UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.     )

Argan, Inc.

One Church Street, Suite 201

Rockville, Maryland 20850

Notice of
Annual Meeting of Stockholders
to Be Held on Thursday, June 23, 201621, 2018

To Our Stockholders:

Our 20162018 Annual Meeting of Stockholders (the “Annual Meeting”) will be held on June 23, 201621, 2018 at 11:00 a.m., local time, at the Cambria Hotel and Suites, 1 Helen Heneghan Way, Rockville, Maryland 20850, for the following purposes:

1.              To elect nine directors to our Board of Directors, each to serve until our 20172019 Annual Meeting of Stockholders and until his/her successor has been elected and qualified or until his/her earlier resignation, death or removal;

2.              To approve our 2016 Executive Performancethe amendment of the Company’s 2011 Stock Plan (the “Stock Plan”) in order to increase the total number of shares of the Company’s common stock reserved for William F. Griffin, Jr.;issuance under the Stock Plan from 2,000,000 shares to 2,750,000 shares;

3.              To hold a non-binding advisory vote on our executive compensation (the “say-on-pay” vote);

4.              To ratify the appointment of Grant Thornton LLP as our independent registered public accountants for the fiscal year ending January 31, 2017;2019; and

5.              To transact any other business that may properly come before the 20162018 Annual Meeting of Stockholders or any adjournment or postponement of the meeting.

These items of business are more fully described in the accompanying proxy statement. Only stockholders of record at the close of business on April 25, 201624, 2018 are entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement of the Annual Meeting.

Your vote is important. Whether or not you plan to attend the Annual Meeting in person, please cast your vote via either the Internet, telephone or mail before the Annual Meeting so that your shares will be represented at the Annual Meeting.

Rockville, Maryland

May 4, 2018

Rockville, Maryland

May 6, 2016

Argan, Inc.

One Church Street, Suite 201

Rockville, Maryland 20850

Proxy Statement

May 6, 20164, 2018

The accompanying proxy is solicited on behalf of the Board of Directors (or the “Board”) of Argan, Inc., a Delaware corporation (referred to herein as “Argan” or the “Company”), for use at the 20162018 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on June 23, 2016,21, 2018, at 11:00 a.m., local time, at the Cambria Hotel and Suites, 1 Helen Heneghan Way, Rockville, Maryland 20850. This proxy statement for 20162018 (the “Proxy Statement”) and the accompanying proxy card are being mailed starting on or about May 16, 201611, 2018 to stockholders of record on April 25, 2016.24, 2018. Our Annual Report on Form 10-K for the fiscal year ended January 31, 20162018 (the “Annual Report”) is enclosed with the Proxy Statement. At the Annual Meeting, stockholders will be asked to consider and vote upon the following four matters, and to transact any other business that may properly come before the Annual Meeting.

1.              The election of nine directors to our Board of Directors, each to serve until our 20172019 Annual Meeting of Stockholders and until his/her successor has been elected and qualified or until his/her earlier resignation, death or removal;

2.              The approval of our 2016 Executive Performancethe amendment of the Company’s 2011 Stock Plan (the “Stock Plan”) in order to increase the total number of shares of the Company’s common stock reserved for William F. Griffin, Jr.;issuance under the Stock Plan from 2,000,000 shares to 2,750,000 shares;

3.              The non-binding advisory approval of our executive compensation as described in this Proxy Statement (the “say-on-pay” vote); and

4.              The ratification of the appointment of Grant Thornton LLP as our independent registered public accountants for the fiscal year ending January 31, 2017.2019.

If a proxy is properly executed and returned to the Company via either the Internet, telephone or mail in time for the Annual Meeting and is not revoked prior to the time it is exercised, the shares represented by the proxy will be voted in accordance with the directions specified therein for the matters listed on the proxy card. Unless the proxy specifies that it is to be voted against or is an abstention on a listed matter, proxies will be voted “FOR” the election to our Board of Directors of each of the nine nominees identified in Proposal 1; “FOR” Proposals 2, 3 and 4; and otherwise in the discretion of the proxy holders as to any other matter that may be properly brought before the Annual Meeting.

INFORMATION CONCERNING VOTING AND PROXY SOLICITATION

Internet Availability of Proxy Materials

As permitted by rules of the Securities and Exchange Commission (the “SEC”), we are making our Proxy Statement and Annual Report available to our stockholders primarily via the Internet, rather than mailing printed copies of these materials to each stockholder. We believe that this process will expedite stockholders’ receipt of proxy materials, lower the costs of the Annual Meeting and help to conserve natural resources.

On or about May 16, 2016,11, 2018, we will begin mailing to each stockholder (other than those who previously requested electronic delivery of all materials or previously elected to receive delivery of a paper copy of the proxy materials) a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access and review the proxy materials on the Internet, including our Proxy Statement and Annual Report for the current year, and how to access an electronic proxy card to vote on the Internet or by telephone. The Notice will also contain instructions on how to receive a paper copy of the proxy materials. If you receive a Notice by mail, you will not receive a printed copy of the proxy materials unless you request one. If you receive a Notice by mail and would like to receive a printed copy of our proxy materials, please follow the instructions included in the Notice.

If the shares you own are held in “street name” by a bank or brokerage firm, they may provide you with a Notice. Follow the instructions on that Notice to access our proxy materials and vote online, or to request a paper copy

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Voting

Each stockholder is entitled to one vote for each share of common stock of Argan, Inc. common stock (“Common(the “Common Stock”) that the stockholder owns as of April 25, 201624, 2018 with respect to all matters presented at the Annual Meeting. Stockholders do not have the right to cumulate their votes infor the election of directors.

Record Date

Only stockholders of record at the close of business (5:00 p.m. EDT) on April 25, 201624, 2018 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting and at any adjournment or postponement thereof.  Stockholders of record will be entitled to one vote for each share of Common Stock held. For information regarding holders of more than 5% of the outstanding Common Stock, see the Principal Stockholders“Principal Stockholders” chart included herein.

Outstanding Shares

At the close of business on the Record Date, April 25, 2016,24, 2018, there were 14,858,46915,567,719 shares of Common Stock outstanding. The closing price of our Common Stock on the Record Date, as reported by the New York Stock Exchange (“NYSE”), was $33.37$37.20 per share.

List of Stockholders

A list of the Company’s registered stockholders as of the Record Date for the Annual Meeting will be available for inspection at the Company’s corporate headquarters, located at One Church Street, Suite 201, Rockville, Maryland 20850, during normal business hours during the ten-day period immediately prior to the Annual Meeting.

Quorum; Effect of Abstentions and “Broker Non-Votes”

A majority of the shares of Common Stock outstanding on the Record Date, present in person or represented by proxy, will constitute a quorum for the transaction of business at the Annual Meeting. If stockholders indicate on their proxy card that they wish to abstain from voting, including brokers holding their customers’ shares of record who cause abstentions to be recorded, these shares are considered present and entitled to vote at the Annual Meeting. These shares will count toward determining whether or not a quorum is present. However, these shares will not be taken into account in determining the outcome of any of the proposals.

If a stockholder does not give a proxy to his/her broker with instructions as to how to vote the shares, the broker has authority under NYSE rules to vote those shares for or against “routine” matters, such as the ratification of Grant Thornton LLP as our independent registered public accountants. Brokers cannot vote on their customers’ behalf on “non-routine” proposals. If a broker votes shares that are unvotednot voted by its customers for or against “routine” proposals, these shares are counted for the purpose of determining the outcome of such “routine” proposals as well as for the purpose of establishing a quorum.

Broker non-votes occur when shares held by a broker for a beneficial owner are not voted with respect to a particular proposal because (1) the broker holding shares in street name for the beneficial owner thereof does not receive voting instructions from the beneficial owner, and (2) the broker lacks discretionary authority to vote the shares. Banks and brokers cannot vote on their clients’ behalf on “non-routine” proposals.proposals without appropriate voting instructions and discretionary authority. Therefore, broker non-votes are not counted for the purpose of determining whether stockholders have approved these types of matters. For the purpose of determining whether stockholders have approved a matter, abstentions are treated as shares present or represented.

Among other matters, the NYSE rules do not grant brokers discretionary authority to vote on the election of directors, the amendment of stock option plans or any proposal to approve the compensation of named executive officers. Therefore, if you hold your shares of Common Stock in street name and do not provide voting instructions to your broker, your shares will not be voted in these matters. We urge you to promptly provide voting instructions to your broker to ensure that your shares are voted in these matters. Please follow the instructions set forth in the Notice provided by your bank or broker.

The effects of broker non-votes and abstentions (i.e. if you or your broker mark “ABSTAIN” on a proxy card) on the counting of votes for each proposal are described below.

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Voting Rights; Required Vote

Holders of Common Stock are entitled to one vote for each share held as of the Record Date. The votes required to approve each proposal are as follows:

· Election of Directors.  Directors will be elected by a plurality of the votes of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote in the election of directors which is considered a “non-routine” matter. Abstentions and broker non-votes will not be taken into account in determining the outcome of the election of directors.

· Approval of the 2016 Executive Performance Plan for William F. Griffin, Jr.Amendment to the 2011 Stock Plan. Approval of this “non-routine” matter requires the affirmative vote by holders of at least a majority of the shares of Common Stock who attend the Annual Meeting in person, or are represented at the Annual Meeting by proxy. Abstentions will have the effect of a vote against this proposal, while broker non-votes will not be taken into account in determining the outcome of the vote on this proposal.

· The Say-on-Pay Vote. This matter is considered “non-routine.” As such, approval of the say-on-pay proposal requires the affirmative vote by holders of at least a majority of the shares of Common Stock who attend the Annual Meeting in person, or are represented at the Annual Meeting by proxy. Abstentions will have the effect of a vote against this proposal. Broker non-votes will not be taken into account in determining the outcome of the vote on this matter.

· Ratification of Accountants. Approval of this proposal, which is considered to be “routine,” requires the affirmative vote by holders of at least a majority of the shares of Common Stock who attend the Annual Meeting in person, or are represented at the Annual Meeting by proxy. Abstentions will have the effect of a vote against this proposal, while broker non-votes will not be taken into account in determining the outcome of the vote on this proposal.

Proxies solicited by our Board of Directors will be voted in accordance with the directions given therein. Unless so revoked, the shares represented by such proxies will be voted at the Annual Meeting and all adjournments thereof. Where no instructions are indicated, proxies will be voted in accordance with the recommendations of the Board of Directors with respect to the proposals described herein.

Votes cast by proxy or in person at the meeting will be tabulated by the inspector of elections appointed for the Annual Meeting and will be counted as present for purposes of determining whether a quorum is present. The inspector of elections will treat broker non-votes as present and entitled to vote for purposes of determining whether a quorum is present.

Our currently serving Named Executive Officers (refer to the “Executive Compensation” hereafterCompensation Discussion and Analysis” section in this Proxy Statement) and the members of our Board of Directors will vote the shares of Common Stock beneficially owned or controlled by them (representing approximately 9.51%5% of the shares of Common Stock issued and outstanding as of January 31, 2016)April 24, 2018, excluding the number of shares related to stock options deemed exercisable) in favor of each of the proposals discussed above.

Voting of Proxies

If you complete and return a proxy pursuant to the appropriate instructions, it will be voted in accordance with the specifications made on the proxy card. If no specification is made on a submitted proxy, the shares represented by the proxy will be voted “FOR” the election to the Board of Directors of each of the nine nominees named on the proxy card; “FOR” Proposals 2, 3 and 4; and otherwise at the discretion of the proxy holders for any other matter that may be properly brought before the Annual Meeting. If you attend the Annual Meeting, you may also vote in person, and any previously submitted votes will be superseded by the vote you cast in person at the Annual Meeting.

Adjournment of Meeting

If a quorum is not present to transact business at the Annual Meeting or if we do not receive sufficient votes in favor of the proposals by the date of the Annual Meeting, the persons named as proxies may propose one or more adjournments of the meeting to permit solicitation of proxies. Any adjournment would require the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting.

