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<TYPE>EX-10.1

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<FILENAME>v010720_ex10-1.txt

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                              EMPLOYMENT AGREEMENT

 

      EMPLOYMENT AGREEMENT, dated as of January 3, 2005 by and between Argan,

Inc. a Delaware corporation (the "Company") and Rainer H. Bosselmann (the

"Executive").

 

                              W I T N E S S E T H:

 

      WHEREAS, the Company desires to continue the services of the Executive as

its President and Chief Executive Officer of the Company and the Executive

desires to continue to perform such services for the Company; and

 

      WHEREAS, the Company and the Executive desire to enter into this Agreement

to set forth the terms and conditions of the employment relationship between the

Company and the Executive, all in accordance with the terms and conditions set

forth below;

 

      NOW, THEREFORE, for and in consideration of the premises hereof and the

mutual covenants contained herein, the parties hereto hereby covenant and agree

as follows:

 

      1. Employment. The Company hereby continues the employment of the

Executive as its President and Chief Executive Officer, and the Executive hereby

agrees to continue to function as such for the Company, for the period set forth

in Section 2 hereof, all upon the terms and conditions hereinafter set forth.

 

      2. Term of Employment. (a) Unless (i) earlier terminated as provided in

Section 7 hereof or (ii) renewed as provided in Section 2(b) hereof, the term of

the Executive's employment under this Agreement shall be for a period beginning

on January 3, 2005 and ending on January 3, 2006 (the "Initial Term").

 

      (b) The term of the Executive's employment under this Agreement shall be

automatically renewed for additional one-year terms (each, a "Renewal Term")

upon the expiration of the Initial Term or any Renewal Term unless the Company

or the Executive delivers to the other, at least 90 days prior to the expiration

of the Initial Term or the then current Renewal Term, as the case may be, a

written notice specifying that the term of the Executive's employment will not

be renewed at the end of the Initial Term or such Renewal Term, as the case may

be.

 

      (c) The period from January 3, 2005 until January 3, 2006 or, in the event

that the Executive's employment hereunder is earlier terminated as provided in

Section 7 hereof or renewed as provided in Section 2(b) hereof, such shorter or

longer period, as the case may be, is hereinafter called the "Employment Term".

 

 

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      3. Duties. The Executive shall be employed as President and Chief

Executive Officer of the Company and shall faithfully and competently perform

such duties as the Board of Directors of the Company shall from time to time

determine, which duties shall be consistent with such position. The Executive

shall perform his duties at the principal offices of the Company, with travel to

such other locations from time to time as the Board of Directors of the Company

may reasonably prescribe. Except as may otherwise be approved in advance by the

Board of Directors of the Company, and except during vacation periods and

personal days and reasonable periods of absence due to sickness, personal injury

or other disability, the Executive shall devote his full time throughout the

Employment Term to the services required of him hereunder. The Executive shall

render his services exclusively to the Company during the Employment Term and

shall use his best efforts, judgment and energy to improve and advance the

business and interests of the Company in a manner consistent with the duties of

his position.

 

      4. Compensation.

 

      (a) Salary. As compensation for the complete and satisfactory performance

by the Executive of the services to be performed by the Executive hereunder

during the Employment Term, the Company shall pay the Executive a base salary at

the annual rate of $150,000 which may be increased (but not reduced) from time

to time in such amounts as the Company may, in its reasonable discretion, deem

to be appropriate (said amount, together with any such increases, being

hereinafter referred to as the "Salary"). Any Salary payable hereunder shall be

paid in regular intervals in accordance with the Company's payroll practices

from time to time in effect. All compensation payable under this Agreement shall

be subject to applicable federal and state withholding tax requirements and

other deductions approved by the Executive.

 

      (b) Bonus Payments. For each calendar year during the Employment Term, the

Executive is eligible to receive an annual bonus in the discretion of the Board

of Directors subject to the satisfaction of such reasonable performance criteria

as shall be established for him with respect to such year.

