10-K405/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(MARK ONE)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM __________ TO __________

COMMISSION FILE NO. 000-29464

ROCK OF AGES CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE (State or other jurisdiction of incorporation or organization)	030153200 (I.R.S. Employer Identification Number)
772 GRANITEVILLE ROAD GRANITEVILLE, VERMONT (Address of principal executive offices)	05654 (Zip Code)

Registrant's telephone number, including area code: (802) 476-3121

Securities registered pursuant to Section 12(b) of the Act:

TITLE OF EACH CLASS	NAME OF EACH EXCHANGE ON WHICH REGISTERED
None

Securities registered pursuant to Section 12(g) of the Act:

CLASS A COMMON STOCK, PAR VALUE $0.01

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yesx Noo

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

As of March 22, 2002, the aggregate market value of the registrant's voting stock (including Class B Common Stock, par value $.01 per share ("Class B Common Stock"), which is convertible on a share-for-share basis into Class A Common Stock, par value $.01 per share ("Class A Common Stock" and, and together with Class B Common Stock, "Common Stock"), held by non-affiliates of the registrant was $38,093,756. As of March 22, 2002, there were outstanding 5,068,385 shares of Class A Common Stock and 2,785,521 shares of Class B Common Stock.

TABLE OF CONTENTS
			PAGE
PART I
ITEM  1.		BUSINESS	1
ITEM  2.		PROPERTIES	6
ITEM  3.		LEGAL PROCEEDINGS	8
ITEM  4.		SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS	8
PART II
ITEM  5.		MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	9
ITEM  6.		SELECTED FINANCIAL DATA	10
ITEM  7.		MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION	11
ITEM  7	A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	17
ITEM  8.		FINANCIAL STATEMETNS AND SUPPLEMENTAL DATA	17
ITEM  9.		CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	17
PART III
ITEM 10.		DIRECTORS AND EXECUTIVE OFFICERS	18
ITEM 11.		EXECUTIVE COMPENSATION	20
ITEM 12.		SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	23
ITEM 13.		CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	24
PART IV
ITEM 14.		EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K	25
		SIGNATURES	26
		INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE	27

2

PART I

ITEM 1. BUSINESS

GENERAL

Rock of Ages Corporation ("Rock of Ages" or the "Company") was founded in 1885 and is an integrated granite quarrier, manufacturer and retailer whose principal product is granite memorials used primarily in cemeteries. The Company believes that it is the largest quarrier, manufacturer and retailer of finished granite memorials and granite blocks for memorial use in North America, based on revenues. The Company owns and operates 11 active quarry properties and 6 manufacturing and sawing facilities in North America, principally in Vermont and the Province of Quebec. The Company markets and distributes its memorials on a retail basis through approximately 102 Company-owned retail sales outlets (including sales outlets located at certain cemeteries owned by the Company located in the state of Kentucky)in the states indicated in Item 2 below. The Company also sells memorials wholesale to approximately 65 independent authorized Rock of Ages retailers in the United States and Canada. The Company markets its memorials at four quality and price points under four separate brand names: Rock of Ages Signature, Rock of Ages Sealmark, Golden Rule by Rock of Ages and Stone Eternal by Rock of Ages. The Company also sells non-branded memorials. The Company believes the Rock of Ages trademark is one of the oldest and best known brand names in the granite memorialization industry. The Company actively promotes its brand names and places a seal bearing the brand name on each branded memorial. All Rock of Ages branded memorials are supported by a perpetual warranty with varying levels of coverage depending on the brand.

The Company acquired 16 cemetery properties and 1 memorial retailer located in the state of Kentucky on January 2, 2001. The Company paid a total aggregate purchase price of approximately $7.5 million for the Kentucky cemeteries and retailer acquired in 2001, $6.8 million of which was paid in cash and the remainder payable in installments through 2004.

The Company sold 2 of its Georgia quarries in 2001 and 4 of its non-core manufacturing facilities in 2001 and early 2002. The Company sold an idled Saw Plant in Barre, Vermont in August 2001 for a cash purchase price of $300,505. The Company sold its Royalty/Berkeley and Millstone quarries in Georgia in October 2001 for a total cash purchase price of $2,250,000. The Company sold its Southern Mausoleums manufacturing facility ("SMI")located in Elberton, Georgia in August 2001, for a total sale price of $840,000, payable in kind through the supply of diamond tools and segments pursuant to a supply agreement. The Company sold its Childs & Childs manufacturing facility ("Childs")located in Elberton, Georgia in October 2001 for a total sale price of $1,800,000, of which $1,000,000 was received in cash at the closing and $800,000 is payable pursuant to the terms of a promissory note delivered by the buyer at the closing. Commissions and closing costs of $287,467 were paid on these sales.

Finally, the Company sold its Lawson manufacturing plant located in Barre, Vermont in January 2002 for a total sales price of $2,550,000, of which $2,300,000 was paid at the closing and $250,000 is payable pursuant to the terms of a promissory note delivered by the Buyer at closing. Each of the above divestitures was completed to allow the Company to focus its resources on building and expanding the Company's profitable quarry operations and branded memorial retail distribution system and to increase the profitability of its manufacturing operations.

The Company has operations in four business segments: Quarrying, Manufacturing, Retailing and Cemeteries. Included within the business segments are operations that are unincorporated divisions of Rock of Ages and others that are separately incorporated subsidiaries. Financial information by business segment and geographic area is incorporated herein by reference to note 14 of the Consolidated Financial Statements of the Company. In addition, information regarding the revenues of each business segment is incorporated herein by reference to Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations." Additional information regarding each business segment and Rock of Ages in general is set forth below.

GROWTH STRATEGY

The Company seeks to expand the scope and profitability of its operations through a growth strategy that focuses on forward vertical integration into retailing, thereby enabling the Company to move closer to the ultimate customer. The principal elements of the growth strategy include the following:

• Expansion of Company-Owned Retail Network. The Company anticipates that it will continue to expand its Company-owned retail network by selectively acquiring independent granite memorial retailers and by opening new retail stores in selected markets in North America. By expanding its Company-owned retail network, the Company believes that it will capture the higher margins (relative to quarrying and manufacturing margins) that have historically existed at the retail level. Where appropriate, the Company may also acquire cemetery properties that have the potential of expanding sales of its granite memorials.

1

• Increased Emphasis on Branded Sales to Independent Authorized Dealers. The Company will seek to increase sales of branded products to independent authorized Rock of Ages retailers that are current or potential customers of the Company in furtherance of its efforts to build an integrated retail network consisting of Company-owned and independent authorized Rock of Ages retail outlets that sell the Company's brands.
  
  
• Brand Enhancement. The Company believes that the Rock of Ages brand is one of the best known brand names in the memorial industry. The Company anticipates that it will, as part of building its integrated network of Company-owned retailers, continue to increase promotion of and advertising expenditures on the Rock of Ages brand and other proprietary brands sold at its Company-owned retail outlets and independent authorized Rock of Ages dealers.

• Strategic Alliances with Funeral Homes and Cemeteries. The Company has formed and anticipates that it will continue to pursue strategic alliances with funeral home and cemetery owners, including consolidators, to sell granite memorials in cooperation with them, in order to increase both pre-need and at-need sales of granite memorials.
  
  
• Selected Acquisitions of Quarries. While the Company owns or controls many of the highest quality granite quarries in North America, the Company will continue to explore the possibility of acquiring selected granite quarriers in North America and internationally to assure that it will continue to have the colors and grades of granites sought by retail purchasers of granite memorials in North America, as well as granite for other uses.
  
  
• Other Product Line Enhancements. The Company intends to continue to expand and enhance its memorial product lines in color, design and style. The Company's objective is to provide a full-range of memorials available at various price ranges.
  
  

PRODUCTS

The Company's principal products may be classified into three general product lines: granite quarry products, manufactured granite products and non-granite memorials. The principal raw material for both granite product lines is natural granite as it comes from the ground with the primary difference between the product lines being the extent of the processing or manufacturing of the granite.

Granite Quarry Products.  The principal quarry product sold by the Company is granite blocks, the raw material of the dimension granite industry. These blocks are extracted from quarries in various sizes through a drilling, blasting and wire sawing process in the quarry. The range of block sizes is large, but most manufacturers of granite memorials and other products generally require minimum dimensions of height, width and length to maximize the efficiency of their block sawing equipment in meeting the required dimensions of the finished product. Granite blocks are normally sold in heights from 2'6" to 5', widths of 3' to 5', and lengths from 7' to 10'. These blocks typically weigh between 20 and 30 tons.

Granite differs from deposit to deposit by color, grade and/or quality, Rock of Ages owns, quarries and sells blocks of (i) gray granites from its Barre, Vermont and Stanstead, Quebec quarries, (ii) black granite from its American Black quarry in Pennsylvania, (iii) pink granites from its Laurentian Pink quarry in Quebec and its Salisbury Pink quarry in North Carolina, (iv) white granites from its Bethel White quarry in Vermont and its Gardenia White quarry in North Carolina, (v) brownish red granite from its Autumn Rose quarry in Oklahoma and (vi) grayish pink granites from its Kershaw and Coral Gray quarries in South Carolina.

The Company sells granite blocks for memorial, building and other uses. While each of the quarries owned by the Company sells granite for memorial use and for building use, the output of Bethel White quarry, the Gardenia White quarry, and the Salisbury Pink quarry are primarily sold and used for building granite use outside North America and the output of the other quarries is primarily used for memorial use in North America. The Company distributes Salisbury Pink, Bethel White, Gardenia White and other owned granites outside North America using its own sales personnel, commissioned agents and stock distributors.

Granite blocks sold by the Company in North America are sold by a quarry sales force. The Company's quarry sales force markets and advertises its granite blocks in various trade publications and by attending various trade shows in North America. Outside of North America, the Company generally sells to the user or independent distributors who buy blocks from the Company and resell them. This includes Rock of Ages Asia, a 50% Company-owned corporation.

Other quarry products include waste pieces not of a shape or size suitable for manufacturing which are sold for riprap for embankments, bridges or piers, and for other uses. In various quarries, the Company has arrangements with crusher operators who operate on or near the Company's quarries and sell crushed stone. The revenues and profits of these operations are not material. The Company has no marketing and advertising programs for these other quarry products.

2

Manufactured Products.  The principal manufactured product of Rock of Ages is granite memorials, which are sold to retailers of granite memorials, including Company-owned outlets, and substantially all of which are placed in cemeteries in remembrance of the life of a person or persons. The memorials sold by the Company encompass a wide-range of granites, including granite blocks purchased from others, as well as a wide-range of sizes, styles and shapes ranging from small, inexpensive markers set flush to the ground, to very elaborate and expensive personal mausoleums of larger sizes available at various price ranges. The broad classifications of granite memorials used by the industry are generally markers, hickeys, slants, standard uprights, estate uprights, pre-assembled mausoleums and conventional mausoleums. From time to time memorial retailers or others order granite products such as benches, steps and other products that may or may not be for cemetery use. These are classified by the Company as memorial sales.

The Company is widely recognized for the personalized granite memorials it produces and the very large memorials it can produce. It has made memorials as large as thirty-five feet in length from one block of granite, including a full size granite replica of a Mercedes Benz automobile.

The Company's granite memorials are sold to retailers by the Company's memorial sales force which regularly speaks with customers by phone and makes personal visits to customers. The Company provides various point of sale materials to its owned and independent authorized Rock of Ages dealers. The Company also advertises in various trade publications.

The Company also manufactures certain precision granite products, which are made along with memorials at the Company's Barre, Vermont plant. These products include surface plates, machine bases, coordinate measuring devices, and other products manufactured to exacting dimensions. These products are sold to the manufacturers of precision measuring devices or end users. Precision products are sold by a precision products sales force which phones or visits customers. The Company does little or no advertising of its precision products.

Retail Products.  The Company's retail division markets and sells granite, bronze and marble memorials primarily to consumers. The Company currently owns and operates approximately 102 retail outlets in 14 states. The granite memorials sold at retail also vary widely and are of the same types as those manufactured by the Company. The Company's retail operations utilize a retail sales force which markets and sells memorials through phone calls and direct meeting with customers in their homes and at retail sales offices. The Company advertises and promotes retail sales through direct mail material, yellow page listings and newspaper advertising. The Company's retail sales outlets are positioned to sell branded and unbranded memorials at all price points and qualities.

Cemetery Products. The Company's cemetery division markets and sells cemetery lots and funeral services such as grave openings and closings. The cemetery division also markets and sells cemetery merchandise such as vaults, bronze markers and niches in community mausoleums at some of its cemeteries. The cemetery division has opened sections in some of its cemeteries which allow the placement of upright granite memorials. Sales of upright granite memorials are handled either by cemetery sales personnel who have been trained to sell such memorials, or by ales personnel from a nearby Company-owned retail store.

MANUFACTURING AND RAW MATERIALS

The Company quarries and manufactures granite in the United States and Canada at the locations detailed in Item 2 "Properties." The Company also out-sources the manufacturing of certain memorial products pursuant to supply agreements with other manufacuturers. In 2001, the Company acquired new equipment for certain of its quarries and plants. There were no plants acquired or material additions to plants in 2001. Management believes that the Company's manufacturing and quarrying capacity, together with its manufacturing outsourcing arrangements, is generally sufficient to meet anticipated production requirements for the foreseeable future.

The most significant raw material used by the Company in its manufacturing operations is granite blocks primarily from the Company's quarries. The Company has an adequate supply from its quarries to supply its manufacturing operations. The Company also purchases certain colors of granite, primarily red and black, from other quarriers. The Company believes there is an adequate supply of memorial granite available from its quarries and quarries owned by others for the foreseeable future.

Significant supplies used by the Company in its manufacturing operations include industrial diamond segments for saw blades and wires, drill steel, drill bits and abrasives. There are a number of sources for these supplies at competitive prices.

The Company had manufacturing backlogs of $11.5 million as of December 31, 2001 and $8.5 million as of December 31, 2000. These backlogs occurred in the normal course of business. The Company does not have a material backlog in its quarrying operations. The Company had retail backlogs of $10.5 million as of December 31, 2001 and $12.4 million as of December 31, 2000. The Company expects that substantially all of the backlog order will be filled during the 2002 fiscal year.

The Company does not normally maintain a significant inventory of finished manufactured products in anticipation of future orders in its manufacturing operations. The Company does maintain a significant inventory of memorials for display and delivery purposes at its retail operations. Approximately 75% of the Company's manufactured product orders and retail orders are delivered within two to twelve weeks, as is customary in the granite memorial industry. The delivery time depends on the size and complexity of the memorial. The Company does accumulate inventory of granite blocks from September from December in preparation for the winter months when its northern quarries are inactive.

3

Because the Company's Barre quarries are closed from mid-December through mid-March, in December each year the Company provides special 90-day payment terms at these quarries for all blocks purchased in the month of December. Customers' manufacturing plants generally remain open during most of this period, and most customers prefer to assure they own blocks of a size and quality selected to them prior to closure. All blocks purchased from the Company's Barre quarries in December on deferred payment terms are invoiced on or about December 31 and removed from the Company's inventory with title passing to the buyer. Payment terms are one-third of the invoice amount on January 15, one-third on February 15, and one-third on March 15. This program provides essentially the normal 30-day payment terms during the months when the Barre quarries are closed, notwithstanding the customer's purchase of a 3-month supply in December. Customers need not use these terms and may buy from inventory during the closure period on a first come first served basis with normal 30-day terms.

RESEARCH AND DEVELOPMENT

The Company does not have a research and development department for any of its products. The Company regularly conducts market research, as well as research on new product designs and on equipment to improve the Company's technology. These activities are not separately accounted for as research, and the Company had no expenditures classified for financial reporting purposes as research in 1999, 2000 or 2001.

COMPETITION

The granite memorial industry is highly competitive. The Company competes with other granite quarriers and manufacturers in the sale of granite blocks on the basis of price, color, quality, geographic proximity, service, design availability and availability of supply. All of the Company's colors of granite are subject to competition from granite blocks of similar color supplied by quarriers located throughout the world. There are approximately 140 manufacturers of granite memorials in North America. There are also manufacturers of granite memorials in India, South Africa, China and Portugal that sell finished memorials in North America. The Company competes based upon price, breadth of product line and design availability as well as production capabilities and delivery options. The Company's quarrying and manufacturing competitors include both domestic and international companies, some of which may have greater financial, technical, manufacturing, marketing and other resources than the Company. Additionally, foreign competitors of the Company may have access to lower cost labor and better commercial deposits of memorial grade granite, and may be subject to less restrictive regulatory requirements than the Company. Companies in South Africa, India, China and Portugal also manufacture and export finished granite memorials into North America.

The competition for retail sales of granite memorials faced by the Company's retail outlets is also intense and is based on price, quality, service, design availability and breadth of product line. Competitors include funeral home and cemetery owners, including consolidators, which have greater financial resources than the Company, as well as approximately 3,000 independent retailers of granite memorials located outside of cemeteries and funeral homes.

PATENTS, TRADEMARKS AND LICENSES

The Company holds a number of domestic and foreign patents, trademarks and copyrights, including the original registered trademark "Rock of Ages" which the Company first registered in 1913. The Company believes the loss of a single patent, trademark or copyright, other than the "Rock of Ages" trademark, would not have a material adverse effect on the Company's business, financial condition or results of operations.

EMPLOYEES

As of December 31, 2001, the Company had approximately 897 employees.

The Company's collective bargaining agreements with the Granite Cutters Association and the United Steelworkers of America, respectively, which together represent approximately 322 of the Company's employees, expire on April 25, 2003.

SEASONALITY

Historically, the Company's operations have experienced certain seasonal patterns. Generally, the Company's net sales are highest in the second quarter and lowest in the first quarter of each year due primarily to weather. See Item 7 - "Management's Discussion and Analysis of Financial Conditions and Results of Operations - Seasonality."

4

REGULATION AND ENVIRONMENTAL COMPLIANCE

The Company's quarry and manufacturing operations are subject to substantial regulation by federal and state governmental statutes and agencies, including OSHA, the Mine Safety and Health Administration and similar state and Canadian authorities. The Company's operations are also subject to extensive laws, and regulations administered by the EPA and similar state and Canadian authorities for the protection of the environment, including those relating to air and water quality, and solid and hazardous waste handling and disposal. These laws and regulations may require the Company to fund remedial action or to pay damages regardless of fault. Environmental laws and regulations may also impose liability with respect to divested or terminated operations even if the operations were divested or terminated many years ago. In addition, current and future environmental or occupational health and safety laws, regulations or regulatory interpretations may require significant expenditures for compliance which could require the Company to modify its operations. The Company cannot predict the effect of such laws, regulations or regulatory interpretations on its business, financial condition or results of operations. The Company expects to be able to continue to comply, in all material respects, with existing laws and regulations.

FORWARD-LOOKING STATEMENTS

Certain statements in this Annual Report on Form 10-K, and other oral and written statements made by the Company from time to time, are "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including those that discuss strategies, goals, outlook or other nonhistorical matters, or projected or anticipated revenues, income, returns or other financial measures. These forward-looking statements are subject to numerous risks and uncertainties that may cause actual results to differ materially from those contained in such statements. These risks and uncertainties include the ability of the Company to continue to identify suitable retail acquisition candidates, to consummate additional retail acquisitions on acceptable terms and to successfully integrate the operations of such acquired entities.