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Expenses of Soliciting Proxies

After the original mailing of the proxy cards and other soliciting materials, we will request that brokers, custodians, nominees and other record holders of our Common Stock forward copies of the proxy cards and other soliciting materials to persons for whom they hold shares and request authority for the exercise of proxies. We may reimburse brokers, nominees and other fiduciaries for their reasonable expenses in forwarding proxy materials to beneficial owners.

We and/or our agents may also solicit proxies by mail, telephone, telegraph, facsimile, e-mail or in person. The other expenses of solicitation, including the cost of printing and mailing, will be paid by us. We do intend to use the proxy solicitation services of MacKenzie Partners, Inc. at an estimated cost of $17,500 plus out-of-pocket expenses.

Revocability of Proxies

Any person submitting a proxy via the Internet, telephone or mail has the power to revoke it at any time before it is voted. A proxy may be revoked by submitting a properly completed proxy with a later date, by delivering a written notice of revocation to Continental Stock Transfer & Trust Company (our stock transfer agent) at 17 Battery Place,1 State Street, New York, New York 10004 or to the Corporate Secretary at Argan, Inc., One Church Street, Suite 201, Rockville, Maryland 20850, or by attending the Annual Meeting and voting in person.

The mere presence at the Annual Meeting of a stockholder who has previously appointed a proxy will not revoke the appointment. Please note, however, that if a stockholder’s shares are held of record by a broker, bank or other nominee and that stockholder wishes to vote at the meeting, the stockholder must bring to the Annual Meeting a letter from the broker, bank or other nominee confirming the stockholder’s beneficial ownership of the Common Stock and that the broker, bank or other nominee is not voting the shares at the Annual Meeting.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

The members of our Board of Directors are elected annually and hold office until the next annual meeting of stockholders and until their successors have been elected and shall have been qualified.  Vacancies and newly-created directorships resulting from any increase in the number of authorized directors may be filled by a majority vote of the directors then in office.

At the Annual Meeting, our stockholders are being asked to elect nine individuals to our Board of Directors, all of whom currently serve in that capacity. Unless a stockholder withholds authority, the holders of proxies representing shares of Common Stock will vote “FOR” the election of each of the nominees listed below.

Proxies cannot be voted for a greater number of persons than the number of nominees named. If any nominee for any reason is unable to serve or for good cause will not serve, the proxies may be voted for such substitute nominee as the proxy holder may determine. We are not aware of any nominee who will be unable to or for good cause will not serve as a member of our Board of Directors. However, if a nominee shall be unavailable for any reason, then the proxies may be voted for the election of such person as may be recommended by the Board of Directors.

Directors/Nominees

The names of the nominees, their ages as of April 30, 2016,2018, and certain information about them are set forth below:

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Rainer H. Bosselmann.  Mr. Bosselmann has been a director and Chairman of the Board of Directors since May 2003 and our Chief Executive Officer (our “CEO”) since October 2003. Mr. Bosselmann was a director and Vice Chairman of the Board from January 2003 to May 2003.  Mr. Bosselmann was Chairmanchairman of the Board, Chief Executive Officerboard, chief executive officer and a director of Arguss Communications, Inc. (“Arguss”), a telecommunications infrastructure company listed on the New York Stock Exchange,NYSE, from 1996 through 2002 and Presidentpresident of Arguss from 1997 through 2002. Mr. Bosselmann served as a director of The Roberts Company, formerly a privately owned firm, from 2008 until December 2015 when it was acquired by us. Mr. Bosselmann served as a director of Midasco LLC from 2008 until 2011 and Morgan Contracting Inc. from 2010 until 2013, both privately owned firms.

Mr. Bosselmann’s long tenureextensive experience as CEOChairman and ChairmanCEO positions him to contribute to the Board his extensive knowledge of the Company, including its history and development, and to provide critical continuity to the Board of Directors.continuity.  As CEOchief executive officer of Arguss and then the Company, he has developed substantial expertise in managing public companies with diverse and remotely-located business operations, and in identifying, executing and integrating acquisitions. He possesses the leadership skills that are important to the Board of Directors and the Company.

Henry A. Crumpton. Ambassador Crumpton has been a member of our Board of Directors since February 2008. Ambassador Crumpton has been President of the Crumpton Group since February 2007. He was Ambassador-at-Large for Counterterrorism at the United States Department of State from August 2005 to February 2007. Ambassador Crumpton was Chief of the National Resources Division at the Central Intelligence Agency from 2003 to August 2005.

Ambassador Crumpton’s distinguished career as a senior official for a variety of federal agencies in various positions has provided him with extensive experience in executive management. He has demonstrated success in assembling teams of diverse, high-level individuals and in directing their efforts to achieve specific objectives. In addition, the Board values his expertise and experience with the development, coordination and implementation of important organizational policies.

Cynthia A. Flanders. Ms. Flanders has been a member of our Board of Directors since April 2009 and was our Chief Financial Officerchief financial officer during the calendar year 2015. Ms. Flanders currently serves as a member of the board of directors of Congressional Bank, a privately-owned community bank serving the Washington, D.C. metropolitan area. Since October 2013, she has served as a Senior Advisorsenior advisor for Verit Advisors LLC, an independent investment bank advisory firm that specializes in ESOPs and other ownership transitions. In 2009, she founded Skipjack Partners LLC, a women-owned consultancy doing business as Manage Fearlessly, an internet resource for 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 capmicro-cap clients in the Mid-Atlantic region.

With her long banking career, at the Bank, Ms. Flanders brings to the Board and the Company 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 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.

Peter W. Getsinger. Mr. Getsinger has been a member of our Board of Directors since his appointment in November 2014. Mr. Getsinger is the managing partner, founder,founded and chief investment officer ofrecently retired from Nexstar Capital Partners LLC (a SEC registered firm), an alternative investment management firm that is focused on investing in emerging markets with a primary concentration in Latin America.America, where he was the managing partner and chief investment officer. The firm commenced operations in March of 2004, receiving its initial investment capital from the Griswold family, formerly the controlling shareholders of Alex Brown in Baltimore. In 2005, the firm acquired an ownership interest (2007) in Electro Dunas S.A. (an(“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 or senior advisor of Electro Dunas from 2007until 2016. From 2012 to 2016.2014, 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 Senior Vice Presidentthe senior vice president and head of fixed income sales for the UK, Europe, and Middle East at Lehman Brothers. Mr. Getsinger is also a former director and owner of GPU Argentina Holdings, Inc.

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Mr. Griffin has significant senior executive experience in the energy-related construction sector. Also, as a member of the senior management of one of our operating companies, Mr. Griffin contributes an in-depth understanding of our business not 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 and savvy contributions to its deliberations regarding our strategic direction, our commitment to certain business development efforts and the identification of future construction project opportunities.

John R. Jeffrey, Jr.  Mr. Jeffrey has been a member of our Board of Directors since June 2017. During Mr. Jeffrey’s 40 years of experience at Deloitte & Touche LLP (“Deloitte”), including 30 years as a partner, he served as lead client service partner, audit partner and advisory partner to several of Deloitte’s largest clients including public companies. Mr. Jeffrey was Managing Partner of Deloitte’s Global Japanese Services Group from 2003 to 2015. Mr. Jeffrey was a member of Deloitte’s United States Chairman and CEO Nominating Committee in 2010.

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 a leading audit firm. Mr. Jeffrey also brings a valuable perspective to our Board specifically related to businesses with long-term construction projects. Accordingly, he is well-qualified to be the chairman of the Board’s Audit Committee. He also brings to the Board viable experience with operational and governance issues faced by complex organizations including extensive international expertise.  Mr. Jeffrey is a certified public accountant with an active license.

William F. Leimkuhler.  Mr. Leimkuhler has been a member of our Board of Directors since June 2007. HeSince November 2017, he has served as the chief financial officer of Mutualink, Inc., a privately owned provider of communications interoperability solutions for the public safety, homeland security and enterprise sectors. Mr. Leimkuhler has been General Counsel and Director of Business Development ofthe general counsel to Paice Corporation, a privately held developer of hybrid electric powertrains, since 1999. Mr. LeimkuhlerHe also advises a number of technology-based companies on business, financial and legal 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. Prior to that, Mr. Leimkuhler was a corporate partner with the New York law firm of Werbel & Carnelutti.general counsel. In November 2013,2012, Mr. Leimkuhler joined the board of directors of Northern Power Systems Corp. (TSX: NPS), which designs, manufactures and services wind turbines, and was appointed chairman in December 2013. He serves on the audit and compensation committeescommittee of this board. Mr. Leimkuhler is also the lead director of U.S. Neurosurgical, Inc. (OTCBB: USNU). He served as a director of Integral Systems, Inc. (NASDAQ: ISYS) and Speedus Corp. (NASDAQ: SPDE) for over five (5) years until 2011.

The experience that Mr. Leimkuhler has developed as a legal executive with an investment banking firm, a securities law firm partner and a board and audit committee member for other public companies makes him a valuable member of our Board, and a well-qualified Audit Committee chairman.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.

W.G. Champion Mitchell.  Mr. Mitchell has been a member of our Board of Directors since October 2003.  From January 2003 until March 2008, Mr. Mitchell was Chairmanchairman of the Boardboard and Chief Executive Officerchief 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.

Mr. Mitchell brings to the Board business leadership skills 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, and with substantial insight into management, operational and financial matters, and knowledge of market conditions and trends.

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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 Board’s lead independent director and 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.

Brian R. Sherras.  Mr. Sherras was appointed to our Board of Directors in March 2012. He holds the position of Director - Sales and Business Development for Atlantic Projects Company Ltd. (“APC”), formerly a management-owned limited liability company registered in Ireland that provides construction, engineering and maintenance services worldwide to the power generation sector with a historical focus on the installation of gas and steam turbines for combined cycle natural gas-fired power plants. APC was acquired by us in May 2015. Mr. Sherras is responsible for global sales and business development. Prior to joining APC in 1999, he held a succession of technical and management positions with the Power Systems group of General Electric Company.

The significance of Mr. Sherras’ experience in our industry makes him an important member of our Board of Directors as we consider various opportunitiesthe Company begins to expand our business.its business worldwide. His wealth of knowledge about the construction of turbine-based power plants especiallyand overseas projects,markets is a valuable element in the spectrum of business experience represented by the members of our Board of Directors.

Composition of Board of Directors

The number of directors which shall constitute the whole Board of Directors shall be not less than four or more than ten. The nineNine current directors will stand for re-election at the Annual Meeting as described in this Proxy Statement.

Director Attendance at the Annual Meeting

All of our directors attended last year’s annual meeting, and we expect that all nine of ourthe nominated directors will attend this year’s Annual Meeting.

Board of Directors Meetings and Committees

During Fiscal 2016,2018, the Board of Directors met five (5)four times and acted once by written unanimous written consent on five (5) other occasions.consent. All current Board members were present for the meetings held during the year or participated by telephone conference.

Currently, the Board has four standing committees: the Executive Committee, the Audit Committee, the Compensation Committee, and the Nominating/Corporate Governance Committee. The functions of each of these committees and their members are specified below. The latter three committeesAudit Committee, the Compensation Committee and the Nominating/Corporate Governance Committee each operate under updated written charters which were reviewedupdated and affirmed by the Board in June 20132017, in order to meet the requirements of the New York Stock ExchangeNYSE Listed Company Manual. These charters, as well as the Board’s Governance Guidelines, are available on our website at www.arganinc.com.

The members of the Executive Committee are Messrs. Bosselmann (who is the chairman of this committee), Mitchell and Quinn.  This committee is authorized to exercise the general powers of the Board of Directors in managing the business and affairs of the Company between meetings. It was not necessary for the Executive Committee to hold any meetings during Fiscal 2016.

