | 150,000(3) | 300,000(2) | 14,322(3) | 464,322 | | Charles E. Collins IV | 500,000(1) | 1,500,000(4) | 53,178(1) | 2,053,178 |

  60. Potential Payments upon Termination

    | (1) Amounts represent the continuation of salary and benefits payments, respectively, for twelve months. |

  61. Potential Payments upon Termination

    | (2) Amounts represents the cash bonus amounts awarded for Fiscal 2024 but paid after January 31, 2024. |

  62. Potential Payments upon Termination

    | (3) Amounts represent the continuation of salary and benefits payments, respectively, for six months. |

  63. Potential Payments upon Termination

    | (4) Amount represents the total of the non-equity incentive cash compensation earned and the cash bonus amount awarded for Fiscal 2024 but paid after January 31, 2024. |

  64. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following tables set forth certain information with respect to plan-based awards made to the NEOs (identified in the “Summary Compensation Table” above) during Fiscal 2024. The awards presented in the table immediately below represent restricted stock units and non-qualified stock options to purchase shares of our Common Stock (“NQSOs”) that were granted under our Argan, Inc. 2020 Stock Plan.

  65. Grants of Plan-Based Awards

    | | | | Estimated Future Payouts under | | | All Other | All Other | Exercise | Grant Date Fair | | | | | Equity Incentive Plan Awards(2) | | | Stock | Option | Price/ | Value of Stock and | | | | Grant | Threshold(3) | Target(4) | Maximum(5) | Awards | Awards | Share | Option Awards(6) | | Name | Award | Date(1) | (#) | (#) | (#) | (#) | (#) | ($) | ($) | | David H. Watson | EPRSU | 4/17/2023 | – | 10,000 | 20,000 | – | – | $– | $197,350 | | | PRSU | 4/17/2023 | – | 5,000 | 10,000 | – | – | – | 174,579 | | | TRSU | 4/17/2023 | – | – | – | 12,000 | – | – | 473,640 | | | NQSO | 4/17/2023 | – | – | – | – | 5,000 | 39.47 | 40,600 | | Richard H. Deily | EPRSU | 4/17/2023 | – | 2,500 | 5,000 | – | – | $– | $49,338 | | | NQSO | 4/17/2023 | – | – | – | – | 2,500 | 39.47 | 20,300 | | Charles E. Collins IV | EPRSU | 4/17/2023 | – | 2,500 | 5,000 | – | – | $– | $49,338 | | | PRSU | 4/17/2023 | – | 1,000 | 2,000 | – | – | – | 34,916 | | | RRSU | 4/17/2023 | – | 7,500 | 7,500 | – | – | – | 118,410 | | | TRSU | 4/17/2023 | – | – | – | 5,000 | – | – | 197,350 | | | NQSO | 4/17/2023 | – | – | – | – | 2,500 | 39.47 | 20,300 |

  66. Grants of Plan-Based Awards

    | (1) The grant date represents the date on which the independent members of the Board of Directors awarded the restricted stock units and stock options. |

  67. Grants of Plan-Based Awards

    | (2) These columns represent the threshold, target, and maximum shares for the performance-based restricted stock unit awards that were granted during Fiscal 2024. These include EPRSUs, PRSUs, and RRSUs, which are described in the “Executive Compensation Discussion and Analysis” section of this Proxy Statement. |

  68. Grants of Plan-Based Awards

    | (3) For the EPRSU awards, if the sum of our diluted EPS over the three-year performance period does not achieve 5% growth, the executive does not earn any shares of our Common Stock. For the PRSU awards, if our stock price performance over the three-year measurement period is not among the top seven of thirteen performers, the executive does not earn any shares of our Common Stock. For the RRSU awards, if RUPO hurdle amounts are not achieved for separate periods of time as defined in each award, the executive does not earn any shares of our Common Stock. |

  69. Grants of Plan-Based Awards

    | (4) For the EPRSU awards, the target number of shares of Common Stock, before adjustment for cash dividends, is earned by the executive if the sum of our diluted EPS over the three-year performance period grows by 15% - 20%. For the PRSU awards, the target number of shares of Common Stock, before adjustment for cash dividends, is earned by the executive if our stock performance ranks sixth or seventh among the thirteen peer companies (including us). For the RRSU awards, the target number of shares of Common Stock, before adjustment for cash dividends, that may be earned by the executive is based on the achievement of all the applicable RUPO hurdles. |