Other factors and assumptions that could generally cause the Company's actual results to differ materially from those included in the forward-looking statements made herein include the effects of general economic conditions in the United States or abroad, changes in competitive market conditions, changes in the Company's business strategy or an inability of the Company to implement its growth strategy due to unanticipated changes in general economic conditions, the Company's ability to negotiate collective bargaining agreements, competitive market conditions or other factors, demand for the Company's products and the sufficiency of the Company's production capacity to meet future demand for its products. Other factors and assumptions not identified above were also involved in the derivation of the forward-looking statements contained in this Annual Report on Form 10-K, and such other factors and the failure of such other assumptions to be realized, may also cause actual results to differ materially from those projected. The Company assumes no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

5

ITEM 2. PROPERTIES

The Company owns the following quarry and manufacturing properties:

PROPERTY	FUNCTION
VERMONT
Barre
Quarry Properties
E. L. Smith Quarry	Quarrying of dimensional Barre Gray granite blocks
Adam-Pirie Quarry	Quarrying of dimensional Barre Gray granite blocks
Manufacturing Properties
Associated Saw Plant*	Finished product storage
Rock of Ages Manufacturing Plant	Manufacturing of memorials
Press Roll Production Plant	Manufacturing of granite press rolls
Rock of Ages Saw Plant #1	Slabbing of granite blocks
Lawson Production Plant**	Slabbing of granite blocks and memorials production facility
Bethel
Quarry Properties
Bethel Quarry	Quarrying of dimensional Bethel White granite blocks
GEORGIA
Madison County
Quarry Properties
Royalty/Berkeley Quarries*	Quarrying of dimensional Royalty Blue and Berkeley Blue granite blocks
Oglethorpe County
Quarry Properties
Millstone Quarry*	Quarrying of dimensional Millstone Gray granite blocks
Elberton
Manufacturing Properties
Southern Mausoleums*	Manufacturing of mausoleums
Childs & Childs Plant*	Manufacturing of memorials
CANADA
Stanstead, Quebec
Quarry Properties
Stanstead Quarry	Quarrying of dimensional Stanstead Gray granite blocks
Guenette, Quebec
Quarry Properties
Laurentian Quarry	Quarrying of dimensional Laurentian Rose granite blocks
Beebe Plain, Quebec
Manufacturing Properties
Rock of Ages Manufacturing Plant	Manufacturing of memorials
Adru Manufacturing Plant	Manufacturing of memorials
PENNSYLVANIA
St. Peters
Quarry Properties
American Black Quarry	Quarrying of dimensional American Black granite blocks
Manufacturing Properties
Saw Plant	Slabbing of granite blocks
NORTH CAROLINA
Salisbury
Quarry Properties
Salisbury Pink Quarry	Quarrying of dimensional Salisbury Pink granite blocks
Rockwell
Quarry Properties
Gardenia White Quarry	Quarrying of dimensional Gardenia White granite blocks
OKLAHOMA
Mill Creek
Quarry Properties
Autumn Rose Quarry	Quarrying of dimensional Autumn Rose granite blocks
SOUTH CAROLINA
Kershaw County
Quarry Properties
Kershaw Quarry	Quarrying of dimensional Kershaw granite blocks
Lancaster County
Quarry Properties
Coral Gray Quarry	Quarrying of dimensional Coral Gray granite blocks

* Property sold during fiscal 2001. See "Item 1 - General."

** Property sold in January 2002. See "Item 1 - General."

6

In addition, the Company owns 102 retail sales outlets and 5 associated sand-blasting facilities in the states of Georgia, Iowa, Illinois, Minnesota, Connecticut, Massachusetts, Rhode Island, Nebraska, New Jersey, Pennsylvania, Ohio, South Dakota, Kentucky and Wisconsin. In certain cases, the Company leases, under customary lease arrangements, the land or other real estate associated with these outlets and facilities. The Company also owns 13 cemeteries in Kentucky.

The following table sets forth certain information relating to the Company's quarry properties. Each of the quarries listed below: (i) is owned by the Company (other than the Kershaw quarry, which is leased with 38 years remaining on the lease); (ii) is an open-pit quarry; (iii)contains granite that is suitable for extraction as dimension granite for memorial or other use; (iv) is serviced by electricity provided by local utility companies (other than the Bethel quarry which is serviced by internal generators); and (v) has adequate and modern extraction and other equipment. The Company presently has no exploration plans.

QUARRY	APPROXIMATE DATE OF COMMENCEMENT OF OPERATIONS	PRIOR OWNER (DATE ACQUIRED)	MEANS OF ACCESS	TOTAL ORIGINAL COST OF EACH PROPERTY	NET SALEABLE RECOVERABLE RESERVES(1) (CUBIC FEET)	SALEABLE RECOVERABLE RESERVES (YEARS) (2)
E. L. Smith	1880	E.L. Smith Quarry Co. (1948)	Paved road	$7,562,676	2,459,534,000	4,918
Adam-Pirie	1880	J.K. Pirie Quarry (1955)	Paved road	$4,211,363	948,886,000	6,559
Bethel	1900	Woodbury Granite Company, Inc. (1957)	Dirt road	$174,024	76,529,000	382
Royalty/Berkeley (3)	1923	Coggins Granite (1991)	Paved road	$2,794,500	6,691,000	67
Millstone (3)	1995	Coggins Granite (1991)	Paved road	$1,195,900	5,599,000	55
Stanstead	1920	Brodies Limited and Stanstead Granite Company (1960)	Paved road	$505,453	32,563,000	216
Laurentian Pink	1944	Brodies Limited (1960)	Paved road	$860,115	3,864,000	51
American Black	1973	Pennsylvania Granite Inc. (1997)	Paved road	$2,900,000	14,615,000	97
Salisbury	1918	Pennsylvania Granite Inc. (1997)	Paved road	$3,886,592	19,344,000	86
Autumn Rose	1969	Autumn Rose Quarry Inc. (1997)	Paved road	$200,000	708,000	21
Kershaw	1955	Pennsylvania Granite Inc. (1997)	Paved road	$200,000	591,000	21
Coral Gray	1955	Pennsylvania Granite Inc. (1997)	Paved road	$200,000	No estimate	No estimate
Gardenia White	1995	J. Greg Faith Thomas E. Ebans, Sr. David S. Hooker William L. Comolli (1998)	Dirt road	$4,633,000	2,602,000	37

(1)  Net saleable reserves are based on internal Company estimates, except for reserves for the E.L. Smith, Adam-Pirie and Bethel quarries,
      which are based on independent assessments by CA Rich Consultants, Inc. and for the Gardenia White quarry, which are based on an
      independent assessment by Geomapping Associates.

(2)   Based on internal Company estimates using current production levels.

(3)  Quarries sold during fiscal 2001. See "Item 1-General."

The estimates of saleable reserves of Company are based on historical quarry operations, workable reserves in the existing quarries and immediately adjacent areas, current work force sizes and current demand. While quarry operations decrease the granite deposits, the size of the granite deposits in which the Company's quarries are located are large and extend well beyond existing working quarry perimeters. The Company has historically expanded quarry perimeters or opened other quarries in the deposit as necessary to utilize reserves and the Company believes it has adequate acreage for expansions as and when necessary. The Company has no reason to believe that it will deplete its granite reserves at any time in the foreseeable future.

Dimension granite is not considered a valuable mineral or commodity such as gold, nor is it traded on any commodities exchange. The prices charged by the Company to third parties for granite blocks depend on the characteristics such as color of and costs to quarry each granite block. The price per cubic food currently charged by the Company for its granite blocks is generally comparable to other granite suppliers and typically does not exceed $30.

7

ITEM 3. LEGAL PROCEEDINGS

The Company is a party to legal proceedings that arise from time to time in the ordinary course of its business. While the outcome of these proceedings cannot be predicted with certainty, management does not expect these matters to have a material adverse effect on the Company. The only major pending litigation currently outstanding is as follows:

Granite Stone Business International Sarl (f/k/a Eurmiex SA) (Luxemburg) vs Rock of Ages Corporation (USA) ICC Arbitration 11502/KGA/MS. On April 18, 2001 the Company received a Request for Arbitration ("Request") from its former European Distributor, Eurimex,S.A. (now known as Granite Stone Business International)in connection with the termination by the Company of the distribution agreement for the Company's Salisbury Pink granite. Eurimex has also claimed compensation in connection with a distribution agreement for the Company's Bethel White granite, which agreement expried by its terms over two years ago. Pursuant to those agreements, the arbitration will take place under the International Chamber of Commerce rules and will be held in Luxemburg.

The request includes claims by Eurimex that the Company wrongfully terminated the Salisbury Pink and Bethel White agreements. The Request also alleges that the Company violated antitrust laws under the European Community Treaty and United States antitrust laws. Eurimex has alleged that it has suffered damages in excess of $30 million, and will seek to have such damages trebled under U.S. antitrust laws.

The Company denies all of Eurimex's allegations and further states that it believes that Eurimex has engaged in improper or unlawful practices in the sale of the Company's products. The Company has answered Eurimex's Request and has brought certain counterclaims against Eurimex, including a claim for frivolous action. A preliminary scheduling conference was held on October 2, 2001 and jurisdictional issues have been briefed. A second hearing on further procedural issues and jurisdiction was held on March 13, 2002. The Company denies liability and will continue to vigourously defend the claims made by Eurimex in connection with the arbitration and does not believe an unfavorable ruling is probable, however, an unfavorable ruling could have a material adverse affect on the Company.

The Company carries insurance with coverages that it believes to be customary in its industry. Although there can be no assurance that such insurance will be sufficient to protect the Company against all contingencies, management believes that its insurance protection is reasonable in view of the nature and scope of the Company's operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the Company's security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this Annual Report on Form 10-K.

8

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Class A Common Stock is traded on the NASDAQ National Market under the symbol "ROAC." There is currently no established public trading market for the Class B Common Stock. The Class A Common Stock commenced public trading on October 21, 1997. The table below sets forth the quarterly high and low sales quotations for the Class A Common Stock for each full quarterly period during fiscal years 2000 and 2001 compiled from information supplied by NASDAQ. All prices represent inter dealer quotations without retail mark ups, mark downs or commissions, and may not necessarily represent actual transactions.

	2000
	HIGH	LOW
First Quarter	9  1/2	4  1/4
Second Quarter	5 3/4	4 3/16
Third Quarter	6 1/4	3 19/20
Fourth Quarter	6 1/8	4
	2001
	HIGH	LOW
First Quarter	5 2/5	5 1/5
Second Quarter	5 1/4	5 1/7
Third Quarter	6 1/9	5 6/7
Fourth Quarter	5 2/5	5 1/4

As of March 22, 2002, based upon information provided by the Company's transfer agent, there were 271 record holders of Class A Common Stock and 27 record holders of Class B Common Stock, which numbers do not include stockholders who beneficially own shares held in street name by brokers.

The Company has not declared or paid a cash dividend since the Class A Common Stock commenced public trading. The Company does not anticipate paying cash dividends in the foreseeable future, but intends to retain any future earnings for reinvestment in its business. Any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon the Company's financial condition, results of operations, capital requirements, contractual restrictions and such other factors as the Board of Directors deems relevant.

RECENT SALES OF UNREGISTERED SECURITIES

The Company made no sales of unregistered securities during fiscal 2001.

9

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated historical financial data presented below under the captions "Statement of Operations Data" and "Balance Sheet Data" for and as of the end of each years in the five-year period ended December 31, 2001 are derived from the consolidated financial statements of the Company, which financial statements have been audited by KPMG LLP, independent certified public accountants ("KPMG"). The following selected consolidated financial data should be read in conjunction with Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the Consolidated Financial Statements of the Company, including the notes thereto, referred to in Item 8.

	YEAR ENDED DECEMBER 31,
	1997		1998		1999		2000		2001
	(U.S. $ IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
Net revenues:
Quarrying	$	14,090	$	19,225	$	22,181	$	22,887	$	25,775
Manufacturing		38,336		44,294		37,414		27,183		22,228
Retailing		1,781		18,597		36,933		40,622		43,159
Cemeteries		—		—		—		—		3,143
Total net revenues		54,207		82,746		96,527		90,693		94,305
Gross Profit:
Quarrying		5,606		8,780		9,973		9,871		11,347
Manufacturing		9,302		10,842		7,791		6,801		5,422
Retailing		1,198		10,799		19,579		22,389		25,461
Cemeteries		—		—		—		—		818
Total gross profit		16,106		30,421		37,344		39,061		43,048
Selling, general and administrative expenses		11,036		20,371		31,241		33,164		36,707
Loss on disposal of assets		—		—		845		—		2,534
Income from operations		5,070		10,049		5,258		5,897		3,807
Interest expense		1,576		511		2,034		2,143		1,758
Income before provision for income taxes		3,494		9,539		3,224		3,754		2,049
Provision for income taxes		849		2,303		1,395		1,291		1,616
Net income before cumulative effect of a change in accounting    principle	$	2,645	$	7,236	$	1,829	$	2,463	$	433
Net income per share	$	0.62	$	0.98	$	0.22	$	0.33	$	0.06
Net income per share assuming dilution	$	0.53	$	0.91	$	0.21	$	0.33	$	0.06
Weighted average number of shares outstanding		4,290		7,349		7,509		7,447		7,606
Weighted average number of shares oustanding assuming dilution		4,997		7,984		7,826		7,576		7,676

	AS OF DECEMBER 31,
	1997		1998		1999		2000		2001
BALANCE SHEET DATA:
Cash and cash equivalents	$	8,637	$	4,701	$	4,877	$	9,501	$	3,435
Working capital		28,737		26,520		18,386		28,875		16,758
Total assets		93,137		121,893		130,669		135,554		153,793
Long-term debt, net of current maturities		975		12,880		12,620		18,527		323
Stockholders' equity		77,884		85,837		86,382		88,720		89,670

10

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

GENERAL

Rock of Ages in an integrated quarrier, manufacturer, distributor and retailer of granite and products manufactured from granite. The Company also owns and operates cemeteries. The quarry division sells granite blocks both to the manufacturing division and to outside manufacturers, as well as to distributors in Europe and Japan. The manufacturing division's principal product is granite memorials used primarily in cemeteries, although it also manufactures some specialized granite products for industrial applications. The retail division primarily sells granite memorials directly to consumers. The cemetery division sells cemetery property and funeral and cemtery products and services both at the time of need and on a preneed basis.

During the year ended December 31, 1998, the Company acquired 13 retail monument companies, thereby expanding its retail presence to locations in Georgia, Iowa, Illinois, Minnesota, Nebraska, New Jersey, Pennsylvania, Ohio and South Dakota (the "1998 Retail Acquisitions"). During the year ended December 31, 1999, the Company acquired an additional 13 retail monument companies and in so doing strengthened its existing retail presence in certain states while expanding its retail presence to Connecticut, Rhode Island, Massachusetts and Missouri (the "1999 Retail Acquisitions"). In 2000, the Company acquired 2 memorial retailers in 2 separate and independent transactions, thereby acquiring 3 retail sales outlets in the states of Connecticut and Iowa (the "2000 Retail Acquisitions"). The Company also acquired 16 cemetery properties and 1 memorial retailer located in the state of Kentucky as of January 2, 2001. The Company paid a total aggregate purchase price in the 2000 Acquisitions of approximately $655,000, all of which was paid in cash; and approximately $7.5 million for the Kentucky cemeteries and retailer acquired in January 2001, $6.8 million of which was paid in cash with the remainder payable in installments through 2004.

In May 1999, the Company sold the Keystone manufacturing plant back to the original owners from whom it had purchased them in June 1997. In exchange, the Company received 263,441 shares of its Class B common stock held by the former Keystone owners. These shares were then retired. In connection with this transaction, the Company recognized a loss on disposal of assets of approximately $845,000 or $.11 per diluted share, during the 1999 fiscal year. This nonrecurring charge had no impact on the Company's tax liability or overall cash position.

During the second quarter of 2001 the Company sold an idled Saw Plant in Barre, Vermont in which cash of $300,505 was received in exchange for $515,433 of assets.

During the third quarter of 2001 the Company completed the sale of the SMI and Childs & Childs manufacturing plants and the Royalty and Millstone quarries in Elberton, Georgia in which total cash of $3,250,000 net of closing costs of $287,467 was recieved and notes receivable were recorded for a total of $1,640,000 in exchange for $6,121,693 of assets.

During the third quarter of 2001, the Company entered into an agreement to sell the Lawson manufacturing plant in Barre, Vermont for $2,550,000 of which $2,300,000 will be cash and $250,000 a note receivable in exhange for $3,346,219 of assets. This sale is consistent with the Company's desire to dispose of certain unprofitable operations and to reallocate resources from the manufacture of commodity memorials and focus on its retail strategy. The Lawson transaction was completed during the first quarter of 2002.

The loss on sale of assets reported for the year ending December 31, 2001, includes a non-tax deductible disposal of intangible assets of approximately $3.7 million. Taxable income resulted from the sale of the inventory and property and equipment, the impact of which was recorded in the three months ended September 30, 2001. The sale of these assets is not expected to have any material effect on income taxes in future periods.

11

Critical Accounting Policies

Our critical accounting policies are as follows: Revenue recognition, impairment of long-lived assets and valuation of deferred income taxes.

Revenue Recognition

The manufacturing division recognizes revenue upon shipment of finished orders from the manufacturing plant. The retailing division recognizes revenue upon the setting of the memorial in the cemetery. In certain instances, the Company may enter into an agreement with a customer, which provides for extended payment terms, generally up to two years from either the date of setting the memorial or, in certain instances, upon the settlement of an estate.

The quarry division recognizes revenue from sales of granite blocks when the granite is shipped or when the customer selects and identifies the blocks at the quarry site. At that time, the block is removed from the Company's inventory, the customer's name is printed on the block, and title and risk of ownership passes to the buyer. In many cases, granite blocks owned by customers remain on the Company's property for varying periods after title passes to the buyer. Payment terms are less 5% 30 days, net 30 days, except the December terms described below. Sales of the Company's blocks are FOB quarry and the Company retains the obligation to load customer's blocks on trucks. At its Barre, Vermont location, sales are FOB Barre, Vermont and the Company retains a delivery obligation using the Company's trucks for block customers in Barre. The customer may take delivery at any time determined by the customer, but all invoices must be paid in accordance with their terms when due whether or not the customer reque sts delivery.

The Company considers the earnings process substantially complete despite the Company's obligations to load the blocks, and, in the case of its Barre customers, deliver the blocks, because the cost of delivery service is inconsequential (less than 3%) in relation to the selling price. Further, under industry terms of trade, title passes and the payment obligation is established when the block is identified to a particular customer and transaction.

In December each year, the Company provides special 90-day payment terms at its Barre quarries for all block purchased in the month of December. The reason for this is that the Barre quarries are generally closed from mid-December through mid-March because of weather. However, the quarry customers' manufacturing plants remain open during most of this period, and most prefer to assure they own blocks of a size and quality selected by them prior to the quarries' closure. All blocks purchased in December on deferred payment terms are invoiced on or about December 31 and removed from the Company's inventory with the title passing to the buyer. Payment terms are one-third of the invoice amount on January 15, one-third on February 15, and one-third on March 15. The program provides essentially the normal 30-day payment terms during the months when the quarry is closed notwithstanding the customer's purchase of a three months supply in December. Customers need not use these terms and may buy from inventory durin g the closure period on a first-come, first-served basis with normal 30-day terms.