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With the election of Mr. Jeffrey to the Board at our 2017 Annual Meeting of Stockholders, the Board changed the membership of its Audit Committee. Mr. Jeffrey was appointed to serve as the chairman of the Audit Committee with Mr. Leimkuhler continuing to serve as a member. Mr. Mitchell stepped down from his membership of this committee. Mr. Jeffrey was also appointed to serve as a member of the Nominating/Corporate Governance Committee.

The Board has determined that the following members of the Board are currently independent directors, as such term is defined in Section 303A of the NYSE Listed Company Manual:  Messrs. Jeffrey, Getsinger, Leimkuhler, Mitchell Quinn, and Ambassador Crumpton.Quinn. Ms. Flanders, who qualified as an independent director until the time of her service as the Company’s chief financial officer in 2015, should regain her independent director status in January 2019. The independentnon-employee directors meet from time to time in executive session without the other members.

Executive Committee. This committee is authorized to exercise the general powers of the Board of Directors in managing the business and affairs of the Company between meetings. It was not necessary for the Executive Committee to hold any meetings during Fiscal 2018.

Audit Committee. During Fiscal 2016,2018, the Audit Committee met five (5) times in person or by telephone conference. All elected members participated in each one of these meetings, except that Mr. Mitchell missed one meeting.meetings. The members of the Audit Committee are all independent directors under applicable SEC and stock exchange rules.  In addition, the Board of Directors has determined that at least one of the independent directors serving on the Audit Committee, Mr. Leimkuhler,Jeffrey, is an audit committee financial expert, as that term has been defined by Item 407 of the SEC’s Regulation S-K.

The original written charter of the Audit Committee was adopted in October 2003. TheAs indicated above, the charter was most recently updated and approved by the Board in June 2013.2017. The Audit Committee assists the full Board of Directors in its oversight responsibilities relating to the integrity of our published consolidated financial statements, our financial disclosure controls and our system of internal control over financial reporting. This group considers and approves the employmentselection of, and approves the fee arrangements with, our independent registered public accountants for audit and other nonaudit services.

The Audit Committee meets with members of management and representatives of our independent registered public accounting firm in order to review the overall plan for the annual independent audits including the scope of audit testing and any other factors that may affectimpact the effectiveness of the audits. The Audit Committee discusses with management and the auditors our major financial and operating risks, the steps that management has taken to monitor and manage such exposures, the results of the quarterly reviews and annual audits and any other matters required to be communicated to the Audit Committee pursuant to generally accepted auditingthe standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), the securities laws or listing standards. At the end of each of the first three quarters and subsequent to year-end, the members of the Audit Committee meet with management and the independent auditors to review the adequacy and accuracy of the information included in the applicable SEC filing, including the disclosures made in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of each filing.

The expanded responsibilities of the Audit Committee nowalso include requirements to meet with representatives of our internal auditing firm in order to review the scope of its annual audit plan and the results of its testing including the identification of any significant deficiencies or material weaknesses in the system of internal control over financial reporting and the discovery of any fraud regardless of materiality.

In addition, the Audit Committee maintains our procedures covering the receipt, retention and treatment of complaints we receive regarding accounting, internal controls or auditing matters, and the confidential or anonymous submissions by employees expressing concerns regarding questionable accounting or auditing practices.

Compensation Committee. TheDuring Fiscal 2018, the members of the Compensation Committee heldmet five times by telephone discussions during and subsequent to Fiscal 2016,conference. All members participated in each of these meetings. These meetings were held primarily to evaluate the elements of compensation for our executive officers, and to make decisions regarding the award of cash bonuses, and the granting of options to purchase shares of our Common Stock. Stock and the granting of performance-based restricted stock units. During Fiscal 2018, the members of the Compensation Committee also undertook a comprehensive shareholder outreach initiative, as described further in the “Executive Compensation Discussion and Analysis” section below. The overall purpose of this outreach was to better understand the perspectives of our shareholders with respect to our compensation practices, and to evaluate and address any concerns or feedback we received.

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The committee members considered the performance of our Company for Fiscal 2016,2018, and reviewed the individual performance and achievements of each named executive during the year. The committee members agreed that the executives performed well in allmost areas of our business during the year, includingespecially the management of the operations of our wholly-owned subsdiary,subsidiary, Gemma. In particular,

The members of the Compensation Committee members notedreviewed and certified the significant progress made duringcalculations performed pursuant to the year on our largest power-plant construction projects and the development of potential new business. It was also recognized that the executive team invested considerable time and effortperformance criteria established in the due diligence

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current and long-term business objectives and should be willing and able to contribute positively to our decision-making process; (iii) nominees should have a commitment to understand the Company and its industry and to regularly attend and participate in meetings of the Board of Directors and its committees; (iv) nominees should have the interest and ability to understand the sometimes conflicting interests of our various constituencies, which include stockholders, employees, customers, governmental units, creditors and the general public, and to act in the interests of

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One of the Board’s key responsibilities is the oversight of our risk management process, as well as throughincluding the risk that our sensitive and confidential data may not be adequately protected from unauthorized access. The standing Audit, Compensation and Nominating/Corporate Governance Committees that address risks inherent in their respective areas of oversight. The wholeConsequently, the Board monitors the design and effectiveness of our system of internal controls, the effectiveness of our corporate codes of conduct and ethics, including whether they are successful in preventing wrongful conduct, and risks associated with the independence of its members, potential conflicts of interest and succession planning.

Our Audit Committee considers and discusses our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment, risk management and our insurance program is undertaken.  The Audit Committee also monitors compliance with legal and regulatory requirements, in addition to oversight of the performance of the internal assessments of our system of internal control over financial reporting and the audits conducted by our independent registered public accountants.

The Compensation Committee administers our stock plans, and reviews and recommends the salaries and bonuses paid to the Named Executive Officers while assessing whether any of our compensation policies and programs has the potential to encourage excessive risk-taking. The independent directors of the full Board approve the salary and bonus amounts paid to Named Executive Officers and approve all stock option awards. Senior management reports on enterprise risks issues, including operational, financial, legal and regulatory, and strategic and reputation risks, to the appropriate committee or to the full Board.

The entire Board and the committees receive reports on areas of material risk and, for each committee, the committee’s area of oversight, from senior management, our internal audit firm, our independent registered public accountants, outside counsel, and other members of management and professional advisors.  When one of the committees receives any such report, the chairman of the committee reports on the discussion to the full Board of Directors at the next Board meeting.  This process enables the Board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships.

In June 2014, the Board of Directors adopted a set of governance guidelines which are intended to provide a framework within which the Board conducts its business. Among other items, theThe guidelines describe the basic responsibilities of a member of our Board and the requirements for the conduct of Board and committee meetings. As stated above, theseThese governance guidelines are available on our website at www.arganinc.com.

Compensation of Directors

Each non-employee member of our Board of Directors receives an annual fee of $20,000, plus $300 for each formal Board or committee meeting attended. Members of the Audit Committee receive an additional annual fee of $5,000. Directors are reimbursed for reasonable expenses actually incurred in connection with attending each formal meeting of the Board of Directors or any committee thereof.  Directors are also eligible for the award of options to purchase shares of our Common Stock.

The following table summarizes the fees and other compensation for the non-employee members of our Board of Directors for Fiscal 2016, including the amounts paid or awarded to Mr. Sherras prior to our acquisition of Atlantic Projects Company Limited on May 29, 2015, and Ms. Flanders subsequent to her serving as our Chief Financial Officer during the calendar year 2015:2018:

(1)         Amounts represent the aggregate award date fair value computed in accordance with generally accepted accounting principles in the United States (“GAAP”), and reflectreflecting the assumptions discussed in Note 16 —13, Stock-Based Compensation, of our consolidated financial statements included in Item 8 of our Annual Report on Form 10-K Annual Report for Fiscal 2016.2018.

(2)         Ambassador Crumpton retired from the Board of Directors at our 2017 Annual Meeting while at the same time Mr. Jeffrey was elected to the Board of Directors.  Their respective fees are prorated based on time served during Fiscal 2018.

(3)         The stock options granted to Mr. Jeffrey during Fiscal 2018 include the award made at the time of his joining the Board, as well as the award typically made to outside directors during the fourth quarter of each fiscal year.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF

EACH OF THE NOMINATED DIRECTORS

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PROPOSAL NO. 2

APPROVAL OFAMENDMENT TO THE 2016 EXECUTIVE PERFORMANCE2011 STOCK PLAN FOR WILLIAM F. GRIFFIN, JR.

IntroductionBackground

At itsOn April 13, 2016 meeting,10, 2018, the Board of Directors unanimously approvedpassed a resolution, subject to stockholder approval, that amended the Argan, Inc. 2011 Stock Plan (the “Stock Plan”) by increasing the number of shares of Common Stock issuable thereunder from 2,000,000 shares to 2,750,000 shares. The material termsfeatures of the performance goalsStock Plan are summarized below. This summary is qualified in its entirety by the complete provisions of the Stock Plan, a copy of which is attached hereto as an Appendix and amended employment agreementincorporated herein by reference.

As of April 24, 2018, there were 20,500 shares of Common Stock available for William F. Griffin, Jr. (“2016 Executive Performance Plan”), effective asaward under the Stock Plan. Options to purchase 986,150 shares of our Common Stock were outstanding, including options to purchase 981,150 shares that were awarded under the Stock Plan and 5,000 shares that were awarded under a predecessor stock option plan. During the Fiscal 2018, plus the period from February 1, 2016. The performance goals under2018 through April 24, 2018, options to purchase 398,500 shares of Common Stock were awarded. Under the 2016Stock Plan and the predecessor plan, stock options have been awarded to our Named Executive Performance Plan are subjectOfficers, key employees and members of the Board of Directors. Also, in April 2018 and for the first time, the Board awarded performance-based restricted stock units to the approval byCEO and CFO pursuant to which they could earn the aggregate issuance of between 18,000 to 36,000 shares of our Common Stock depending on the Company’s stockholders at the Annual Meeting.  A summaryachievement of certain stockholder-return targets measured over a three-year period.

The 2011 Stock Plan

Purpose. The purpose of the 2016 Executive PerformanceStock Plan is included below. A summaryto promote the attraction and retention of William F. Griffin, Jr.’s Second Amendedofficers, employees and Restated Employment Agreement (the “Employment Agreement”) is included on page 30 of this Proxy Statement and the complete text of the Employment Agreement may be founddirectors with outstanding abilities, who are in a position to contribute materially to our long-term success, by providing them with opportunities to increase their interests in the Company’s Current Report on Form 8-K filed withwelfare. The members of the SEC on April 18, 2016, whichBoard of Directors believe that it is incorporated hereinimportant to have shares of our Common Stock available for issuance under a plan like the Stock Plan in its entirety.  Stockholders are urgedorder to review it together withmake awards that provide incentive to new employees and other key members of our workforce including those additional management and non-management employees who may join us as a result of future business acquisitions or the following information.organic growth of the Company. The Stock Plan is administered by the Compensation Committee of our Board of Directors.

PurposeEligibility. Subject to certain other provisions of the Stock Plan, the number of shares of our Common Stock which may be issued or transferred pursuant to stock options and other stock awards made under the Stock Plan (“Awards”) shall not exceed 2,750,000 shares in the aggregate, assuming the approval of this Proposal No. 2. The classes of persons who are eligible to receive awards under the Stock Plan are the non-employee members of the Board of Directors, the executive officers (including the Named Executive Officers) and all other employees of the Company. As of April 24, 2018, six non-employee directors, four executive officers (including three Named Executive Officers) and approximately 1,439 other employees were eligible to receive awards under the Stock Plan. During the year ended January 31, 2018, the Company awarded stock options to purchase 301,500 shares of its Common Stock to non-employee directors, executive officers and other employees. The distribution of the number of shares covered by these stock option awards to the three eligibility groups were 23%, 33% and 44% of the total number, respectively.

