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<SEC-DOCUMENT>0000950123-10-044634.txt : 20100505
<SEC-HEADER>0000950123-10-044634.hdr.sgml : 20100505
<ACCEPTANCE-DATETIME>20100505171512
ACCESSION NUMBER:		0000950123-10-044634
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20100623
FILED AS OF DATE:		20100505
DATE AS OF CHANGE:		20100505
EFFECTIVENESS DATE:		20100505

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ARGAN INC
		CENTRAL INDEX KEY:			0000100591
		STANDARD INDUSTRIAL CLASSIFICATION:	CONSTRUCTION SPECIAL TRADE CONTRACTORS [1700]
		IRS NUMBER:				131947195
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0131

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31756
		FILM NUMBER:		10802876

	BUSINESS ADDRESS:	
		STREET 1:		ONE CHURCH STREET SUITE 401
		CITY:			ROCKVILLE
		STATE:			MD
		ZIP:			20850
		BUSINESS PHONE:		301 315-0027

	MAIL ADDRESS:	
		STREET 1:		ONE CHURCH STREET SUITE 401
		CITY:			ROCKVILLE
		STATE:			MD
		ZIP:			20850

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PUROFLOW INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ULTRA DYNAMICS CORP
		DATE OF NAME CHANGE:	19830522
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>c00276def14a.htm
<DESCRIPTION>DEF 14A
<TEXT>
<HTML>
<HEAD>
<TITLE>DEF 14A</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="center" style="font-size: 14pt; margin-top: 6pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>SCHEDULE 14A</B>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 12pt">Proxy Statement Pursuant to Section&nbsp;14(a) of the Securities<BR>
Exchange Act of 1934 (Amendment No.&nbsp;_____)</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Filed by the Registrant <FONT face="wingdings" size="2">&#254;</FONT><BR>
Filed by a Party other than the Registrant <FONT face="wingdings" size="2">&#111;</FONT>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box:

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Preliminary Proxy Statement</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD><B>Confidential, for Use of the Commission Only (as permitted by Rule&nbsp;14a-</B><B>6(e)(2)</B><B>)</B></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#254;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Definitive Proxy Statement</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Definitive Additional Materials</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Soliciting Material Pursuant to &#167;240.14a-12</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center" style="font-size: 10pt; margin-top: 6pt">&nbsp;</DIV>

<DIV align="center" style="font-size: 14pt">
ARGAN, INC.</DIV>
<DIV align="center" style="font-size: 10pt"><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
(Name of Registrant as Specified In Its Charter)</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">&nbsp;</DIV>

<DIV align="center">
</DIV>
<DIV align="center" style="font-size: 10pt"><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Payment of Filing Fee (Check the appropriate box):

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#254;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>No fee required.</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and 0-11.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(1)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Title of each class of securities to which transaction applies:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(2)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Aggregate number of securities to which transaction applies:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(3)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule&nbsp;0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined):</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(4)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Proposed maximum aggregate value of transaction:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(5)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Total fee paid:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Fee paid previously with preliminary materials.</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="1%" nowrap align="left" valign="top">
<FONT face="wingdings" size="2">&#111;</FONT></TD>
<TD width="1%">&nbsp;</TD>
<TD>Check box if any part of the fee is offset as provided by Exchange Act Rule&nbsp;0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(1)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Amount Previously Paid:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(2)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Form, Schedule or Registration Statement No.:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(3)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Filing Party:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">(4)</TD>
<TD width="1%">&nbsp;</TD>
<TD>Date Filed:</TD>
</TR>

<TR>
<TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
<TD width="2%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD style="font-size: 10pt"><DIV align="left">