  70. Grants of Plan-Based Awards

    | (5) For the EPRSU awards, the maximum number of shares of Common Stock, before adjustment for cash dividends, is earned by the executive if the sum of our diluted EPS over the three-year performance period exceeds 30% growth. For the PRSU awards, the maximum number of shares of Common Stock, before adjustment for cash dividends, is earned by the executive if our stock performance ranks in the top four among the thirteen peer companies (including us). For the RRSU awards, the maximum number of shares of Common Stock, before adjustment for cash dividends, that may be earned by the executive is based on the achievement of all the applicable RUPO hurdles. |

  71. Grants of Plan-Based Awards

    | (6) Each amount represents the fair value of the corresponding restricted stock units and stock options on the date of grant as computed for financial reporting purposes reflecting the assumptions discussed in the “Share-Based Payments” section of Note 1 – Description of the Business and Basis of Presentation, and in Note 11 – Stock-Based Compensation of our consolidated financial statements, both of which are included in Item 8 of our Annual Report on Form 10-K for Fiscal 2024. |

  72. Stock Options Exercised and Stock Vested

    Stock Options Exercised and Stock Vested This table provides information on an aggregate basis about NQSOs that were exercised during Fiscal 2024 and shares of Common Stock, including additional shares related to cash dividends, that were earned and issued pursuant to restricted stock units during Fiscal 2024 for each of the NEOs.

  73. Stock Options Exercised and Stock Vested

    | | Option Awards | | Stock Awards | | | | Number of Shares | Value Realized | Number of Shares | Value Realized | | Name | Acquired on Exercise(1) | on Exercise | Acquired on Vesting(1)(2) | on Vesting | | David H. Watson | 32,000 | $434,240 | 6,929 | $271,494 | | Richard H. Deily | – | $– | 6,703 | $284,661 | | Charles E. Collins IV | – | $– | 5,177 | $203,253 |

  74. Stock Options Exercised and Stock Vested

    | (1) A portion of these shares reported were withheld by the Company to satisfy exercise price and/or tax withholding obligations. |

  75. Stock Options Exercised and Stock Vested

    | (2) The number of shares acquired on vesting presented in this table includes additional shares related to dividends. |

  76. Outstanding Equity Awards

    Outstanding Equity Awards The table set forth immediately below presents certain information relating to the EPRSUs held by the NEOs as of January 31, 2024.

  77. Outstanding Equity Awards

    | | Outstanding EPRSUs | | | | | Number of | Market | Market | | Name | Shares(1) | Price/Share(2) | Price(3) | | David H. Watson | 20,000 | $44.33 | $886,600 | | Richard H. Deily | 5,000 | $44.33 | $221,650 | | Charles E. Collins IV | 5,000 | $44.33 | $221,650 |

  78. Outstanding Equity Awards

    | (1) The number of shares presented in this table represents the maximum number of shares that could be earned over the corresponding three-year stock performance measurement period before adjustment for cash dividends. EPRSUs were awarded to Messrs. Watson, Deily and Collins on April 17, 2023. |

  79. Outstanding Equity Awards

    | (2) This price represents the closing per share price of our Common Stock on January 31, 2024, as reported by the NYSE. |

  80. Outstanding Equity Awards

    | (3) Each amount represents the market value of the maximum number of shares of our Common Stock as of January 31, 2024, that could be earned under the corresponding EPRSU award, before adjustment for cash dividends. |

  81. Outstanding Equity Awards

    The table set forth immediately below presents certain information relating to the PRSUs held by the NEOs as of January 31, 2024.