The purposesStock options granted under the Stock Plan may be either “incentive stock options” within the meaning of the 2016 Executive Performance Plan are to provide competitive total cash compensation opportunities based on corporate and individual performance; reinforce the communication of the Company’s mission, objectives and goals; enhance the Company’s ability to motivate, reward and retain its key employee, Mr. Griffin; and enhance stockholder value by increasing income tax efficiencies.

Tax Deductibility

Section 162(m)422 of the Internal Revenue Code of 1986, as amended (the “Code”“IRC”), places a limitor non-qualified options. Incentive stock options may be granted only to employees of $1,000,000 on the amount the Company (including directors who are employees), while non-qualified options may deduct in any one year for compensation paidbe issued to its chief executive officeremployees and each of its other three most highly-compensated executive officers (excluding the Chief Financial Officer).  There is, however,directors (whether or not an exemption to this limit for certain “qualified performance-based compensation.”  Awards made pursuant to the 2016 Executive Performance Plan that constitute qualified performance-based compensation are not subject to the deductibility limitation of Section 162(m)employee) of the CodeCompany.

Employees and directors shall also be eligible to receive grants of restricted and/or unrestricted stock under the relevant income tax regulations.  However, in order to continue to qualify for this exemption, among other things, stockholders must approve the material terms of the performance goals of the 2016 Executive PerformanceStock Plan. To the extent that the Compensation Committee of theOur Board of Directors has the authority to changedetermine those individuals who shall receive Awards and the targets with respectnumber of shares of our Common Stock subject to such Awards. The Board of Directors shall also determine the performance goals, stockholders would have to reapprove such goals in the fifth year following the year intime periods over which the performance goals were first approved by the stockholders.  If the performance goals are not approved by stockholders, the 2016 Executive Performance Plan will continue in effect; however, in accordance with Section 162(m) of the Code, the Company’s ability to deduct performance-based compensation under the 2016 Executive Performance Plan will be limited to $1,000,000.

Performance Goals

To the extent that awardsstock options granted under the 2016 Executive PerformanceStock Plan are intendedmay become partially or fully exercisable and the exercise price for each stock option granted under the Stock Plan, subject to certain limitations described therein.

Restricted stock grants may be “qualified performance-based compensation” under Section 162(m)made subject to vesting, in one or more installments, upon the happening of certain events, upon the Code, and therefore to be deductiblepassage of a specified period of time, upon the fulfillment of certain conditions or upon the achievement by the Company the three performance goal metrics selected by the Board of Directors are Adjusted EBITDA (as defined in the Employment Agreement) of our wholly-ownedor any subsidiary, Gemma Power Systems, LLC, its safety performance, and success fees related to developmental efforts.

Administration

The 2016 Executive Performance Plan will be administered by the Compensation Committeedivision, affiliate or joint venture of the BoardCompany of Directors. Each member ofcertain performance goals, as the Compensation Committee shall be an “outside director” within the meaning of Section 162(m) of the Code. The Compensation Committee has the authority to interpret the 2016 Executive Performance Plan and maintain administrative guidelines and procedures relating to the 2016 Executive Performance Plan. The determinations of the Compensation Committee are final, binding and conclusive upon all persons.decide in each case.

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PaymentsThe Stock Plan does not permit the repricing of any option to purchase shares of our Common Stock nor does it allow the cancellation of an existing stock option in connection with the award of a new option.

As soon as practicable after the end of each fiscal year, the Compensation Committee will certify in writing the extent to which the performance goals have been achieved and whether any other relevant termsTerms of the awards have been satisfied.Options. Awards will be paid in cashmade under the Stock Plan must occur no later than two and a half months following the endJuly 19, 2021. The per share purchase price of the fiscal yearshares of Common Stock subject to incentive and non-qualified stock options may not be less than the fair market value of the Common Stock on the date that the stock option is granted.

For incentive stock options granted to any person who owns, directly or indirectly, at the time of the grant, 10% or more of the total combined voting power of all classes of stock of the Company, the per share purchase price of the shares of Common Stock subject to the option shall be at least 110% of the fair market value of our Common Stock on the date of grant.

Incentive stock options granted under the Stock Plan cannot be exercised more than ten years from the date of grant although the term of an incentive stock option issued to a 10% Stockholder cannot exceed five years. The aggregate exercise price of an incentive stock option, or any portion thereof, shall be payable on the date of exercise of the option (i) in cash or by check, bank draft or postal or express money order by the option holder, or (ii), provided that a public market exists for our Common Stock, in cash received by the Company under a procedure whereby a qualified broker-dealer advances funds on behalf of an option holder or sells shares acquired upon the exercise of a stock option on behalf of an option holder. Notwithstanding any other provisions hereof, the aggregate fair market value (determined at the time the stock option is granted) of the Common Stock with respect to which an incentive stock option becomes exercisable for the first time during any calendar year (under the Stock Plan and all other similar plans of the Company) shall not exceed $100,000.

Transferability. No right under the Stock Plan may be transferred other than by will or the laws of descent and distribution. During the lifetime of an option holder, a stock option will be exercisable only by the option holder or his/her conservator. If a stock option shall expire and terminate for any reason, in whole or in part, without being exercised or, if a stock award relates.is forfeited because the restrictions with respect to such stock award shall not have been met or have lapsed, the number of shares of Common Stock subject to the stock option or which are no longer outstanding under a stock award may again become available for an Award.

Federal Income Tax Consequences. If an option granted under the Stock Plan is an incentive stock option, the option holder will recognize no taxable income upon grant of the incentive stock option and incur no tax liability due to the exercise unless the option holder is subject to the alternative minimum tax. We will not be allowed a deduction for federal income tax purposes as a result of the exercise of an incentive stock option regardless of the applicability of the alternative minimum tax. Upon the sale or exchange of the shares at least two years after grant of the option and one year after transfer of the shares to the option holder by us, any gain will represent a long-term capital gain for the option holder. If these holding periods are not satisfied, the option holder will recognize ordinary income equal to the difference between the exercise price and the fair market value of the Common Stock at the date of the option exercise and we will be entitled to an income tax deduction in the same amount as the ordinary income recognized by the option holder. Any gain recognized on such a premature disposition of the shares in excess of the amount treated as ordinary income (also described as a disqualifying disposition) will be characterized as capital gain.

If an option granted under the Stock Plan is a non-qualified stock option (also referred to as a nonstatutory stock option), the option holder ordinarily will recognize no taxable income upon the receipt of an Award and incur no tax liability at that time. However, upon exercise of a non-qualified stock option, the option holder will recognize ordinary income in an amount equal to the fair market value of our Common Stock on the date of exercise less the amount paid for the Common Stock. Subsequent sale or exchange of the Common Stock acquired upon such an exercise will result in a capital gain or loss for the option holder. We will be entitled to an income tax deduction in the same amount as the ordinary income recognized by an option holder with respect to shares of Common Stock acquired upon the exercise of a non-qualified stock option.

The recipient of the Award of restricted stock generally does not recognize taxable income at the time of grant, and we are not entitled to a tax deduction at that time unless the recipient elects to be taxed at the time of Award by making an election under Section 83(b) of the Code within 30 days of the date of award. When the restrictions applicable to the shares lapse, the recipient recognizes ordinary income in an amount equal to the excess of the fair market value of the shares of our Common Stock at such time over the amount, if any, paid for the shares. Ordinarily, we will be entitled to a tax deduction at the same time and in the same amount as the ordinary income recognized by the recipient.

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The grant of an Award of unrestricted shares of our Common Stock has immediate income tax consequences for both the recipient and us. The recipient will recognize ordinary income at the time of the Award in an amount equal to the then fair market value of the Common Stock less any amount paid for the shares. Ordinarily, we will be entitled to a tax deduction at the same time and in the same amount as the ordinary income recognized by the recipient.

The Tax Cuts and Jobs Act (the “Act”) was signed into law by President Trump on December 22, 2017. For individuals, the tax cut is achieved primarily by preserving seven individual tax brackets and cutting the corresponding tax rates. The tax rates on capital gains and dividends were not changed. The Act also provides changes to the individual alternative minimum tax that should reduce the number of taxpayers who are affected, however, individual liabilities may not be reduced in all cases. The individual tax rate changes are all effective for 2018, but most of the individual changes provided by the Act are set currently to expire, or “sunset,” on December 31, 2025.

Consequently, under the Act, the top annual federal income tax rate on net capital gain (net long-term capital gain minus net short-term capital loss) is 20% for single and joint filers with 2018 incomes in the highest brackets. In addition, the 3.8% Medicare surtax on net investment income, which includes capital gains, will result in an overall capital gain rate of 23.8% for higher-income taxpayers.

TermThe foregoing is only a summary of the 2016 Executive Performanceeffects of United States federal income taxation upon individuals and us with respect to Awards and the acquisition of shares of our Common Stock under the Stock Plan, and does not purport to be complete. References should be made to the applicable provisions of the Code. In addition, this summary does not discuss the income tax laws of any municipality, state or foreign country in which the recipient of an Award is a resident.

Termination of Employment/Relationship. If employment with us of the holder of an incentive stock option is terminated other than by death or permanent disability, the term of any then outstanding stock option held by the employee shall extend for a period no later than three months after the employment termination date. In the event of employment termination due to permanent disability, the term of any then outstanding incentive stock option held by the employee shall extend for a period no later than twelve months after the employment termination date. In both of these circumstances, an incentive stock option shall be exercisable only to the extent it was exercisable as of the last date of employment.

If the holder of a non-qualified stock option terminates employment or ceases his/her service as a non-employee director, as applicable, for any reason other than death, the term of any then outstanding stock option held by the individual shall extend for a period no later than twelve months after the employment termination or service cessation date, as applicable. In these circumstances as well, a non-qualified stock option shall be exercisable only to the extent it was exercisable as of the last date of employment.

If the holder of either an incentive or non-qualified stock option dies, the representative of his/her estate or beneficiaries thereof to whom the stock option has been transferred shall have the right during the period ending no later than twelve months after the date of death to exercise any then outstanding stock options in whole or in part.

If employment with us of the holder of restricted stock is terminated or a director who is a holder of restricted stock ceases to be a director, other than by death, prior to the lapse of any restrictions applicable to the restricted stock, such stock shall be forfeited. If a restricted stock holder dies, the representative of his/her estate or beneficiaries thereof to whom the restricted stock has been transferred shall generally hold such Common Stock free of all such restrictions.

Notwithstanding the foregoing, at the time of a change in control of the Company as defined in the Stock Plan, all outstanding stock options shall become fully vested and the restrictions related to any outstanding restricted stock shall lapse.

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Equity Compensation Plan Information

The 2016 Executive Performance Plan shall remain in effect until January 31, 2021, unless terminated earlier byfollowing table sets forth certain information, as of April 24, 2018, concerning the Compensation Committee.shares authorized for issuance upon the exercise of options to purchase our Common Stock or the lapse of stock restrictions.

Amendment

(1)               Approved plans include the Company’s 2011 Stock Plan.

(2)               Represents the maximum number of shares of Common Stock that could be earned pursuant to outstanding restricted stock units. The Compensation Committee may, at any time, amend any or alltarget number of shares of Common Stock that could be earned pursuant to outstanding restricted stock units is 18,000.

(3)               Represents the provisionsnumber of shares of our Common Stock reserved for future awards and excludes the 2016 Executive Performance Plan or suspend or terminate it entirely. No amendment, suspension or termination may reduce the rightsnumber of Mr. Griffin under an award without his consent.