 

      5. Benefits. During the Employment Term, the Executive shall:

 

      (a) be eligible to participate in executive fringe benefits that may be

provided by the Company for its executive employees in accordance with the

provisions of any such plans, as the same may be in effect from time to time;

 

      (b) be eligible to participate in any medical and health plans or other

executive welfare benefit plans that may be provided by the Company for its

executive employees in accordance with the provisions of any such plans, as the

same may be in effect from time to time;

 

 

                                     - 2 -

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      (c) be entitled to annual paid vacation in accordance with the Company

policy that may be applicable to executive employees from time to time, such

vacation to be in no event less than two weeks in each calendar year;

 

      (d) be entitled to sick leave and sick pay in accordance with any Company

policy that may be applicable to executive employees from time to time;

 

      (e) be entitled to life insurance coverage (payable to his designated

beneficiary) and long term disability insurance coverage provided by the Company

to executive employees; and

 

      (f) be entitled to reimbursement for all reasonable and necessary

out-of-pocket business expenses incurred by the Executive in the performance of

his duties hereunder in accordance with the Company's policies for executive

employees.

 

      6. Stock Plans and Options. During the Employment Term, the Executive

shall be eligible to participate in any stock option, incentive and similar

plans established by the Company from time to time and at any time and the

Company shall grant to the Executive or cause to be granted to him stock options

and other benefits similar to the 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 Directors of any discretion granted to it or them thereunder.

 

      7. Termination: Effect of Termination. (a) The Executive's employment

hereunder shall be terminated upon the occurrence of any of the following:

 

            (i) death of the Executive;

 

            (ii) termination of the Executive's employment hereunder by the

      Company because of the Executive's inability to perform his duties on

      account of disability or incapacity for a period of one hundred eighty

      (180) or more days, whether or not consecutive, occurring within any

      period of twelve (12) consecutive months;

 

            (iii) written notice by the Company to the Executive of the

      termination of his employment hereunder by the Company at any time "for

      cause,"

 

            (iv) written notice by the Executive to the Company of the

      termination of the Executive's employment hereunder by the Executive

      because of a material diminution of the Executive's duties, authority or

      responsibility or a material impairment by action of the Company of his

      ability to perform his duties or responsibilities, regardless of whether

      such diminution of duties or impairment is accompanied by a change in the

      Executive's title of President and Chief Executive Officer;

 

 

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            (v) written notice by the Executive to the Company of a material

      breach by the Company of any provision of this Agreement if such breach

      continues for thirty (30) days after written notice thereof to the

      Company;

 

            (vi) written notice by the Executive to the Company of the voluntary

      termination of the Executive's employment hereunder by the Executive at

      any time for any reason whatsoever (including, without limitation,

      resignation or retirement) other than a breach of any provision of this

      Agreement by the Company (as described in paragraph (v) above) or other

      than the occurrence of any event described in clause (iv) above; or

 

            (vii) written notice by the Company to the Executive of the

      termination of his employment hereunder by the Company at any time without

      cause, including notice of non-renewal of this Agreement.

 

The following, and only the following, actions, failures or events by or

affecting the Executive shall constitute "cause" for termination within the

meaning of clause (iii) above:

 

(1) conviction of having committed a felony, (2) acts of dishonesty or moral

turpitude that are materially detrimental to the Company, (3) willful acts or

omissions which the Executive knew were likely to materially damage the business

of the Company or (4) willful and material breach by the Executive of his

obligations under this Agreement.

 

      (b) In the event that the Executive's employment with the Company is

terminated by the Executive pursuant to the clauses (iv), (v) or (vii) above,

then the Company shall pay to the Executive, as severance pay in a single lump

sum payment, an amount equal to 24 months of base salary within thirty (30) days

after the Executive's termination of employment, based on 12 times the

Executive's final full month of salary at the date the Executive's employment so

ceases, without reduction or offset for any other monies which the Executive may

thereafter earn or be paid. Executive shall also be entitled for a period of 24

months from the termination of his employment to the continuation of all

benefits, as provided for in Section 5, excluding sick and vacation time,

subject to any applicable employee co-payments.

 

      (c) In the event that the Executive's employment with the Company

terminates pursuant to clauses (i), (ii), (iii) or (vi) above, then

notwithstanding anything to the contrary expressed or implied herein, except as

required by applicable law and Section 8 hereof, the Company shall not be

obligated to make any payments to the Executive or on his behalf of whatever

kind or nature by reason of the Executive's cessation of employment other than

(i) such amounts, if any, of his Salary as shall have accrued and remained

unpaid as of the date of said cessation and (ii) such other amounts which may be

then otherwise payable to the Executive from the Company's benefit plans or

reimbursement policies, if any.