  82. Outstanding Equity Awards

    | | Outstanding PRSUs | | | | | Number of | Market | Market | | Name | Shares(1) | Price/Share(2) | Price(3) | | David H. Watson | 50,000 | $44.33 | $2,216,500 | | Richard H. Deily | 5,000 | $44.33 | $221,650 | | Charles E. Collins IV | 6,000 | $44.33 | $265,980 |

  83. Outstanding Equity Awards

    | (1) The number of shares presented in this table represents the maximum number of shares that could be earned over the corresponding three-year stock price performance measurement period before adjustment for cash dividends. PRSUs were awarded to Mr. Watson on April 16, 2021, April 18, 2022, and April 17, 2023; they were awarded to Mr. Deily on September 13, 2022; and they were awarded to Mr. Collins on April 16, 2021, April 18, 2022, and April 17, 2023. In April 2024, as a result of the increase in the price of our Common Stock not achieving the minimum performance requirement, 20,000 shares and 2,000 shares of Common Stock were forfeited by Mr. Watson and Mr. Collins, respectively. The shares Common Stock covered by the corresponding forfeited PRSUs had approximate market value amounts of $0.9 million and $0.1 million, respectively, as of January 31, 2024. |

  84. Outstanding Equity Awards

    | (2) This price represents the closing per share price of our Common Stock on January 31, 2024, as reported by the NYSE. |

  85. Outstanding Equity Awards

    | (3) Each amount represents the market value of the maximum number of shares of our Common Stock as of January 31, 2024, that could be earned under the corresponding PRSU award, before adjustment for cash dividends. |

  86. Outstanding Equity Awards

    The table set forth immediately below presents certain information relating to the RRSUs held by Mr. Collins as of January 31, 2024. None of the other NEOs have been awarded RRSUs.

  87. Outstanding Equity Awards

    | | Outstanding RRSUs | | | | | Number of | Market | Market | | Name | Shares(1) | Price/Share(2) | Price(3) | | Charles E. Collins IV | 16,500 | $44.33 | $731,445 |

  88. Outstanding Equity Awards

    | (1) The number of shares presented in this table represents the maximum remaining number of shares that could be earned over the corresponding three-year term, before adjustment for cash dividends and as adjusted for shares of Common Stock forfeited, if any, as of January 31, 2024, for the failure of renewable project bookings to meet certain defined RUPO hurdles. In April 2024, as a result of not meeting certain RUPO hurdles, RRSUs covering 3,000 shares of Common Stock were forfeited by Mr. Collins that had an approximate market value of $0.1 million as of January 31, 2024. |

  89. Outstanding Equity Awards

    | (2) This price represents the closing per share price of our Common Stock on January 31, 2024, as reported by the NYSE. |

  90. Outstanding Equity Awards

    | (3) Each amount represents the market value of the maximum number of shares of our Common Stock as of January 31, 2024 that could be earned under the RRSU award, before adjustment for cash dividends. |

  91. Outstanding Equity Awards

    Presented below is information relating to the TRSUs held by NEOs as of January 31, 2024.

  92. Outstanding Equity Awards

    | | Outstanding TRSUs | | | | | Number of | Market | Market | | Name | Shares(1) | Price/Share(2) | Price(3) | | David H. Watson | 22,001 | $44.33 | $975,304 | | Richard H. Deily | 11,834 | $44.33 | $524,601 | | Charles E. Collins IV | 13,334 | $44.33 | $591,096 |

  93. Outstanding Equity Awards

    | (1) The number of shares presented in this table represents the total number of shares scheduled to vest, before adjustment for cash dividends, over a three-year period. The TRSUs were awarded to each NEO, on April 18, 2022 and April 16, 2021, and to Mr. Watson and Mr. Collins on April 17, 2023. TRSUs were awarded to Mr. Deily on September 13, 2022. |

  94. Outstanding Equity Awards

    | (2) This price represents the closing per share price of our Common Stock on January 31, 2024, as reported by the NYSE. |

  95. Outstanding Equity Awards

    | (3) Each amount represents the market value of the total number of shares of our Common Stock as of January 31, 2024 that are scheduled to vest over a three-year period, before adjustment for cash dividends. |

  96. Outstanding Equity Awards

    The table immediately below sets forth certain information concerning exercisable and unexercisable options to purchase shares of Common Stock that were held by our NEOs as of January 31, 2024.