</DIV></TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<TD width="2%" style="background: transparent">&nbsp;</TD>
<TD width="3%" nowrap align="left">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt">
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><IMG src="c00276c0027600.gif" alt="(ARGAN, INC.  LOGO)">
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 10pt">One Church Street<BR>
Suite&nbsp;201<BR>
Rockville, MD 20850<BR>
301-315-0027<BR>
fax 301-315-0064<BR>
www.arganinc.com
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 10pt">May&nbsp;7, 2010
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Dear Fellow Argan, Inc. Stockholder:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">You are cordially invited to attend our 2010 Annual Meeting of Stockholders to be held on
Wednesday, June&nbsp;23, 2010, at 11 a.m. local time at the offices of Allen &#038; Company LLC located at
711 Fifth Avenue, 9th Floor, New York, New York 10022. The matters to be acted upon at the meeting
are described in detail in the accompanying notice of annual meeting of stockholders and proxy
statement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">We are pleased to be using the Securities and Exchange Commission rule that allows companies
to furnish proxy materials to their stockholders primarily over the Internet. We believe that this
process should expedite stockholders&#146; receipt of proxy materials, lower the costs of the annual
meeting and also help to conserve natural resources by reducing the use of paper. On or about May
10, 2010, we will mail our stockholders a Notice of Internet Availability of Proxy Materials (the
&#147;Notice&#148;) containing instructions on how to access our 2010 Proxy Statement and 2010 Annual Report
and vote online. The Notice also includes instructions on how to receive a paper copy of the proxy
materials, including the notice of annual meeting, proxy statement, annual report and proxy card.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Whether or not you plan to attend the meeting, your vote is important and we encourage you to
review our proxy materials and promptly cast your vote using the instructions provided in the
Notice. You may vote your shares over the Internet or via a toll-free telephone number.
Alternatively, if you requested or received a paper copy of the proxy materials by mail, you may
vote over the Internet, you may vote by telephone, or you may sign, date and mail the proxy card in
the envelope provided. Instructions regarding the three methods of voting are contained in the
Notice and proxy card.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As described in the accompanying proxy statement, the Company&#146;s Board of Directors has
approved the matters included in the proposals presented there, and believes that they are fair to,
and in the best interests of, the Company&#146;s stockholders. Thank you for your continued support of
Argan, Inc.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">I look forward to seeing you on June&nbsp;23rd.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Very truly yours,</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ <I>Rainer H. Bosselmann</I>
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Rainer H. Bosselmann<BR>
Chief Executive Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>If you plan to attend the 2010 Annual Meeting on June&nbsp;23, 2010</B>, as a courtesy to the building
management at 711 Fifth Avenue, we request that you call, fax or email your intentions so that we
can notify the front desk of your attendance. Please notify Sherolyn Nanson by phone at
301-315-0027, by fax at 301-315-0064, or by email at
<u>ssnanson@arganinc.com</u>.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Argan, Inc.<BR>
One Church Street, Suite&nbsp;201<BR>
Rockville, Maryland 20850</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Notice of<BR>
Annual Meeting of Stockholders<BR>
to Be Held Wednesday, June&nbsp;23, 2010</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">To Our Stockholders:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Our 2010 Annual Meeting of Stockholders (the &#147;Annual Meeting&#148;) will be held on June&nbsp;23, 2010
at 11:00&nbsp;a.m., local time, at the offices of Allen &#038; Company LLC located at 711 Fifth Avenue,
9<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Floor, New York, New York 10022.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">At the Annual Meeting you will be asked to consider and vote upon the following matters:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">1.&nbsp;The election of eight directors to our Board of Directors, each to serve until our 2011
Annual Meeting of Stockholders and until his/her successor has been elected and qualified or until
his/her earlier resignation, death or removal.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">2.&nbsp;The ratification of the appointment of Grant Thornton LLP as our independent registered
public accountants for the fiscal year ending January&nbsp;31, 2011.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">3.&nbsp;To transact any other business that may properly come before the 2010 Annual Meeting of
Stockholders or any adjournment or postponement of the meeting.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">These items of business are more fully described in the accompanying proxy statement. Only
stockholders of record at the close of business on April&nbsp;27, 2010 are entitled to notice of and to
vote at the Annual Meeting or any adjournment or postponement of the Annual Meeting.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">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.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">BY ORDER OF THE BOARD OF DIRECTORS,</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ <I>Arthur F. Trudel</I>
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Arthur F. Trudel<BR>
Corporate Secretary
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Rockville, Maryland<BR>
May&nbsp;7, 2010
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Argan, Inc.<BR>
One Church Street, Suite&nbsp;201<BR>
Rockville, Maryland 20850</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>Proxy Statement</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>May&nbsp;7, 2010</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The accompanying proxy is solicited on behalf of the Board of Directors of Argan, Inc., a
Delaware corporation (referred to herein as &#147;Argan&#148; or the &#147;Company&#148;), for use at the 2010 Annual
Meeting of Stockholders (the &#147;Annual Meeting&#148;) to be held on June&nbsp;23, 2010, at 11:00&nbsp;a.m., local
time, at the offices of Allen &#038; Company LLC located at 711 Fifth Avenue, 9<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> Floor, New
York, New York 10022. This Proxy Statement and the accompanying proxy card are being mailed
starting on or about May&nbsp;10, 2010 to stockholders of record on April&nbsp;27, 2010. Our Annual Report on
Form 10-K for the fiscal year ended January&nbsp;31, 2010 is enclosed with this Proxy Statement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">At the Annual Meeting, stockholders will be asked to consider and vote upon two proposals: (1)
the election of eight directors to serve until the 2011 Annual Meeting of Stockholders (the
&#147;Election of Directors&#148;) and (2)&nbsp;the ratification of the appointment of the Company&#146;s independent
registered public accountants (the &#147;Ratification of Accountants&#148;).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">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 &#147;FOR&#148; each of the two
proposals set forth above and otherwise in the discretion of the proxy holders as to any other
matter that may come before the Annual Meeting.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>INFORMATION CONCERNING VOTING AND PROXY SOLICITATION</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Internet Availability of Proxy Materials</B>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As permitted by Securities and Exchange Commission rules, we are making this proxy statement
and our 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&#146; receipt of proxy materials, lower the costs of the Annual Meeting and help to
conserve natural resources. On or about May&nbsp;10, 2010, 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 &#147;Notice&#148;) containing instructions on how to access and review
the proxy materials, including our proxy statement and our annual report, on the Internet 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.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">If the shares you own are held in &#147;street name&#148; by a bank or brokerage firm, your bank or
brokerage firm 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 of our proxy materials. If you received
these materials in paper form, the materials include a voting instruction card so you can instruct
your broker, bank or other holder of record how to vote your shares.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 1 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Voting</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Each stockholder is entitled to one vote for each share of Argan, Inc. common stock (&#147;Common
Stock&#148;) that the stockholder owns as of April&nbsp;27, 2010 with respect to all matters presented at the
Annual Meeting. Stockholders do not have the right to cumulate their votes in the election of
directors.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Record Date</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Only stockholders of record at the close of business (5:00 p.m. Eastern Daylight Time) on
April&nbsp;27, 2010 (the &#147;Record Date&#148;) 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 &#147;Principal Stockholders.&#148;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Outstanding Shares</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">At the close of business on the Record Date, April&nbsp;27, 2010, there were 13,590,727 shares of
Common Stock outstanding. The closing price of our Common Stock on the Record Date, as reported by
NYSE Amex, was $10.67 per share.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Quorum; Effect of Abstentions and &#147;Broker Non-Votes&#148;</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">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.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">If stockholders indicate on their proxy card that they wish to abstain from voting, including
brokers holding their customers&#146; 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.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">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 New York Stock Exchange rules to vote those shares for
or against &#147;routine&#148; matters, such as the ratification of Grant Thornton LLP as our independent
registered public accountants. Brokers cannot vote on their customers&#146; behalf on &#147;non-routine&#148;
proposals. These rules apply to us notwithstanding the fact that shares of our Common Stock are
traded on the NYSE Amex market. If a broker votes shares that are unvoted by its customers for or
against &#147;routine&#148; proposals, these shares are counted for the purpose of establishing a quorum and
will also be counted for the purpose of determining the outcome of such &#147;routine&#148; proposals.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B>The New York Stock Exchange rules no longer grant brokers discretionary authority to vote in
the election of directors. 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 the election of
directors. We urge you to promptly provide voting instructions to your broker to ensure that your
shares are voted in the election of directors. Please follow the instructions set forth in the
Notice</B>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The effect of abstentions (i.e. if you or your broker mark &#147;ABSTAIN&#148; on a proxy card) and
broker non-votes on the counting of votes for each proposal is described below. 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)&nbsp;the broker holding shares in street name for the beneficial owner
thereof does not receive voting instructions from the beneficial owner, and (2)&nbsp;the broker lacks
discretionary authority to vote the shares. Banks and brokers cannot vote on their clients&#146; behalf
on &#147;non-routine&#148; proposals. For the purpose of determining whether stockholders have approved a
matter, abstentions are treated as shares present or represented and voting. Broker non-votes are
not counted or deemed to be present or represented for the purpose of determining whether
stockholders have approved a matter.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 2 -<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Voting Rights; Required Vote</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">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:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#149; 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. Abstentions and broker non-votes are not taken into account in determining
the outcome of the election of directors.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">&#149; Ratification of Accountants. Approval of this 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, while broker non-votes will not be taken into account in determining
the outcome of the vote on this proposal.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Accordingly, abstentions, broker non-votes or the failure to either return a proxy or to
attend the Annual Meeting will be deemed to be the related stockholder not voting on the Election
of Directors and the Ratification of Accountants.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Named Executive Officers and the Directors of the Company will vote the shares of Common
Stock beneficially owned or controlled by them (representing approximately 24.14% of the shares of
Common Stock issued and outstanding as of January&nbsp;31, 2010) in favor of each of the proposals
discussed above.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">You may revoke your proxy at any time before it is voted by delivering written notice of
revocation to the Corporate Secretary at Argan, Inc., One Church Street, Suite&nbsp;201, Rockville,
Maryland 20850, by executing and delivering a subsequently dated proxy, or by attending the Annual
Meeting and voting in person. Proxies solicited by the Board of Directors of the Company 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.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">A quorum of stockholders is necessary to take action at the Annual Meeting. The presence, in
person or by proxy, of the holders of a majority of the shares of Common Stock of the Company
entitled to vote at the meeting will constitute a quorum. 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.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Voting of Proxies</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">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 &#147;FOR&#148; each proposal, including
&#147;FOR&#148; the election to the Board of each of the nominees named on the proxy card, and &#147;FOR&#148; 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.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Adjournment of Meeting</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">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.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 3 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Expenses of Soliciting Proxies</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The expenses of solicitation, including the cost of printing and mailing, will be paid by the