 

 

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      8. Change in Control.

 

      (a) In the event of a Change in Control (as hereinafter defined),

Executive shall be entitled to the compensation provided in Section 7(b) hereof

within thirty (30) days after the Change in Control.

 

      (b) Change in Control shall mean (i) any transfer or other transaction

whereby the right to vote more than fifty percent (50%) of the then issued and

outstanding capital stock of (A) the Company or (B) any subsidiary of the

Company to which the Company shall have transferred all or substantially all of

its business, is transferred to any party or affiliated group of parties, (ii)

any merger or consolidation of the Company (or a subsidiary of the Company of

the type described in clause (i)(B) above) with any other business entity, at

the conclusion of which transaction the persons who were holders of all the

voting stock of the Company immediately prior to the transaction hold less than

fifty percent (50%) of the total voting stock of the successor entity

immediately following the transaction, or (iii) any sale, lease, transfer or

other disposition of all or substantially all the assets of the Company (or a

subsidiary of the type described in clause (i)(B) above), or (iv) when, during

any period of 12 consecutive months, the individuals who, at the beginning of

such period, constitute the Company's Board of Directors (the "Incumbent

Directors") cease for any reason other than death to constitute at least a

majority thereof, provided that a director who was not a director at the

beginning of such 12-month period shall be deemed to have satisfied such

12-month requirement (and be an Incumbent Director) if such director was elected

by, or on the recommendation of or with the approval of at least two-thirds of

the directors who then qualified as Incumbent Director either actually (because

they were directors at the beginning of such 12-month period) or by prior

operation of this Section 8(b)(iv).

 

      9. Binding Effect. This Agreement shall inure to the benefit of and be

binding upon the parties hereto and their respective heirs, successors, legal

representatives and assigns.

 

      10. Notices. Any notice required or permitted to be given under this

Agreement shall be sufficient if in writing and either delivered in person or

sent by first class certified or registered mail, postage prepaid, if to the

Company, at the Company's principal place of business, and if to the Executive,

at his home address or addresses as either party shall have designated in

writing to the other party hereto.

 

      11. No Set-Off. The Company will pay promptly when due all sums to be paid

the Executive under this Agreement without abatement, deduction or reduction of

any kind or without any kind of setoff against any such sums; it being the

intention of the parties that all such sums shall continue to be payable in all

events unless the Company's obligation to pay such sums shall be terminated

pursuant to the express provisions of this Agreement.

 

      12. Law Governing. This Agreement shall be governed by and construed in

accordance with the laws of the State of Maryland.

 

 

                                     - 5 -

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      13. Severability. If any part of this Agreement is held by a court of

competent jurisdiction to be invalid, illegible or incapable of being enforced

in whole or in part by reason of any rule of law or public policy, such part

shall be deemed to be severed from the remainder of this Agreement for the

purpose only of the particular legal proceedings in question and all other

covenants and provisions of this Agreement shall in every other respect continue

in full force and effect and no covenant or provision shall be deemed dependent

upon any other covenant or provision.

 

      14. Waiver. Failure to insist upon strict compliance with any of the

terms, covenants or conditions hereof shall not be deemed a waiver of such term,

covenant or condition, nor shall any waiver or relinquishment of any right or

power hereunder at any one or more times be deemed a waiver or relinquishment of

such right or power at any other time or times.

 

      15. Entire Agreement; Modifications. This Agreement constitutes the entire

and final expression of the agreement of the parties with respect to the subject

matter hereof and supersedes all prior agreements, oral and written. This

Agreement may be modified or amended only by an instrument in writing signed by

both parties hereto.

 

      16. Counterparts. This Agreement may be executed in two or more

counterparts, each of which shall be deemed an original, but all of which

together shall constitute one and the same instrument.

 

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be

executed on the day and year first above written.

 

ARGAN, INC.                                             EXECUTIVE

 

 

By

  --------------------------------                      ------------------------

  Its                                                   Rainer H. Bosselmann

 

 

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