The cemetery division's revenue from preneed sales of funeral services, and cemetery services and merchandise is deferred until the period in which the services or merchandise is delivered. On the balance sheet, the full contract amount is included in prearraged deferred revenue, a liability. The corresponding receivable due from the customer is reflected in prearragned receivables, an assets, and the corresponding cash received from the customer is reflected part in prearraged receivables (for the portion placed in trust) and part in cash (for the portion the Company is allowed to retain). When the services or merchandise is delivered, the Company recognizes as revenue the full contract amount plus all trust earnings associated with that contract. The Company cannot predict when the existing contracts will mature but it is estimated that most contracts will have an average life of ten to fifteen years and in some cases greater than fifteen years. The amount of prearranged deferred revenue at December 31, 2001 was $24,224,212.

Impairment of long-lived assets

The Company's long-lived assets consist primarily of goodwill and other intangible assets and property and equipment. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such an asset may not be recoverable. Such events or circumstances include, but are not limited to, a significant decrease in the fair value of the underlying business, a significant decrease in the benefits realized from the acquired business, difficulty and delays in integrating the business or a significant change in the operations of the acquired business.

Recoverability of long-lived assets is measured by comparison of the carrying amount to estimated future undiscounted net cash flows the assets are expected to generate. Those cash flows include an estimated terminal value based on a hypothetical sale at the end of its goodwill amortization period. Estimating these cash flows and terminal values requires management to make judgments about the growth in demand for services, sustainability of gross margins, our ability to integrate acquired companies and achieve economies of scale, and valuation multiples required by investors or buyers. If assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the long-lived asset exceeds its fair value. Based on the current standards of SFAS No. 121, the Company has determined that it has no impairment of long-lived assets.

Effective January 1, 2002, the Company will assess impairment of goodwill in accordance with the provisions of SFAS No.142. The provisions of SFAS No. 142 require that a two-step test be performed. First, the fair value of each of our reporting units will be compared to its carrying value. If the fair value exceeds the carrying value, goodwill is not impaired and no further testing is performed. If the carrying value exceeds the fair value, then the implied fair value of the reporting unit's goodwill must be determined and compared to the carrying value of the goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then an impairment loss equal to the difference will be recorded. The Company has done preliminary estimations as to the amount of the impairment in the retail reporting unit and has estimated that it will incur a pre-tax non-cash impairment charge of approximately $32,500,000 in the first quarter of 2002. The Company has not yet done an estimation of the impairment, if any, in the cemetery reporting unit.

12

Valuation of deferred income taxes

As of December 31, 2001 and 2000, the Company had net deferred tax assets of $1,567,000 and $425,000, respectively. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependant upon the generation of future taxable income during the periods in which thos temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Management has recorded a valuation allowance of $4,904,000 and $4,172,000 as of December 31, 2001 and December 31, 2000, respectively, against the minimum tax credit carryforwards and other deferred tax assets. Based upon the projections for future taxable income over the periods for which the deferred tax assets are deductible, management believes that it is more likely than not that the company will realize the benefit of these unreserved net deferred tax assets. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income are reduced.

The following table sets forth certain historical statement of operations data as a percentage of net revenues with the exception of quarrying, manufacturing and retailing gross profit, which are shown as a percentage of quarrying, manufacturing and retailing revenues, respectively.

	YEAR ENDED DECEMBER 31,
	1999		2000		2001
STATEMENTS OF OPERATIONS DATA:
Net Revenues:
Quarrying		23.0%		25.2%		27.3%
Manufacturing		38.7%		30.0%		23.6%
Retailing		38.3%		44.8%		45.8%
Cemeteries		—		—		3.3%
Total net revenues		100.0%		100.0%		100.0%
GROSS PROFIT:
Quarrying		45.0%		43.1%		44.0%
Manufacturing		20.8%		25.0%		24.4%
Retailing		53.0%		55.1%		57.0%
Cemeteries		—		—		26.0%
Total gross profit		38.7%		43.1%		45.6%
Selling, general & administrative expenses		33.2%		36.6%		39.0%
Loss on disposal of assets		—		—		2.7%
Income from operations		5.4%		6.5%		3.9%
Interest expense		2.1%		2.4%		1.9%
Income before provision for income taxes		3.3%		4.1%		2.0%
Provision for income taxes		1.4%		1.4%		1.7%
Net Income		1.9%		2.7%		0.5%

13

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

Revenues for the fiscal year ended December 31, 2001 increased 4.0% to $94.3 million from $90.7 million for the year ended December 31, 2000. Quarrying revenues were $25.8 million for the year ended December 31, 2001 compared to $22.9 million for the year ended December 31, 2000. The increase was largely due to strong demand for Bethel and Gardenia White granite from both domestic and international customers as well as increased revenues from the Salisbury quarry as a result of the Company terminating the distribution agreement with Eurimex. See "Item 3 - Legal Proceedings." The Company's sale of its quarries in Georgia in 2001 is not expected to have a material effect on quarry operations.

Manufacturing revenues were $22.2 million for the year ended December 31, 2001 compared to $27.2 million for the year ended December 31, 2000. The decrease was due to poor shipments in the first quarter of 2001 as a result of difficult weather conditions, a decrease in sales to some customers incompatible with the Company's branding strategy, and a decrease in demand for the Company's industrial products that are sold to the high tech industry due to a general softening in that business sector. The Company's sale of Childs and SMI, which were completed in 2001, and the sale of Lawson, which was completed in January 2002, were consistent with the Company's desire to focus on the manufacture of branded memorials for its authorized retail network and its owned retail stores. While the Company expects a decrease in revenue as a result of the loss in customer base associated with these facilities, it expects that this decrease will be partially offset by an increase in revenues and percent of branded sales fro m its remaining customer base.

Retailing revenues were $43.2 million for the year ended December 31, 2001 compared to $40.6 million for the year ended December 31, 2000. The increase is a result of additional branded sales at the retail locations and favorable seasonable factors in 2001 which allowed for those retailers affected by weather to have greater cemetery settings in the fourth quarter of 2001 compared to the same period in 2000.

Cemetery revenues were $3.1 million for the year ended December 31, 2001. The Company acquired the cemeteries in January 2001 and has no comparable data.

Gross profit dollars for the fiscal year ended December 31, 2001 increased 10.2% to $43.0 million from $39.0 million for the fiscal year ended December 31, 2000. Consolidated gross profit percentage increased to 45.6% in fiscal 2001 from 43.1% in fiscal 2000.

Quarrying gross profit was $11.3 million or 44.0% of revenue for the year ended December 31, 2001 compared to $9.9 million or 43.1% of revenue for the year ended December 31, 2000. The increase was mostly due to increased operational efficiencies at the Bethel quarry and an increase in the reported revenue at the Salisbury quarry as a result of the Company terminating the distribution agreement with Eurimex. See "Item 3 - Legal Proceedings." These increases were partially offset by a decrease in gross profit at the Pennsylvania Black quarry due to short-term higher than anticipated quarry development costs.

Manufacturing gross profit was $5.4 million or 24.0% of revenue for the year ended December 31, 2001 compared to $6.8 million or 25.0% of revenue for the year ended December 31, 2000. The decline in gross profit dollars is primarily a result of the decreased revenues discussed above as well as a decrease in profitability in the industrial products business due to a general softening in the technology business sector. The Company believes that the sale of Childs and SMI, which were completed in 2001, will have a positive effect on gross margins since these facilities historically had gross margins below those of the Company's other manufacturing groups. The sale of Lawson, which was completed in January 2002, is also expected to have a positive effect on gross margins due to the elimination of traditionally low margin customers and a strong focus on the Company's core authorized dealer network resulting in expected increased branded sales, which have historically had higher gross margins than unbranded sal es. In connection with the Lawson sale, the Company entered into a seven-year contract to purchase memorials from the new owner. Although there are many alternative suppliers of granite memorials, the Company is dependent on this arrangement to provide product to its customers and believes it will be favorable for the Company.

Retailing gross profit was $25.5 million or 59.0% of revenue for the year ended December 31, 2001 compared to $22.4 million or 55.1% of revenue for the year ended December 31, 2000. This increase was primarily attributable to an increase in branded sales as a result of the Company's strong emphasis on the branding strategy.

Selling, general and administrative expenses for 2001 increased 11.0% to $36.7 million from $33.2 million. As a percentage of net sales, these expenses for 2001 increased to 39.0% from 36.6%. This increase is a result of additonal legal expenses in the quarry segment as a result of the Eurimex litigation and the higher selling expenses associated with the cemetery segment that the company acquired in January 2001.

Interest expense for the fiscal year ended December 31, 2001 decreased to $1.7 million from $2.1 million for the fiscal year ended December 31, 2000. This decrease was due to lower interest rates under the Company's credit facilities as well as a decrease in debt funded by cash from operations and the sale of the Southern Mausoleum Manufacturing Plant ("SMI"), the Childs & Childs Manufacturing Plant ("Childs") and the Royalty Quarries ("Royalty") all in Georgia.

14

Income taxes as a percentage of earnings before taxes increased to 78.9% in 2001 from 34.4% in 2000. This increase was the result of the disposition of the quarrying and manufacturing assets for which the write down of goodwill was non-deductible for tax purposes. The Company expects its tax rate to return to historical levels in 2002.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999.

Revenues for the fiscal year ended December 31, 2000 decreased 6.0% to $90.7 million from $96.6 million for the year ended December 31, 1999. Quarrying revenues increased $.7 million, mostly due to a greater percentage of its shipments being made to outside customers. Manufacturing revenues declined $10.2 million, primarily as a result of the Keystone Sale and increased shipments to the Company's owned retailers. Retailing revenues increased $3.7 million due to the positive impact of a full year's revenue from the 1998 Retail Acquisitions and revenues generated by the 1999 Retail Acquisitions.

Gross profit for the fiscal year ended December 31, 2000 increased 4.6% to $39.0 million from $37.3 million for the fiscal year ended December 31, 1999. Quarrying gross profits decreased $100,000. The quarrying gross profit percentage decreased to 43.1% in 2000 from 45.0% in 1999, primarily as a result of slighlty lower gross profit margin at the Company's Barre and Bethel quarries.

Manufacturing gross profit decreased $1.0 million, which was attributable to lower manufacturing revenues as described above. The manufacturing gross profit percentage increased to 25.0% in 2000 from 20.8% in 1999, as a result of significantly stronger gross profit margins at the Company's Barre, Beebe, and Industrial Products operations.

Retailing gross profit increased $2.8 million in 2000 as a result of owning and operating the 1999 Retail Acquisitions for the full 2000 fiscal year. The retailing gross profit percentage increased from 53.0% to 55.1% primarily due to a slightly stronger performance by the 1998 Retail Acquisitions.

Selling, general and administrative expenses for 2000 increased 3.1% to $33.1 million from $32.1 million. As a percentage of net sales, these expenses for 2000 increased to 36.6% from 33.2%. The absolute increase in selling, general and administrative expenses was primarily caused by the Company's increase in retail sales, which carry substantially higher selling costs than the Company's other sources of revenue; the relative increase in selling, general and administrative expenses was primarily caused by the Company's ability to begin to leverage its investment in retail as the size of that segment increases.

Interest expense for the fiscal year ended December 31, 2000 increased to $2.1 million from $2.0 million for the fiscal year ended December 31, 1999. This increase was due to higher interest rates during the first half of the year.

Income taxes as a percentage of earnings before taxes decreased to 34.4% in 2000 from 43.3% in 1999. This was primarily the result of the $845,000 loss from the Keystone Sale in 1999 which was not deductible for tax purposes.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity.  The Company considers its liquidity to be adequate to meet its long and short-term cash requirements. Historically the Company has met these requirements from cash generated by operating activities and periodic borrowings under commercial credit facilities. The Company's recent acquisitions have increased its requirements for external sources of liquidity, and the Company anticipates that this trend will continue as it further implements its growth strategy.

Cash Flow. For 2001, net cash provided by operating activities was $11.6 million. This consisted primarily of net income of $432,780 adjusted for a non-cash loss on sale of assets of $2.7 million and depreciation, depletion and amortization of $4.5 million as well as a decrease in trade receivables of $1.6 million primarily as a result of the sale of Childs and SMI and an increase in payables, accruals and taxes payable of $2.5 million. Net cash used in investing activities was $7.6 million in 2001 compared to $2.8 million in 2000, which was mostly due to the cemetery acquisitions and capital expenditures offset by the proceeds from the sale of assets. Net cash used in financing activities in 2001 was $9.6 million compared to $2.9 million provided by financing activities in 2000. The cash used in financing activities in 2001 consisted primarily of $6.4 million repayment of the revolving credit facility and $4.3 million principle payments on long-term debt funded primarily from the sale of as sets.

Capital Resources. The Company has a credit facility with the CIT Group/Business Credit ("CIT"). The facility consists of an acquisition term loan line of credit of up to $30.0 million and a revolving credit facility of up to another $20.0 million based on eligible accounts receivable and inventory. As of December 31, 2001, the Company had $14.4 million outstanding and $15.6 million available under the term loan line of credit and $4.0 million outstanding and $16.0 million available under the revolving line of credit facility.

15

The Company has a multi-tiered interest rate structure on its outstanding debt with CIT. As of December 31, 2001, the interest rate structure was as follows:

	Amount	Formula	Effective Rate
Revolving Credit Facility	$3.0 million	LIBOR + 1.75%	3.61%
	1.0 million	Prime - .50%	4.00%
Term Loans	12.0 million	LIBOR +1.75%	3.61%
	1.9 million	LIBOR + 2.0%	3.86%
	.5 million	LIBOR + 2.0%	3.86%

Contractual Obligations.

		Total
			Less than 1 year
Contractual Cash Obligation						1-3 Years		4-5 Years	After 5 Years
Long-Term Debt	$	14,993,815	$	14,671,315	$	42,157	$	18,776	$	261,567
Operating Leases		2,381,481		1,099,062		1,059,187		204,632		18,600
Purchase Obligations		21,000,000		3,000,000		6,000,000		6,000,000		6,000,000
Total Obligations	$	38,375,296	$	18,770,377	$	7,101,344	$	6,223,408	$	6,280,167

The Company's primary need for capital will be to maintain and improve its manufacturing, quarrying, and retail facilities and to finance acquisitions as part of its growth strategy. The Company has approximately $4.0 million budgeted for capital expenditures in 2002. In addition, both the term loan and the revolving credit facility described above expire in December 2002. The Company has begun discussions with a number of institutions, including CIT, on a new credit facility with principally the same structure as the current facility. The Company does not expect to have any difficulty securing a new credit facility. The Company believes that the combination of cash flow from operations,its existing credit facilities, and/or its new credit facility will be sufficient to fund its operations for at least the next twelve months.

RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement No. 141, "Business Combination," and Statement No. 141, "Goodwill and Ohter Intangible Assets." Statement No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. Statement 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, noting that any purchase price allocable to an assembled workforce may not be accounted for separately. Statement 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of Statement 142. Statement 142 will also require that intangible assets with definite useful lives be amortized o ver their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."

The Company is required to adopt the provisions of Statement 141 immediately, except with regard to business combinations intiated prior to July 1, 2001, which it expects to account for using the pooling-of-interests method, and Statement 142 effective January 1, 2002. Furthermore, any goodwill and any intangible assets determined to have an indefinite useful life that are acquired in a purchase business combination completed after June 30, 2001 will not be amortized, but will continue to be evaluated for impairment in accordance with the appropriate pre-Statement 142 accounting literature. Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 will continue to be amortized prior to the adoption of Statement 142. Any impairment loss will be measured as of the date of adoption and recognized as accumulated effect of a change in accounting principle in the first interim period.

Statement 141, will require upon adoption of Statement 142, that the Company evaluate its existing intangible assets and goodwill that were acquired in a prior purchase business combination, and to make any necessary reclassifications in order to conform with the new criteria in Statement 141 for recognition apart from goodwill.

Upon adoption of Statement 142, the Company will be required to reassess the useful lives and residual values of all intangible assets acquired in purchase business combinations, and make any necessary amortization period adjustments by the end of the first interim period after adoption. In addition, to the extent an intangible asset is identified as having an indefinite useful life, the Company will be required to test the intangible asset for impairment in accordance with the provisions of Statement 142 within the first interim period.

In connection with the transitional goodwill impairment evaluation, Statement 142 will require the Company to perform an assessment of whether there is an indication that goodwill (and equity-method goodwill) is impaired as of the date of adoption. To accomplish this the Company must identify its reporting units and determine the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units as of the date of adoption. The Company will then have up to six months from the date of adoption to determine the fair value of each reporting unit and compare it to the reporting unit's carrying amount. To the extent a reporting unit's carrying amount exceeds its fair value, an indication exists that the reporting unit's goodwill may be impaired and the Company must perform the second step of the transitional impairment test. In the second step, the Company must compare the implied fai r value of the reporting unit's goodwill, determined by allocating the reporting unit's fair value to all of its assets (recognized and unrecognized) and liabilities in a manner similar to a purchase price allocation in accordance with Statement 141, to its carrying amount, both of which would be measured as of the date of adoption. This second step is required to be completed as soon as possible, but not later than the end of the year of adoption. Any transitional impairment loss will be recognized as the cumulative effect of a change in accounting principle in the Company's statement of earnings.

And finally, any unamortized negative goodwill (and negative equity-method goodwill) existing at the date Statement 142 is adopted must be written off as the cumulative effect of a change in accounting principle.

As of the date of adoption, the Company has unamortized goodwill in the amount of $34,176,922, unamortized identifiable intangible assets in the amount of $368,571, and unamortized negative goodwill in the amount of $(53,259), all of which will be subject to the transition provisions of Statement 141 and 142.

16

The Company has done preliminary estimations as to the amount of the impairment in the retail reporting unit and it is estimated that it will incur a pre-tax non-cash impairment charge of approximately $32,500,000 in the first quarter of 2002. The Company has not done an estimation of the impairment, if any, in the cemetery reporting unit.

Statement of Financial Accounting Standards No. 143"Accounting for Asset Retirement Obligations"("SFAS 143"), issued in August 2001, addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and for the associated retirement costs. SFAS 143, which applies to all entities that have a legal obligation associated with the retirement of a tangible long-lived asset is effective for fiscal years beginning after June 15, 2002. The Company does not expect the implementation of SFAS 143 to have a material impact on its financial condition or results of operations.

Statement of Financial Accounting Standards No. 144,"Accounting for the Impairment or Disposal of Long-Lived Assets"("SFAS 144"), issued in October 2001, addresses financial accounting and reporting for the impairment or disposal of long-lived assets. SFAS 144, which applied to all entities, is effective for fiscal years beginning after December 15, 2001. The Company does not expect the implementation of SFAS 144 to have a material impact on its financial condition or results of operations.

SEASONALITY

Historically, the Company's operations have experienced certain seasonal patterns. Generally the Company's net sales have been highest in the second quarter and lowest in the first quarter of each year due primarily to weather. Cemeteries in northern areas generally do not accept granite memorials during winter months when the ground is frozen because they cannot be properly set. In addition, the Company typically closes certain of its Vermont and Canadian quarries during these months because of increased operating costs attributable to adverse weather conditions. As a result, the Company has historically incurred a net loss during the first three months of each calendar year.

INFLATION

The Company believes that the relatively moderate rates of inflation experienced in recent years have not had a significant effect on its results of operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company has financial instruments that are subject to interests rate risk, principally debt obligations under its credit facilities. Historically, the Company has not experienced material gains or losses due to interest rate changes. Based on the Company's current variable rate debt obligations, the Company believes its exposure to interest rate risk is not material.