  97. Outstanding Equity Awards

    | | Number of Securities Underlying | | | | | | Unexercised Stock Options | | Exercise | Expiration | | Name | Exercisable | Unexercisable | Price/Share | Date | | David H. Watson | 30,000(1) | – | $41.68 | 6/23/2026 | | | 40,000 | – | 64.25 | 4/6/2027 | | | 32,000 | – | 37.60 | 4/13/2028 | | | 32,000 | – | 50.30 | 4/12/2029 | | | 6,666 | 3,334 | 54.60 | 4/16/2031 | | | 3,333 | 6,667 | 36.78 | 4/18/2032 | | | – | 5,000 | 39.47 | 4/17/2033 | | Richard H. Deily | 10,000(1) | – | $33.85 | 4/13/2026 | | | 10,000 | – | 64.25 | 4/6/2027 | | | 10,000(1) | – | 37.60 | 4/13/2028 | | | 10,000 | – | 50.30 | 4/12/2029 | | | 10,000(1) | – | 33.81 | 4/16/2030 | | | 2,334 | 1,166 | 54.60 | 4/16/2031 | | | 1,167 | 2,333 | 36.78 | 4/18/2032 | | | – | 2,500 | 39.47 | 4/17/2033 | | Charles E. Collins IV | 5,000 | – | $46.35 | 1/11/2028 | | | 25,000 | – | 43.10 | 9/12/2028 | | | 10,000 | – | 42.31 | 9/10/2029 | | | 10,000 | – | 33.81 | 4/16/2030 | | | 1,667 | 3,333 | 36.78 | 4/18/2032 | | | – | 2,500 | 39.47 | 4/17/2033 |

  98. Outstanding Equity Awards

    | (1) In April 2024, all of these exercisable options were exercised. |

  99. Outstanding Equity Awards

    None of the stock options presented in the table above have been repriced or otherwise materially modified. The 2020 Stock Plan does not permit repricing nor does it allow the cancellation of existing stock options in connection with the award of new stock options.

  100. Non-Qualified Deferred Compensation Plan

    Non-Qualified Deferred Compensation Plan The nonqualified deferred compensation plan for key employees of Gemma was approved by the Board on April 6, 2017 with the objective of keeping the management team of Gemma in place for the long term. The unfunded, cash-based plan, as amended, has six or seven-year vesting periods. Based on the performance of each key employee, a dollar amount may be set aside each year for each key employee in the deferred compensation plan. Over 25 of Gemma’s key employees are participants in the plan. For awards made on or after January 31, 2021 and pursuant to an amendment to the plan, 50% of each annually awarded amount vests on the fourth anniversary of the date of award and 25% of the awarded amount will vest on the fifth and sixth anniversary dates, respectively. For awards made prior to January 1, 2021, 50% of each annually awarded amount vests on the fifth anniversary of the date of award and 25% of the awarded amount will vest on the sixth and seventh anniversary dates, respectively. Except in the events of disability or death, vesting is dependent on continuous employment with Gemma up to the applicable vesting date. The balances presented below for Mr. Collins relate to his participation in the plan prior to becoming a NEO. None of our other NEOs are participants in the plan.

  101. Non-Qualified Deferred Compensation Plan

    | | Executive | Registrant | Total | Withdrawals/ | Balance at | | Named Executive Officer | Contributions | Contributions | Compensation | Distributions | January 31, 2024(1) | | Charles E. Collins IV | $– | $– | $– | $150,000 | $300,000 |