Company. After the original mailing of the proxy materials, we and/or our agents may also solicit
proxies by mail, telephone, telegraph, facsimile, e-mail or in person. 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. The Company may reimburse brokers, nominees and other fiduciaries for
their reasonable expenses in forwarding proxy materials to beneficial owners.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Revocability of Proxies</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">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 &#038;
Trust Company (our stock transfer agent) at 17 Battery Place, New York, New York 10004 or to the
Corporate Secretary at Argan, Inc., One Church Street, Suite&nbsp;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&#146;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&#146;s beneficial ownership of
the Common Stock and that the broker, bank or other nominee is not voting the shares at the Annual
Meeting.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 4 -<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PROPOSAL NO. 1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>ELECTION OF DIRECTORS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The directors of the Company 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.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">At the Annual Meeting, stockholders of the Company are being asked to elect eight 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 &#147;FOR&#148; the election of each of the nominees
listed below.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">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 director. 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.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Directors/Nominees</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The names of the nominees, their ages as of April&nbsp;30, 2010, and certain information about them
are set forth below:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Position</B></TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Rainer H. Bosselmann</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="white-space: nowrap">Chairman of the Board</FONT></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Henry A. Crumpton</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cynthia A. Flanders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DeSoto S. Jordan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">William F. Leimkuhler</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Daniel A. Levinson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">W.G. Champion Mitchell</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James W. Quinn</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B><I>Rainer H. Bosselmann</I></B><B>. </B>Mr.&nbsp;Bosselmann has been a Director and Chairman of the Board of
Directors since May&nbsp;2003 and Chief Executive Officer since October&nbsp;2003. Mr.&nbsp;Bosselmann was a
Director and Vice Chairman of the Board from January&nbsp;2003 to May&nbsp;2003. Mr.&nbsp;Bosselmann was Chairman
of the Board, Chief Executive Officer and a Director of Arguss Communications, Inc. (&#147;Arguss&#148;), a
telecommunications infrastructure company listed on the New York Stock Exchange, from 1996 through
2002 and President of Arguss from 1997 through 2002. Since 1996, Mr.&nbsp;Bosselmann has served as a
principal with Holding Capital Group, Inc., a firm engaged in mid-market acquisitions and
investments. From 1991 through 1995, Mr.&nbsp;Bosselmann served as Vice Chairman of the Board and
President of Jupiter National, Inc. (&#147;Jupiter National&#148;), a business development company listed on
the American Stock Exchange. Mr.&nbsp;Bosselmann currently serves as a director of Midasco LLC and The
Roberts Company which are companies controlled by Main Street Resources.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Mr.&nbsp;Bosselmann&#146;s long tenure as CEO and Chairman positions him to contribute to the Board his
extensive knowledge of the Company, its history and development, and to provide critical Board
continuity. As CEO 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 and the Company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B><I>Henry A. Crumpton. </I></B>Ambassador Crumpton has been a Director of the Company since February&nbsp;2008.
Ambassador Crumpton has been President of the Crumpton Group since February&nbsp;2007. He was
Ambassador-at-Large for Counterterrorism at the United States Department of State from August&nbsp;2005
to February&nbsp;2007.
Ambassador Crumpton was Chief of the National Resources Division at the Central Intelligence
Agency from 2003 to August&nbsp;2005.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 5 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Ambassador Crumpton&#146;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.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B><I>Cynthia A. Flanders. </I></B>Ms.&nbsp;Flanders was appointed to the Board of Directors in April&nbsp;2009. In
2009, she also founded Skipjack Partners LLC, a woman-owned consultancy that advises entrepreneurs
and businesses on issues of capital, strategy, organization and management. From 1975 through
2009, Ms.&nbsp;Flanders held a series of positions of increasing responsibility with Bank of America and
its predecessor organizations (the &#147;Bank&#148;). Ultimately, she served as the Global Commercial Banking
Executive for the Bank&#146;s Mid-Atlantic region overseeing eight commercial banking markets and over
80 client teams delivering a full array of financial services to over 6,000 small, middle market
and micro cap clients in South/Central New Jersey, Pennsylvania, Delaware, Maryland, Virginia and
the District of Columbia. From 2000 to 2008, as a Commercial Market Executive, Ms.&nbsp;Flanders led
twelve client management teams covering middle market clients and prospects throughout Maryland and
the Washington, DC metropolitan area. In addition to spending over 20&nbsp;years in commercial banking,
Ms.&nbsp;Flanders also worked in the consumer banking, operations and finance organizations of the Bank.
She is a FINRA Registered Principal with various securities licenses.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company was fortunate to add Ms.&nbsp;Flanders to the Board last year. With her long career at
the Bank, she brings to the Board and the Company considerable experience in executive management
and strategic planning, as well as expertise in financial analysis and capital structuring. 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 general commercial banking matters and issues
specifically related to the Bank.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B><I>DeSoto S. Jordan</I></B><B>. </B>Mr.&nbsp;Jordan has been a Director of the Company since May&nbsp;2003. Mr.&nbsp;Jordan
has been Chairman of Afton Holdings, LLC, a private equity firm, since 2000. Mr.&nbsp;Jordan was a
co-founder of Perot Systems Corporation (&#147;Perot&#148;) and served as an officer from 1988 to 1999 and as
a Director from February&nbsp;2004 to the time of its acquisition in 2009. Mr.&nbsp;Jordan was a Director of
Arguss from 1999 through 2002.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Mr.&nbsp;Jordan has been a long-time and trusted source of business advice to the Company&#146;s senior
executives as a member of the Company&#146;s Board as well as the board of directors of Arguss. He is
richly experienced in both executive management and board service. His experience gained as a
member of both the compensation committee and the nominating and governance committee for the board
of directors of Perot is particularly valued by our Board, and makes him well-qualified to serve as
the chair of the Board&#146;s Compensation Committee.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B><I>William F. Leimkuhler. </I></B>Mr.&nbsp;Leimkuhler has been a Director since June&nbsp;2007. He has been
General Counsel and Director of Business Development of Paice Corporation, a privately held
developer of hybrid electric powertrains, since 1999. From 1994 through 1999, he held various
positions with Allen &#038; Company LLC, a New York investment banking firm, initially serving as the
firm&#146;s General Counsel. Prior to that, Mr.&nbsp;Leimkuhler was a corporate partner with the New York law
firm of Werbel &#038; Carnelutti (now Heller Ehrman White &#038; McAuliffe). Mr.&nbsp;Leimkuhler is a Director of
Speedus Corp. (NASDAQ: SPDE), Integral Systems, Inc. (NASDAQ: ISYS) and U.S. Neurosurgical, Inc.
(OTCBB: USNU), and also serves on the Board of a number of privately held companies.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The experience that Mr.&nbsp;Leimkuhler has developed as a legal executive with an investment
banking firm, a securities law firm partner and a board member for other public companies makes him
a valuable member of our Board, and a well-qualified Audit Committee chairman. He is a respected
source of legal guidance to the members of the executive management team and the members of the
Board and provides special insight to them on matters relating to financial reporting and corporate
governance requirements.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 6 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B><I>Daniel A. Levinson</I></B><B>. </B>Mr.&nbsp;Levinson has been a Director of the Company since May&nbsp;2003. In 1997,
Mr.&nbsp;Levinson founded Main Street Resources, a niche sponsor of private equity transactions, and has
been its managing
partner. Since 1998, Mr.&nbsp;Levinson has been President of MSR Advisors, Inc. From 1988 to
1997, Mr.&nbsp;Levinson was one of the principals of Holding Capital Group. Mr.&nbsp;Levinson was also a
Director of Arguss from 2000 through 2002.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As a member of the boards of Arguss and the Company, Mr.&nbsp;Levinson has been a valuable and
long-time source of advice and counsel to our Chief Executive Officer on general business issues
and on a wide variety of financial matters as well as strategic planning and the evaluation of
potential acquisition targets. He also contributes to the Board his considerable financial acumen,
business analytical skills and experiences gained from active involvement in the oversight of each
of the companies included in his firm&#146;s portfolio.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B><I>W.G. Champion Mitchell</I></B><B>. </B>Mr.&nbsp;Mitchell has been a Director of the Company since October&nbsp;2003.
From January&nbsp;2003 until June&nbsp;2008, Mr.&nbsp;Mitchell was Chairman of the Board and Chief Executive
Officer of Network Solutions, Inc. which is engaged in the creation, marketing and management of
digital identity and web presence products. From August&nbsp;2001 to 2003, Mr.&nbsp;Mitchell was Executive
Vice President and General Manager, Mass Markets Division, of VeriSign Inc. which is a provider of
critical Internet infrastructure services. From May&nbsp;1999 to March&nbsp;2000, Mr.&nbsp;Mitchell was Chairman,
President and Chief Executive Officer of Convergence Equipment Company, a telephony switch
manufacturer.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Mr.&nbsp;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 the Company addresses
the contemporary issues facing public companies today. His experience provides him with substantial
insight into management, operational and financial matters, and knowledge of market conditions and
trends.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><B><I>James W. Quinn</I></B><B>. </B>Mr.&nbsp;Quinn has been a Director of the Company since May&nbsp;2003. Mr.&nbsp;Quinn is
currently a Managing Director of Allen &#038; Company LLC (&#147;Allen&#148;), an investment banking firm. Since
1982, Mr.&nbsp;Quinn has served in various capacities at Allen and its affiliates, including head of the
Corporate Syndicate Department and Chief Financial Officer. Mr.&nbsp;Quinn served as a Director of
Arguss from 1999 through 2002.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Mr.&nbsp;Quinn&#146;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 chair of
the Board&#146;s Nominating Committee. His many years of experience allow him to counsel the Board on
matters such as mergers and acquisitions, capital structure, financings and strategic planning and
to provide insightful views on public company reporting matters and general business trends.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Composition of Board of Directors</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The number of directors which shall constitute the whole Board of Directors shall be not less
than four or more than ten. The eight current directors will stand for re-election at the Annual
Meeting as described in this proxy statement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Director Attendance at the Annual Meeting</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Although the Company does not have a formal policy with respect to the attendance of members
of our Board of Directors at annual meetings, the Company strongly encourages directors to attend
the annual meeting. All but one of our directors attended last year&#146;s annual meeting, and we
expect that all of our directors will attend this year&#146;s Annual Meeting.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Board of Directors Meetings and Committees</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">During the fiscal year ended January&nbsp;31, 2010, the Board of Directors met four (4)&nbsp;times,
including telephone conference meetings, and acted by unanimous written consent on two (2)&nbsp;other
occasions. No director attended fewer than 75% of the aggregate number of meetings of the Board of
Directors and meetings held by all committees of the Board on which the director served during the
fiscal year.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 7 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Board has four standing committees: the Executive Committee, the Audit Committee, the
Compensation Committee, and the Nominating Committee. The functions of each of these committees and
their members are specified below. The latter three committees operate under written charters
approved by the Board of Directors, which are available on our
website at <u><I>www.arganinc.com</I></u>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Executive Committee is comprised of Messrs.&nbsp;Bosselmann (who is the chairman of this
committee), Jordan and Levinson. The Executive Committee, which held no meetings during fiscal
year ended January&nbsp;31, 2010, is authorized to exercise the general powers of the Board of Directors
managing the business and affairs of the Company between meetings.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%">The members of the other three committees are identified in the following table.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="46%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Audit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Compensation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Nominating</B></TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Director</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Committee</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Committee</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Committee</B></TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<tr>
    <TD>&nbsp;</TD>
</tr>