The Company is subject to foreign currency exchange rate risk primarily from the operations of its Canadian subsidiary. Based on the size of this subsidiary and the Company's corresponding exposure to changes in the Canadian/U.S. dollar exchange rate, the Company does not consider its market exposure relating to currency exchange to be material.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

The information required for this item is included in this Annual Report on Form 10-K on Pages i through xxxi, inclusive, and is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

17

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

Certain information concerning directors and executive officers of the Company is set forth below:

NAMES OF DIRECTORS AND EXECUTIVE OFFICERS (1)	AGE	POSITIONS WITH THE COMPANY
George R. Anderson	62	Director
John L. Forney	40	Director, President and Chief Operating Officer/Memorials Division
James L. Fox	50	Director
Douglas S. Goldsmith	32	Chief Financial Officer,Vice President of Finance and Administration and Treasurer
Jon M. Gregory	52	Director, President and Chief Operating Officer/Quarries Division
Richard C. Kimball	61	Director, Chief Strategic and Marketing Officer
Donald Labonte	40	Vice President/Manufacturing
Dennis I. Merchant	51	Vice President/Retail Operations
Terry Shipp	44	Vice President/Sales and Marketing
Kurt M. Swenson	57	President and Chief Executive Officer, Chairman of the Board of Directors
Michael B. Tule	40	Vice President, General Counsel and Secretary
Charles M. Waite	69	Director
Frederick E. Webster Jr.	64	Director

(1) Each executive officer serves for a term of one year (and until his successor is chosen and qualified).

George R. Anderson has been a director of the Company since 1984. From 1984 until February 1999, Mr. Anderson was also Chief Financial Officer and Treasurer. Mr. Anderson joined the Company in 1969 as Chief Accountant and subsequently held the position of Controller. He has been a director of the Barre Granite Association and a trustee of the Granite Group Insurance Trust and the Barre Belt Multi-Employer Pension Plan. Mr. Anderson's current term as a director will expire at the 2002 annual shareholders meeting..

John L. Forney has been President and Chief Operating Officer/Memorials Division since January 2001 and Chief Financial Officer and Treasurer of the Company since February 1999. He has been a director of the Company since February 2001. Prior to assuming these position and since 1996, Mr. Forney was Senior Vice President of Finance at Raymond James & Associates, Inc. From 1994 to 1996, Mr. Forney was a Vice President at Morgan Stanley & Company. Mr. Forney's current term as director will expire at the 2002 annual shareholders meeting.

James L. Fox has been President and Chief Executive Officer of govOne Solutions, an electronic government payment service, since July 2001. From June 2000 to July 2001, he was Vice President - Corporate Development and Chief Financial Officer of Gomez, Inc., a research and consulting firm specializing in Internet quality measurement. He was Vice Chairman of PFPC, Inc., a division of PNC Financial Services Group, Inc., since December 1999. He was President of First Data Investor Services Group, a division of First Data Corporation, since 1989. Mr. Fox has been a director of the Company since October 1997. Mr. Fox's current term as a director of the Company will expire in 2004.

Douglas S. Goldsmith has been Chief Financial Officer and Vice President of Finance and Administration since September 2001. From 1997 until September 2001, Mr. Goldsmith served as the Chief Information Officer of the Company.

Jon M. Gregory has been President and Chief Operating Officer/Quarries Division of the Company since 1993. Mr. Gregory was elected by the Board of Directors to his current directorship in October 1998. Since joining the Company in 1975, Mr. Gregory has served in various positions including Senior Vice President - Memorials Division, Manager of Manufacturing and line production supervisor. Mr. Gregory's current term as a director will expire in 2003.

Richard C. Kimball has been Chief Strategic and Marketing Officer of the Company since January 2001 and Vice Chairman of the Company's Board of Directors since 1993. From 1993 to January 2001, he was Chief Operating Officer/Wholesale Division. He has been a director of the Company since 1986. Prior to joining the Company, Mr. Kimball served as a director, principal and President of The Bigelow Company, Inc., a strategic planning and investment banking firm from 1972 until 1993. Mr. Kimball's current term as a director will expire in 2003.

Donald Labonte has been Vice President/Manufacturing since January 2002 and has been President of Rock of Ages Canada since 1999. From 1998 to 1999, he was Vice President/General Manager of Rock of Ages Canada. From 1993 to 1998, Mr. Labonte was Director of Operations of Rock of Ages Canada.

18

Dennis I. Merchant has been Vice President/Retail Operations since August 1999. From 1984 to August 1999 he served as Manager/Manufacturing Operations.

Terry Shipp has been Vice President/Retail Sales and Marketing since January 2001. From 1997 to December 2000, he was the Sales Manager of Keith Monument Company, LLC, a wholly owned subsidiary of the Company.

Kurt M. Swenson has been President, Chief Executive Officer and Chairman of the Board of Directors of the Company since 1984. Prior to the IPO, Mr. Swenson had been the Chief Executive Officer and a director of Swenson Granite Company, Inc. since 1974, and currently serves as non-officer Chairman of the Board of Swenson Granite Company, LLC, a Delaware limited liability company engaged in the granite curb and landscaping business. He is also a director of the American Monument Association, the National Building Granite Quarries Association and Group Polycor International and its subsidiaries. Mr. Swenson's current term as a director will expire in 2003.

Michael B. Tule hass ben Vice President, General Counsel and Secretary of the Company since April 2000. From March 1996 to April 2000, he was Vice President, General Counsel and Secretary of WPI Group, Inc., now known as NEXIQ Technologies, Inc. Prior to 1996, Mr. Tule was a partner at the Manchester, New Hampshire law firm of McLane, Graf, Raulerson & Middleton.

Charles M. Waite has been a director of the Company since 1985. Since 1989, Mr. Waite has been managing partner of Chowning Partners, a financial consulting firm that provides consulting services to New England companies. Mr. Waite's current term as a director will expire in 2004.

Frederick E. Webster Jr., Ph.D. has been a Professor of Management at the Amos Tuck School of Business Administration of Dartmouth College since 1965. He is also a management consultant and lecturer. Mr. Webster has been a director of the Company since October 1997. Mr. Webster's current term as a director will expire at the 2002 annual shareholder's meeting.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires that directors, certain officers, and beneficial owners of more than 10% of the Company's common stock file reports of initial beneficial ownership and changes in beneficial ownership of the Company's common stock with the Securities and Exchange Commission. Based solely upon its review of reports filed pursuant to Section 16(a) of the Exchange Act and written representations by such reporting persons, the Company believes that during fiscal year 2001 such persons made all required filings except that Mr. Kimball filed a late Form 5 (Annual Statement of Changes in Beneficial Ownership) reporting an option exercise of 5,000 shares of Class B common stock, the conversion of such shares to Class A common stock, and subsequent sale of 2,000 of the Class A shares acquired pursuant to the option, which transactions were also reported late.

19

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth information with respect to the Chief Executive Officer of the Company and each of the four other most highly compensated executive officers of the Company (the "Named Executive Officers") for the years ended December 31, 2001, December 31, 2000 and December 31, 1999.

SUMMARY COMPENSATION TABLE

NAME AND PRINCIPAL POSITION	YEAR	ANNUAL COMPENSATION SALARY        BONUS				LONG-TERM COMPENSATION SECURITIES UNDERLYING OPTIONS(#)		ALL OTHER COMPENSATION
Kurt M. Swenson	2001	$	360,000	$	30,000	—	$	1,200
Chief Executive Officer and Chairman of the	2000	$	340,080	$	0	—	$	1,200
Board of Directors	1999	$	340,080	$	0	—	$	1,150
John L. Forney	2001	$	250,008	$	40,000	—	$	1,200
President and Chief Operating	2000	$	192,000	$	0	75,000	$	1,200
Officer/Memorials Division, Director	1999	$	185,040	$	0	—	$	0
Richard C. Kimball	2001	$	240,000	$	30,000	—	$	1,2000
Chief Strategic and Marketing Officer	2000	$	240,000	$	0	—	$	1,200
Director	1999	$	240,000	$	0	25,000	$	1,150
Jon M. Gregory	2001	$	230,307	$	40,000	—	$	1,200
President and Chief Operating	2000	$	192,000	$	0	—	$	1,200
Officer/Quarries Division, Director	1999	$	185,040	$	0	—	$	1,150
Terry Shipp	2001	$	180,331	$	15,000	—	$	1,200
Vice President/Sales	2000	$	—	$	—	15,000	$	—
and Marketing	1999	$	—	$	—	—	$	—

(1)  In each case, represents a matching contribution under the Company's 401(k) Plan.

STOCK OPTION GRANTS

The Company did not grant options to purchase its Class A or Class B Common Stock to any Named Executive Officer during fiscal 2001.

The following table sets forth information concerning options to purchase Class A and Class B Common Stock held by the Named Executive Officers. The Class B Common Stock is convertible on a share-for-share basis into Class A Common Stock. The Company has not granted any stock appreciation rights.

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

				NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS AT DECEMBER 31, 2001
	SHARES ACQUIRED ON EXERCISE					VALUE OF UNEXERCISED IN-THE-MONEY OPTIONS AT DECEMBER 31, 2001(2)
		VALUE REALIZED (1)
NAME				EXERCISABLE	UNEXERCISABLE	EXERCISABLE		UNEXERCISABLE
Kurt M. Swenson	5,000	$	4,450	—	—	$	—	$	—
Richard C. Kimball	5,000	$	11,200	20,000	5,000	$	—	$	—
Jon M. Gregory	50,000	$	64,100	—	—	$	—	$	—
John L. Forney	—	$	—	25,000	50,000	$	1,750	$	3,500
Terry Shipp	—	$	—	5,000	10,000	$	350	$	700

(1) These values are calculated using the closing price of the Class A Common Stock on the NASDAQ National Market on the date of exercise.

(2) These values are calculated using the $5.01 per share closing price of the Class A Common Stock on the NASDAQ National Market on December 31, 2001.

20

PENSION PLANS

The Company maintains a qualified pension plan (the "Pension Plan"), and has entered into non-qualified salary continuation agreements (the "Salary Continuation Agreements") with certain officers of the Company, including the Named Executive Officers listed in the table on the next succeeding page. The Company's Pension Plan is noncontributory and provides benefits based upon length of service and final average earnings. Generally, employees age 21 with one year of continuous service are eligible to participate in the Pension Plan. The annual pension benefits shown for the Pension Plan assume a participant attains age 65 during 2001 and retires immediately. The Employee Retirement Income Security Act of 1974 places limitations on the compensation used to calculate pensions and on pensions which may be paid under federal income tax qualified plans, and some of the amounts shown on the following table may exceed the applicable limitations. Such limitations are not currently applicable to the Salary Continuation Agreements.

The following table shows the total estimated annual retirement benefits payable upon normal retirement under the Pension Plan for the Named Executive Officers at the specified executive remuneration and years of continuous service.

PENSION PLAN TABLE

FINAL AVERAGE COMPENSATION	15 YEARS	20 YEARS	25 YEARS	30 YEARS	35 YEARS
$125,000	$38,952	$51,937	$64,921	$77,905	$77,905
$150,000	$47,202	$62,937	$78,671	$94,405	$94,405
$175,000	$55,452	$73,937	$92,421	$110,905	$110,905
$200,000	$63,702	$84,937	$106,171	$127,405	$127,405
$225,000	$71,952	$95,937	$119,021	$143,905	$143,905
$250,000	$80,202	$106,937	$133,671	$160,405	$160,405
$275,000	$88,452	$117,937	$147,421	$176,905	$176,905
$300,000	$96,702	$128,937	$161,171	$193,405	$193,405
$325,000	$104,952	$139,937	$174,921	$209,905	$209,905
$350,000	$113,202	$150,937	$188,671	$226,405	$226,405

These calculations are based on the retirement formula in effect as of December 31, 2001, which provides an annual life annuity at age 65 equal to 1.8% of a participant's final five-year average compensation (excluding bonus) plus .4% of a participant's final five-year average compensation in excess of social security covered compensation times years of service to a maximum of 30 years. Estimated years of continuous service for each of the Named Executive Officers, as of December 31, 2001 and rounded to the full year, are: Mr. Forney, 3 years; Mr. Gregory, 26 years; Mr. Kimball, 9 years; and Mr. Swenson, 28 years.

In addition, the Company's Salary Continuation Agreements provide for supplemental pension benefits to certain officers of the Company, including the Named Executive Officers listed in the table below. The following table sets forth the supplemental pension benefits for the specified Named Executive Officers under their respective Salary Continuation Agreements.

NAME	ANNUAL BASE COMPENSATION	TOTAL YEARS OF SERVICE AT AGE 65	ANNUAL RETIREMENT BENEFIT AT AGE 65
R. Kimball	$240,000	12	28,800
K. Swenson	$360,000	26	102,960
J. Gregory	$230,037	39	53,829

These calculations are based on individual Salary Continuation Agreements, which provide a 100% joint and survivor annuity at age 65 equal to a percentage, ranging from .6% to 1.1%, of a participant's highest annual base compensation times full years of service. The percentage range has been determined by the Board of Directors. There are no compensation increases assumed in these calculations.

COMPENSATION OF DIRECTORS

Directors who are not also officers of the Company are paid annual directors' retainers of $10,000 and $500 for each meeting of the Board, including committee meetings. Directors are also eligible for stock option grants under the Company's Amended and Restated 1994 Stock Plan.

21

EMPLOYMENT AGREEMENTS

The Company has an employment agreement with Kurt M. Swenson (the "Swenson Employment Agreement") for retention of his services as President and Chief Executive Officer of the Company. The term of the Swenson Employment Agreement commenced on October 24, 1997, the date of consummation of the IPO (the "Commencement Date"), and continues until the fifth anniversary thereof, provided that on the third and each subsequent anniversary of the Commencement Date such term will automatically be extended for one additional year, unless, not later than ninety days prior to the expiration of the term, the Company or Mr. Swenson gives notice that the term will not be extended. The Swenson Employment Agreement provides for continued payment of salary and benefits over the remainder of the term if Mr. Swenson's employment is terminated by the Company without Cause (as defined in the Swenson Employment Agreement) or as a result of death or disability or by Mr. Swenson for Good Reason (as defined in the Swenson Employment Agreement). The Swenson Employment Agreement also provides for a lump sum payment to Mr. Swenson equal to the sum of (i) accrued but unpaid salary, and a prorated bonus amount equal to the greater of the largest annual bonus paid to Mr. Swenson during the prior three years and the annual bonus payable in respect of the most recently completed fiscal year (the "Highest Annual Bonus"), through the date of termination and (ii) three times the sum of (A) his then annual salary and (B) Highest Annual Bonus, and for continuation of benefits for three years, if Mr. Swenson's employment is terminated by the Company (other than for Cause, death or disability) during the twelve-month period following, or prior to but in connection with, or by Mr. Swenson during the twelve-month period following, a Change in Control (as defined in the Swenson Employment Agreement). In the event of a termination related to a Change in Control, Mr. Swenson may elect in lieu of the lump sum payment described above, to receive in a lump sum or over the then remaining term of the Swenson Employment Agreement, an amount equal to the total amount he would have been entitled to receive if his employment had been terminated by the Company without Cause or by Mr. Swenson for Good Reason. If any payment or distribution by the Company to or for the benefit of Mr. Swenson under the Swenson Employment Agreement would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by Mr. Swenson with respect to such excise tax, then Mr. Swenson will generally be entitled to receive an additional payment such that after payment by Mr. Swenson of all taxes, Mr. Swenson retains an amount of the additional payment equal to the excise tax imposed.

The Company also has employment with each of the other Named Executive Officers except Mr. Shipp (such employment agreements being referred to collectively as the "Other Employment Agreements"), each of which provides for an initial five-year employment term commencing on October 24, 1997, with the exception of the Company's agreement with John L. Forney, which has a five-year term commencing on January 22, 1999. The Other Employment Agreements provide for benefits of the type generally provided to key executives of the Company, and for continued payment of salary and benefits over the remainder of the term if the employee's employment is terminated by the Company without Cause (as defined in the Other Employment Agreements). The Other Employment Agreements or related undertakings generally prohibit the employee from competing with the Company during the term of employment and for two years thereafter, and contain customary confidentiality provisions in favor of the Company.

22

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 22, 2002, certain information with respect to the beneficial ownership of the Common Stock by each (i) director, (ii) executive officer and (iii) beneficial owner of more than 5% of either class of the outstanding Common Stock known to the Company, based on Securities and Exchange Commission filings and other available information and (iv) by all directors and executive officers of the Company as a group. The Class B Common Stock is convertible on a share-for-share basis into Class A Common Stock. The Class B Common Stock is entitled to ten votes per share and the Class A Common Stock is entitled to one vote per share. Unless otherwise indicated, each person has sole voting and investment power with respect to the shares listed opposite such person's name.

NAME AND ADDRESS OF BENEFICIAL OWNER (1)	NUMBER	PERCENT OF CLASS	NUMBER (2)	CLASS (2)
	SHARES OF CLASS B COMMON STOCK BENEFICIALLY OWNED		SHARES OF CLASS A COMMON STOCK BENEFICIALLY OWNED
Wellington Management Company, LLP (3)
75 State Street
Boston, MA 02109	—	—	573,000	10.6%
Dimensional Fund Advisors (4)
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401	—	—	333,700	6.2%
Douglas M. Schair	—	—	503,153	9.3%
Kurt M. Swenson (5) **	1,005,000	35.0%	1,135,000	17.7%
Kevin C. Swenson (6)	1,023,489	35.6%	1,023,489	15.9%
Robert L. Pope	144,875	5.0%	144,875	2.6%
Richard C. Kimball (7) **	29,126	1.0%	133,426	2.5%
George R. Anderson**	—	—	25,000	*
Jon M. Gregory**	—	—	35,326	*
Charles M. Waite**	29,126	1.0%	30,000	*
James L. Fox(8)**	—	—	6,000	*
John L. Forney (9)**	—	—	25,000	*
Frederick E. Webster Jr.(10)**	—	—	5,000	*
Dennis Merchant(11)**	—	—	8,334	*
Douglas Goldsmith(12)**	—	—	8,334	*
Michael Tule(13)**	—	—	5,000	*
Terry Shipp(14)**	—	—	6,000	*
Donald Labonte(15)**	—	—	3,334	*
All directors and executive officers as a group (14 persons)	1,063,252	37.0%	1,923,907	29.8%

**Executive Officer and/or Director

* Less than 1%

(1) The business address of each director and executive officer of the Company is c/o Rock of Ages Corporation, 772 Graniteville Road, Graniteville, Vermont 05654.

(2) For each beneficial owner (and directors and executive officers as a group), (i) the number of shares of Class A Common Stock listed includes (or is comprised solely of) a number of shares equal to the number of shares of Class B Common Stock, if any, listed as beneficially owned by such beneficial owner(s) and (ii) the percentage of Class A Common Stock listed assumes the conversion on March 22, 2002 of all shares of Class B Common Stock, if any, listed as beneficially owned by such beneficial owner(s) into Class A Common Stock and also that no other shares of Class B Common Stock beneficially owned by others are so converted.

(3) According to a Schedule 13G dated February 12, 2002, Wellington Management Company, LLP, in its capacity as an investment advisor, may be deemed to be the beneficial owner of the listed shares which are held of record its clients.

(4)  According to a Schedule 13G dated February 12, 2002, Dimensional Fund Advisors Inc., in its capacity as an investment advisor or manager, may be deemed to be the beneficial owner of the listed shares which are held of record by certain investment companies, trusts or other accounts that it advises or manages.