  102. Non-Qualified Deferred Compensation Plan

    | (2) Amount in total was contributed prior to Fiscal 2020. |

  103. Pay Ratio Disclosure

    Pay Ratio Disclosure Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and Item 402(a) of Regulation S-K promulgated by the SEC thereunder requires us to disclose the median of the total compensation of all employees, excluding our CEO, and the ratio of the median of the annual total compensation of all employees to the annual total compensation of our CEO. The annual total compensation of the employee with the median amount of such compensation, among all of our employees who were employed as of December 31, 2023 (other than our CEO), was $80,627 for the period defined below. The annual total compensation for Mr. David Watson, our CEO, was $1,867,181 for Fiscal 2024 as presented in the “Summary Compensation Table” above. The ratio of the annual total compensation of our CEO to the annual total compensation of the employee with the median amount of such compensation was 23 to 1. The SEC’s rules for identifying the median-compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratio. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on the data included in our payroll and employment records and the methodology described herein. In order to identify the employee with the median amount of annual total compensation and as our consistently applied compensation measure, we identified the actual amount of fixed cash compensation paid to each employee from January 1, 2023 through December 31, 2023. We defined fixed cash compensation as any regular payment(s) (such as base salary), overtime pay and annual fixed allowance(s) that were guaranteed to the employee regardless of performance. For each employee who was hired during the defined period and did not work for the entire twelve-month period (and was not designated as a temporary employee in our payroll records, or was employed for 30 days or less), we estimated his/her twelve-month fixed cash compensation amount based (i) on the amount actually paid for the portion of the period that the individual was employed or (ii) on the planned salary amount for each employee who was on a leave of absence. The employee population used to identify the employee with the median amount of annual total compensation comprised approximately 819 individuals.

  104. Pay Versus Performance

    Pay Versus Performance We assessed our pay-versus-performance alignment pursuant to Item 402(v) of the SEC’s Regulation S-K for the four years ended January 31, 2024, and we have provided the table below, which presents total compensation for our NEOs, compensation actually paid to our NEOs, and certain performance metrics. In this table, total compensation presented for our NEOs is determined by two methods. First, each total compensation amount agrees with the amount presented above in the “Summary Compensation Table” (“SCT”) for the applicable year. Second, the amount of Compensation Actually Paid (“CAP”) is calculated pursuant to SEC rules and adjusts amounts presented in the SCT by year-over-year changes in the fair value of unvested equity awards that are outstanding at the end of the respective year, that vest during the respective year, or that are forfeited during the respective year. Also presented for each year are our total shareholder return (“TSR”) over the respective period and the TSR for a chosen peer group of the Company. The table also presents the amounts of our annual net income for the four years ended January 31, 2024, as well as our consolidated EBITDA, expressed as percentages of corresponding consolidated revenues, which are financial performance measures that we find most important in determining the compensation for our NEOs. For further information concerning our philosophy relating to the alignment of compensation for our NEOs with certain performance metrics, refer to the “Executive Compensation Discussion and Analysis” section of this Proxy Statement.

  105. Pay Versus Performance

    | | | | | | | | Value of Initial Fixed $100 | | | | | | | | | | Average | Average | Investment Based On: | | | | | | SCT Total | SCT Total | CAP | CAP | SCT Total | CAP | | Peer | | EBITDA | | Fiscal | for CEO | for CEO | to CEO | to CEO | for Other | to Other | Argan, Inc. | Group | Net Income | as a % of | | Year | Bosselmann(1) | Watson(2) | Bosselmann(1) | Watson(2) | NEOs(3) | NEOs(3) | TSR(4) | TSR(4)(5) | (in thousands)(6) | Revenues(7) | | 2024 | $n/a | $1,867,181 | $n/a | $1,876,980 | $1,561,321 | $1,729,313 | $122 | $232 | $32,358 | 9.0% | | 2023 | 1,911,619 | 1,398,444 | 2,158,773 | 1,596,121 | 1,888,785 | 2,162,355 | 104 | 206 | 34,704 | 10.6% | | 2022 | 1,877,163 | n/a | 1,980,856 | n/a | 1,631,539 | 1,559,220 | 97 | 160 | 35,706 | 10.6% | | 2021 | 1,027,895 | n/a | 1,110,509 | n/a | 997,554 | 1,063,796 | 110 | 128 | 23,811 | 7.5% |

  106. Pay Versus Performance

    | (1) Mr. Bosselmann served as Chairman of the Board and CEO for Fiscal 2021, Fiscal 2022 and a portion of Fiscal 2023, and is therefore included as the CEO in the table for each of these years. |

  107. Pay Versus Performance

    | (2) Mr. Watson has served as CEO since August 16, 2022, and is therefore included as CEO for Fiscal 2023 and Fiscal 2024. |

  108. Pay Versus Performance

    | (3) Other NEOs include the following executives and their roles for each year: |

  109. Pay Versus Performance

    Fiscal 2021 – Mr. Watson (Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary), Mr. Collins (Co-President, Gemma) and T. Colin Trebilcock (Co-President, Gemma). Fiscal 2022 – Mr. Watson (Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary), Mr. Collins (Chief Executive Officer, Gemma) and Mr. Trebilcock (President, Gemma). Fiscal 2023 and Fiscal 2024 – Mr. Deily (Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary) and Mr. Collins (Chief Executive Officer, Gemma).