<TR valign="bottom" style="background: #cceeff">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Henry A. Crumpton
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Member</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Cynthia A. Flanders
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Member</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">DeSoto S. Jordan
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Member
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Chairman
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Member</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">William F. Leimkuhler
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Chairman
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Member</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Daniel A. Levinson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">W.G. Champion Mitchell
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Member</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">James W. Quinn
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Member
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Chairman</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Board has determined that the following members of the Board are independent directors, as
such term is defined in Section&nbsp;803 of the NYSE Amex Company Guide: Messrs.&nbsp;Jordan, Leimkuhler,
Mitchell, Quinn, Ambassador Crumpton and Ms.&nbsp;Flanders. The independent directors may meet from time
to time in executive session without the other members.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><I>Audit Committee. </I>During the fiscal year ended January&nbsp;31, 2010, the Audit Committee met six
(6)&nbsp;times, including telephone conference meetings. The written charter of the Audit Committee was
adopted in October&nbsp;2003. 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.&nbsp;Leimkuhler, is an
audit committee financial expert, as that term has been defined by SEC rules. Mr.&nbsp;Mitchell served
as a member of the Audit Committee from December&nbsp;7, 2007 to June&nbsp;6, 2008.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Audit Committee assists the full Board of Directors in its oversight of our financial
accounting, reporting and internal controls by meeting with members of management and our
independent registered public accountants. The Audit Committee has the responsibility to review our
annual audited financial statements, and meets with management and the independent accountants at
the end of each quarter to review the quarterly financial results. In addition, this group
considers and approves the employment of, and approves the fee arrangements with, independent
accountants for audit and other functions. The Audit Committee reviews our accounting policies and
internal controls.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><I>Compensation Committee</I>. During the fiscal year ended January&nbsp;31, 2010, the Compensation
Committee held multiple telephone discussions, primarily to review the performance of the Company&#146;s
Chief Executive and Chief Financial Officers. The members of the Compensation Committee are
independent directors under applicable stock exchange rules. No member of the Compensation
Committee was an officer or employee of the Company during the fiscal year ended January&nbsp;31, 2010.
The written charter for the Compensation Committee was adopted in April&nbsp;2004.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 8 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Compensation Committee is responsible for implementing and reviewing executive
compensation plans, policies and programs in an effort to ensure the attraction and retention of
executive officers in a reasonable and cost-effective manner, to motivate their performance in the
achievement of the Company&#146;s business objectives and to align the interests of executive officers
with the long-term interests of the Company&#146;s stockholders. To that end, it is the responsibility
of the Compensation Committee to develop and approve periodically a general
compensation plan and salary structure for executive officers of the Company which considers
business and financial objectives, industry and market pay practices and/or such other information
as may be deemed appropriate. It is the responsibility of the Compensation Committee to review and
recommend for approval by the independent directors of the full Board of Directors the compensation
(salary, bonus and other compensation) of the Chief Executive Officer of the Company, to review and
approve the compensation (salary, bonus and other compensation) of the other executive officers of
the Company, and to review and approve perquisites offered to executive officers of the Company.
The Compensation Committee shall also review and approve corporate goals and objectives relevant to
the compensation of executive officers of the Company, evaluate performance in light of the goals
and objectives, and review and approve all employment, retention and severance agreements for
executive officers of the Company. The Compensation Committee acts on behalf of the Board of
Directors in administering compensation plans approved by the Board and/or the stockholders of the
Company (including the Company&#146;s 2001 Stock Option Plan) in a manner consistent with the terms of
such plans, reviews and makes recommendations to the Board of Directors with respect to new
compensation, incentive and equity-based plans, and reviews and makes recommendations to the Board
on changes in major benefit programs for executive officers of the Company. The Compensation
Committee also reviews the management succession program for the Chief Executive Officer and
selected executive officers of the Company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><I>Nominating Committee. </I>The written charter of the Nominating Committee was adopted in April
2004. The Nominating Committee is responsible for identifying individuals qualified to become
members of the Board of Directors, and recommending to the Board of Directors the persons to be
nominated by the Board for election as directors at the annual meeting of stockholders and the
persons to be elected by the Board of Directors to fill any vacancies on the Board. Each member of
the Nominating Committee participated in the evaluation processes which resulted in its
recommendation to the Board of Directors that Ms.&nbsp;Flanders be appointed. She was recommended to the
Nominating Committee by Mr.&nbsp;Bosselmann, the Chairman of the Board of Directors and Chief Executive
Officer.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Board of Directors believes that the Board, as a whole, should include individuals with a
diverse range of experience to give the Board both depth and breadth in the mix of skills
represented for the benefit of our stockholders. To that end, the Board endeavors to include in its
overall composition an array of targeted skills that complement one another rather than requiring
each director to possess the same skills, perspective and interests. Accordingly, the Nominating
Committee and the full Board consider the qualifications of directors and director nominees both
individually and in the broader context of the Board&#146;s overall composition and the Company&#146;s
current and future needs.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Nominating Committee considers the gender and ethnic diversity of the Board of Directors
and uses certain other selection criteria as a guide in its selection process including the
following: (i)&nbsp;nominees should have a reputation for integrity, honesty and adherence to high
ethical standards; (ii)&nbsp;nominees should have demonstrated business acumen, experience and ability
to exercise sound judgments in matters that relate to the current and long-term objectives of the
Company and should be willing and able to contribute positively to the decision-making process of
the Company; (iii)&nbsp;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
the various constituencies of the Company, which include stockholders, employees, customers,
governmental units, creditors and the general public, and to act in the interests of all
stockholders; and (v)&nbsp;nominees should not have, or appear to have, a conflict of interest that
would impair the nominee&#146;s ability to represent the interests of all the Company&#146;s stockholders and
to fulfill the responsibilities of a director. Nominees shall not be discriminated against on the
basis of race, religion, national origin, sex, sexual orientation, disability or any other basis
proscribed by law. The Nominating Committee is also responsible for reviewing with the Board of
Directors, on an annual basis, the requisite skills and criteria for new Board members as well as
the composition of the Board as a whole.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 9 -<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Nominating Committee will consider nominees for the Board of Directors recommended by
stockholders. Nominations by stockholders must be in writing, must include the full name of the
proposed nominee, a brief description of the proposed nominee&#146;s business experience for at least
the previous five years, and a representation that the nominating stockholder is a beneficial or
record owner of the Company&#146;s common stock. Any such submission must also be accompanied by the
written consent of the proposed nominee to be named as a nominee and to serve as director if
elected. The Nominating Committee is required to review the qualifications and
backgrounds of all directors and nominees (without regard to whether a nominee has been
recommended by stockholders), as well as the overall composition of the Board of Directors.
Nominations must be delivered to the following address:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">Nominating Committee<br>
Argan, Inc.<br>
c/o Corporate Secretary<br>
One Church Street, Suite&nbsp;201<br>
Rockville, Maryland 20850
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Board Leadership and Risk Oversight</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Mr.&nbsp;Bosselmann, the Company&#146;s Chief Executive Officer, currently serves as the Chairman of our
Board of Directors. None of the other seven members of the Board are members of management, and six
of these members are considered to be independent based on our Board&#146;s consideration of our
independence standards and the applicable New York Stock Exchange independence standards. The Board
believes that its current leadership structure provides independent Board leadership and engagement
while also deriving the benefit of having our Chief Executive Officer serve as Chairman of the
Board. The Board has determined that Mr.&nbsp;Bosselmann, the individual with primary responsibility for
managing the Company&#146;s day-to-day operations, is best positioned to chair regular Board meetings
and to lead and facilitate discussions of key business and strategic issues. The Board has not
designated a lead independent director.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Board periodically reviews the structure of the Board. As set forth in the Company&#146;s
bylaws, the Board is empowered to choose any one of its members (and not just the Chief Executive
Officer) as Chairman of the Board. The Board believes that the Company has in place corporate best
practices to ensure that the Company maintains a strong and independent Board, the highest
standards of corporate governance and the continued accountability of the Chief Executive Officer
to the Board. This structure is evidenced by the composition of the current Board of Directors and
its Audit, Compensation and Nominating Committees.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">All of the members of such committees are independent directors. Consequently, independent
directors directly oversee critical matters such as the remuneration policy for executive officers,
succession planning, our corporate governance guidelines, policies and practices, the director
nomination process, our corporate finance strategies and initiatives, and the integrity of our
financial statements and internal controls over financial reporting.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">One of the Board&#146;s key functions is oversight of our risk management process. The Board
administers its oversight function directly through the Board as a whole, which has the ultimate
oversight responsibility for the risk management process, as well as through the standing Audit,
Compensation and Nominating Committees that address risks inherent in their respective areas of
oversight.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">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 whole Board monitors 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 the Board, potential conflicts of interest and succession planning. The
Compensation Committee administers our stock option plan, and reviews and recommends the salaries
and bonuses paid to the executive officers while assessing whether any of our compensation policies
and programs has the potential to encourage excessive risk-taking. The entire Board approves the
salary and bonus amounts paid to executive officers and approves 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 the full Board.
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 10 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The entire Board and the committees receive reports on areas of material risk and, for each
committee, the committee&#146;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.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Compensation of Directors</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Each non-employee director of the Company receives an annual fee of $20,000, plus $300 for
each formal 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 the fiscal years ended January&nbsp;31, 2010, 2009 and 2008:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Fiscal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Option</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>All Other</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Total</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Fees</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Awards</B><SUP style="font-size: 85%; vertical-align: text-top"><B>(1)</B></SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Compensation</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Compensation</B></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->