23

(5) Kurt M. Swenson is the brother of Kevin C. Swenson. Includes 1,005,000 shares of Class B Common Stock and 130,000 shares of Class A Common Stock held by the Kurt M. Swenson Revocable Trust of 2000. Kurt M. Swenson, as the sole trustee of the Kurt M. Swenson Revocable Trust of 2000, beneficially owns such shares.

(6)  Kevin C. Swenson is the brother of Kurt M. Swenson.

(7)  Includes 20,000 shares of Class A Common Stock subject to currently exerciseable options.

(8)  Includes 5,000 shares of Class A Common Stock subject to currently exercisable stock options.

(9)  All 25,000 shares of Class A Common Stock listed are subject to currently exercisable stock options.

(10)  All 5,000 shares of Class A Common Stock listed are subject to currently exercisable stock options.

(11)  Includes 3,334 shares of Class A Common Stock subject to currently exercisable stock options.

(12) Includes 3,334 shares of Class A Common Stock subject to currently exercisable stock options.

(13) All 5,000 shares of Class A Common Stock listed are subject to currently exercisable stock options.

(14)  Includes 5,000 shares of Class A Common Stock subject to currently exercisable stock options.

(15) All 3,334 shares of Class A Common Stock listed are subject to currently exercisable stock options.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In connection with and prior to its initial public offering in 1997, the Company effected a reorganization whereby, among other things, the Company's then parent corporation Swenson Granite Company, Inc. ("Swenson Granite") was merged with and into the Company, with the Company as the surviving corporation, and, immediately prior to such merger, Swenson Granite distributed its curb and landscaping business to its stockholders through a pro rata distribution of all of the member interests in a newly formed limited liability company named Swenson Granite Company LLC ("Swenson LLC"). Kurt M. Swenson, the Company's Chairman, President and Chief Executive Officer, and his brother Kevin C. Swenson, each own approximately 30.3% of Swenson Granite LLC. Certain other executive officers and directors of the Company collectively own approximately 9% of Swenson LLC. Kurt M. Swenson serves as a non-officer Chairman of the Board of Swenson LLC, but has no involvement with its day-to-day operations. Robert Pope, a holder of more than 5% of the Class B Common Stock, is the President and Chief Executive Officer, and owns approximately 5% of Swenson LLC. Neither Kurt M. Swenson nor any other officer of the Company receives salary, bonus, expenses or other compensation from Swenson LLC, except for any pro rata share of earnings attributable to their ownership interest in Swenson LLC.

Swenson LLC owns two granite quarries, one in Concord, New Hampshire and another in Woodbury, Vermont. Both have been owned by Swenson LLC (or its predecessor Swenson Granite) for more than 40 years. Because of the proximity of the Woodbury quarry to Barre, Vermont, the Company provides, and may continue to provide, certain maintenance services and parts to the Woodbury quarry and is reimbursed for the cost of such services. During 2001, the Company received approximately $117,000 for such maintenance service and parts. Both the Company and Swenson LLC have the right to terminate these services at any time and the Company has no obligation to purchase or continue to purchase Woodbury granite from Swenson LLC. The Company also purchases Concord blocks from Swenson LLC at market prices. The Company's purchases of granite provided by Swenson LLC in 2001 were approximately $13,000. Swenson also purchases granite blocks and slabs from the Company. Such purchases amounted to approximately $25,000 in 2001. The Company believes these arrangements with Swenson LLC are as favorable, or more favorable, to the Company than would be available from an unrelated party for comparable granite blocks.

In February and April 2000 the Company loaned $130,000 to Richard C. Kimball and $143,186 to Jon M. Gregory, in connection with the exercise of certain stock options by them. Mr. Kimball and Mr. Gregory are both directors and executive officers of the Company. The purpose of the loans was to assist Mr. Kimball and Mr. Gregory in paying certain taxes incurred in connection with the exercise of Company stock options and the resulting Alternative Minimum Tax imposed on the unrealized gain on the transactions. The loans are each evidenced by a demand promissory note and are secured by a pledge of the shares acquired in the option exercises. The notes are payable on demand and provide for annual interest of 5.88% on the outstanding principal balance. Mr. Kimball paid his loan in full in July 2001. As of March 2002, $58,098 remained outstanding on the loan to Mr. Gregory.

24

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of or are included in this Annual Report on Form 10-K and are incorporated herein by reference:

1. The financial statements listed in the Index to Consolidated Financial Statements and Financial Statement Schedule, filed as part of this Annual Report on Form 10-K.

2. The financial statement schedule listed in the Index to Consolidated Financial Statements and Financial Statement Schedule, filed as part of this Annual Report on Form 10-K.

3. The exhibits listed in the Exhibit Index filed as part of this Annual Report on Form 10-K.

(b) Reports on Form 8-K: No reports on Form 8-K were filed by the Company during the last quarter of the fiscal year ended December 31, 2001.

25

ROCK OF AGES CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

December 31, 2001, 2000 and 1999

(With Independent Auditors' Report Thereon)

ROCK OF AGES CORPORATION AND SUBSIDIARIES

Table of Contents
	PAGE
Independent Auditors' Report	i
Consolidated Balance Sheets	ii
Consolidated Statements of Operations	iv
Consolidated Statements of Stockholders' Equity and Comprehensive Income	v
Consolidated Statements of Cash Flows	vi
Notes to Consolidated Financial Statements	viii
Supplementary Information:
Independent Auditors' Report on Supplementary Information	xxx
Schedule II - Valuation and Qualifying Accounts and Reserves	xxxi

INDEPENDENT AUDITORS' REPORT

The Board of Directors of Rock of Ages Corporation and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Rock of Ages Corporation and Subsidiaries as of December 31, 2001 and 2000 and the related consolidated statements of operations, stockholders' equity and comprehensive income and cash flows for each of the years in the three-year period ended December 31, 2001. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Rock of Ages Corporation and Subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.

As discussed in Note 1 to the financial statements, the Company adopted the provisions of Statement of Position 98-5, "Reporting the Costs of Start-Up Activities," in 1999.

KMPG LLP
/s/ KPMG LLP

March 12, 2002
Boston, Massachusetts

i

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2001 and 2000

ASSETS (note 6)	2001		2000
Current assets:
Cash and cash equivalents	$	3,435,181	$	9,501,365
Trade receivables,less allowance for doubtful accounts of $1,547,923 in 2001 and        $1,303,054 in 2000 (note 5)		16,119,068		15,486,560
Due from affiliates (note 11)		102,554		147,429
Inventories (notes 2 and 5)		22,680,187		22,910,377
Income taxes receivable		12,974		521,259
Deferred tax assets (note 8)		694,000		576,000
Assets held for sale(note 16)		2,546,216		—
Other current assets		4,103,375		2,865,856
Total current assets		49,693,555		52,008,936
Property,Plant and Equipment:
Granite reserves and development costs		15,838,230		16,570,984
Land		9,123,662		7,260,436
Buildings and improvements		14,465,284		16,925,559
Machinery and equipment		25,726,213		32,045,754
Furniture and fixtures		1,667,789		1,544,710
Construction-in-process		80,923		203,717
		66,902,101		74,551,160
Less accumulated depreciation, depletion and amortization		23,758,832		30,104,619
Net property, plant and equipment		43,143,269		44,446,541
Other assets:
Cash surrender value of life insurance, net loans of $65,217 in 2001 and $95,412         2000 and 1999		811,139		1,599,487
Intangibles, less accumulated amortization of $4,667,568 in 2001 and $3,326,578 in         2000 (note 3)		34,492,234		36,083,403
Debt issuance costs, less accumulated amortization of $175,819 in 2001 and        $133,194 in 2000		50,225		92,951
Due from affiliates (note 11)		128,928		219,874
Deferred tax assets (note 8)		873,000		—
Intangible pension asset (note 9)		221,869		119,483
Prearranged receivables (note 1)		15,388,492		—
Cemetery property, at cost (note 1)		5,997,568		—
Other		2,992,559		982,883
Total other assets		60,956,014		39,098,081
Total assets	$	153,792,838	$	135,553,558

See accompanying notes to consolidated financial statements

ii

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2001 and 2000

LIABILITIES AND STOCKHOLDERS' EQUITY	2001			2000
Current liabilities:
Borrowings under lines of credit (note 5)	$	3,970,402		$	10,304,260
Current installments of long-term debt (note 6)		14,671,315			791,697
Deferred compensation payable (note 9)		278,649			163,907
Trade payables		1,945,625			1,687,420
Accrued expenses		5,236,561			3,429,512
Income taxes payable		85,875			—
Customer deposits		6,711,080			6,720,982
Total current liabilities		32,899,507			23,133,778
Long-term debt, excluding current installments (note 6)		322,500			18,527,340
Deferred compensation (note 9)		4,070,923			3,381,305
Prearranged deferred revenue		24,224,212			—
Deferred tax liability(note 8)		—			151,000
Accrued pension cost (note 9)		390,987			438,597
Accrued postretirement benefit cost(note 9)		779,093			705,537
Other		1,435,904			496,476
Total liabilities		64,122,496			46,834,033
Commitments (note 4)
Stockholders' equity (note 10):
Preferred stock - $0.01 par value;
2,500,000 shares authorized
No shares issued and outstanding
Common Stock - Class A $0.01 par value;
30,000,000 shares authorized;
5,014,408 issued and outstanding in 2001 and
4,665,219 in 2000		50,144			46,652
Common Stock - Class B $0.01 par value;
15,000,000 shares authorized;
2,787,021 issued and outstanding in 2001 and
2,826,438 in 2000		27,870			28,264
Additional paid-in capital		69,066,548			67,996,227
Retained earnings		21,473,481			21,040,703
Accumulated other comprehensive income		(947,701	)		(392,321	)
Total stockholders' equity		89,670,342			88,719,525
Total liabilities and stockholders' equity	$	153,792,838		$	135,553,558

See accompanying notes to consolidated financial statements

iii

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Years ended December 31, 2001, 2000 and 1999

	2001		2000		1999
Net revenues:
Quarrying	$	25,774,536	$	22,886,916	$	22,180,179
Manufacturing		22,227,965		27,183,417		37,414,503
Retailing		43,159,474		40,622,169		36,932,655
Cemeteries		3,142,682		—		—
Total net revenues		94,304,657		90,692,502		96,527,337
Cost of revenues:
Quarrying		14,427,461		13,015,779		12,206,442
Manufacturing		16,806,213		20,382,475		29,623,521
Retailing		17,698,738		18,233,141		17,353,072
Cemeteries		2,324,238		—		—
Total cost of revenues		51,256,650		51,631,395		59,183,035
Gross profit:
Quarrying		11,347,075		9,871,137		9,973,737
Manufacturing		5,421,752		6,800,942		7,790,982
Retailing		25,460,736		22,389,028		19,579,583
Cemeteries		818,444		—		—
Total gross profit		43,048,007		39,061,107		37,344,302
Selling, general and administrative expenses		36,706,809		33,163,621		31,241,128
Loss on disposal of assets (note 16)		2,534,091		—		845,117
Income from operations		3,807,107		5,897,486		5,258,057
Interest expense		1,757,929		2,143,226		2,034,129
Income before provision for income taxes and cumulative effect           of a change in accounting principle		2,049,178		3,754,260		3,223,928
Provision for income taxes (note 8)		1,616,400		1,290,764		1,394,846
Net income before cumulative effect of a change in accounting           principle		423,778		2,463,496		1,829,082
Cumulative effect in prior years of a change in accounting principal     (net of tax benefit of $47,559) (Note 17)		—		—		(149,781	)
Net income	$	432,778	$	2,463,496	$	1,679,301
Net income per share - basic:
Net income before cumulative effect of a change in accounting        principle	$	0.06	$	0.33	$	0.24
Cumulative effect in prior year of change in accounting principle       (net of tax benefit of $47,599)		—		—		(0.02	)
Net income per share	$	0.06	$	0.33	$	0.22
Net income per share - diluted:
Net income before cumulative effect of a change in accounting        principle	$	0.06	$	0.33	$	0.23
Cumulative effect in prior year of change in accounting principle       (net of tax benefit of $47,599)		—		—		(0.02	)
Net income per share	$	0.06	$	0.33	$	0.21
Weighted average number of shares outstanding - basic		7,605,785		7,447,460		7,509,241
Weighted average number of shares outstanding - diluted		7,675,990		7,575,839		7,825,589

See accompanying notes to consolidated financial statements

iv

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity and Comprehensive Income
Years ended December 31, 2001, 2000 and 1999

		NUMBER OF SHARES ISSUED AND OUTSTANDING
							CLASS A COMMON STOCK			CLASS B COMMON STOCK			ADDITIONAL PAID-IN CAPITAL Income
		CLASS A COMMON STOCK SHARES		CLASS B COMMON STOCK (SHARES)												RETAINED EARNINGS	ACCUMULATED OTHER COMPREHENSIVE INCOME			TOTAL STOCKHOLDERS' EQUITY
Balance at December 31, 1998		3,896,178			3,484,957			38,962			34,849			69,350,225		16,897,906		(485,248	)		85,836,694
Comprehensive income:
	Net income	—			—			—			—			—		1,679,301		—			1,679,301
	Cumulative translation adjustment	—			—			—			—			—		—		305,889			305,889
Total comprehensive income																					1,985,190
Retirement of stock		(1,000	)		—			(10	)		—			—		—		—			(10	)
Conversion of common stock		380,370			(380,370	)		3,804			(3,804	)		—		—		—			—
Exercise of options		—			274,600			—			2,746			716,117		—		—			718,863
Repurchase of stock (note 16)		—			(263,441	)		—			(2,634	)		(2,796,427	)	—		—			(2,799,061	)
Acquisitions (note 15)		52,623			—			526			—			639,460		—		—			639,986
Balance at December 31, 1999		4,328,171			3,115,746		$	43,282		$	31,157		$	67,909,375	$	18,577,207	$	(179,359	)	$	86,381,662
Comprehensive income:
	Net income	—			—			—			—			—		2,463,496		—			2,463,496
	Cumulative translation adjustment	—			—			—			—			—		—		(212,962	)		(212,962	)
Total comprehensive income																					2,250,534
Conversion of common stock		343,626			(343,626	)		3,436			(3,436	)		—		—		—			—
Exercise of options		—			84,318			—			843			303,257		—		—			304,100
Repurchase of stock		(6,578	)		(30,000	)		(66	)		(300	)		(216,405	)	—		—			(216,771	)
	Balance at December 31, 2000	4,665,219			2,826,438		$	46,852		$	28,264		$	67,996,227		21,040,703	$	(392,321	)	$	88,719,525
Comprehensive income:
	Net income	—			—			—			—			—		432,778		—			432,778
	Cumulative translation adjustment	—			—			—			—			—		—		(396,382	)		(396,382	)
	Minimum pension liability	—			—			—			—			—		—		(158,997	)		(158,997	)
Total comprehensive income																					(122,601	)
Conversion of common stock		359,999			(359,999	)		3,600			(3,600	)		—		—		—			—
Exercise of options		—			320,582			—			3,206			1,186,421		—		—			1,189,627
Repurchase of stock		(10,810	)		—			(108	)		—			(116,100	)	—		—			(116,208	)
	Balance at December 31, 2001	5,104,408			2,787,021		$	50,144		$	27,870		$	69,066,548		21,473,481	$	(947,701	)	$	89,670,342

See accompanying notes to consolidated financial statements.

v

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended December 31, 2001, 2000 and 1999

	2001			2000			1999
Cash Flows From Operating Activities:
Net income	$	432,778		$	2,463,496		$	1,679,301
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Loss on sale of assets		1,734,088			—			—
Depreciation, depletion and amortization		4,461,697			4,670,803			4,010,012
Write down of goodwill		—			382,864			—
Decrease (increase) in cash surrender value of life insurance		788,348			(74,355	)		(78,076	)
Loss on assets held for sale		800,003			—			—
Loss on sale of property, plant and equipment		196,905			172,198			842,030
Cumulative effect of a change in accounting principle		—			—			149,781
Deferred taxes		(72,092	)		452,377			2,709
Changes in operating assets and liabilities:
Decrease (increase) in trade receivables		1,643,054			(1,353,744	)		400,648
Decrease (increase) in due to/from related parties		135,821			(272,014	)		(99,701	)
Decrease (increase) in inventories		(100,095	)		494,930			1,671,371
Decrease (increase) in other current assets		368,823			(600,559	)		(613,993	)
Decrease (increase) in tangible pension asset		(102,386	)		(119,483	)		218,888
Decrease in prearranged receivables		449,714			—			—
Increase in cemetery property		(211,917	)		—			—
Decrease (increase) in other assets		(79,292	)		(58,603	)		59,413
Increase (decrease) in payables		258,203			(348,629	)		(987,382	)
Increase (decrease) in accruals		1,612,702			1,014,791			(1,196,545	)
Increase (decrease) in income taxes payable/receivable		594,160			(1,365,039	)		1,482,531
Increase (decrease) in customer deposits		(56,457	)		(552,117	)		1,241,789
Decrease in deferred compensation		803,730			(112,831	)		(33,856	)
Decrease in deferred income		—			—			(124,386	)
Increase (decrease) in accrued pension cost		(47,610	)		(62,593	)		467,098
Increase in accrued postretirement benefit cost		73,556			70,732			65,160
Decrease in prearranged deferred revenue		(1,029,438	)		—			—
Increase (decrease) in other liabilities		(1,083,457	)		(118,941	)		417
Net cash provided by operating activities		11,570,838			4,683,283			9,157,209
Cash flows from investing activities
Purchases of property, plant and equipment		(3,752,960	)		(2,884,389	)		(3,559,510	)
Proceeds from sale of assets		3,263,038			884,586			137,451
Decrease in other investments		—			—			342,551
Acquisitions, net of cash acquired		(7,043,366	)		(655,081	)		(12,919,177	)
Increase in intangible assets		(28,050	)		(152,164	)		—
Cash included in sale of subsidiary		—			—			(250,000	)
Net cash used in investing activities		(7,561,338	)		(2,807,048	)		(16,248,685	)
Cash flows from financing activities:
Net borrowings (repayments) under lines of credit		(6,369,858	)		(3,279,586	)		6,933,190
Decrease in debt issuance costs		—			—			11,796
Proceeds from long-term debt		—			6,500,000			—
Principal payments on long-term debt		(4,325,222	)		(417,387	)		(608,126	)
Net stock option transactions		1,073,419			87,330			718,853
Net cash provided by (used in) financing activities		(9,621,661	)		2,890,357			7,055,623
Effect of exchange rate exchanges on cash		(454,023	)		(142,441	)		211,899
Net increase (decrease) in cash and cash equivalents		(6,066,184	)		4,624,151			176,046
Cash and cash equivalents, beginning of year		9,501,365			4,877,214			4,701,168
Cash and cash equivalents, end of year	$	3,435,181		$	9,501,365		$	4,877,214

See accompanying notes to consolidated financial statements

vi

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows

	2001		2000		1999
Supplemental cash flow information:
Cash paid during the year for:
Interest	$	1,757,929	$	2,143,226	$	2,112,113
Income taxes		1,003,249		2,209,383		(88,691	)

Supplemental non-cash investing and financing activities:

During the third quarter of 2001 the Company completed the sale of the SMI and Childs manufacturing plants in Elberton, Georgia in a non-cash transaction in which a note receivable was recorded for $1,640,000.

During 2000 the Company increased intangibles and other long-term liabilities for $420,000 of covenants- not- to- compete.