  110. Pay Versus Performance

    | (4) Cumulative total shareholder return is calculated based on the value of an initial fixed investment of $100 on January 31, 2020, assuming the reinvestment of dividends. |

  111. Pay Versus Performance

    | (5) The peer group used for the calculations of the peer group total shareholder returns is the Dow Jones US Heavy Construction TSM index. |

  112. Pay Versus Performance

    | (6) The amounts in this column represent the amounts of net income presented in our audited consolidated financial statements for the applicable fiscal year. |

  113. Pay Versus Performance

    | (7) As discussed further in the “Executive Compensation Discussion and Analysis” section in this Proxy Statement, we believe that EBITDA, expressed as a percentage of corresponding revenues, is a meaningful performance measure as the percentage reflects our ability to convert dollars of revenues into earnings. Such percentages for each of the four years ended January 31, 2024, are calculated as follows: |

  114. Pay Versus Performance

    | | Fiscal | Fiscal | Fiscal | Fiscal | | ($s in thousands) | 2024 | 2023 | 2022 | 2021 | | Revenues | $573,333 | $455,040 | $509,370 | $392,206 | | Net income, as reported | $32,358 | $34,704 | $35,706 | $23,811 | | Income tax expense | 16,575 | 11,296 | 11,356 | 1,074 | | Depreciation | 2,013 | 2,983 | 3,367 | 3,715 | | Amortization of intangible assets | 392 | 732 | 870 | 904 | | EBIDTA | 51,338 | 49,715 | 51,299 | 29,504 | | EBITDA of non-controlling interest | - | 1,606 | (2,538) | (40) | | EBITDA attributable to the stockholders of Argan, Inc. | $51,338 | $48,109 | $53,837 | $29,544 | | EBITDA as a percent of revenues | 9.0% | 10.6% | 10.6% | 7.5% |

  115. Pay Versus Performance

    The two tables below provide reconciliations of the amounts of total compensation that are presented in the SCT for the CEOs and the Other NEOs to the amounts of compensation actually paid that are determined pursuant to SEC rules. As such, the amounts of compensation actually paid that are presented in the tables below are determined by adjusting totals presented in the SCT by year-over-year changes in the fair value of unvested equity awards that are outstanding at the end of the respective year, vest during the respective year, or are forfeited during the respective year

  116. Pay Versus Performance

    | | Chief Executive Officers | | | | | | | Fiscal Year Ended January 31, | | | | | | | 2021 | 2022 | 2023 | 2023 | 2024 | | | (Bosselmann)(1) | (Bosselmann)(1) | (Bosselmann)(1) | (Watson)(2) | (Watson) | | Summary Compensation Table ("SCT") Total | $1,027,895 | $1,877,163 | $1,911,619 | $1,398,444 | $1,867,181 | | Grant-date fair value of equity awards made during the year, as disclosed in the SCT | (601,061) | (1,425,250) | (949,952) | (759,962) | (886,169) | | Fair value of unvested equity awards made during the year, measured as of year-end | 854,824 | 657,043 | 946,327 | 757,062 | 1,014,585 | | Change in fair value of unvested equity awards granted in prior years, measured as of year-end | 64,617 | (364,221) | 95,894 | 76,714 | 225,588 | | Change in fair value of vested equity awards granted in prior years, measured as of the vesting date | (235,766) | 1,236,121 | 319,202 | 255,317 | 707 | | Change in fair value of equity awards granted in prior years that forfeited/failed to meet vesting conditions | – | – | (164,317) | (131,454) | (344,912) | | Compensation Actually Paid | $1,110,509 | $1,980,856 | $2,158,773 | $1,596,121 | $1,876,980 |