2016 Executive Performance Plan Benefits

As discussed above, awards under the 2016 Executive Performance Plan will be based upon performance goal measures established no later than April 30, 2016 with respect to the fiscal year ending January 31, 2017 and to be established with respect to future fiscal years. It is not presently possible to determine the benefits or the amounts that will be granted to Mr. Griffin under the 2016 Executive Performance Plansecurities reflected in the future.first two columns of this table.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVALAMENDMENT OF

THE 2016 EXECUTIVE PERFORMANCESTOCK PLAN IN ORDER TO INCREASE THE NUMBER OF SHARES OF OUR COMMON STOCK RESERVED FOR WILLIAM F. GRIFFIN, JR.ISSUANCE THEREUNDER FROM 2,000,000 SHARES TO 2,750,000 SHARES

PROPOSAL NO. 3

APPROVAL OF EXECUTIVE COMPENSATION (THE “SAY-ON-PAY” PROPOSAL)

We are seeking stockholder approval of the compensation of our executive officers (our “Named Executive Officers”) as described in this Proxy Statement. This description is contained in the Executive Compensation section of this Proxy Statement which is included below, including the compensation tables and the narrative compensation disclosures included therein. 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 fourthsixth annual advisory say-on-pay vote. Subsequent to the annual meeting of stockholders held in 2013 and based on the results of voting by the stockholders, the Board of Directors determined that we will hold an advisory vote on executive compensation every year.

Because this is an advisory vote, it 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 Named Executive Officers. However, our Compensation Committee does intend to take into accountconsider the outcome of the vote when consideringdetermining future executive compensation arrangements.

Our executive compensation program is based onhas been meaningfully modified over the last several years as part of a philosophy of paying for performance and tying a significant portion of executive pay tocontinuous effort by the achievement of long-term growth in the value of the Company. Our philosophy and the core components of our approach to executive compensation generally did not change during Fiscal 2016, and we feel consistency in our approach will helpCompensation Committee to ensure the stability of our core management team through a challenging business environment while providing powerful incentives to drive profitable growth and to deliver value to our stockholders. However,When our proposal seeking approval of the executive compensation program at the 2017 Annual Meeting failed to receive majority support from our stockholders, we were disappointed that the vote represented a decline in April 2016,support for our program from the prior year. As such, the Compensation Committee commenced a comprehensive shareholder outreach initiative during Fiscal 2018. The purposes of this outreach were 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 feedback we received. Based on the feedback, 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 policy prohibiting the future negotiation of single-trigger change in control provisions. These changes lead to an enhancement of our Proxy Statement disclosures which are included herein. Further details on this outreach effort are included in the “Executive Compensation Discussion and Analysis” section below.

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We believe that it is important to add that two years ago the Board of Directors adopted several policies which are intended to enhancewith the intention of enhancing accountability and further encourageencouraging an alignment of stockholder and executive officer interests in the future.interests. The policies, which are also described in further detail below, in the “Executive Compensation Discussion and AnalysisAnalysis” section, include a stock ownership policy for Named Executive Officers and non-employee Directors, a clawback policy, a no pledging policy and an anti-hedging policy. Additionally,

Also, in an effort to increase compensation transparency to our stockholders and to improve our overall income tax efficiency, we developed specific performance metrics

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Audit Firm Independence

The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accountants and it evaluates the selection of them each year. In addition, in order to promote continuing auditor independence, the Audit Committee considers the independence of Grant Thornton at least annually. Based on their most recent evaluation, including the firm’s past performance and an assessment of the firm’s qualifications and resources, the Audit Committee believes that the continued retention of Grant Thornton to serve as our independent registered public accountants is in the best interests of the Company and its stockholders.

Audit Committee Pre-Approval Policies and Procedures

The Audit Committee of the Board of Directors has established a policy requiring the advance approvalpre-approval of anyall audit and non-audit services to be performed by our independent registered public accountants, who may not render any audit or any other accounting or audit firm.non-audit service unless the service is approved in advance by the Audit Committee pursuant to its pre-approval policy. The Audit Committee Chairman mayhas delegated to its chairman the authority to pre-approve certain non-audit related fees whichservices. The chairman must report any pre-approval pursuant to such delegation of authority to the entireother members of the Audit Committee ratifies in a subsequentat its next scheduled meeting at which time the Audit Committee meeting in accordance with SEC requirements.is then asked to approve and ratify the pre-approved service. For Fiscal 2016,2018 and Fiscal 2017, the Audit Committee followed these guidelines in approving all services rendered by accounting and audit firms.our independent registered public accountants.

THE BOARD RECOMMENDS A VOTE “FOR” RATIFICATION OF THE

APPOINTMENT OF GRANT THORNTON LLP

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The Audit Committee has also received from Grant Thornton the written communication required by the corporate governance rules of the NYSE that describes the firm’s quality control policies and procedures including its audit performance and independence monitoring systems. This communication also provides disclosure of material issues raised by inquiry or investigation by government or professional authorities over the last five years.

Recommendation That Financial Statements Be Included in the Annual Report

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements described above be included in the Company’s Annual

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(1)              ApplicableEach applicable percentage of ownership is based on 14,836,46915,567,719 shares of Common Stock outstanding as of January 31, 2016,2018, 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, 2018 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.

(2)              Includes 158,576 shares owned by the William F. Griffin, Jr. GRAT DTD 02/13/12 and 347,574 shares owned by the William F. Griffin, Jr. Revocable Trust DTD 12/09/04; Mr. Griffin is a trustee of both trusts. Excludes 50,000 shares owned by the Griffin Family Trust and 10,000 shares held by the Peach Pit Foundation; Mr. Griffin’s wife is a co-trustee of both trusts. Mr. Griffin disclaims beneficial ownership of these shares. Also includes options to purchase 10,000 shares of Common Stock which are fully vested.

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EXECUTIVE COMPENSATION

Compensation Discussion and AnalysisDISCUSSION AND ANALYSIS

Introduction

This section of the Proxy Statement presents highlights our performanceaccomplishments during Fiscal 20162018 and provides an overview and also analysis of our executive compensation program. TheDuring Fiscal 2018, our Compensation Committee undertook a comprehensive shareholder outreach effort resulting in a number of meaningful modifications to the Company’s executive compensation program which is discussed below. In addition, the following discussion also describes the Company’s executive compensation-setting process, the program’s compensation principles and objectives, the compensation-setting process, the major elements of compensation paid to executives under the program, and other compensation-related policies. This section also reviewspolicies and the actions that were taken by the Compensation Committee for Fiscal 2016.2018 and beyond.

ForThe Company’s senior executive officers as identified in this Proxy Statement for Fiscal 2016, our Named2018 (our “Named Executive Officers (“NEOs”Officers”) were:

·                Rainer H. Bosselmann, Chairman of the Board and Chief Executive Officer;

·                William F. Griffin, Jr,Jr., Vice Chairman, and Chief Executive Officer Gemma;and President of Gemma (1);

·                David H. Watson, Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary (1);

·                  Cynthia A. Flanders, Director and former Senior Vice President, Chief Financial Officer and Corporate Secretary (1);Secretary; and

·                Daniel L. Martin, President Gemma.of Gemma (1)

(1)         Ms. Flanders relinquished her role as Senior Vice President, Chief Financial Officer and Corporate Secretary, effective October 15, 2015.On November 17, 2017, Mr. WatsonMartin retired from Gemma. Mr. Griffin was appointed to the positions, effective October 15, 2015.

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Role of the Chief Executive Officer

Our CEO, in consultation with the Compensation Committee, establishes the strategic direction of our executive compensation program. During the first quarter of each fiscal year, the CEO consults with the Chairman of the Compensation Committee to discuss the prior year financial results and to obtain and to evaluate his assessment of the performance of the other Named Executive Officers. This review, together with the Compensation Committee’s own judgments regarding executive performance, which also considers the results of the most recent competitive market positioning review, is used to evaluate the individual performance and compensation of those Named Executive Officers. The Compensation Committee reviews and certifies the calculations of the performance-based results of Mr. Griffin’s Executive Compensation Plan in consultation with our CFO. In addition, the Compensation Committee is solely responsible for evaluating the CEO’s performance and setting the level and elements of his compensation. The CSO is not present when the Compensation Committee discusses and determines his compensation.

Financial Summary

Fiscal 2018 FinancialOverview. Argan’s primary business is providing a full range of services to the power industry, including the engineering, procurement and construction of gas-fired and biomass-fired power plants, along with related commissioning, operations management, maintenance, project development and consulting services.  We provide these services through our Gemma Power Systems (“Gemma”) and Atlantic Projects Company (“APC”) subsidiary operations. Argan also owns Southern Maryland Cable, which provides telecommunications infrastructure services, and The Roberts Company (“TRC”), which is a fully integrated fabrication, construction and plant services company.

We are pleased to have followed up a strong Fiscal 2017 with another record year in Fiscal 2018 with almost $900 million in revenues and over $70 million in net income.  In fact, we have seen significant growth over the last five years as we have earned over $400 million in EBITDA (defined below), while at the same time remaining focused on our profitability, generating EBITDA margins as a percent of revenues of over 15%.  The following is a summary of several of our key financial and operational measurements from Fiscal 2018:

·                  Revenues increased 32.3% to $892.8 million for Fiscal 2018 as compared to $675.0 million for the prior year.

·                  Our overall gross profit amount increased 1.8% to $149.3 million for Fiscal 2018 as compared to $146.7 million for the prior year. However, our overall gross profit percentage decreased to 16.7% for Fiscal 2018 as compared to 21.7% for the prior year.

·                  Net income attributable to the stockholders of Argan increased 2.4% to $72.0 million for Fiscal 2018, or 8.1% of consolidated revenues, as compared to $70.3 million for the prior year.

·                  EBITDA (1) attributable to the stockholders of Argan increased 5.0% to $116.1 million for Fiscal 2018, or 13.0% of consolidated revenues, as compared to $110.6 million for the prior year.

·                  Our international subsidiary, APC, has begun to capitalize on the opportunities foreseen when we acquired this business in Fiscal 2016. During the current year, it was awarded two meaningful construction-type contracts related to power plants in the United Kingdom with a combined contract value in excess of $110 million.

·                  We declared and paid $1.00 per share in cash dividends during Fiscal 2018. In addition, we announced our intent to declare and pay a regular quarterly cash dividend of $0.25 per share, starting in the first quarter ending April 30, 2018.

·                  Our tangible net worth (2) increased by 27.4% to $316.6 million as of January 31, 2018 from $248.5 million as of January 31, 2017.

·                  Our liquidity, or working capital (3), increased by 27.2% to $301.8 million as of January 31, 2018 from $237.2 million as of January 31, 2017.

(1)         EBITDA is a measure not recognized under accounting principles generally accepted in the United States. We have defined EBITDA as earnings before interest, taxes, depreciation and amortization.

(2)         We define tangible net worth as our total stockholders’ equity less goodwill and intangible assets, net.

(3)         We define working capital as our total current assets less our total current liabilities.

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Since the acquisition of GPS in December 2006, over 11 years ago, we have lead our business through challenging industry economic cycles with the growth in revenues and profitability trending upwards as illustrated below. We have achieved an average annual growth in revenues of 16% per year and an average growth in EBITDA of 32% per year. Note that the amounts in the chart for Net Income and EBITDA below are attributable to the stockholders of Argan, Inc. (dollars in millions).

However, despite the overall strong financial performance of the Company for Fiscal 2018, the share price performance since October 2017 has been disappointing. We believe this reflects, in part, the stated management expectation of decreased revenues for the fiscal year ending January 31, 2019 as the Company finishes up several large power-plant construction projects and the investor uncertainty regarding the timing of new project awards and the commencement of the corresponding project activities.

We expect to add new EPC projects to our project backlog during Fiscal 2019; however, even if the Company is successful in securing such projects, the ramp-up to meaningful revenues associated with new projects will not be immediate due to the normal life-cycles of such projects. Therefore, we expect Fiscal 2019 to be a year where we transition from the final stages of our existing projects to the early stages of expected new projects. We are cautiously optimistic that the growth of our consolidated revenues will resume in Fiscal 2020 and continue into the future as we are awarded new construction projects and they mature.

The following graph compares the percentage change in the cumulative total stockholder return on our Common Stock for the last five years with the S&P 500, a broad market index, and the Dow Jones US Heavy Construction TSM Index, a group index of companies whose primary focus is heavy civil construction. The returns are calculated assuming that an investment with a value of $100 was made in our Common Stock and in each index at January 31, 2013, and that all dividends were reinvested in additional shares of Common Stock. The graph lines merely connect the measuring dates and do not reflect fluctuations between those dates. The stock performance shown on the graph is not intended to be indicative of future stock performance.