On May 28, 1999 the Company exchanged all of the outstanding shares of Keystone Memorial, Inc., a newly formed subsidiary, containing land, buildings and equipment of $2,318,292, inventory of $1,750,000, deferred tax liabilities of $417,564, prepaids of $9,351, intangibles of $47,974 and cash of $250,000 for shares valued at $2,799,061 and a note receivable with a net present value of $399,538. See Note 16 for further discussion.

	2001			2000			1999
Acquisitions:
Assets acquired	$	34,560,804		$	780,777		$	15,364,803
Liabilities assumed and issued		(27,517,438	)		(125,696	)		(1,638,803	)
Common stock issued		—			—			(639,986	)
Cash paid		7,043,366			655,081			13,086,014
Costs related to acquisitions		—			—			336,976
Less cash acquired		—			—			(503,813	)
Net cash paid for acquisitions	$	7,043,366		$	655,081		$	12,919,177

See accompanying notes to consolidated financial statements.

vii

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

(1)  Summary of Significant Accounting Policies

Rock of Ages Corporation and Subsidiaries (the "Company") is an integrated quarrier, manufacturer, wholesaler and retailer of granite and products manufactured from granite. The Company also owns and operates cemeteries.

(a) Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

(b)  Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquidated investments purchased with a maturity of three months or less to be cash equivalents.

(c)  Inventories

Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. The portion of developed cemetery property that management estimates will be used in the next twelve months is included in inventories. All other developed cemetery property is classified as a non-current asset and is included in cemetery property.

(d)  Depreciation, Depletion and Amortization

Property, plant and equipment are stated at cost. Depreciation is calculated using the straight-line and declining balance methods, based upon the following estimated useful lives:

Buildings and land improvements	5 to 40 years
Machinery and equipment	3 to 20 years
Furniture and fixtures	5 to 12 years

Depreciation expense amounted to $3,015,215, $3,174,615 and $2,658,965 in 2001, 2000 and 1999, respectively, which includes depreciation related to equipment under capital leases.

Cost depletion and amortization of granite reserves and development costs are provided by charges to operations based on cubic feet produced in relation to estimated reserves of the property. Cost depletion and amortization charged to operations amounted to $62,767, $41,228 and $160,109 in 2001, 2000 and 1999, respectively.

(e)  Intangibles

Intangibles consist of names and reputations, covenants not to compete, trademarks and other. Names and reputations, also called goodwill, is recorded as a result of acquisitions, and is equal to the purchase price of the acquisition less the value of net assets acquired. The Company amortizes goodwill over 40 years using the straight-line method. Covenants not to compete, which are also recorded as a result of acquisitions, are being amortized over the length of the respective agreements. The Company assesses the recoverability of goodwill by determining whether the amortization over its remaining life can be recovered through undiscounted future operating cash flows of the acquired operations. The amount of impairment, if any, is measured based on discounted projected future operating cash flows using a discount rate reflecting the Company's average cost of funds. The assessment of the recoverability of goodwill will be impacted if estimated future operating cash flows are not achieved.

viii

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

(f) Debt Issuance Costs

The Company amortizes debt issuance costs using the straight-line method over the term of the related borrowing. Amortization expense was $42,745, $42,725 and $48,023 in 2001, 2000 and 1999, respectively.

(g)  Organization Costs

The Company adopted "Statement of Position (SOP) 98-5, Reporting on the Costs of Start-Up Activities" as of January 1, 1999. The SOP requires the costs of start-up activities, including organization costs to be expensed as incurred. See Note 17 for further discussion.

(h)  Foreign Currency Translation

The Company translates the accounts of its foreign subsidiaries in accordance with Statement of Financial Accounting Standards (SFAS) No. 52, Foreign Currency Translation, under which all assets and liabilities are translated at the rate of exchange in effect at year end. Revenue and expense accounts are translated using weighted average exchange rates in effect during the year. Gains or losses from foreign currency translation are charged to accumulated other comprehensive income which is included in the stockholders' equity in the accompanying consolidated balance sheets.

(i) Income Taxes

The Company files its U.S. Federal income tax returns on a consolidated basis. Rock of Ages Canada, Inc., a wholly-owned subsidiary, is responsible for income taxes in Canada.

The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognizes the effect on deferred tax assets and liabilities of a change in tax rates in income in the period that includes the enactment date.

The Company is allowed to claim percentage depletion, under IRS Code Section 613, for tax purposes based upon income derived from quarrying operations.

The Company intends to reinvest the unremitted earnings of its non-U.S. subsidiaries and postpone their remittance indefinitely. Accordingly, no provision for U.S. income taxes was required on such earnings during the three years ended December 31, 2001.

(j)  Stock-Based Employee Compensation

The Company uses the intrinsic value based method per Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock issued to Employees, for all of its stock-based employee compensation arrangements.

(k)  Pension and Other Postretirement Plans

The Company has a defined benefit pension plan covering substantially all of its Vermont based non-union employees. The benefits are based on years of service and the employee's compensation. The cost of this program is being funded currently.

The Company has a salary continuation plan which covers certain employees who have deferred compensation agreements with the Company. The Company measures the cost of its obligations based on actuarial estimates. The Company recognizes net periodic costs as employees render the necessary services to earn the deferred compensation benefits.

ix

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

The Company also sponsors a defined benefit postretirement health care plan for certain early retirees and defined benefit postretirement group life insurance plans for all Vermont based union and non-union employees. The Company measures the costs of its obligation based on actuarial estimates and recognizes net periodic costs as retirees and employees render the services necessary to earn the postretirement benefits.

(l)  Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to use estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

(m)  Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

The Company accounts for long-lived assets in accordance with the provisions of SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. This Statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company measures recoverability of assets to be held and used by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value of the assets. The Company reports assets to be disposed of at the lower of the carrying amount or fair value less costs to sell.

(n) Revenue Recognition

Manufacturing and Retailing

The manufacturing division recognizes revenue upon shipment of finished orders from the manufacturing plant. The retailing division recognizes revenue upon the setting of the memorial. In certain instances, the Company may enter into an agreement with a customer which provides for extended payment terms, generally up to two years from either the date of setting of the memorial or, in certain instances, upon the settlement of an estate.

Quarrying

The quarry division recognizes revenue from sales of granite blocks when the granite is shipped or when the customer selects and identifies the block at the quarry site. At that time, the block is removed from the Company's inventory, the customer's name is printed on the block, and title and risk of ownership passes to the buyer. In many cases, granite blocks owned by customers remain on the Company's property for varying periods of time after title passes to the buyer. Payment terms are less 5% 30 days, net 30 days, except the December terms described below. Sales of the Company's blocks are FOB quarry and the Company retains the obligation to load customer's blocks on trucks. At its Barre, Vermont location, sales are FOB Barre, Vermont and the Company retains a delivery obligation using the Company's trucks for block customers in Barre. The customer may take delivery at any time determined by the customer, but all invoices must be paid in accordance with their terms when due whether or not the customer requests delivery.

The Company considers the earnings process substantially complete despite the Company's obligations to load the blocks, and, in the case of its Barre customers, deliver the blocks, because the cost of delivery service is inconsequential (less than 3%) in relation to the selling price. Further, under industry terms of trade, title passes and the payment obligation is established when the block is identified to a particular customer and transaction.

In December each year, the Company provides special 90-day payment terms at its Barre quarries for all block purchased in the month of December. The reason for this is that the Barre quarries are generally closed from mid-December through mid-March because of weather. The quarry customer's manufacturing plants remain open during most of this period, however, and most prefer to assure they own blocks of a size and quality selected by them prior to the quarries' closure. All blocks purchased in December on deferred payment terms are invoiced on or about December 31 and removed from the Company's inventory with title passing to the buyer. Payment terms are one-third of the invoice amount on January 15, one-third on February 15, and one-third on March 15. The program provides essentially the normal 30-day payment terms during the months when the quarry is closed notwithstanding the customer's purchase of a three-months supply in December. Customers need not use these terms and may buy from inventory during the closure period on a first-come first-serve basis with normal 30-day terms.

x

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

Cemeteries

In 2001, the Company acquired 16 cemeteries (see Note 15). Cemetery activity is accounted for in the manner described below:

For preneed sales of interment rights, the associated revenue and all costs to acquire the sale will be recognized in accordance with Statement of Financial Accounting Standards ("SFAS") No. 66, "Accounting for Sales of Real Estate." Under Statement No. 66, recognition of revenue and costs must be deferred until 20% of the property sale price has been collected.

For preneed sales of merchandise, primarily vaults and markers, the associated revenue and all costs to acquire them are deferred until the merchandise is delivered or certain conditions are met.

For preneed sales of markers, the associated revenue and all costs will be recognized when the marker has been cast/manufactured and engraved for the customer, title and risk of loss has been transferred to the customer, the customer obtains a certificate of ownership and the marker has been attached to the realty of the cemetery or at the request of the customer, the marker has been properly segregated, identified by the customer and stored in an acceptable manner.

Multiple element arrangements and service fee revenue will be recognized using timing appropriate to each individual element. Service fee revenue, including delivery and installation fees or grave opening and closing fees, will not be recognized prior to the time the services are performed.

Cemetery merchandise trust earnings will be deferred until the underlying merchandise is delivered. The revenue is included in the prearranged deferred revenue line item on the balance sheet.

The customer contract receivables and deferred revenue associated with prearranged cemetery contracts will be recognized in the Company's balance sheet as prearranged receivables and prearranged deferred revenue at the date a customer contract is signed provided they meet the definitions of assets and obligations as set forth in Statement of Financial Concepts No. 6, "Elements of Financial Statements" (CON6) and satisfy the fundamental recognition criteria set forth in Statement of Financial Concepts No. 5, "Recognition and Measurement in Financial Statements of Business Enterprises" (CON5).

The Company will record a reduction in the customer receivable for the funds received from the customer and record a receivable from the trust upon transfer to the trust equal to the amount of funds transferred.

With respect to the sale of cemetery property, whether preneed or at-need, the Company is generally required by state law to place into a perpetual care trust, a portion, usually 10 percent, of the proceeds it receives in order to fund maintenance of the cemetery grounds. As payments are received, the Company generally funds the perpetual care trust in the same proportion as the payment bears to the contract amount. The Company recognizes the earnings on its perpetual care trust funds as they are realized in the trust and withdraws the earnings on these funds to use towards the maintenance of its cemeteries, but principal must generally be held in the trust in perpetuity. Principal in these funds is not reflected on the balance sheet because the principal must remain in the trust in perpetuity.

The Company does not require collateral or other security on trade receivables. The credit risk on trade receivables is controlled by requiring significant deposits. The Company continuously monitors outstanding trade receivables.

xi

(o) Prearranged Receivables

Prearranged receivables are comprised of funds owed to the Company for the preneed sale of funeral and cemetery merchandise and services. These funds are due from trust funds, which represent amounts already paid by customers and realized earnings on those amounts and due from customers.

(p) Common Stock

The Company has two classes of common stock outstanding, Class A and Class B. The shares of Class A common stock and Class B common stock differ with respect to voting rights and certain conversion rights, as described below:

Voting Rights - Each share of Class A common stock entitles the holder to one vote on each matter submitted to a vote of the Company's stockholders and each share of Class B common stock entitles the holder to ten votes on each such matter, in each case including the election of directors. Neither the Class A common stock nor the Class B common stock has cumulative voting rights.

Conversion - Class A common stock has no conversion rights. Class B common stock is convertible into Class A common stock, in whole or in part, at any time and from time to time at the option of the holder on the basis of one share of Class A common stock for each share of Class B common stock converted. Each share of Class B common stock will also automatically convert into one share of Class A common stock upon transfer to any person or entity other than a Permitted Transferee, as defined in the Company's Amended and Restated Certificate of Incorporation.

(q)  Net Income Per Share

Net income per share, or basic earnings per share, is computed by dividing earnings available for common shares by the weighted average number of common shares outstanding during each year. Net income per share - diluted, or diluted earnings per share, is computed by dividing earnings available for common shares by the weighted average number of common shares outstanding during each year, adjusted to include the additional number of common shares that would have been outstanding if the dilutive potential common shares had been issued. Potential common shares are not included in the diluted earnings per share calculations where the effect of their inclusion would be antidilutive.

(r)  Comprehensive Income

Comprehensive income consists of net income, cumulative translation adjustment, and a pension minimum liability adjustment and is presented in the consolidated pension statements of stockholders' equity and comprehensive income.

(s) Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement No. 141, "Business Combination," and Statement No. 141, "Goodwill and Ohter Intangible Assets." Statement No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 as well as all purchase method business combinations completed after June 30, 2001. Statement 141 also specifies criteria intangible assets acquired in a purchase method business combination must meet to be recognized and reported apart from goodwill, noting that any purchase price allocable to an assembled workforce may not be accounted for separately. Statement 142 will require that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of Statement 142. Statement 142 will also require that intangible assets with definite useful lives be amortized o ver their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."

The Company is required to adopt the provisions of Statement 141 immediately, except with regard to business combinations intiated prior to July 1, 2001, which it expects to account for using the pooling-of-interests method, and Statement 142 effective January 1, 2002. Furthermore, any goodwill and any intangible assets determined to have an indefinite useful life that are acquired in a purchase business combination completed after June 30, 2001 will not be amortized, but will continue to be evaluated for impairment in accordance with the appropriate pre-Statement 142 accounting literature. Goodwill and intangible assets acquired in business combinations completed before July 1, 2001 will continue to be amortized prior to the adoption of Statement 142. Any impairment loss will be measured as of the date of adoption and recognized as accumulated effect of a change in accounting principle in the first interim period.

xii

Statement 141, will require upon adoption of Statement 142, that the Company evaluate its existing intangible assets and goodwill that were acquired in a prior purchase business combination, and to make any necessary reclassifications in order to conform with the new criteria in Statement 141 for recognition apart from goodwill.

Upon adoption of Statement 142, the Company will be required to reassess the useful lives and residual values of all intangible assets acquired in purchase business combinations, and make any necessary amortization period adjustments by the end of the first interim period after adoption. In addition, to the extent an intangible asset is identified as having an indefinite useful life, the Company will be required to test the intangible asset for impairment in accordance with the provisions of Statement 142 within the first interim period.

In connection with the transitional goodwill impairment evaluation, Statement 142 will require the Company to perform an assessment of whether there is an indication that goodwill (and equity-method goodwill) is impaired as of the date of adoption. To accomplish this the Company must identify its reporting units and determine the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units as of the date of adoption. The Company will then have up to six months from the date of adoption to determine the fair value of each reporting unit and compare it to the reporting unit's carrying amount. To the extent a reporting unit's carrying amount exceeds its fair value, an indication exists that the reporting unit's goodwill may be impaired and the Company must perform the second step of the transitional impairment test. In the second step, the Company must compare the implied fai r value of the reporting unit's goodwill, determined by allocating the reporting unit's fair value to all of its assets (recognized and unrecognized) and liabilities in a manner similar to a purchase price allocation in accordance with Statement 141, to its carrying amount, both of which would be measured as of the date of adoption. This second step is required to be completed as soon as possible, but not later than the end of the year of adoption. Any transitional impairment loss will be recognized as the cumulative effect of a change in accounting principle in the Company's statement of earnings.

And finally, any unamortized negative goodwill (and negative equity-method goodwill) existing at the date Statement 142 is adopted must be written off as the cumulative effect of a change in accounting principle.

As of the date of adoption, the Company has unamortized goodwill in the amount of $34,176,922, unamortized identifiable intangible assets in the amount of $368,571, and unamortized negative goodwill in the amount of $(53,259), all of which will be subject to the transition provisions of Statement 141 and 142.

The Company has done preliminary estimations as to the amount of the impairment in the retail reporting unit and it is estimated that it will incur a pre-tax non-cash impairment charge of approximately $32,500,000 in the first quarter of 2002. The Company has not done an estimation of the impairment, if any, in the cemetery reporting unit.

Statement of Financial Accounting Standards No. 143"Accounting for Asset Retirement Obligations"("SFAS 143"), issued in August 2001, addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and for the associated retirement costs. SFAS 143, which applies to all entities that have a legal obligation associated with the retirement of a tangible long-lived asset is effective for fiscal years beginning after June 15, 2002. The Company does not expect the implementation of SFAS 143 to have a material impact on its financial condition or results of operations.

Statement of Financial Accounting Standards No. 144,"Accounting for the Impairment or Disposal of Long-Lived Assets"("SFAS 144"), issued in October 2001, addresses financial accounting and reporting for the impairment or disposal of long-lived assets. SFAS 144, which applied to all entities, is effective for fiscal years beginning after December 15, 2001. The Company does not expect the implementation of SFAS 144 to have a material impact on its financial condition or results of operations.

xiii

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998

(2) Inventories

Inventories consist of the following at December 31, 2001 and 2000:

	2001		2000
Raw materials	$	9,949,781	$	9,710,070
Work-in-process		1,536,417		3,500,434
Finished goods and supplies		11,193,989		9,699,873
	$	22,680,187	$	22,910,377

(3)  Intangibles

Intangibles consist of the following at December 31, 2001 and 2000:

	ESTIMATED USEFULE LIFE		2001		2000
Names and reputations		40 Years	$	38,077,388	$	38,337,567
Covenants not to compete		5-11 Years		955,100		945,100
Trademarks and other		5-40 Years		127,314		127,314
				39,159,802		39,409,981
Less accumulated amortization				4,667,568		3,326,578
Total			$	34,492,234	$	36,083,403

Amortization expense was $1,340,990 in 2001,$1,412,235 in 2000 and $1,142,915 in 1999

xiv

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998

(4)  Commitments and Contingencies

Leases

The Company has several noncancellable operating leases for vehicles, equipment and office space which expire over the next five years. Rental expense for all operating leases was $1,221,751, $1,222,011 and $1,257,320 during 2001, 2000 and 1999, respectively. Rental expense includes amounts for related party operating leases of $419,569, $618,947 and $533,047 in 2001, 2000 and 1999, respectively.

Future minimum lease payments under noncancellable operating leases (with initial or remaining lease terms in excess of one year) are as follows:

YEAR ENDED DECEMBER 31:	Related Party		Other
2002	$	422,384	$	676,678
2003		321,181		377,978
2004		157,764		202,264
2005		76,800		77,125
2006		—		50,707
Thereafter		—		18,600
	$	978,129	$	1,403,352

The Company also is the lessor of various parcels of land. Rental income was $33,341, $45,771 and $35,239 in 2001, 2000 and 1999, respectively. Future minimum rentals to be received under noncancellable leases are as follows:

YEAR ENDED DECEMBER 31:
2002	$	33,419
2003		32,119
2004		26,949
2005		14,550
2006		14,400
	$	121,437

Purchase Commitment

In connection with the Lawson sale (see note 16), the Company entered into a Supply Agreement with Adams Granite Co. The Company has agreed to purchase a minimum of $3,000,000 of monuments from Adams Granite each year for a term of seven years with various stipulations as to variations from the "minimum order" and pricing agreements. If orders over a two-year period are less than the "minimum order," then the Company shall, at its sole option either place orders for monuments in the amount of the deficiency; or pay to Adams the gross margin that Adams would have realized had such orders been placed and filled. The gross margin used in this calculation will be Adams' average gross margin on sales of monuments to the Company over the prior two-year period.