<tr>
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Henry A. Crumpton<SUP style="font-size: 85%; vertical-align: text-top"><B>(2)</B></SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">63,550</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">96,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">121,550</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cynthia A. Flanders<SUP style="font-size: 85%; vertical-align: text-top"><B>(3)</B></SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">20,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">157,650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">178,200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DeSoto S. Jordan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">63,550</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,100</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,800</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Daniel A. Levinson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">57,050</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,900</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,475</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,475</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">William F. Leimkuhler</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">28,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">63,850</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,700</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87,150</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">W.G. Champion Mitchell</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">57,050</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,300</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,300</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James W. Quinn</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">57,050</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,200</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="left"><DIV style="font-size: 10pt; margin-top: 10pt; width: 18%; border-bottom: 1px solid #000000">&nbsp;</DIV></DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Amounts represent the aggregate award date fair value.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Ambassador Crumpton was appointed to the Board of Directors in February&nbsp;2008.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Ms.&nbsp;Flanders was appointed to the Board of Directors in April&nbsp;2009.</DIV></TD>
</TR>

</TABLE>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">During the year ended January&nbsp;31, 2010, Messrs.&nbsp;Quinn, Jordan and Leimkuhler served on the
Compensation Committee. There are no compensation committee interlocks between the Company and
other entities involving the Company&#146;s executive officers and directors
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>THE BOARD OF DIRECTORS RECOMMENDS A VOTE &#147;</B><B><I>FOR</I></B><B>&#148; THE ELECTION OF EACH NOMINATED DIRECTOR</B>
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 11 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PROPOSAL NO. 2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>RATIFICATION OF APPOINTMENT OF<BR>
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Audit Committee of our Board of Directors has selected Grant Thornton LLP (&#147;Grant
Thornton&#148;) as the independent registered public accountants to perform the audit of our
consolidated financial statements for our fiscal year ending January&nbsp;31, 2011, and our stockholders
are being asked to ratify the Audit Committee&#146;s selection. Grant Thornton has served as our
independent registered public accountants since May&nbsp;2006. Representatives of the accounting firm
are not expected to be present at the Annual Meeting.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Fees</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following table below presents estimated and billed fees for professional services
rendered to us by Grant Thornton for work performed during and related to the fiscal years ended
January&nbsp;31, 2010, 2009 and 2008.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2010</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2009</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008</B></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">583,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">657,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">395,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit-Related Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">52,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All Other Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">636,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">662,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">447,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><I>Audit Fees. </I>This category consists of fees billed for professional services rendered for
audits of our annual consolidated financial statements, for reviews of quarterly condensed
consolidated financial statements, for the audit of our system of internal control and other
consultation related to compliance with Section&nbsp;404 of the Sarbanes-Oxley Act, for the review of
registration statements and other documents filed with the SEC and for other accounting
consultation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><I>Audit-Related Fees. </I>This category includes fees billed for services provided by Grant Thornton
that are related to acquisitions that we pursued during the fiscal year ended January&nbsp;31, 2010.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><I>Tax Fees. </I>This category consists of fees billed for professional services provided in the
areas of tax compliance, tax advice and tax planning.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Audit Committee Pre-Approval Policies and Procedures</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Audit Committee of the Board of Directors has established a policy requiring the advance
approval of any non-audit services to be performed by our independent registered public accountants
or any other accounting or audit firm. Occasionally, the Audit Committee Chairman pre-approves
certain non-audit related fees and the entire Audit Committee ratifies the Chairman&#146;s pre-approval
in a subsequent Audit Committee meeting in accordance with SEC requirements. For the fiscal year
ended January&nbsp;31, 2010, the Audit Committee followed these guidelines in approving all services
rendered by accounting and audit firms.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>THE BOARD RECOMMENDS A VOTE </B><B><I>&#147;FOR&#148;</I></B><BR>
<B>RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP</B>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 12 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>AUDIT COMMITTEE REPORT</B>
</DIV>



<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Audit Committee of the
 Board of Directors of the Company is composed of four independent
directors. The Audit Committee adopted a written charter, a copy of which can be found on the
Company website at <u>www.arganinc.com</u>. The Board of Directors has made a determination that the
members of the Audit Committee satisfy the independence and other requirements of applicable NYSE
Amex and SEC rules. The Board of Directors has also made the determination that at least one
member of the Audit Committee is a &#147;financial expert&#148; as that term is defined in applicable SEC
rules.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The responsibilities of the Audit Committee are set forth in the Charter of the Audit
Committee, which was adopted by the Board of Directors of the Company in October&nbsp;2003. The Audit
Committee is responsible for, among other things, appointing, establishing the compensation for,
supervising and, where appropriate, replacing the Company&#146;s independent public accountants;
considering the qualifications and independence of the Company&#146;s independent accountants; approving
all audit and non-audit services provided by the Company&#146;s independent public accountants; and
reviewing and discussing with Company management and the Company&#146;s independent public accountants
the Company&#146;s financial statements. The Company&#146;s independent public accountants are required to
report directly to the Audit Committee. The Audit Committee also reviews the Company&#146;s accounting
policies, internal control procedures and systems and compliance activities and also reviews the
Charter of the Audit Committee.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following is a report on the Audit Committee&#146;s activities relating to the fiscal year
ended January&nbsp;31, 2010.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Review of Audited Financial Statements</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Audit Committee reviewed and discussed the Company&#146;s audited consolidated financial
statements as of January&nbsp;31, 2010 and for the year then ended with the management of the Company
and with Grant Thornton LLP, the Company&#146;s independent registered public accountants. The Audit
Committee also reviewed and discussed the assessment and the audit of the Company&#146;s system of
internal control over financial reporting as of January&nbsp;31, 2010 conducted by the Company&#146;s
management and by Grant Thornton LLP, respectively.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Re</B>v<B>iew of Other Matters with the Independent Registered Public Accountants</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Audit Committee has also discussed with Grant Thornton LLP the matters required to be
discussed by Statement on Auditing Standards No.&nbsp;61 (Communication with Audit Committees). The
Audit Committee has received from Grant Thornton LLP the written disclosures and the letter
required by Independence Standards Board Standard No.&nbsp;1 (Independence Discussions with Audit
Committees), and has discussed with Grant Thornton LLP matters relating to the firm&#146;s independence
from the Company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Recommendation That Financial Statements Be Included in the Annual Report</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">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&#146;s Annual Report on Form 10-K for the fiscal year ended January&nbsp;31, 2010 for filing
with the Securities and Exchange Commission.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Submitted by the Audit Committee of the Board of Directors:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">William F. Leimkuhler (Chairman, Audit Committee)<BR>
Henry A. Crumpton (Member, Audit Committee)<BR>
Cynthia A. Flanders (Member, Audit Committee)<BR>
DeSoto S. Jordan (Member, Audit Committee)