  117. Pay Versus Performance

    | (1) Mr. Bosselmann served as Chairman of the Board and CEO for Fiscal 2021, Fiscal 2022 and a portion of 2023, and is therefore included as the CEO in the table for each year. |

  118. Pay Versus Performance

    | (2) Mr. Watson has served as CEO since August 16, 2022, and is therefore included as CEO for Fiscal 2023 and Fiscal 2024. |

  119. Pay Versus Performance

    | | Other Named Executive Officers Average | | | | | | Fiscal Year Ended January 31, | | | | | | 2021(1) | 2022(2) | 2023(3) | 2024(3) | | Summary Compensation Table ("SCT") Total | $997,554 | $1,631,539 | $1,888,785 | $1,561,321 | | Grant-date fair value of equity awards made during the year, as disclosed in the SCT | (198,149) | (685,267) | (614,704) | (244,975) | | Fair value of unvested equity awards made during the year, measured as of year-end | 290,753 | 382,871 | 800,822 | 351,285 | | Change in fair value of unvested equity awards granted in prior years, measured as of year-end | 28,431 | (137,659) | 57,748 | 99,404 | | Change in fair value of vested equity awards granted in prior years, measured as of the vesting date | (54,793) | 367,736 | 114,006 | 11,016 | | Change in fair value of equity awards granted in prior years that forfeited/failed to meet vesting conditions | – | – | (84,302) | (48,738) | | Compensation Actually Paid | $1,063,796 | $1,559,220 | $2,162,355 | $1,729,313 |

  120. Pay Versus Performance

    | (1) NEOs and their respective roles for Fiscal 2021: Mr. Watson (Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary), Mr. Collins (Co-President, Gemma) and T. Colin Trebilcock (Co-President, Gemma). |

  121. Pay Versus Performance

    | (2) NEOs and their respective roles for Fiscal 2022: Mr. Watson (Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary), Mr. Collins (Chief Executive Officer, Gemma) and Mr. Trebilcock (President, Gemma). |

  122. Pay Versus Performance

    | (3) NEOs and their respective roles for Fiscal 2023 and Fiscal 2024: Mr. Deily (Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary) and Mr. Collins (Chief Executive Officer, Gemma). |

  123. Pay Versus Performance

    As described further in the “Executive Compensation Discussion and Analysis” section of this Proxy Statement, our executive compensation is assessed using a variety of quantitative and qualitative factors. The list below presents the financial performance measures that are included for the most important factors in the determination of NEO compensation.

  124. Pay Versus Performance

    | ● | EBITDA |

  125. Pay Versus Performance

    | ● | EBITDA, expressed as a percent of revenues |

  126. Pay Versus Performance

    | ● | Selling, general and administrative expenses, expressed as a percent of revenues |

  127. Pay Versus Performance

    | ● | Return on equity |

  128. Pay Versus Performance

    | ● | Project backlog |

  129. Pay Versus Performance

    We believe that EBITDA is a meaningful presentation that enables us to assess our operating performance by removing from our operating results the impacts of our capital structure, the effects of the accounting methods used to compute depreciation and amortization and the effects of operating in different income tax jurisdictions. Further, we believe that EBITDA is widely used by investors and analysts as a measure of performance. In general, EBITDA, expressed as a percent of revenues, reflects our ability to convert revenue dollars into earnings, which is primarily driven by maintaining strong gross margins. Likewise, SG&A, expressed as a percent of revenues, is a meaningful measure of the effectiveness of our cost containment efforts. The return on equity metric measures our profitability based on the amount of dollars invested. Our reported amount of project backlog at a point in time represents the success of our business development efforts, as it measures the total value of projects awarded to us that we consider to be firm less the amount of revenues recognized to date related to the corresponding projects. Net income increased from Fiscal 2021 to Fiscal 2024 by approximately 50%. EBITDA, expressed as a percentage of revenues was 9.0% for Fiscal 2024, an increase of approximately 20% from EBITDA for the first period presented, Fiscal 2021. However, as presented in the table above, our cumulative TSR over the three-year period presented was 22%, whereas the cumulative TSR of our peer group used for the table was 132% over the same period. The CAP for our CEOs and other NEOs fluctuated over the same period based substantially on the timing of vesting associated with restricted stock unit awards.