Litigation

The Company is party to legal proceedings that arise from time to time in the ordinary course of its business. While the outcome of these proceedings cannot be predicted with certainty, management does not expect these matters to ahve a material adverse effect on the Company. One of the litigation items outstanding is a request for Arbitration ("Request") from its former European Distributor, Eurimex, S.A. (now known as Granite Stone Business International) in connection with the termination by the Company of the distribution agreement for the Company's Salisbury Pink granite. Eurimex has also claimed compensation in connection with a distribution agreement for the Company's Bethel White grnite, which agreement expired by its terms over two years ago. Pursuant to those agreements, the arbitration will take place under the International Chamber of Commerce rules and will be held in Luxemburg.

xv

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998

The Request includes claims by Eurimex that the Company wrongfully terminated the Salisbury Pink and Bethel White agreements. The Request also alleges that the Company violated antitrust laws under the European Community Treaty and United States antitrust laws. Eurimex has alleged that it has suffered damages in excess of $30 million, and will seek to have such damages trebled un U.S. antitrust laws.

The Company denies all of Eurimex's allegations and further states that it believes that Eurimex has engaged in improper or unlawful practices in the sale of the Company's products. The Company has answered Eurimex's Request and has brought certain counterclaims against Eurimex, including a claim for frivolous action. A preliminary scheduling conference was held on October 2, 2001 and jurisdictional issues have been briefed. A second hearing on further procedural issues was held on March 13, 2002. The Company denies liability, will continue to vigorously defend the claims made by Eurimex in connection with the arbitration and does not believe an unfavorable ruling is probable, however, an unfavorable ruling could have a material adverse affect on the Company.

(5) Lines Of Credit

The Company's financing with the CIT Group/Business Credit, Inc. provides for an acquisition term loan line of credit of $30 million and a revolving credit facility of an additional $20 million. Effective July 1, 1998, 50% of each facility has been assigned to FleetBoston, consistent with the initial agreement. Such loans and advances under the revolving credit facility shall be in amounts up to 75% of the outstanding eligible accounts receivable of the Company and 50% of the aggregate value of eligible inventory of the Company; however, advances against eligible inventory may not exceed $12,500,000 at any one time. The acquisition term loans are limited to two per calendar quarter and must be at least $1,000,000 each. There are currently two loans, to be referred to as term loan A and term loan B. The interest rate on term loan A is based on a formula of prime less .50%, or at the Company's election, the sum of 1-3/4% plus LIBOR. The interest rate on term loan B is based on a formula of prime less .50%, or at the Company's election, the sum of 2.5% plus LIBOR. However, if the Company chooses the LIBOR option, the elections must be in multiples of $1,000,000, and no more than four LIBOR elections may be in effect at any one time. Fees include a one time fee of $125,000 (which was paid in full in 1999), a line of credit fee of $4,167 per month and a collateral management fee of $1,000 per month. Amounts outstanding were $3,970,402 and $12,500,000 and $1,942,351 as of December 31, 2001 and $10,340,260 and $12,000,000 and $6,000,000 as of December 31, 2000 on the revolving credit facility, term loan A and term loan B, respectively. The weighted average interest rate was 7.25% and 9.08% on the revolving credit facility in 2001 and 2000, respectively.

Both the term loan and the revolving credit facility described above expire in December 2002. The Company has begun discussions with a number of institutions, including the current lenders, on a new credit facility with principally the same structure as the current credit facility. The Company does not expect to have any difficulty securing a new credit facility.

The Company's Canadian subsidiary also has a line of credit agreement with a lending institution. Under the terms of this agreement, a maximum of approximately $4,000,000 may be advanced based on percentages of eligible accounts receivable, eligible inventory, and tangible fixed assets. The line of credit agreement will be reviewed at least annually for any revisions to the agreement, bears interest at the Canadian prime rate plus .25%, and is secured by substantially all assets of the subsidiary. There were no amounts outstanding as of December 31, 2001 and 2000.

(6) Long-Term Debt

xvi

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

Long-term debt at December 31, 2001 and 2000 consists of the following:

	2001		2000
Note payble - Dutton, interest at 6%, payable in monthly principal and interest payments of $674, unsecured,     due December 2003	$	15,243	$	22,190
Note payable - Plante, interest at 8%, payable in monthly payments of $2,593 beginning February 2001,     unsecured, due January 2021		303,448		310,000
Note payable - Anderson, payable with granite inventory at a set sales price of $14.50 per cubic foot at     maximum sales of 1,500 cubic foot per month		193,490		236,697
Note payable - Chrysler Financial, interest at 2.9%, payable in monthly installments of $598, due December    2001, secured by equipment		—		2,122
Note payable - GMAC, interest at 4.9%, payable in monthly installments of $439, due February 2002, secured     by equipment		874		5,968
Note payable - GMAC, interest at 2.9%, payable in monthly installments of $716, due October 2002, secured    by equipment		7,070		15,332
Note payable - Harold, interest at 10%, payable in monthly installments of $4,366, due June 2001, secured    by property and equipment		—		21,298
Term loan - interest at 3.6% and 8.57% in 2001 and 2000, respectively (see note 5), due December 2002,    secured by substantially all assets of the Company		12,500,000		12,500,000
Note payable - PNC, interest at 8.95%, payable in monthly installments of $334, due July 2001, secured    by equipment		—		2,811
Note payable - Remsen Dodge, interest at 2.9%, payable in monthly installments of $598, due October 2002,    secured by equipment		—		6,483
Note payable - Ford Motor Credit Corp., interest at 2.9%, payable in monthly installments of $392, due    September 2002, secured by equipment		3,462		7,994
Term loan, interest at 3.86 and 9.0% in 2001 and 2000, respectively (see note 5), payable in quarterly installments of $212,000 with a final balloon payment due    December 2002, secured by substantially all assets of the Company		1,942,351		6,000,000
Note payable - GMAC, interest at 0%, payable in monthly installments of $797, due     October 2004, secured by equipment		27,877		—
Obligation under capital lease, interest at 7.89%, payable in monthly installments of $10,276, due June 2001,    secured by equipment		—		188,142
		14,993,815		19,319,037
Less current installments		14,671,315		791,697
Long-term debt, excluding current installments	$	322,500		18,527,340

Future maturities of the December 31, 2001 long-term debt are as follows:

YEAR ENDED DECEMBER 31:
2002	$	14,671,315
2003		25,073
2004		17,084
2005		9,014
2006		9,762
Thereafter		261,567
	$	14,993,815

The cost of the equipment under capital leases was $670,590 and related accumulated depreciation was $201,558 as of December 31, 2001. The leases matured in 2001.

The financing agreements with banks contain various restrictive covenants with respect to the maintenance of financial ratios, capital addition, and other items. As of December 31, 2001 the Company was in compliance with all such covenants.

xvii

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

(7)  Fair Value of Financial Instruments

SFAS No. 107, Disclosure About the Fair Value of Financial Instruments, requires disclosure of information about the fair value of certain financial instruments for which it is practicable to estimate that value. For purposes of the following disclosure the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced sale or liquidation. Management has determined that the carrying values of its financial assets and liabilities approximate fair value at December 31, 2001.

(8) INCOME TAXES

Income before provision for income taxes, classified by source of income for the years ended December 31, 2001, 2000 and 1999 was as follows:

	2001		2000		1999
U.S.	$	830,666	$	2,555,670	$	2,351,664
Foreign		1,218,512		1,198,590		872,264
Income before provision for income taxes	$	2,049,178	$	3,754,260	$	3,223,928

A summary of the significant components of the provision for income taxes for the years ended December 31, 2001, 2000 and 1999 is as follows:

	2001			2000			1999
Current:
Federal	$	1,094,764		$	233,446		$	791,319
State		191,057			197,003			314,787
Foreign		402,276			407,938			286,031
		1,688,097			838,387			1,392,137
Deferred:
Federal		(23,072	)		295,969			(1,713	)
State		(12,462	)		159,873			(926	)
Foreign		(36,163	)		(3,465	)		5,348
		(71,697	)		452,377			2,709
Cumulative effect of change in accounting principle		—			—			(47,559	)
Total provision for income taxes	$	1,616,400		$	1,290,764		$	1,347,287

xviii

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2001 and 2000 are presented below:

	2001			2000
Deferred tax assets:
Accrued pension, accrued postretirement benefit cost and deferred compensation	$	1,416,000		$	1,270,000
Allowance for doubtful accounts		280,000			341,000
Accrued expenses		428,000			87,000
Inventories, principally due to additional costs inventoried for tax purposes         pursuant to the Tax Reform Act of 1986		434,000			457,000
Prearranged deferred revenue		3,654,000			—
Alternative minimum tax credits		3,898,000			3,318,000
State net operating loss carryovers		481,000			405,000
Total gross deferred tax assets		10,591,000			5,878,000
Less valuation allowance		(4,904,000	)		(4,172,000	)
Total net deferred tax assets		5,687,000			1,706,000
Deferred tax liabilities:
Cemetery Property		(2,134,000	)		—
Quarry development		(376,000	)		(394,000	)
Names and reputations		(789,000	)		(616,000	)
Other liabilities		(195,000	)		(216,000	)
Property and Equipment		(626,000	)		(55,000	)
Total gross deferred tax liabilities		(4,120,000	)		(1,281,000	)
Net deferred tax assets	$	1,567,000			425,000

xviii

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

SFAS No. 109, Accounting for Income Taxes, requires a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Deferred tax assets include significant alternative minimum tax credit carryforwards which have been fully reserved and may be carried forward indefinitely. Utilization of these alternative minimum tax credits is limited to future federal income tax in excess of the alternative minimum tax. Management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the net deferred tax assets.

The net deferred tax expense differs from the change in the net deferred tax assets as a result of the purchase accounting treatment of the Company's acquisitions during 2001.

A reconciliation of differences between the statutory U.S. federal income tax rate, on income before provision for income taxes and cumulative effect of a change in accounting principle, and the Company's effective tax rate follows:

	2001		2000		1999
U.S. statutory rate		34.0%		34.0%		34.0%
State taxes, net of federal benefit		5.8%		6.3%		6.4%
Names and reputations		7.7%		10.7%		6.0%
Divesture		62.0%		—		10.3%
Change in valuation allowance		35.7%		22.0%		13.6%
Other, primarily tax depletion		(66.3%)		(38.6%)		(27.0%)
Effective tax rate		78.9%		34.4%		43.3%

Deferred taxes have not been provided on the undistributed earnings of the Company's wholly-owned Canadian subsidiary since the Company can control the distribution if such earnings and has determined that such earnings will be reinvested indefinetely. Additional taxes could be due if these earnings were distributed.

(9) PENSION AND OTHER BENEFITS

The Company has a defined benefit pension plan covering substantially all of its Vermont based non-union employees. The benefits are based on years of service and the employee's compensation. The cost of this program is being funded currently.

The Company has a salary continuation plan which covers certain employees who have deferred compensation agreements with the Company. The Company measures the costs of its obligations based on actuarial estimates. The net periodic costs are recognized as employees render the necessary services to earn the deferred compensation benefits.

The Company also sponsors a defined benefit postretirement health care plan for certain early retirees and defined benefit postretirement group life insurance plans for all Vermont based union and non-union employees. The Company measures the costs of its obligations based on actuarial estimates. The net periodic costs are recognized as retirees and employees render the services necessary to earn the postretirement benefits.

xix

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

		NON-UNION PENSION BENEFITS					DEFERRED COMPENSATION BENEFITS					OTHER BENEFITS
		2001		2000			2001		2000			2001		2000
CHANGE IN BENEFIT OBLIGATION:
Benefit obligation at beginning of year	$	17,186,365		$	16,228,960	$	1,833,950		$	1,592,016	$	1,720,110		$	1,711,891
Service cost		434,532			442,750		30,374			62,488		21,488			24,962
Interest cost		1,229,210			1,200,929		162,798			115,417		116,099			114,738
Actuarial (gain)/loss		(1,262	)		263,320		433,218			170,277		(13,892	)		623
Benefits paid		(957,118	)		(949,594)		(106,248	)		(106,248)		(127,167	)		(132,104)
Benefit obligation at end of year	$	17,891,727		$	17,186,365	$	2,354,092		$	1,833,950	$	1,716,638		$	1,720,110
CHANGE IN PLAN ASSETS:
Fair value of plan assets at beginning of year	$	16,329,219		$	16,541,624	$	—		$	—	$	—		$	—
Actual return on plan assets		(634,206	)		292,534		—			—		—			—
Employer contribution		500,000			444,655		106,248			106,248		127,167			132,104
Benefits paid		(957,118	)		(949,594)		(106,248	)		(106,248)		(127,167	)		(132,104)
Fair value of plan assets at end of year	$	15,237,895		$	16,329,219	$	—		$	—	$	—		$	—
Funded status	$	(2,653,832	)	$	(857,146)	$	(2,354,092	)	$	(1,833,950)	$	(1,716,638	)	$	(1,720,110)
Unrecognized net acturial (gain)/loss		986,922			(955,138)		287,981			57,975		179,915			193,807
Unrecognized prior service cost		1,110,509			1,104,029		217,086			147,084		—			—
Unrecognized transition obligation		165,414			269,658		4,783			10,948		757,360			820,766
Net amount recognized	$	(390,987	)	$	(438,597)	$	(1,844,242	)	$	(1,617,943)	$	(779,093	)	$	(705,537)
Amounts recognized in the consolidated balance sheet consists of:
Accrued benefit liability	$	(390,987	)	$	(438,597)	$	(2,225,108	)	$	(1,737,426)	$	(779,093	)	$	(705,537)
Intangible asset		—			—		221,869			119,483		—			—
Maximum liability adjustment		—			—		158,997			—		—			—
Net amount recognized	$	(390,987	)	$	(438,597)	$	(1,844,242	)	$	(1,617,493)	$	(779,093	)	$	(705,537)
WEIGHTED-AVERAGE ASSUMPTIONS AS OF DECEMBER 31:
Discount rate		7.25%			7.5%		7.25%			7.5%		7.0%			7.5%
Expected return on plan assets		9.0%			9.0%		8.5%			N/A		N/A			N/A
Rate of compensation increase		5.5%			5.5%		4.5%			4.5%		4.5%			N/A

For measurement purposes, a 6 % annual rate of increase in the per capita cost of covered health care benefits was assumed for 2001, 6% for 2002 and 2004, 4% for 2005 and remain at that level thereafter.

xx

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000, and 1999

		NON-UNION PENSION BENEFITS						DEFERRED COMPENSATION BENEFITS						OTHER BENEFITS
		2001		2000		1999		2001		2000		1999		2001		2000		1999
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service cost	$	434,532	$	442,750	$	475,922	$	30,374	$	62,488	$	96,855	$	21,488	$	24,962	$	24,613
Interest cost		1,229,210		1,200,929		1,127,258		162,798		115,417		117,612		116,099		105,484		119,513
Expected return on plan    assets		(1,446,000	)	(1,458,621	)	(1,370,730	)	—		—		—		—		—		—
Amortization of prior service   cost		130,404		130,404		130,404		112,444		24,263		24,263		—		—		—
Amortization of transition   obligation		104,244		104,244		104,244		6,165		6,165		6,165		63,136		63,136		63,136
Recognized net actuarial    (gain)/loss		—		(37,644	)	—		20,766		—		1,560		—		—		8,916
Net periodic benefit cost	$	452,390	$	382,062	$	467,098	$	332,547	$	208,333	$	246,455	$	200,723	$	193,582	$	216,178

The Company has multiple postretirement benefit plans. The health care plan covers a closed group of retirees selected by the Company and benefits for all but two of the participants cease at age 65. The life insurance plan covers all Vermont based employees; non-union coverage is 50% of the group insurance coverage which the employee had prior to retirement (but not more than $60,000) and union employee coverage is $6,000. The life insurance plan assumes a 4.50% rate of compensation increase for all years.

UNION PENSION BENEFITS

In July 1999, Vermont based union employees became participants in Steelworkers Pension Trust. The Company contributes amounts as required by the union contract.

In 1998, Vermont based union employees participated in a multi-employer defined benefit pension plan. The Company contributed amounts as required by the union contract. The amount charged to operations in the accompanying consolidated statements of operations was $620,066, $641,358 and $641,150 in 2001, 2000 and 1999, respectively.

DEFERRED COMPENSATION BENEFITS

In addition to the deferred compensation benefits under its salary continuation plan, the Company has deferred compensation agreements with three former stockholders of acquired companies. The present value of the future payments under these agreements was $1,921,901, $1,807,786 and $2,142,185 as of December 31, 2001, 2000 and 1999, respectively. Total annual payments of $260,200 begin and end at various dates from 1997 to 2016. One of these agreements is partially paid through benefits paid by the Company into the defined pension plan, therefore the payment amount changes annuall based on actuarial estimates.

The Rock of Ages Canada subsidiary has deferred compensation agreements with three former employees. The present value of the future payments under these agreements is $201,933 as of December 31, 2001. Total annual payments of $36,324 begin and end at various dates through 2023.

401(k) BENEFITS

The Company's contributions were $311,582, $104,032 and $156,205 in 2001, 2000 and 1999, respectively. Acquisitions during 2001, 2000 and 1999 have significantly increased the number of participants in the plans.

xxi

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

(10) STOCK-BASED EMPLOYEE COMPENSATION

Under the terms of the Amended and Restated 1994 Stock Plan, 1,500,000 options were reserved for issuance to key employees and directors to purchase equivalent shares of common stock. The options granted prior to 1999 have a five year term and vest at 20% per year and options granted in 1999 and 2000 have a four year term and vest at 25% per year.

The following table sets forth the stock option transactions for the years ended December 31, 2001, 2000 and 1999:

	NUMBER OF OPTIONS			WEIGHTED AVERAGE EXERCISE PRICE
Outstanding, December 31, 1998		1,288,252		$	8.90
Granted during 1999		175,000			11.68
Exercised during 1999		(274,600	)		(2.62	)
Surrendered during 1999		(658,252	)		(16.17	)
Outstanding, December 31, 1999		530,400		$	4.04
Granted during 2000		392,500			4.94
Lapsed during 2000		(84,318	)		(3.61	)
Exercised during 2000		(5,500	)		(3.74	)
Outstanding, December 31, 2000		833,082		$	4.45
Granted during 2001		—			—
Exercised during 2001		(320,582	)		(3.70	)
Surrendered during 2001		(95,000	)		(3.81	)
Oustanding December 31, 2001		417,500			5.16
Exercisable, December 31, 2001		153,208		$	5.43
Weighted average remaining contractual life		2.3 years

	WEIGHTED AVERAGE
					OPTIONS EXERCISABLE
		EXERCISE PRICE
EXERCISE PRICE	NUMBER OF OPTIONS OUTSTANDING		REMAINING CONTRACTUAL LIFE		NUMBER	WEIGHTED AVERAGE EXERCISE PRICE
$ 3.74	15,000	$                      3.74		1 Year	15,000	$	3.74
$ 4.94	377,500	$                      4.94		2.5 Years	125,708	$	4.94
$ 12.68	25,000	$                    12.38		1 Year	12,500	$	12.38

The Company has adopted the disclosure-only provisions of SFAS No. 123, Accounting for Stock-Based Compensation. Accordingly, no compensation cost has been recognized for stock options granted under the plan as the options were all granted at exercise prices which equaled the fair market value at the date of the grant. Had compensation cost for the Company's stock option plan been determined based on the fair value at the grant date for awards during 2001, 2000 and 1999 consistent with the provisions of SFAS No. 123, the Company's net income would have been reduced to the pro forma amount indicated below:

	2001		2000		1999
Net income, as reported	$	432,778	$	2,463,469	$	1,679,301
Net income, pro forma		89,342		2,202,163		1,518,030
Net income per share, pro forma		.01		.30		.20
Net income per share - assuming dilution, pro forma		.01		.29		.19

xxii

Pro forma net income reflects only options granted subsequent to December 31, 1995 and is not necessarily indicative of future effects on net income. Therefore, the full impact of calculating compensation cost for stock options under SFAS No. 123 is not reflected in the pro forma net income amounts presented because compensation costs is reflected over the options' vesting periods and compensation cost only for options granted after January 1, 1996.