</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 13 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PRINCIPAL STOCKHOLDERS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following table shows the amount of our Common Stock beneficially owned as of January&nbsp;31, 2010,
by (i)&nbsp;each director, (ii)&nbsp;each executive officer named in the Summary Compensation Table below,
(iii)&nbsp;all directors and executive officers as a group, and (iv)&nbsp;each person who, to our knowledge,
owns beneficially more than five percent (5%) of our Common Stock. Unless otherwise indicated,
beneficial ownership is direct and the person indicated has sole voting and investment power. As of
January&nbsp;31, 2010, we had 13,582,494 outstanding shares of Common Stock. Unless otherwise noted in
the footnotes below, the address for each of the individuals listed in the table below is c/o
Argan, Inc., One Church Street, Suite&nbsp;201, Rockville, Maryland 20850.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Beneficial</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Beneficially</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Ownership</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name and Address</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Owned (1)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Percentage (1)</B></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">MSR Advisors, Inc. (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,366,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">10.03</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Daniel A. Levinson (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,384,270</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">10.15</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">William F. Griffin, Jr. (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,256,839</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">9.25</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Joel M. Canino (5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">485,689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.58</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Rainer H. Bosselmann (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">420,660</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.06</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Arthur F. Trudel (7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">139,124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.01</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">James W. Quinn (8)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">94,570</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">DeSoto S. Jordan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">W.G. Champion Mitchell (9)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">William F. Leimkuhler (9)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Henry A. Crumpton (9)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cynthia A. Flanders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Officers and Directors as a Group
(11 Persons) (10)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,340,463</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">24.14</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Brown Advisory Holdings Incorporated (11)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,439,571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">25.32</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Richard L. Scott (12)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,750,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">12.88</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ashford Capital Management, Inc. (13)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,125,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">8.29</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<DIV align="left"><DIV style="font-size: 10pt; margin-top: 10pt; width: 18%; border-bottom: 1px solid #000000">&nbsp;</DIV></DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Less than 1%.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Applicable percentage of ownership is based on 13,582,494 shares of
Common Stock outstanding as of January&nbsp;31, 2010, together with
applicable options and warrants for each stockholder. Beneficial
ownership is determined in accordance with the rules of the Securities
and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of Common Stock subject to
options and warrants that are currently exercisable or exercisable
within 60&nbsp;days of January&nbsp;31, 2010 are deemed to be beneficially owned
by the person holding such 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.</DIV></TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 14 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Based upon a Schedule&nbsp;13D/A filed with the Commission by MSR Advisors, Inc. and certain affiliates on
January&nbsp;4, 2007. The filing reports 1,320,270 shares of Common Stock and warrants to purchase 50,000
shares of Common Stock beneficially owned (warrants to purchase 4,000 shares were subsequently
exercised) in the aggregate by MSR Advisors, Inc., a Connecticut corporation (&#147;MSRA&#148;); MSR I SBIC
Partners, LLC, a Connecticut limited liability company (&#147;MSRI Partners&#148;); MSR I SBIC, L.P., a Delaware
limited partnership (&#147;MSRI LP&#148;); MSR Fund II L.P., a Delaware limited partnership (&#147;MSRII LP&#148;); and MSR
Fund II GP, LLC, a Delaware limited liability company (&#147;MSRII GP&#148;). Of such shares, MSRA has sole
voting and dispositive power with respect to the 46,000 shares subject to the warrants and shared
voting and dispositive power with respect to 1,320,270 shares; MSRI LP has sole voting and dispositive
power with respect to 879,730 shares; MSRI Partners has shared voting and dispositive power with
respect to 879,730 shares; MSRII LP has sole voting and dispositive power with respect to 440,540
shares; and MSRII GP has shared voting and dispositive power with respect to 440,540 shares. MSRA is
the manager of MSRI Partners and MSRII GP, and investment advisor to MSRI LP and MSRII LP. The business
address of MSRA, MSRI Partners, MSRI LP, MSRII LP, and MSRII GP is 120 Post Road West, Suite&nbsp;101,
Westport, Connecticut 06880. Each of MSRA, MSRI Partners, MSRI LP, MSRII LP, and MSRII GP (each an
&#147;MSRA Person&#148;) disclaims beneficial ownership of all shares and warrants of the Company beneficially
owned by the other MSRA Persons, except to the extent such person has sole voting and dispositive power
with respect to such securities.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Includes options to purchase 15,000 shares of Common Stock held by Mr.&nbsp;Levinson, all of which are fully
vested. Includes 1,320,270 shares and warrants to purchase 46,000 shares beneficially owned (in the
aggregate) by the MSRA Persons. Includes 3,000 shares owned directly by Tri-Lev LLC, a Connecticut
limited liability company (&#147;Tri-Lev&#148;). Mr.&nbsp;Levinson, a Director of the Company, is the President and
sole shareholder of MSRA, and is the Managing Member of MSRI Partners, MSRII GP and Tri-Lev. MSRI
Partners and MSRII GP are the General Partners of MSRI LP and MSRII LP, respectively. The business
address of Mr.&nbsp;Levinson and Tri-Lev is 120 Post Road West, Suite&nbsp;101, Westport, Connecticut 06880. Mr.
Levinson disclaims beneficial ownership of all shares and warrants of the Company beneficially owned by
the MSRA Persons.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Includes 750,000 shares and 21,150 shares owned by the William F. Griffin, Jr. GRAT (dated 11/16/09)
and the William F. Griffin, Jr. Revocable Trust, respectively, for which Mr.&nbsp;Griffin is a trustee. Also
includes 485,689 shares owned by the Joel M. Canino Revocable Trust and deemed to be beneficially owned
by Mr.&nbsp;Griffin who is a co-trustee. Excludes 130,000 shares and 107,052 shares owned by the Peach Pit
Foundation and the Griffin Family Trust, respectively, for which Mr.&nbsp;Griffin&#146;s wife is the trustee and
for which Mr.&nbsp;Griffin disclaims beneficial ownership.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Represents shares owned by the Joel M. Canino Revocable Trust. Mr.&nbsp;Canino, former vice chairman of
Gemma, passed away in March&nbsp;2009.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Includes 238,710 shares owned by Mr.&nbsp;Bosselmann, 23,850 shares owned by Mr.&nbsp;Bosselmann&#146;s wife (of which
Mr.&nbsp;Bosselmann disclaims beneficial ownership), and options to purchase 98,100 shares of Common Stock
and warrants to purchase 60,000 shares of Common Stock, all of which are held by Mr.&nbsp;Bosselmann and are
fully vested.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Includes 10,000 shares of Common Stock owned by Mr.&nbsp;Trudel and options to purchase 69,124 shares of
Common Stock and warrants to purchase 60,000 shares held by Mr.&nbsp;Trudel, all which are fully vested.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Includes options to purchase 15,000 shares of Common Stock held by Mr.&nbsp;Quinn, all of which are fully
vested. Does not include 531,183 shares of Common Stock held by Allen &#038; Company LLC and affiliates.
Mr.&nbsp;Quinn disclaims beneficial ownership of the shares held by Allen &#038; Company LLC and affiliates.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">In each case, includes options to purchase 15,000 shares of Common Stock, all of which are fully vested.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(10)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Includes options to purchase 98,100 shares of Common Stock and warrants to purchase 60,000 shares of
Common Stock held by Mr.&nbsp;Bosselmann, options to purchase 69,124 shares of Common Stock and warrants to
purchase 60,000 shares of Common Stock held by Mr.&nbsp;Trudel, warrants to purchase 46,000 shares of Common
Stock held by MSRA (of which Mr.&nbsp;Levinson is President), and options to purchase 75,000 shares of
Common Stock held by certain Directors of the Company.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(11)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Based upon a Schedule&nbsp;13G/A filed with the Commission by Brown Advisory Holdings Incorporated (&#147;BAHI&#148;)
as of December&nbsp;31, 2009. The filing reports 3,439,571 shares of Common Stock beneficially owned by
BAHI, a Maryland corporation, with shared dispositive power. BAHI has no voting power with respect to
the shares. The address for BAHI is 901 South Bond Street, Suite&nbsp;400, Baltimore, Maryland 21231.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(12)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Based upon a Schedule&nbsp;13D/A filed with the Commission by Mr.&nbsp;Scott on October&nbsp;29, 2008. The address for
Mr.&nbsp;Scott is c/o Jeffrey S. Buschman, Esq., Boult Cummings Connors &#038; Berry, PLC, 1600 Division Street,
Suite&nbsp;700, Nashville, Tennessee 37203.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(13)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Based upon a Schedule&nbsp;13G filed with the Commission by Ashford Capital Management, Inc. (&#147;Ashford&#148;) on
February&nbsp;12, 2010. The filing reports 1,125,350 shares of Common Stock beneficially owned by Ashford, a
Delaware corporation. Ashford has sole voting and dispositive powers with respect to the shares. The
address for Ashford is P.O. Box 4172, Wilmington, Delaware 19807.</DIV></TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 15 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>EXECUTIVE COMPENSATION</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Compensation Discussion and Analysis</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Our executive compensation philosophy is to compensate our senior executive officers
competitively with a mix of base salary, annual cash bonus and equity incentives designed to
attract and retain highly qualified executives and motivate them to produce strong financial
performance for the benefit of the Company and our stockholders.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Compensation Committee strives to maintain an appropriate balance between base salary,
annual cash bonus opportunity and stock option awards to compensate named executive officers fairly
while also providing them with appropriate incentives for achieving both annual and longer-term
objectives. Providing competitive base salaries is an essential foundation for compensating our
executives, managers and other employees. However, the Compensation Committee believes that
performance-based awards should comprise a substantial portion of executive compensation in order
to motivate named executive officers to achieve specific Company goals and to link pay to the
achievement of those goals. The Compensation Committee also believes that it is appropriate to tie
a significant portion of executive compensation to the value of the Company&#146;s stock in order to
closely align the interests of named executives with the interests of our stockholders. The
Committee believes that executives should have a meaningful ownership interest in the Company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Compensation Committee reviews the Company&#146;s compensation philosophy and objectives each
year to determine if revisions are necessary in light of market conditions, the Company&#146;s strategic
goals or other relevant factors. Based on this review, the Compensation Committee believes that our
executive compensation programs are designed to appropriately align compensation with our business
strategy and not to encourage behaviors that could create material adverse risks to our business.
The amounts of salary and any bonus and the number of shares included in any stock option award for
the Chief Executive Officer (the &#147;CEO&#148;) and the Chief Financial Officer (the &#147;CFO&#148;) are not
determined pursuant to formal plans or established formulas. The Board of Directors prefers to have
the discretion to adjust the amounts and numbers of shares in light of the most recent performance
of the Company without contractual obligations committing the Company to specific amounts.
Typically, the Compensation Committee makes a compensation recommendation for the CEO and CFO to
the Board of Directors shortly after the end of each fiscal year. The recommendations address the
amounts of annual cash bonus payable, if any, to the two officers based on the Compensation
Committee&#146;s assessment of the financial performance of the Company for the year just ended, the
annual salary amounts for the upcoming year, and the award of stock options, if any.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The amounts of compensation for the year ended January&nbsp;31, 2010 for Rainer H. Bosselmann, our
CEO, and Arthur F. Trudel, our CFO, are presented below. Both individuals are included in the group
of senior executives designated as our Named Executive Officers. The total compensation amounts for
the CEO and CFO for fiscal 2010 were less than fiscal 2009 total amounts due to lower annual bonus
amounts awarded for current year performance and a reduced number of shares included in the annual
award of stock options. In order to assess Company performance, the Compensation Committee members
are usually influenced by profitability measures such as net income and earnings before interest,
taxes, depreciation and amortization (EBITDA).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">While net income and the achievement of other corporate measures remained strong for the
current fiscal year despite the challenging global economic conditions, the Company was less
profitable in the current year compared with last year. As a result, the annual cash bonus amounts
were reduced and salaries were not increased.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As stated above, options to purchase shares of Common Stock are typically awarded to the CEO
and CFO subsequent to each fiscal year end. As the stock options usually vest on the one-year
anniversary of the date of award, the compensation related to the stock option awards is recorded
ratably over the one-year period subsequent to the award date. For both the CEO and the CFO, the
amount of stock compensation included in total compensation was lower for fiscal 2010 than for
fiscal 2009 as the stock options awarded to each executive in February&nbsp;2009 (25,000 shares for each
executive) covered fewer shares than the stock options awarded in February&nbsp;2008 (40,000 shares for
each executive). Reflecting the reduced profitability of the Company in fiscal 2010, the stock
options awarded to the CEO and CFO subsequent to January&nbsp;31, 2010 covered 10,000 shares for each
executive.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 16 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The total compensation for William F. Griffin, Jr., a former owner and current chief executive
officer of Gemma Power Systems (our &#147;Gemma CEO&#148;) for the year ended January&nbsp;31, 2010 is presented
below as he also is designated as a Named Executive Officer. Due to reductions in base salary and
annual cash bonus, Mr.&nbsp;Griffin&#146;s total compensation for fiscal 2010 was lower than the amount for
the prior year. As described more fully below, Mr. Griffin has an employment agreement with the
Company that was executed in December&nbsp;2006 in connection
with the Company&#146;s acquisition of Gemma Power Systems and its affiliates (&#147;Gemma&#148;). The
Company believes that it is in its best interests to retain the services of Mr.&nbsp;Griffin due to the
strong performance of Gemma under his leadership. Accordingly, the employment agreement was amended
in March&nbsp;2009, extending the term of employment to June&nbsp;2012. However, effective in June&nbsp;2009, the
annual base salary was reduced to $200,000 (the same annual salary amount paid to the Company&#146;s CEO
and CFO). The basis for annual cash bonus was revised as well. For the prior year, the annual bonus
amount was based on a formula included in the employment contract amendment effective at the time
with Mr.&nbsp;Griffin entitled to a bonus of $500,000 with Gemma&#146;s achievement of annual adjusted EBITDA
in the amount of $20&nbsp;million. The earned bonus amount increased to $1&nbsp;million with adjusted EBITDA
performance in excess of $25&nbsp;million. The amendment to the employment agreement executed in March
2009 retained the adjusted EBITDA hurdle amounts, but the amounts of annual bonus payable upon
Gemma&#146;s achievement of the adjusted EBITDA targets are to be determined at the discretion of the
Board of Directors. The amendment also allows the Board of Directors the discretion to award
additional bonus amounts for special or extraordinary achievements. Reflecting the strong, but
reduced, profit performance of Gemma for the year ended January&nbsp;31, 2010, the Board of Directors
agreed that, even though the adjusted EBITDA of Gemma did not exceed the $20&nbsp;million hurdle amount,
Mr.&nbsp;Griffin earned a cash bonus in the amount of $800,000 as he assumed the sole leadership of
Gemma after the passing of Mr.&nbsp;Canino. The current year bonus amount was lower than the amount
awarded for the previous year. The reduction in the base salary and the lower bonus amount
decreased Mr.&nbsp;Griffin&#146;s total compensation for the current year by approximately 30% compared with
the total compensation amount for the prior year. As Mr.&nbsp;Griffin remains a principal stockholder of
the Company, the Compensation Committee believes that, to date, the annual award of stock options
has not been necessary in order to assure that Mr.&nbsp;Griffin&#146;s interests are aligned with those of
the other stockholders.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Mr.&nbsp;Joel Canino, a former owner of Gemma, was also a vice chairman of Gemma at the time of his
death in March&nbsp;2010. He is considered one of our Named Executive Officers for the three years in
the period ended January&nbsp;31, 2010.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Summary Compensation Table</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following table sets forth the total amount of compensation paid to or earned by the
&#147;Named Executive Officers&#148; for services in all capacities for the fiscal years ended January&nbsp;31,
2010, 2009 and 2008. The Company&#146;s Named Executive Officers included the Company&#146;s CEO and CFO, and
the vice chairmen of Gemma.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="34%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left"><B>Name and Principal</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Fiscal</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Salary</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Bonus</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Option</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>All Other</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Total</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Position</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Earned</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Earned</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Awards</B><SUP style="font-size: 85%; vertical-align: text-top"><B>(1)</B></SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Compensation</B><SUP style="font-size: 85%; vertical-align: text-top"><B>(2)</B></SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Compensation</B></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->