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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 a published heavy construction company index suggests that, despite the reduction in our stock price in Fiscal 2018, our stock price performance has meaningfully exceeded the performance of the overall market and our competitors.

A more precise comparison of our stock price performance versus the stock performance of competitors supports this conclusion. 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 our performance relative to a peer group of 12 publicly traded companies selected by us and identified below in the “Competitive Market Positioning” section of this Proxy Statement.

Total Stockholder Return: Argan v. Peer Group (1)

(1)         TSR data is sourced from FactSet Research Systems Inc. and is calculated on an annualized basis as of May 2, 2018.

Again, despite our unfavorable stock price performance for the latter part of Fiscal 2018, our performance is near the top of our peer group over the five-year period.

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The following section covers Fiscal 2018 compensation deliberations and associated compensation decisions made by the Compensation Committee.  Subsequent to year end, based on changes in our executive compensation program as discussed in detail below under “2017 Say on Pay Vote and Subsequent Investor Outreach,” the long-term equity-based incentive compensation was changed to incorporate both stock options and performance-based restricted stock units, both of which were awarded in April 2018. The values of these awards will be reflected in the “Summary Compensation Table” for the first time in next year’s proxy statement that will present executive compensation data related to the fiscal year ending January 31, 2019. The values of the awards made in April 2017 are included in the compensation amounts presented in the “Summary Compensation Table” for the fiscal year ended January 31, 2018.

Fiscal 2018 Compensation Deliberations

Pay for Holding Company Named Executives Is “At Risk” and Aligned with Performance. The executive compensation program is designed to maintain a strong link between pay and performance. “At risk” compensation includes discretionary incentive cash compensation (cash bonus awards) and long-term equity incentive awards (stock options and restricted stock) through which the performance of the individual officer is recognized.

It is important to differentiate between the Named Executive Officers who are officers of Argan, a holding company, and the Named Executive Officer who is the chief executive officer of Gemma, our principal operating company.  Our CEO, Mr. Bosselmann, and our CFO, Mr. Watson (together, the “Holding Company Named Executive Officers”), are employees of the holding company and are responsible for the overall strategic direction of the Company and other important activities. They include mergers and acquisitions, capital allocation and treasury functions, monitoring of the financial performance of all subsidiaries, consolidated financial reporting in compliance with the rules and regulations of the SEC and the effectiveness of the Company’s system of internal controls over financial reporting. These executives also direct company-wide initiatives including insurance programs, income tax planning and compliance, retention and succession planning related to key employees, investor relations and others.

The Holding Company Named Executive Officers have a compensation program that sets base salaries at the lower end of the Peer Group. This reflects, in part, that they are not directly responsible for the profitability and performance of our subsidiaries. Mr. Griffin is specifically responsible for the leadership and management of our largest subsidiary, Gemma, and its ongoing operations and financial performance.

In order to achieve its objectives, the Compensation Committee has designed the executive compensation program utilizing three major pay elements for Messrs. Bosselmann and Watson:

·Base salary. Provides a fixed amount of cash compensation for completing day-to-day responsibilities. The Compensation Committee reviews the base salary of each Holding Company Named Executive 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.

·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 executive stock option holders with opportunities to participate in, and be rewarded for, the long-term growth in the value of the Company’s Common Stock. Awards also facilitate executive stock ownership. Awarded stock options vest, or become exercisable, based on the satisfaction of service requirements.

The Compensation Committee considers each pay element in assessing the executive compensation package for each Holding Company Executive Officer so that they will provide the properly balanced incentives for the achievement of short and long-term objectives of the Company. The Compensation Committee does not rely on any single performance metric to assess the performance of the Holding Company Named Executive Officers. Instead, their individual performance is analyzed based on a detailed review of factors and achievements, like those discussed below, that the Compensation Committee deems critical to the Company’s long-term success.

The performance of the Holding Company Named Executive Officers for Fiscal 2018 was measured on a number of different quantitative and qualitative factors associated with the Company’s operational and financial performance, shareholder value creation, capital allocation, the retention and motivation of core employees, shareholder engagement and effectiveness in the areas of financial reporting and income tax planning.

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·Operational Performance. Operational performance during Fiscal 2018 was strong as measured by a number of different criteria. In general, the Company is focused on maintaining gross margins and containing costs, even if it results in the Company choosing not to pursue certain revenue opportunities that do not meet our gross margin requirements. As such, the Compensation Committee looked at the following three metrics for Fiscal 2018, among others, compared to Fiscal 2017 and Fiscal 2016.

(1)         Selling, general and administrative expenses.

In general, EBITDA as a percent of revenue reflects our ability to convert revenue dollars into earnings, which is primarily driven by maintaining gross margins.  Likewise, SG&A as a percent of revenues, is a good measure of the effectiveness of our cost containment efforts. The return on equity metric measures our profitability based on dollars invested.  The Compensation Committee considered the performance of the Company for Fiscal 2018 using these metrics, among others, as strong and with the results aligned with our strategic plan.

·Shareholder Value. The Company’s efforts to enhance shareholder value were mixed, as the Compensation Committee generally places a focus on long-term value creation which, from a TSR basis, remains strong over a five-year period at 21.5%, or in the 92% peer group percentile rank. Reflecting the decrease in our share price since October 2017, the one-year TSR is disappointing. However, it should be noted that the Company has had record financial performance over the past two years. In addition, the Company did commence the practice of making quarterly cash dividend payments to stockholders starting with the first quarter of fiscal year ending January 31, 2019.

·Capital Allocation. Capital allocation and balance sheet management activities during Fiscal 2018 were conservative but opportunistic. There were no merger and acquisition transactions as we were unwilling to pay prices based on the current high valuations for businesses. However, management opportunistically made a number of project developmental loans during the year, or $1.5 million in total, and several subsequent to year-end, which may lead to meaningful new EPC contracts for gas-fired power plant projects.  Additionally, our Credit Facility with the Bank of America was expanded from $10 million to $50 million and extended for three years. Cash on the balance sheet was invested conservatively in bank certificates of deposit to ensure continued liquidity while generating a 1.5% weighted average annual return. We also strengthened the relationship with our surety provider, providing ourselves with increased confidence that capacity will be available for future construction projects that require bonding.

·Investor Relations and Communications. Our Holding Company Named Executive Officers were also critical in organizing and facilitating the shareholder engagement process which followed our 2017 Annual Meeting as described in further detail below. We believe that their efforts to reach out and engage with key shareholders in meaningful discussions regarding the strategic direction of the Company and the changes that should be considered to executive compensation in order to enhance the Company’s prospects for long-term success were effective. Working with our Board of Directors and Compensation Committee, management’s analysis of the feedback received during those conversations was critical in determining the responsive changes implemented since the 2017 Annual Meeting.

Other notable achievements by our Holding Company Named Executive Officers during Fiscal 2018 included, but were not limited to the following:

·Enhancing Board Membership. In coordination with the Nominating/Corporate Governance Committee, the Company screened and identified a strong individual for appointment to our Board, Mr. John R. Jeffrey, who possesses an extensive accounting and financial reporting background. His addition strengthened the financial expertise of the Board and enhanced the effectiveness of the Audit Committee oversight over the Company’s accounting and finance reporting function.

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·Ensuring Income Tax Optimization in the Midst of Regulatory Changes. The Company continues to look for opportunities to optimize its overall income tax strategies and to minimize its income tax payment obligations under the law. For example, the Company established a performance-based executive compensation plan for Mr. Griffin in 2016, in part, to ensure income tax deductibility for the incentive-based portion of his annual compensation. During the current year, we commenced the purchasing of state income tax credits at a discount which we will use to reduce our state income tax burden for the year ended January 31, 2018.  In addition, the Company has commenced a review of the activities of its engineering staff in order to identify and quantify the amounts of research and development credits, if any, that we may be entitled to use in reducing prior and current year income taxes. These continued efforts, among others, have resulted in increased profitability and have helped prepare the Company to optimize its strategies under the new federal tax law.

·Retaining and Incentivizing Core Employees. In Fiscal 2018 and as described above, the Company established a deferred compensation plan covering a broad set of managers and key employees for Gemma, our principal operating subsidiary, whereby a portion of each covered employee’s compensation will vest 50% on the fifth anniversary of the award date, and 25% each on the sixth and seventh anniversaries of the award date. The vesting provisions of the deferred compensation plan are designed to encourage long-term employee retention for the individuals covered by the program who are significant contributors to the operational excellence of Gemma and the success of the Company. In addition, stock options were granted to 48 employees of the Company during Fiscal 2018. We believe that the turnover of management and key employees continues to be low relative to industry standards.

Compensation for Mr. Griffin. Mr. Griffin’s compensation is subject to his 2016 Executive Compensation Plan, which was overwhelmingly approved by the Company’s stockholders two years ago and is discussed further below. The Compensation Committee reviewed and approved the following results, determined pursuant to the terms of Mr. Griffin’s agreement. The plan has three performance-based criteria for each fiscal year, including the adjusted EBITDA of Gemma, Gemma’s safety record and project development success fees received by Gemma.

For the first criteria, if the adjusted EBITDA of Gemma (as defined in Mr. Griffin’s plan) for any fiscal year equals or exceeds $40,000,000, Mr. Griffin shall be entitled to a bonus equal to the sum of (i) $1,000,000, and (ii) 6.67% of the amount by which the adjusted EBITDA of Gemma exceeds $40,000,000. For Fiscal 2018, the adjusted EBITDA of Gemma, as defined, was $125.2 million.

For the second criteria, if the project safety performance on Gemma’s projects, as measured by the OSHA Recordable Incident Rate (“RIR”), for any calendar year during his employment term is less than the national average, Mr. Griffin shall be entitled to receive a performance-based compensation payment of either $125,000 or $250,000, depending on the degree of favorable performance. For 2017, because Gemma’s RIR equaled 0.80, which was below the national average, and it was less than the plan target RIR of 1.00, Mr. Griffin earned the higher amount.

For the third criteria, in the event that success fees related to the development of power plants and received by Gemma equal or exceed $100,000, Mr. Griffin shall be entitled to performance-based compensation based thereon equal to $5,000 for each full $100,000 of success fees so received. For Fiscal 2018, Gemma did not earn or receive any success fees. Therefore, Mr. Griffin did not earn incentive compensation for Fiscal 2018 related to this criterion.

The total amount of performance-based compensation for any fiscal year earned by Mr. Griffin as a result of Gemma’s attainment of one or more of the performance goals criteria described above may not exceed a total amount of $4,000,000. As such, Mr. Griffin earned non-equity incentive plan compensation of $4,000,000 for Fiscal 2018 under the terms of his 2016 Executive Compensation Plan.

A nonqualified deferred compensation plan for key employees of Gemma was approved by our Board of Directors 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 has five to seven-year vesting periods with a continuous employment requirement. Based on Gemma’s and each key employee’s performance each year, a dollar amount is set aside each year for the key employees in the deferred compensation plan. 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. With the retirement of Mr. Martin, none of our Named Executive Officers are currently participants in this plan; however, over 25 of Gemma’s key employees are participants in the plan.

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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, the Compensation Committee acted as follows:

·                  Approved the payment of annual cash bonuses related to Fiscal 2018 to Mr. Bosselmann and Mr. Watson in the amounts of $225,000 and $200,000, respectively;

·                  Reviewed and certified the results of the calculations pursuant to the performance criteria established in Mr. Griffin’s employment agreement for Fiscal 2018 resulting in the payment of non-equity incentive plan compensation of $4,000,000;

·                  Approved the award of non-qualified stock options and restricted stock units to Mr. Bosselmann covering 40,000 shares and up to 20,000 shares of Common Stock, respectively; and

·                  Approved the award of non-qualified stock options and restricted stock units to Mr. Watson covering 32,000 shares and up to 16,000 shares of Common Stock, respectively.