<tr>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Rainer H. Bosselmann</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">125,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">176,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">502,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Chief Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">175,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">259,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">635,400</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">175,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">376,200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Arthur F. Trudel</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">100,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">176,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,920</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">478,170</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Senior Vice President,</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">259,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,920</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">611,120</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Chief Financial Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">351,600</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">and Corporate Secretary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">William F. Griffin, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">365,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,178,150</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Vice Chairman and Chief</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">680,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,680,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Executive Officer,</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">680,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,180,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gemma Power Systems</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Joel M. Canino</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">159,025</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">159,025</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Vice Chairman, Gemma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">560,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,560,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Power Systems</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">560,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,060,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="left"><DIV style="font-size: 10pt; margin-top: 10pt; width: 18%; border-bottom: 1px solid #000000">&nbsp;</DIV></DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Amounts represent the aggregate award date fair value computed in accordance with the
current guidance provided by generally accepted accounting principles in the United States.</DIV></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">Amounts represent matching contributions made pursuant to the Company&#146;s 401(k) plan for
Messrs.&nbsp;Bosselmann and Trudel, and car allowance payments for Mr.&nbsp;Griffin.</DIV></TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 17 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">





<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Executive Officers Who Are Not Directors</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Mr.&nbsp;Trudel, age 60, has been Secretary of the Company since April&nbsp;2006, Senior Vice President
and Chief Financial Officer of the Company since May&nbsp;2003 and a corporate officer of the Company
since January&nbsp;2003. From 1997 to 2002, Mr.&nbsp;Trudel served as Chief Financial Officer of Arguss
Communications, Inc. From 1988 to 1997, Mr.&nbsp;Trudel was Senior Vice President and Chief Financial
Officer of JHM Capital Corporation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Mr.&nbsp;Griffin,
age 55, has been Vice Chairman of Gemma Power Systems (&#147;Gemma,&#148; wholly-owned by
Argan, Inc.) since November&nbsp;1, 2007 and Chief Executive Officer of Gemma since September&nbsp;3, 2008.
From September&nbsp;3, 2008 to January&nbsp;2, 2009, he was also President of Gemma. From December&nbsp;6, 2006 to
November&nbsp;1, 2007, he was Chief Executive Officer of Gemma. From March&nbsp;1997 to December&nbsp;2006, he was
a fifty (50)&nbsp;percent owner and a senior executive officer of Gemma.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Mr.&nbsp;Canino was Vice Chairman of Gemma from December&nbsp;2006 until his death in March&nbsp;2009. He was
69&nbsp;years old. From March&nbsp;1997 to December&nbsp;2006, he was a fifty (50)&nbsp;percent owner and a senior
executive officer of Gemma.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Summary of Employment Arrangements</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><I>Rainer H. Bosselmann and Arthur F. Trudel. </I>On January&nbsp;3, 2005, the Company entered into
substantially similar employment agreements with (i)&nbsp;Rainer H. Bosselmann as its Chief Executive
Officer, and (ii)&nbsp;Arthur F. Trudel as its Senior Vice President, Chief Financial Officer and
Corporate Secretary (each, an &#147;Executive&#148;). Pursuant to the employment agreements, the Company
agreed to employ each Executive for an initial term of one year, which term automatically renews
for successive one year periods unless the Company or the Executive provides at least 90&nbsp;days prior
written notice of its or his election not to renew. Currently, the employment term anniversary date
is January 3 for both Mr.&nbsp;Bosselmann and Mr.&nbsp;Trudel. The agreements provide for each Executive to
receive during the employment period an annual base salary of $150,000, subject to increase (but
may not be reduced) from time to time in such amounts as the Company, in its reasonable discretion,
deems to be appropriate, and an annual bonus in the discretion of the Board of Directors of the
Company, subject to the satisfaction of reasonable performance criteria established for the
Executive with respect to such year. During the fiscal year ended January&nbsp;31, 2007, the annual base
salary for each Executive was increased to $200,000. The agreements further provide that each
Executive may participate in any stock option, incentive and similar plans established by the
Company and shall be granted stock options and other benefits similar to options and benefits
granted to other executives, subject in all cases to the satisfaction by the Executive of the terms
and conditions of such plans and to the reasonable exercise by the Board of any discretion granted
to it or them thereunder.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In addition, under the employment agreements, in the event that an Executive&#146;s employment is
terminated for any of the reasons specified below or there occurs a &#147;change in control,&#148; the
Executive will receive as severance pay in a single lump sum payment, an amount equal to
twenty-four (24)&nbsp;months of his base salary within thirty (30)&nbsp;days after the Executive&#146;s
termination of employment or change of control, as the case may be, based on twelve (12)&nbsp;times the
Executive&#146;s final full month salary at the date the Executive&#146;s employment ceases or at the date of
the change in control, as the case may be, without reduction or offset for any other monies which
the Executive may thereafter earn or be paid. The reasons which cause severance pay to be paid to
an Executive include:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">termination by the Executive because of a material diminution of the
Executive&#146;s duties, authority or responsibility, or a material impairment by action of
the Company of his ability to perform his duties and responsibilities, regardless of
whether such diminution is accompanied by a change in the Executive&#146;s title with the
Company;</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">termination by the Executive because of a material breach by the Company of any
provision of the employment agreement, which breach continues for a period of thirty
(30)&nbsp;days after written notice of such breach is given by the Executive to the Company;
and</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">termination by the Company at any time without cause, including notice of
non-renewal of the employment agreement.</DIV></TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 18 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV style="margin-top: 10pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Each Executive shall also be entitled for a period of twenty-four (24)&nbsp;months from the
termination of his employment or a change in control, as the case may be, to the continuation of
all benefits provided to the Executive, excluding sick and vacation time, subject to any applicable
employee co-payments. If an Executive&#146;s employment is
terminated by the Company by reason of the Executive&#146;s death, disability or &#147;for cause&#148; or
voluntarily by the Executive for any reason other than as set forth in the preceding paragraph, the
Company will not be obligated to make any payments to the Executive by reason of his cessation of
employment other than such amounts, if any, of his base salary that have accrued and remain unpaid
and such other amounts which may then otherwise be payable to the Executive from the Company&#146;s
benefit plans or reimbursement policies, if any.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><I>Joel M. Canino and William F. Griffin, Jr</I>. The Company entered into substantially similar
employment agreements with Messrs Canino and Griffin (the &#147;Gemma Executives&#148;) in December&nbsp;2006. As
amended in February&nbsp;2008, the agreements provided for Messrs. Canino and Griffin to receive during
the employment periods annual base salaries of $560,000 and $680,000, respectively. The agreements,
as amended, extended the employment terms to June&nbsp;7, 2009 and required the payment of a bonus to
each Gemma Executive related to the fiscal year ended January&nbsp;31, 2008 in the amount of $500,000.
Pursuant to the amended agreements, each Gemma Executive also earned bonuses of $1&nbsp;million for the
fiscal year ended January&nbsp;2009 as the Adjusted EBITDA of GPS (as defined in each original
employment agreement) exceeded the required target of $25&nbsp;million. Pursuant to amendments to the
agreements executed on March&nbsp;5, 2009, the Gemma Executives agreed to extend their employment terms
until June&nbsp;7, 2012. However, Mr.&nbsp;Canino passed away on March&nbsp;13, 2009.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Under the agreement as amended in March&nbsp;2009 and beginning in June&nbsp;2009, the annual salary of
Mr.&nbsp;Griffin was established at $200,000. For each of the fiscal years ending during the three-year
extension period, he will be eligible for an annual bonus with bonus amounts determined by the
Board of Directors if the annual Adjusted EBITDA of GPS exceeds $20&nbsp;million. Mr.&nbsp;Griffin shall also
be eligible for additional bonus compensation for such special or extraordinary circumstances or
occurrences as determined by the Board of Directors. Mr.&nbsp;Griffin has the option to extend the
employment term for an additional period of three years to June&nbsp;7, 2015 by providing written notice
at least three months prior to June&nbsp;7, 2012. Subsequent to June&nbsp;7, 2015, the employment term will
automatically renew for successive one-year periods unless the Company or Mr.&nbsp;Griffin provides at
least three months prior written notice of its or his election not to renew.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Under the employment agreement, as amended, in the event that Mr.&nbsp;Griffin&#146;s employment is
terminated by the Company for its convenience, or by Mr.&nbsp;Griffin for Good Reason (as defined in the
employment agreement), he shall be entitled to continue to receive his salary for the remainder of
the current employment term. He shall also be entitled to the continuation of all benefits being
provided to him, excluding sick and vacation time, subject to any applicable employee co-payments
for the period from the termination of his employment to the end of the current employment term.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">If Mr.&nbsp;Griffin&#146;s employment is terminated by reason of death, disability or &#147;for cause&#148; or
voluntarily by him for any reason other than as set forth in the paragraph above, the Company is
not obligated to make any payments to him by reason of his cessation of employment other than such
amounts, if any, of his base salary that have accrued and remain unpaid and such other amounts
which may then otherwise be payable to him from the Company&#146;s benefit plans or reimbursement
policies, if any.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The original employment agreements required the Company to maintain key-man insurance policies
on the life of each Gemma Executive in an amount not less than $5&nbsp;million with Argan, Inc. named as
the sole beneficiary. Pursuant to the amendment to the employment agreement dated March&nbsp;5, 2009,
the Company agreed to transfer ownership of the key-man insurance policy on the life of Mr.&nbsp;Canino
to him.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 19 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Grants of Plan-Based Awards</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">There were no plan-based awards made to Named Executive Officers (identified in the Summary
Compensation table above) during the fiscal year ended January&nbsp;31, 2010.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Outstanding Equity Awards Table</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following table sets forth certain information concerning exercisable and unexercisable
warrants and options to purchase shares of Common Stock that were held by our Named Executive
Officers (identified in the Summary Compensation table above) as of January&nbsp;31, 2010. There are no
outstanding Common Stock awards for either Mr.&nbsp;Griffin or Mr.&nbsp;Canino.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Number of Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Underlying Unexercised</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Warrants and Options</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Expiration</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Exercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Unexercisable</B><SUP style="font-size: 85%; vertical-align: text-top"><B>(1)</B></SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Price/Share</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->

<tr>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Rainer H. Bosselmann</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/31/2012</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6/21/2016</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/6/2018</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/25/2019</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Arthur F. Trudel</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12/31/2012</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4/20/2016</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/6/2018</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/25/2019</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">The options to purchase 25,000 shares of Common Stock each became exercisable on
February&nbsp;25, 2010.</DIV></TD>
</TR>

</TABLE>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Exercises of Stock Options</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following table sets forth certain information relating to all exercises of options to
purchase shares of Common Stock by Named Executive Officers (identified in the Summary
Compensation table above) during the fiscal year ended January&nbsp;31, 2010. Each transaction presented
in the table below represents the exercise of nonqualified stock options awarded under the
Company&#146;s 2001 Stock Option Plan.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Acquired on</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Realized on</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Exercise</B><SUP style="font-size: 85%; vertical-align: text-top"><B>(1)</B></SUP></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Rainer H. Bosselmann</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,900</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">207,025</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Arthur F. Trudel</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,876</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">596,364</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR style="font-size: 6pt">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="96">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="text-align: justify">The amount realized upon exercise represents the difference between the aggregate
market value of the acquired shares based on the closing price for the Common Stock on the
date(s) of exercise as reported by NYSE Amex and the aggregate price paid for the acquired
shares.</DIV></TD>
</TR>

</TABLE>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Code of Ethics</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company has established a Code of Ethics for Senior Officers that applies to the Company&#146;s
CEO and CFO. The Code of Ethics embodies the Company&#146;s commitment to the highest standards of
ethical and professional conduct and imposes a higher standard of honesty and integrity than the
Company&#146;s Code of Conduct that applies to, and is acknowledged in writing by, all of the Company&#146;s
employees. The Board of Directors, or the Audit
Committee, shall determine, or designate appropriate persons to determine, remedial actions to
be taken in the event of a violation of the Code of Ethics and has full and discretionary authority
to approve any amendment to or waiver from this Code of Ethics for senior officers. Any such
amendment or waiver will be promptly disclosed as required by applicable law or regulation.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 20 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>COMPENSATION COMMITTEE REPORT</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Management of the Company has prepared the Compensation Discussion and Analysis as required by
Item 402(b) of Regulation&nbsp;S-K, and the Compensation Committee has reviewed and discussed it with
management. Based on this review and discussion, the Compensation Committee recommended that the
Compensation Discussion and Analysis be included in the proxy statement for the Company&#146;s 2010
Annual Meeting of Stockholders.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Submitted by the Compensation Committee of the Board of Directors:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">DeSoto S. Jordan (Chairman, Compensation Committee)<BR>
William F. Leimkuhler (Member, Compensation Committee)<BR>
James W. Quinn (Member, Compensation Committee)

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In July&nbsp;2008, the Company completed a private placement sale of 2.2&nbsp;million shares of Common
Stock to investors at a price of $12.00 per share that provided net proceeds of approximately $25
million. Allen &#038; Company LLC (&#147;Allen&#148;), a firm considered to be a related party, served as
placement agent for the stock offering and was paid a fee of approximately $1.3&nbsp;million for its
services by the Company. James W. Quinn, a Director of the Company, is a managing director of
Allen. The Board of Directors approved the private placement transaction, based on proposed terms
substantially similar to those included in the final transaction, prior to consummation. Mr.&nbsp;Quinn
recused himself from the discussion of and vote on the retention of Allen as placement agent.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Bank of America (the &#147;Bank&#148;) has made loans to the Company. Cynthia A. Flanders, appointed to
the Board of Directors in April&nbsp;2009, held a succession of management positions with the Bank. The
Company believes that the loans were made in the ordinary course of the Bank&#146;s business, that they
were made on substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable loans with persons not related to the Bank, and that they did
not involve more than the normal risk of collectibility for the Bank or present it with other
unfavorable features.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>COMPLIANCE UNDER SECTION 16(a)<BR>
OF THE SECURITIES EXCHANGE ACT OF 1934</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Section&nbsp;16(a) of the Securities Exchange Act of 1934 and related regulations require the
Company&#146;s directors, certain officers, and any persons holding more than 10% of the Company&#146;s
Common Stock (&#147;Reporting Persons&#148;) to report their initial ownership of the Company&#146;s Common Stock
and any subsequent changes in that ownership to the SEC. Specific due dates have been established,
and the Company is required to disclose any failure to file by these dates during the fiscal year
ended January&nbsp;31, 2010 in this proxy statement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In making this disclosure, the Company has relied solely on its review of copies of Section
16(a) reports filed with the SEC and representations received by the Company from Reporting
Persons, without conducting any independent investigations of its own.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company believes that each of the Reporting Persons timely filed Forms 3, 4 and 5 with the
Securities and Exchange Commission during the fiscal year ended January&nbsp;31, 2010, except that Ms.
Flanders and Mr.&nbsp;Jordan were each late in filing one report.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 4%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 21 -<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">
<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>STOCKHOLDER NOMINATIONS AND
PROPOSALS; DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 2011
ANNUAL STOCKHOLDERS MEETING</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Our Certificate of Incorporation provides that, for stockholder nominations to the Board of
Directors or other proposals to be considered at an annual meeting, the stockholder must have given
timely notice thereof in writing to the Corporate Secretary of the Company. To be timely for the
2011 Annual Meeting, a stockholder&#146;s
notice must be delivered to or mailed and received by the Corporate Secretary of the Company
at the principal executive offices of the Company by January&nbsp;7, 2011. A stockholder&#146;s notice to
the Corporate Secretary must set forth as to each matter the stockholder proposes to bring before
the annual meeting the information required by Article&nbsp;Thirteen and Fourteen of our Certificate of
Incorporation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Stockholders are entitled to present proposals for consideration at forthcoming stockholder
meetings provided that they comply with the proxy rules promulgated by the Securities and Exchange
Commission and our bylaws and Certificate of Incorporation. Stockholders wishing to present a
proposal at our 2011 Annual Meeting of Stockholders must submit such proposal not less than 70&nbsp;days
prior to the next scheduled annual meeting or if less than 70&nbsp;days prior notice of the next meeting
is provided to our stockholders, within 10&nbsp;days of the announcement of the next annual meeting.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>STOCKHOLDER COMMUNICATIONS WITH DIRECTORS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Stockholders may communicate with the Board of Directors, or any of the Company&#146;s individual
directors, by sending their communications to the Board of Directors, or to any individual
director, at the following address:
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">Board of Directors of Argan, Inc.<br>
c/o Corporate Secretary<br>
One Church Street, Suite&nbsp;201<br>
Rockville, Maryland 20850
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">All stockholder communications received by the Company&#146;s Corporate Secretary will be delivered
to one or more members of the Board of Directors, or, in the case of communications sent to an
individual director, to such director.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>OTHER BUSINESS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">We know of no other matters to be submitted to the Annual Meeting. If any other matters
properly come before the Annual Meeting, it is the intention of the persons named in the enclosed
proxy to vote the shares they represent as the Board of Directors may recommend.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->- 22 -<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="center" style="font-size: 12pt; margin-top: 10pt"><B>Argan, Inc.</B>
</DIV>

<DIV align="center" style="margin-top: 30pt">
<DIV style="width: 80%; border: 1px solid black; padding: 6px;">



<DIV align="center" style="font-size: 10pt; margin-top: 0pt"><B>VOTE BY INTERNET OR TELEPHONE<BR>
QUICK * * * EASY * * * IMMEDIATE</B>
</DIV>

</DIV>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">As a stockholder of Argan, Inc., you have the option of voting your shares electronically through
the Internet or on the telephone, eliminating the need to return the proxy card. Your electronic or
telephone vote authorizes the named proxies to vote your shares in the same manner as if you
marked, signed, dated and returned the proxy card. Votes submitted electronically over the Internet
or by telephone must be received by 7:00 p.m., Eastern Time, on June&nbsp;22, 2010.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="29%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="29%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px"><IMG src="c00276c0027601.gif" alt="(IMAGE)">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><IMG src="c00276c0027602.gif" alt="(IMAGE)">
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><IMG src="c00276c0027603.gif" alt="(IMAGE)"></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding: 5px">
    <TD valign="top" align="center" style="border: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px"><U><B><I>Vote Your Proxy on the Internet:</I></B></U><BR><BR>
<DIV align="left"><B>Go to www.continentalstock.com</B></DIV>
<DIV align="justify">Have your proxy card available when
you access the above website. Follow
the prompts to vote your shares.</DIV>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><BR><BR><BR><B>OR</B></TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top" style="border: 1px solid #000000"><U><B><I>Vote Your Proxy by Phone:</I></B></U><BR><B>Call 1 (866)&nbsp;894-0537</B>
<DIV align="justify">Use any touch-tone telephone to vote
your proxy. Have your proxy card
available when you call. Follow the
voting instructions to vote your shares.</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><BR><BR><BR><B>OR</B></TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top" style="border: 1px solid #000000"><U><B><I>Vote Your Proxy by Mail:</I></B></U><BR><BR>
<DIV align="justify">Mark, sign, and date your proxy card,
then detach it, and return it in the
postage-paid envelope provided.</DIV></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<P>

<DIV align="center" style="margin-top: 30pt">
<DIV style="width: 80%; border: 1px solid black; padding: 11px;">



<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE<BR>
VOTING ELECTRONICALLY OR BY PHONE</B>
</DIV>

</DIV>
</DIV>


<DIV align="center" style="font-size: 8pt; margin-top: 10pt">&#9660;<B> FOLD AND DETACH HERE AND READ THE REVERSE SIDE </B>&#9660;
</DIV>

<DIV align="center">
<TABLE style="font-size: 9pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="71%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap><B>PROXY <BR style="font-size: 3pt">
THE BOARD OF DIRECTORS RECOMMENDS A VOTE &#147;FOR&#148; PROPOSALS 1
AND 2.</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-size: 7pt">Please mark <BR>your votes<BR>
like this</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="font-size: 10pt" face="Wingdings">&#120;</FONT></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<P><DIV style="position: relative; float: left; width: 50%">
<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">1.</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><DIV align="justify">The election of eight directors to our Board of Directors, each
to serve until our 2011 Annual Meeting of Stockholders and
until his/her successor has been elected and qualified or until
his/her earlier resignation, death or removal.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>FOR
ALL</B>
Nominees
listed
to the left</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" rowspan="3"><B>WITHHOLD
AUTHORITY</B>
to vote (except
as marked to the
contrary for all nominees listed
to the left)<BR>
<FONT face="Wingdings">&#111;</FONT></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px; line-height: 6pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" NOWRAP>(01) Rainer H. Bosselmann<BR>
(02)&nbsp;Henry A. Crumpton<BR>
(03)&nbsp;Cynthia A. Flanders<BR>
(04)&nbsp;DeSoto S. Jordan
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" NOWRAP>(05) William F. Leimkuhler<BR>
(06)&nbsp;Daniel A. Levinson<BR>
(07)&nbsp;W.G. Champion Mitchell<BR>
(08)&nbsp;James W. Quinn
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><BR>
<FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>

</TR>
<TR valign="bottom" style="padding-top: 1px; line-height: 3pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD colspan="9" valign="top" align="left"><DIV align="justify"><B>(Instruction: To withhold authority to vote for any individual nominee, strike a line
through that nominee&#146;s name in the list above)</B></DIV></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

</DIV>
<DIV style="position: relative; float: right; width: 40%">
<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="66%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>FOR</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>AGAINST</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>ABSTAIN</B></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px; line-height: 3pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV align="justify">The ratification of the appointment of
Grant Thornton LLP as our independent
registered public accountants for the
fiscal year ending January&nbsp;31, 2011.</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT face="Wingdings">&#111;</FONT></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px; line-height: 3pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top">3.</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" valign="top" align="left"><DIV align="justify">To transact any other business that may properly come before the 2010 Annual Meeting of Stockholders or any adjournment or postponement of
the meeting.</DIV></TD>
</TR>
<TR valign="bottom" style="padding-top: 1px; line-height: 3pt"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD colspan="9" valign="top" align="left"><DIV align="justify"><B>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 &#147;FOR&#148; each of the two proposals set forth
above and otherwise in the discretion of the proxy holders as to any other matter that may come before the Annual Meeting.</B></DIV></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="27%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="67%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>COMPANY ID:</B></TD>
</TR>
<TR valign="bottom" style="line-height: 12pt"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>PROXY NUMBER:</B></TD>
</TR>
<TR valign="bottom" style="line-height: 12pt"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>ACCOUNT NUMBER:</B></TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>

</DIV>
<BR clear="all"><BR>
<DIV align="center">
<TABLE style="font-size: 8pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Signature</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Signature</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Date</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="left" valign="top" colspan="2" nowrap><B>, 2010.</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 7pt; margin-top: 0pt">Note: Please sign exactly as name appears hereon. When shares are held by joint owners, both
should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate
officer, please
give title as such.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="center" style="font-size: 12pt; margin-top: 10pt"><B>Important Notice Regarding the Availability of Proxy Materials for<BR>
the Annual Meeting of Stockholders to Be Held June&nbsp;23, 2010.</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 20pt"><B>The Proxy Statement and the 2010 Annual Report to Stockholders are<BR>
available at </B><U><B>http://www.cstproxy.com/arganinc/2010</B></U>
</DIV>


<DIV align="center" style="font-size: 8pt; margin-top: 120pt">&#9660; <B>FOLD AND DETACH HERE AND READ THE REVERSE SIDE </B>&#9660;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>PROXY</B>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 10pt"><B>Argan, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><B>One Church Street, Suite&nbsp;201<BR>
Rockville, Maryland 20850<BR><BR>
May&nbsp;10, 2010</B></DIV>



<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The accompanying proxy is solicited on behalf of the Board of Directors of
Argan, Inc., a
Delaware corporation (referred to herein as &#147;Argan&#148; or the &#147;Company&#148;), for use at the
2010 Annual
Meeting of Stockholders (the &#147;Annual Meeting&#148;) to be held on June&nbsp;23, 2010, at 11:00&nbsp;a.m.,
local time,
at the offices of Allen &#038; Company LLC located at 711 Fifth Avenue, 9th Floor, New York, New
York
10022. The Proxy Statement and this accompanying proxy card are being mailed starting on
or about May&nbsp;10, 2010 to stockholders of record on April&nbsp;27, 2010. Our Annual Report on
Form 10-K for the fiscal year ended January&nbsp;31, 2010 is enclosed with the Proxy Statement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">At the Annual Meeting, stockholders will be asked to consider and vote upon
two proposals:
(1)&nbsp;the election of eight directors to serve until the 2011 Annual Meeting of Stockholders (the
&#147;Election
of Directors&#148;) and (2)&nbsp;the ratification of the appointment of the Company&#146;s
independent registered public accountants (the &#147;Ratification of Accountants&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 30pt"><B>(Continued, and to be marked, dated and signed, on the other side)</B>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
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