As noted above, the values of stock options awarded to Mr. Bosselmann and Mr. Watson in April 2017 covering 50,000 shares and 40,000 shares, respectively, are included in the amounts of compensation reported for the year ended January 31, 2018. Subsequent to year-end, based on changes in our executive compensation program as discussed in detail below under “2017 Say on Pay Vote and Subsequent Investor Outreach,” long-term equity-based incentive compensation was modified to incorporate stock options and performance-based restricted stock units. The awards of both that are disclosed above were made to Messrs. Bosselmann and Watson in April 2018. The values of these awards will be included in the “Summary Compensation Table” for the first time in the amounts of compensation reported for the fiscal year ending January 31, 2019.

For Fiscal 2018, over 72% and 100% of all cash and equity compensation, respectively, was “At Risk” for our Named Executive Officers. 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 financial performance of the Company for Fiscal 2018 and our overall executive compensation strategy. Moreover, the Compensation Committee made its individual bonus and cash incentive amount and stock option award recommendations to the full Board of Directors for approval. These recommendations were approved by the independent directors of the Board of Directors.

Competitive Market Positioning

Although the Compensation Committee possesseshas 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 this process.the exercise of its responsibilities or completion of any of its initiatives. In view of the holding company structure and the 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 available to us at this time.

The executive compensation programCompensation Committee seeks to provide a mix of target total directachieve 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 Named Executive Officer’s performance and experience. For Fiscal 2016,2018, the peer group (the “Peer Group”) consisted of the following 12 companies from the specialty construction and engineering services industry:industry.

Peer Group

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The Compensation Committee periodically reviews the composition of the Peer Group and updates such compositionit based on available market information when appropriate. The companies in the Peer Group were selected because, in the judgment of the Compensation Committee, such companies, when taken as a whole,they represent companies with which we would compete for executive talent.

There were two companies removed from and two added to our Peer Group for Fiscal 2018. Dycom Industries, Inc. was removed due to its large market capitalization relative to ours. The Willbros Group, Inc. was removed due to its pending merger with Primoris Services Corporation. Aegion Corporation and Layne Christensen Company were both added, reflecting market capitalizations and businesses similar to ours. 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 usingexercising its collective judgment in settingthe assessment of executive pay, the Compensation Committee uses benchmarking as one consideration; however,consideration. However, at this time, the Compensation Committee’scommittee’s decisions are based primarily on recommendations from our Chief Executive Officer, the Compensation Committee’s evaluationCEO, its own evaluations of the executive’sexecutive performance, the Company’s overall performance, the specific accomplishments of Gemma and our overall compensation strategy. We do not target executive compensation at any specific percentile or ranking within our Peer Group.

222017 Say on Pay Vote and Subsequent Investor Outreach

Overview.  In 2017, our advisory proposal to approve our executive compensation program failed to receive majority support from our stockholders. Disappointed by this decline in support from the prior year, our Compensation Committee undertook a comprehensive shareholder outreach initiative during the summer and fall of 2017. The objectives of this outreach for the Company were the development of a better understanding of the perspectives of our shareholders with respect to our compensation practices, and the evaluation of any concerns or constructive feedback we received. The following paragraphs describe the details of the outreach process, the feedback received from stockholders and our responses to the concerns.

Process. The process was led by Mr. Quinn, the Chairman of our Compensation Committee, along with Committee members Messrs. Getsinger and Leimkuhler, constituting the entire Compensation Committee. Each of the Compensation Committee members participated in all of our conference calls with investors. Other participants included Mr. Watson, our CFO, and a representative of MacKenzie Partners, our proxy solicitation firm, both of whom were primarily in “listen-only mode” during these discussions. The Compensation Committee members held regular discussions before and after our conferences with shareholders in order to prepare for and react to these conversations. The full Board of Directors received regular updates from the Compensation Committee throughout the process.

Engagement Timeline.

Extent of Outreach.  As part of our outreach, we contacted 28 of our top 50 shareholders, as well as one shareholder from outside of the top 50, along with the two major proxy advisory firms. The stockholders collectively represented over 50% of our outstanding shares of Common Stock. We received responses from and ultimately engaged with six of these stockholders representing more than 15% of the shares that voted at last year’s Annual Meeting. These six investors were represented primarily by members of the corporate governance and proxy voting staffs at large index funds and actively managed mutual funds. The other stockholders either declined our invitation to converse or did not respond. While the Committee had hoped to engage with a wider spectrum of our shareholder base, a number of our top holders are quantitatively focused with whom engagement is limited. In many cases at these

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Rolefirms, there is no contact with whom we can engage. Therefore, we believe that the investor response that we received was a reasonable result of Executive Officersour best efforts to engage with as many shareholders as possible. In addition to speaking with these six large shareholders, we also held extensive discussions with both major proxy advisory firms, whose views we regard as representative of many large investors.

The Chief Executive Officer,What We Heard. Though there was no strong consensus on any one particular item, some of the feedback we received was echoed by two or more other investors. Below is an overview of the feedback we received.

·                  Almost all investors encouraged us to disclose the results of our engagement effort clearly in consultation withour 2018 Proxy Statement.

·                  Almost all stockholders were interested in increased disclosure regarding how executive achievements and financial performance factor into discretionary compensation decisions. Several asked that we include in our 2018 Proxy Statement the identification and description of the specific metrics that the Compensation Committee establishesconsiders. One large investor, however, cautioned against providing too much detail, suggesting that more disclosure is not necessarily equivalent to better disclosure.

·                  Most investors agreed that a three-year vesting period for stock option awards is more market-standard than our customary one-year vesting period and suggested that we should revise the strategic directionvesting periods of future stock option grants accordingly. However, none of the investors had any issues with our use of stock options in general.

·                  Although most investors agreed that stock options and equity awards in general are inherently performance-based to a degree, some suggested that an additional performance metric may create greater alignment between pay and performance. However, none voiced a strong preference for any specific metric, as they were comfortable deferring to the Compensation Committee’s judgment as to what the optimal metric might be. Also, many acknowledged the challenge in selecting an appropriate metric by which to measure the performance of holding company employees.

·                  One investor suggested that we provide a clear summary overview of our business, possibly represented via charts and graphics in the Compensation Discussion and Analysis section of our Proxy Statement, so that investors have a clearer picture of how they should evaluate performance.

·                  None of the institutions we spoke with pushed strongly for moving to “double-trigger” change-of-control agreements with our executives, although some suggested that they would view it positively if we did so prospectively.

·                  Our shareholders were generally comfortable with the levels of compensation and the alignment of pay and performance from a quantitative perspective.

What We Did and Why. Based on the feedback we received, the Compensation Committee took the following actions in 2018.

·Enhanced Disclosure. Given the feedback from some of our major shareholders that they would like to see enhanced disclosure in our Proxy Statement, we are providing more detail regarding the specific factors that influence the Compensation Committee’s decisions, along with greater clarity on our executive compensation program. Duringprogram as a whole, to the first quarterextent possible.

·Increased Vesting Period of each fiscalOption Awards.  All option awards granted from 2018 onward will vest ratably over three years, as opposed to one year, to increase the Chiefalignment between pay and long-term performance. The longer stock option vesting periods have been incorporated into the terms of all stock options awarded since January 1, 2018.

·Introduced Performance-Based Long-Term Incentive Compensation: The Compensation Committee recognizes that although some stockholders consider stock options to be performance-based, other institutions have voiced a desire for the addition of a performance-based equity component to our long-term incentive awards. With that feedback, we have awarded performance-based restricted stock to Messrs. Bosselmann and Watson in April 2018, which vests based on our total shareholder returns relative to our peer group over a three-year period. We believe that these incentive awards are more aligned with market practice. We also believe that total shareholder return is an appropriate performance metric for the Holding Company Named Executive Officer consultsOfficers given that it is one of the few metrics over which they have direct influence. In our conversations with them, our stockholders were supportive of this metric and the general structure of the awards.

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For Mr. Bosselmann, the Board approved the award of a stock option covering 40,000 shares of our Common Stock, with vesting over three years, and the award of performance-based restricted stock units with the Chairmantargeted number of shares to be issued equal to 10,000 shares. For Mr. Watson, the Board approved the award of a stock option covering 32,000 shares of our Common Stock, also with vesting over three years, and the award of performance-based restricted stock units with the targeted number of shares to be issued equal to 8,000 shares. Pursuant to the restricted stock arrangements and depending on the stock performances, the maximum numbers of shares of Common Stock that Mr. Bosselmann and Mr. Watson may earn over the three-year stock price performance period is 20,000 shares and 16,000 shares, respectively, as determined based on the stock earning scale presented below:

·Added Cap on Annual Cash Incentive Awards. Although the annual cash incentive awards to our holding company employees have typically been modest and have varied within a fairly narrow range, given the concerns of one institution, the Compensation Committee is adopting a policy that caps the annual cash incentive awards for Messrs. Bosselmann and Watson to discuss the prior year financial results and to evaluate and to assess the performanceequivalent of 200% of the other Named Executive Officers. This assessment, together with the Compensation Committee’s own judgment taking into account the resultsamount of the most recent competitive market positioning review, is used to evaluate the individual performance and compensationbase salary. We believe that this cap will mitigate undue risk of those Named Executive Officers. The Compensation Committee is solely responsiblewindfall awards, while still ensuring that our executives are adequately rewarded for evaluating the Chief Executive Officer’s performance and setting the level and elements of his compensation. The Chief Executive Officer issuperior performance.

·No New Single-Trigger Change-in-Control Provisions: Although there was not present whena clear consensus from our stockholders on this issue, the Compensation Committee discusseswill commit to not entering into any new employment agreements with “single-trigger” change-in-control provisions. Although the Committee considered amending the existing agreements to remove these awards, after careful deliberation, it ultimately determined that doing so would have required significant trade-offs that were not in stockholders’ best interests.

·Reevaluated Peer Group: Given the significant growth of the Company over the past several years, the Compensation Committee decided to reevaluate the composition of our peer group of companies that we reference in order enable a more effective comparison of our financial performance to the peers going forward and determines his compensation.

Compensationto ensure that our total direct compensation is competitive with market practices. We have made several changes to this peer group which we believe reflect the increasing complexity of our business and Riskthe evolving market in which we compete for talent, described in further detail below.

The Compensation Committee evaluates risksintends to continue its ongoing dialogue with investors and rewards associatedthe proxy advisory firms and, if appropriate, will continue to consider their feedback as the Company makes additional future changes to the Company’s executive compensation plans that are consistent with our overallcorporate business objectives.

2017 Changes Implemented by the Compensation Committee

We also note here that the Company adopted policies and guidelines in the following areas, all effective April 13, 2016, in order to incorporate evolving “best practices” into our executive compensation principlesprogram. These policies are discussed in detail in our 2017 Proxy Statement and structure, and determines the compensationare summarized below.

Stock Ownership Guidelines. The Board of Directors established stock ownership guidelines for the Named Executive Officers. ManagementOfficers and the Compensation Committee identify potential risks and reflectnon-employee directors to further align their economic interests with those risksof our stockholders. Under these guidelines, stock ownership includes shares owned directly or held in trust by an individual. The policy does not encompass shares that an individual has the right to acquire through the exercise of stock options. The Board of Directors will require that each Named Executive Officer own a minimum number of shares of our Common Stock under the guidelines set forth in the designtable below. Each non-employee member of our executive compensation program. With respectBoard of Directors shall own a minimum of 10,000 shares of our Common Stock.

In order to satisfy the ownership requirements, 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 option plan until the applicable ownership requirement is achieved. Excluding sales of shares related to taxes associated with the exercising of stock options, no sales of existing stockholdings are permitted until the required stock ownership quantities are attained but, once attained, the individual may sell any shares that exceed the applicable minimum requirement. In addition, 25% of the target number of shares of Common Stock that may be issued pursuant to performance-based restricted stock units are included in the number of shares held calculation.

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The Board of Directors will periodically review the stock ownership guidelines and may make adjustments. The guidelines are expected to be met within five years of the date they were established. Each non-employee director has either exceeded the stock ownership threshold or is making satisfactory progress toward achieving the threshold.

Clawback Policy. The Company adopted a Clawback Policy covering performance-based incentive compensation. Under this policy, the Board of Directors may, in its sole discretion and to the elementsextent that it determines it is in the Company’s best interest to do so, require the reimbursement of compensation:all or a portion of any performance-based incentive compensation, if:

·                  Base salary provides a fixed level ofThis compensation was based on industry standards and our objectives.

·                  Annual cash incentives are designed to rewardthe achievement of short-term performance objectives.

·                  Long-term equity-based compensation is administered incertain financial results that were subsequently the subject of, or affected by, a numberrestatement of ways to mitigate risk:all or a portion of the Company’s financial statements;

·                  The executive compensation program is designed to deliver a significant portion of a Holding Company executive’s compensationofficer engaged in gross negligence, intentional misconduct or fraud that caused or partially caused the form of long-term incentive opportunities which focusesneed for the executive on maximizing long-term stockholder value restatement; and overall financial performance.

·                  WeThe amount of performance-based incentive compensation that would have establishedbeen awarded to, or the profit realized by the executive officer would have been lower, had the financial results been properly reported.

No Pledging Policy. Our Board of Directors approved as part of new stock ownership guidelines forthat no officer of the NEOs and non-employee directors.Company may pledge, hypothecate, 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 of Directors 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 securities.

Major Elements of Executive Compensation and Analysis of Compensation Decisions

Annually, the Compensation Committee considers each of the following elements of executive compensation, individually and in the aggregate, when making decisions regarding the ratification and/or approval of compensation amounts for each Named Executive Officer. 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 and believesmanagement. 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 the Company.

Major Pay Elements of the Executive Compensation Program and Analysis of Fiscal 2016 Compensation Decisions

The Compensation Committee considers each pay element under the executive compensation program individually and in the aggregate when making decisions regarding amounts that may be awarded to Named Executive Officers.

Annual Base Salaries. Each Named Executive Officers are provided with aOfficer is paid an annual base salary which recognizesamount 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 importanceother factors considered important to the Company. Base salary levels are intentionally setestablished 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 responsibility.responsibilities. In making hisindividual salary recommendation to the Compensation Committee, the Chief Executive Officer reviewsevaluates the performance of the other Named Executive Officers, reviews market compensation levels for comparable positions, and considers the particular executive’s potential attractiveness to other companies andwhile mindful of the overall financial health and performance of the Company. The Compensation Committee reviews the Chief Executive Officer’ssalary recommendations of the CEO and, together with impressions formed based on its own judgments, setsobservations, approves base salaries relative to the recommendations.for Named Executive Officers.

The Compensation Committee directly sets the base salary for the Chief Executive Officer.CEO. In so doing, the Compensation Committee reviewsmembers annually review the performance of the Chief Executive OfficerCEO and other relevant information.

Based upon the recently completed reviews and the negotiation of a new employment agreement with Mr. Griffin (see the Summary of Employment Arrangements below), his base salary was increased to $1,000,000 starting in fiscal 2017 while the guaranteed bonus portion of his previous employment agreement was eliminated.  Mr. Griffin’s base salary, which has not been adjusted since 2011, was increased due to superior performance at Gemma when compared to peers over the past several years.  As noted earlier, Gemma has demonstrated consistent organic revenue growth of 9.5% per year and EBITDA growth of 19.1% per year while sustaining superior margins to industry

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competitors. Including theThe base salary paid to each Named Executive Officer for the fiscal years ended January 31, 2018, 2017 and 2016 is set forth in the “Salary” column of the Chief Executive Officer, no other“Summary Compensation Table” presented below. No changes were made to the base salaries of the Named Executive Officers for the fiscal year ending January 31, 2017.

The base salary paid to each Named Executive Officer for the fiscal years ended January 31, 2016, 2015 and 2014 is set forth in the “Salary” column of the Summary Compensation Table on page 28 of this Proxy Statement.2018.

Annual Cash Incentives.Bonuses. The Compensation Committee providesmay award cash bonus payments to Named Executive Officers with annual cash incentive awards 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 designedintended to communicateconvey to executives that good performance is recognized and valued.valued by the Compensation Committee. Furthermore, we believe that annual cash incentivebonus awards strongly encourage executives to continuously improve their efforts in delivering annual results that are aligned with our long-term goals.

At the conclusion of each fiscal year, the Chief Executive OfficerCEO submits to the Compensation Committee recommended annual cash incentivebonus award amounts for each of the other Named Executive Officers.

After reviewing the recommendations of the Chief Executive Officer,CEO, the Fiscal 20162018 financial performancesperformance of the Company as a whole and the business of Gemma in particular and the individual performances of Mr. Griffin, Mr. Martin, Ms. FlandersBosselmann and Mr. Bosselmann,Watson, the Compensation Committee approved an aggregate amount of $3.9 million$425,000 in annual cash incentivebonus awards for Fiscal 20162018 as identified above under the caption Fiscal 2016 Compensation Decisions.  These annual cash incentive awards were paid to executives in March 2016.February 2018. The annual incentive awards earned by each Named Executive Officer for the fiscal years ended January 31, 2016, 20152018, 2017 and 20142016 are set forth in the “Bonus” column of the “Summary Compensation Table” presented below. Going forward, as part of our changes for Fiscal 2019, the annual cash bonus amounts for Messrs. Bosselmann and Watson will be subject to a cap equal to 200% of the corresponding base salary amounts.

For Fiscal 2018, Mr. Griffin received non-equity incentive plan compensation pursuant to his 2016 Executive Compensation Plan, in lieu of annual cash bonuses which he received for the fiscal year ended January 31, 2016, and earlier. The Compensation Committee reviewed and certified the calculations for Mr. Griffin’s plan resulting in the payment of $4,000,000 in non-equity incentive plan compensation in April 2018, and set forth in the “Non-equity Incentive Plan Compensation” column of the Summary Compensation Table on page 28 of this Proxy Statement.presented below.

Long-Term Equity-Based Compensation. For Fiscal 2016,2018, Named Executive Officers were eligible to receive grants of long-term equity-based compensation awards under our 2011the Stock Plan. Equity-basedHistorically, the awards made to the Named Executive Officers have historically been comprisedconsisted of time vestingtime-vesting stock options which the Compensation Committee believes best achievesrespond to the executive compensation program’s objectives of:

·                  Linking incentive compensation to the Company’s long-term performance;

·                  Creating long-term stockholder value;

·                  Aligning the financial interests of the Named Executive Officers with the financial interests of stockholders; and

·                  Rewarding actions that enhance long-term stockholder returns.

However, as discussed in the above, the Compensation Committee combined performance-based restricted stock units with non-qualified stock options for the long-term equity-based compensation awards made to Mr. Bosselmann and Mr. Watson in April 2018.  The release of the stock restrictions depends on the price performance of our Common Stock measured against the price performances of a peer group of common stocks over a three-year period. In addition, the vesting period associated with non-qualified stock options awarded to each executive is three years, consistent with the elongated vesting period policy for stock options that was adopted by the Compensation Committee in January 2018.

In making each award determination, the Compensation Committee takes into considerationconsidered key business priorities, Peer Group trends, potential stockholder dilution and the general economic environment. Stock options emphasize our commitmentare typically used as incentives to stockholder returns. Stock options generally align the priorities of Named Executive Officers’ incentivesOfficers with those of our stockholders because stock options provide value to the holderholders only if our stock price increases from the date of grant. Stock options also inherently reward performance as it is our performance over an extended period that causesgrant to the valuedate of our Common Stock and the value of outstanding stock options, to increase.

Exceptexercise. In addition, except with respect to certain terminations following a change of control of the Company, the continued employment of a stock option holder is required for the vesting of each stock option.option to occur. Thus, the potential realization of the value of outstanding but unvested stock option awardsoptions meaningfully encourages executives to remain with the Company, as leaving the Company results in the forfeiture of the value associated with any unvested stock option awards.

In addition, the Compensation Committee takes into consideration the significant number of shares of our Common Stock that Mr. Griffin owns which amounts to over 3.4% of our outstanding shares, and believes that his interests are fully aligned with the interests of the other shareholders.  Given the significance of Mr. Griffin’s equity holdings in the Company, the Compensation Committee has elected to pay out annual cash incentives in lieu of stock options for Mr. Griffin.32

As a resultBased on the results of the factors discussed above,its deliberations, the Compensation Committee granted stock option awards to Mr. BosselmanBosselmann and Mr. Watson on April 13, 2018 having a grant date fair valuevalues of approximately $450,000$349,600 and $279,700, respectively, based on the Black-Scholes valuation model atand an option exercise price equal to the closing price of the underlying Common Stock on the date of grant ($33.8537.60 per share). The Compensation Committee also approved in April 2016 the award of an initialIn addition, performance-based restricted stock optionunits were awarded to Mr. Bosselmann and Mr. Watson covering 10,000 shares in recognitionon April 13, 2018 with estimated fair value amounts of his new employment with the Company.approximately $333,000 and $266,000, respectively. No stock options or performance-based restricted stock units were granted to Ms. Flanders or Mr. MartinGriffin during or after Fiscal 20162018 related to his service as an executive officer.

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Finally, in connection with his retirement in November 2017, Mr. Martin entered into a separation agreement with Gemma pursuant to the terms of the Company’s 2001 Stock Option Plan (the “2001 Plan”), in whole or in part, in its sole discretion uponwhich he is entitled to receive three payments over a change in control, as definedthree-year period that will total $630,000 in the plan document. In its sole discretion,aggregate. This arrangement is described in the Compensation Committee may also determine that, upon the occurrence“Summary of such a change in control, each outstanding stock option awarded under the 2001 Plan shall terminate within a specified number of days after notice to the optionee thereunder, and each such optionee shall receive, with respect to each share of our Common Stock subject to such option, an amount equal to the excess of the fair market value of such shares immediately prior to such change in control over the exercise price per share of such option. As of January 31, 2016, there were outstanding options to purchase 35,000 shares of our Common Stock that were awarded pursuant to the terms of the 2001 Plan that expired in July 2011 and that was succeeded by the Company’s 2011 Stock Plan.Employment Agreements” section below.

Other Benefits

We provide a range of retirement and health and welfare benefits. The Named Executive Officers are eligible for the following benefits:

401(k) Plan.We maintain three tax qualified defined contribution retirement plans (the “401(k) Plans”) that cover substantially all salaried and hourly employees. Each of the Named Executive Officers participates in a 401(k) Plan. Each employee is entitled to participate in only one of the 401(k) Plans. We do not maintain any defined benefit pension plan or non-tax qualified supplemental retirement plan or non-tax qualified deferred compensation plan.

Health and Welfare Plans. Group benefits for active employees such as medical, dental, vision, life insurance and disability coverages are available to substantially all salaried and hourly employees, including Named Executive Officers, through our flexible benefits plan.

Clawback Policy

Effective April 13, 2016, we adopted a Clawback Policy covering performance-based incentive compensation. Under this policy, the Board of Directors may, in its sole discretion and to the extent that it determines it is in the Company’s best interest to do so, require the reimbursement of all or a portion of any performance-based incentive compensation, if:

·                  This compensation was based on the achievement of certain financial results that were subsequently the subject of, or affected by, a restatement of all or a portion of the Company’s financial statements;

·                  The executive officer engaged in gross negligence, intentional misconduct or fraud that caused or partially caused the need for the restatement; and

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed with management the preceding Compensation Discussion and Analysis as required by Item 402(b) of Regulation S-K. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended January 31, 2016.2018.

The foregoing report has been furnished on behalf of the Board of Directors by the undersigned members of the Compensation Committee.

Compensation Committee

James W. Quinn, Chair

Peter W. Getsinger

William F. Leimkuhler

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