The fair value of each option grant is estimated on the date of the grant. Options granted prior to 1997 were valued using the Minimum Value Method with the following weighted-average assumptions: risk-free interest rate of 6%; dividend yield of $0; and expected lives of five (5) years. The per share weighted-average fair value of stock options granted during 2000 and 1999 was $2.32 and $6.08, respectively, on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions; risk-free interest rate of 6%; dividend yield of $0; expected volatility of 52% and 47%, respectively; and expected lives of four (4) years.

(11) RELATED PARTY TRANSACTIONS

The Company is related through common ownership with several companies. The transactions with related parties, included in the consolidated statements of operations, are as follows for the years ended December 31, 2001, 2000 and 1999:

	2001		2000		1999
Net revenues	$	25,223	$	14,934	$	26,013
Cost of revenues		12,842		54,379		320,247

Amounts due from related parties as of December 31, 2001 and 2000 are as follows:

	2001		2000
Due from Swenson Granite Company, LLC	$	16,263	$	1,376
Due from Granite Accents, Inc.		37,242		62,135
Due from Kotecki Family Enterprises		3,233		3,233
Due from Rock of Ages Asia		128,928		178,433
Due from Maple Farms Japan		45,816		122,126
	$	231,482	$	367,303

See note 4 for operating lease obligations with related parties.

xxiii

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

(12) UNAUDITED QUARTERLY SUMMARY INFORMATION

The following is a summary of unaudited quarterly summary information for the years ended December 31, 2001, 2000 and 1999 (in thousands, except per share data):

		NET REVENUES		NET INCOME (LOSS)			NET INCOME (LOSS) PER SHARE			NET INCOME (LOSS) PER SHARE- ASSUMING DILUTION
2001 Quarters:
	First	$	13,319	$	(3,682	)	$	(0.49	)	$	(0.49	)
	Second		31,297		4,089			0.54			0.54
	Third		24,722		(1,033	)		(0.14	)		(0.14	)
	Fourth		24,967		1,059			0.14			0.14
	Total	$	94,305	$	433		$	0.06		$	0.06
2000 Quarters:
	First	$	14,233	$	(2,693	)	$	(.36	)	$	(.36	)
	Second		28,813		3,211			.43			.42
	Third		23,528		1,355			.18			.18
	Fourth (1)		24,119		590			.08			.09
	Total	$	90,693	$	2,463		$	.33		$	.33
1999 Quarters:
	First	$	17,518	$	(2,012	)	$	(.27	)	$	(.27	)
	Second		28,986		1,336			.18			.17
	Third		24,413		1,062			.14			.14
	Fourth		25,610		1,293			.17			.17
	Total	$	96,527	$	1,679		$	.22		$	.21

NOTE

The Company has historically experienced certain seasonal patterns, primarily due to weather conditions affecting operations in Vermont and Canada and the setting of memorials in cemeteries located in northern regions.

(1) The 2000 fourth quarter results have been affected by certain significant nonrecurring items. The Company evaluated certain assets for impairment and subsequently recorded a reduction in the value of these assets, amounting to approximately $843,000. Also, as the Company refined its standard costing system, and old inventory was replaced by new inventory, the net effect on cost of sales in the fourth quarter was approximately $600,000 increase to cost of sales.

xxiv

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

(13) EARNINGS PER SHARE

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share (EPS) computations for net income for the years ended December 31, 2001, 2000 and 1999:

	2001		2000		1999
Numerator:
Income available to common shareholders used in basic and diluted      earnings per share	$	432,778	$	2,463,496	$	1,679,301
Denominator:
Denominator for basic earnings per share:
Weighted average shares		7,605,785		7,447,460		7,509,241
Effect of dilutive securities:
Stock options		70,205		128,379		316,348
Denominator for diluted earnings per share:
Adjusted weighted average shares		7,675,990		7,575,839		7,825,589
Basic earnings per share	$	.06	$	.33	$	.22
Diluted earnings per share	$	.06	$	.33	$	.21

Options to purchase 25,000 shares of Class A common stock at exercises prices ranging from $12.38 to $18.50 per share were outstanding in 2001, 2000 and 1999, respectively, but were not included in the computation of diluted EPS because the options' exercise price was greater than the average market price of the common shares during those years.

(14) SEGMENT INFORMATION

The Company is organized based on the products and services that it offers. Under this organizational structure, the Company operates in three segments: quarrying, manufacturing, and retailing.

The quarrying segment extracts granite from the ground and sells it to both the manufacturing segment and to outside manufacturers, as well as to distributors in Europe and Japan.

The manufacturing segment's principal product is granite memorials used primarily in cemeteries, although it also manufactures some specialized granite products for industrial applications.

The retailing segment engraves and sells memorials and other granite products at various locations throughout the United States.

The cemetery segment sells funeral services such as grave openings and closings and cemetery merchandise such as vaults, markers and mausoleums.

Inter-segment revenues are accounted for as if the sales were to third parties.

xv

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

The following is the segment information for the years ended December 31, 2001, 2000 and 1999 (in thousands):

2001		QUARRYING	MANUFACTURING			RETAILING		CEMETERIES			CORPORATE OVERHEAD		TOTAL
Total net revenues	$	28,648	$	31,446	$	43,159		$	3,143	$	—		$	106,396
Inter-segment net revenues		2,873		9,218		—			—		—			12,091
Net revenues		25,775		22,228		43,159			3,143		—			94,305
Total gross profit		12,450		5,249		24,531			818		—			43,048
Inter-segment gross profit		1,103		(173	)	(930	)		—		—			—
Gross Profit		11,347		5,422		25,461			818		—			43,048
Selling, general and administrative expenses		4,388		4,833		22,555			1,203		3,728			36,707
Loss on disposal of assets		197		2,337		—			—		—			2,534
Income (loss) from operations	$	6,762	$	(1,748)	$	2,906		$	(385)	$	(3,728	)	$	3,807

2000		QUARRYING	MANUFACTURING			RETAILING		CEMETERIES			CORPORATE OVERHEAD		TOTAL
Total net revenues	$	26,588	$	35,763	$	40,622		$	—	$	—		$	102,973
Inter-segment net revenues		3,701		8,579		—			—		—			12,280
Net revenues		22,887		27,184		40,622			—		—			90,693
Total gross profit		11,249		6,254		21,558			—		—			39,061
Inter-segment gross profit		1,378		(547	)	(831	)		—		—			—
Gross Profit		9,871		6,801		22,389			—		—			39,061
Selling, general and administrative expenses		3,011		5,721		21,476			—		2,956			33,164
Income (loss) from operations	$	6,860	$	1,080	$	913		$	—	$	(2,956	)	$	5,897

1999		QUARRYING	MANUFACTURING			RETAILING		CEMETERIES			CORPORATE OVERHEAD		TOTAL
Total net revenues	$	27,972	$	44,790	$	36,933		$	—	$	—		$	109,695
Inter-segment net revenues		5,792		7,376		—			—		—			13,168
Net revenues		22,180		37,414		36,933			—		—			96,527
Total gross profit		12,565		5,595		19,184			—		—			37,344
Inter-segment gross profit		2,591		(2,195	)	(396	)		—		—			—
Gross Profit		9,974		7,790		19,580			—		—			37,344
Selling, general and administrative expenses		3,068		6,262		19,154			—		2,757			31,241
Loss on disposal of assets		—		845		—			—		—			845
Income (loss) from operations	$	6,906	$	683	$	426		$	—	$	(2,757	)	$	5,258

xxvi

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

Net revenues by geographic area are as follows for the years ended December 31, 2001, 2000 and 1999 (in thousands):

	2001		2000		1999
Net revenues (1):
United States	$	86,316	$	82,886	$	87,045
Canada		7,989		7,807		9,482
Total net revenues	$	94,305	$	90,693	$	96,527

(1) Net revenues are attributed to countries based on where product is produced.

Long-lived assets by geographic area are as follows as of December 31, 2001, 2000, and 1999 (in thousands):

	2001		2000		1999
Long-lived assets:
United States	$	41,203	$	42,543	$	42,798
Canada		1,940		1,904		1,976
Japan		—		—		5
	$	43,143	$	44,447	$	44,779

(15) ACQUISITIONS

On January 3, 2001 the company acquired 16 cemeteries and one granite retailer in Kentucky. The aggregate purchase price was approximately $7.5 million consisting of $7 million in cash and an additional consideration amount of $558,000 which has been classified as other liabilities and will be paid in four annual installments commencing December 2001. The acquisition was accounted for by the purchase method of accounting, and accordingly the consolidated statement of operations includes the results of operations of the acquired cemeteries and granite retailer beginning January 3, 2001. The assets acquired and liabilities assumed were recorded at estimated fair values as determined by the Company's management based on information currently available and on current assumptions as to future operations which has resulted in $1,271,150 of cost in excess of net assets acquired.

For the period January through December 2000, the Company, through its subsidiary Rock of Ages Memorials, Inc. acquired American Monument Company and Union County Memorials, Inc.

The aggregate consideration for the 2000 acquisitions was $655,081. The aggregate purchase price has been allocated to the assets acquired and liabilities assumed based upon their respective fair market values resulting in $209,055 of cost in excess of net assets acquired.

For the period January through November 1999 the Company, through its subsidiary Rock of Ages Memorials, Inc., acquired Toledo Monumental Works Company, Milwaukee Memorial Company, Inc., J.W. Reynolds Monument Company, Inc., Beasley Monument Company, Inc. Hilgendorf Memorials, Inc., R&B Nelson Memorial Studio, Inc., Bethel-Miller Memorials, Inc., Caron Granite Company, Clinton Monuments, Inc., East Ohio Memorial Service, Bass Chickering Corporation, Bristol Memorial Works, Inc., Methuen Memorials, Inc., WRL, Inc. and all of the outstanding stock of Milwaukee, R&B Nelson, Bethel-Miller, Caron, Clinton, Brisol and Urbach.

xxvii

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

The aggregate consideration for the 1999 acquisitions was $13,086,014 in cash and $639,986 representing 52,623 shares of the Company's Class A common stock ranging from $10.00 to $13.26 per share in transactions which were accounted for under the purchase method of accounting. The aggregate purchase price has been allocated to the assets acquired and liabilities assumed based upon their respective fair market values, resulting in $9,570,046 of cost in excess of net assets acquired.

The following unaudited pro forma information has been prepared assuming that the acquisitions occurred at the beginning of the current and immediately preceding periods, if presented. The pro forma information is presented for information purposes only and is not necessarily indicative of what would have occurred if the acquisitions had been made as of those dates.

	(UNAUDITED)
	YEARS ENDED DECEMBER 31,
	2000		1999
Net Revenues	$	95,422,318	$	104,846,879
Net income		2,463,522		2,262,457
Net income per share		.36		.30
Net income per share - assuming dilution		.35		.29

(16) ASSETS HELD FOR SALE AND ASSETS SOLD

In October 2001, the Company entered into an agreement to sell the Lawson manufacturing plant in Barre, Vermont. This sale is consistent with the Company's desire to dispose of certain unprofitable operations and to reallocate resources from the manufacture of commodity memorials and focus on its retail strategy.

In connection with this sale, the Company has determined that the values of certain assets have been impaired. At December 31, 2001, in accordance with the Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" (SFAS No. 121), the Company recorded a non-cash charge related to the impairment of assets of $800,003.

These assets held for sale have been grouped together and classified as "Assets held for sale" in the current assets section of the balance sheet. Assets held for sale have been written down to their realizable values based upon expected sales proceeds. The Lawson sale was completed in January 2002.

At December 31, 2001, assets held for sale are comprised of:

Inventory	$	284,226
Property and equipment		1,757,813
Intangible assets		1,304,180
		3,346,219
Less impairment charge		(800,003	)
Net assets held for sale	$	2,546,216

xxviii

During the second quarter of 2001 the Company sold an idled Saw Plant in Barre, Vermont in which cash of $300,505 was received in exchange for $515,433 in assets.

During the third quarter of 2001, the Company completed the sale of SMI and Childs & Childs manufacturing plants and the Royalty and Millstone quarries in Elberton Georgia in which cash of $3,250,000 net of closing costs of $287,467 was received and a note receivable was recorded for $1,640,000 in exchange for $6,121,693 of assets. The loss on sale of assets reported for the year ending December 31, 2001, includes a non-tax deductible dispoal of intangible assets of approximately $3.7 million. Taxable income resulted from the sale of the inventory and property and equipment, the impact of which was recorded in the three months ended September 30, 2001. The sale of these assets is not expected to have any material effect on income taxes in future periods.

On May 28, 1999 the Company exchanged all of the outstanding shares of Keystone Memorials, Inc., a newly-formed subsidiary, containing land, buildings, and equipment of its Keystone and Keywest manufacturing plants and certain inventory at those locations, for 263,441 shares of Rock of Ages Class B common stock and a note receivable with a net present value of $399,538. The net assets of Keystone Memorials, Inc. had a net book value of $4,021,053. Legal costs incurred were $22,663. A loss on the sale was recorded of $845,117, included in loss on sale of assets. The transaction was considered a tax-free event for purposes of calculating the provision for income taxes.

ROCK OF AGES CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001, 2000 and 1999

(17) ACCOUNTING CHANGE

The Company adopted "SOP 98-5, Reporting on the Costs of Start-Up Activities," as of January 1, 1999. The SOP requires the costs of start-up activities, including organization costs, to be expensed as incurred. As a result, acquisition costs of $197,340 were expenses in 1999 as the cumulative effect of a change in accounting principle.

xxix

INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION

The Board of Directors of Rock of Ages Corporation and Subsidiaries:

Under date of March 12, 2002, we reported on the consolidated balance sheets of Rock of Ages Corporation and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of operations, stockholders' equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2001. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule referred to as "Schedule II - Valuation and Qualifying Accounts and Reserves." This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express and opinion on this financial statement schedule based on our audits.

In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

KPMG LLP
/s/ KPMG LLP

March 12, 2002
Boston, Massachusetts

xxx

ROCK OF AGES CORPORATION AND SUBSIDIARIES

Schedule II - Valuation and Qualifying Accounts and Reserves

Years ended December 31, 2001, 2000 and 1999

(In Thousands)

COLUMN A		COLUMN B		COLUMN C				COLUMN D		COLUMN E
DESCRIPTION		BALANCE AT BEGINNING OF PERIOD		INCREASE DUE TO ACQUISITIONS		CHARGED TO COSTS AND EXPENSES		DEDUCTIONS		BALANCE AT END OF PERIOD
2001
	Allowances for doubtful accounts	$	1,303		534		743		1,032		1,548
2000
	Allowances for doubtful accounts	$	1,826		—		362		885		1,303
1999
	Allowances for doubtful accounts	$	2,124		—		555		853		1,826

See accompanying independent auditors' report on supplementary information.

xxxi

SIGNATURES

   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ROCK OF AGES CORPORATION
By:	/s/ Kurt M. Swenson Kurt M. Swenson President, Chief Executive Officer and Chairman of the Board of Directors

Date:  April 1, 2002

   Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of April 1, 2002.

SIGNATURE	TITLE
/s/ Kurt M. Swenson Kurt M. Swenson	President, Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)
/s/ Douglas S. GoldsmithDouglas S. Goldsmith	Vice President, Chief Financial Officer and Treasurer (Principal Accounting Officer)
/s/ John L. ForneyJohn L. Forney	Director, President and Chief Operating Officer/Memorials Division
/s/ Richard C. KimballRichard C. Kimball	Director, Chief Strategic and Marketing Officer
/s/ Jon M. GregoryJon M. Gregory	Director, President and Chief Operating Officer/Quarries Division
/s/ George R. AndersonGeorge R. Anderson	Director
/s/ James L. FoxJames L. Fox	Director
/s/ Douglas M. SchairDouglas M. Schair	Director
/s/ Charles M. WaiteCharles M. Waite	Director
/s/ Frederick E. Webster Jr.Frederick E. Webster Jr.	Director

25

EXHIBIT INDEX

EXHIBIT NUMBER	DESCRIPTION
3.1	Form of Amended and Restated Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-1 (Registration No. 333-33685) filed with the Securities and Exchange Commission on August 15, 1997 and declared effective on October 20, 1997)
3.2	Amended and Restated By-Laws of the Company (as amended through April 6, 1999) (incorporated herein by reference to Exhibit 3.2 to the Company's Quarterly report on Form 10-Q for the quarterly period ended March 31, 1999 and filed with the Securities and Exchange Commission on May 17, 1999)
4.	Specimen Certificate representing the Class A Common Stock (incorporated herein by reference to Exhibit 4 to the Company's Registration Statement on Form S-1 (Registration No. 333-33685) filed with the Securities and Exchange Commission on August 15, 1997 and declared effective on October 20, 1997)
10.1*	Rock of Ages Corporation Amended and Restated 1994 Stock Plan (as amended through October 26, 1998)(incorporated herein by reference to Exhibit 10.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999 and filed with the Securities and Exchange Commission on March 31, 1999)
10.2*	Employment Agreement of Kurt M. Swenson (incorporated herein by reference to Exhibit 10.2 to the Company's Registration Statement on Form S-1 (Registration No. 333-33685) filed with the Securities and Exchange Commission on August 15, 1997 and declared effective on October 20, 1997)
10.3*	Employment Agreement of Peter Friberg (incorporated herein by reference to Exhibit 10.4 to the Company's Registration Statement on Form S-1 (Registration No. 333-33685) filed with the Securities and Exchange Commission on August 15, 1997 and declared effective on October 20, 1997)
10.4*	Employment Agreement with John L. Forney (incorporated herein by reference to Exhibit 10.5 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999 and filed with the Securities and Exchange Commission on March 30, 2000)
10.5*	Form of Employment Agreement with Richard C. Kimball and Jon M. Gregory (incorporated herein by reference to Exhibit 10.8 to the Company's Registration Statement on Form S-1 (Registration No. 333-33685) filed with the Securities and Exchange Commission on August 15, 1997 and declared effective on October 20, 1997)
10.6*	Form of Salary Continuation Agreement (incorporated herein by reference to Exhibit 3.1 to the Company's Registration Statement on Form S-1 (Registration No. 333-33685) filed with the Securities and Exchange Commission on August 15, 1997 and declared effective on October 20, 1997)
10.7*	Employment Agreement with John E. Keith (incorporated herein by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 filed with the Securities and Exchange Commission on March 30, 2001)
10.8	Form of Collective Bargaining Agreement dated May 2, 2000 by and between Rock of Ages Corporation and the United Steelworkers of America, AFL-CIO-CIC on behalf of USWA Amalgamated Local #4 (incorporated herein by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31,2000 filed with the Securities and Exchange Commission on March 30, 2001)
10.9	Form of Collective Bargaining Agreement dated May 1, 2000 by and between Rock of Ages Corporation - Quarries Division and United Steelworkers of America, AFL-CIO-CIC on behalf of USWA Amalgamated Local #4 (incorporated herein by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 filed with the Securities and Exchange Commission on March 30,2001)
10.10	Form of Collective Bargaining Agreement dated April 29, 2000 by and between Rock of Ages Corporation and the Granite Cutters Association (incorporated herein by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 filed with the Securities and Exchange Commission on March 30, 2001)
10.11	Credit Facility dated as of June 25, 1997 between Royal Bank of Canada and Rock of Ages Canada, Inc., Rock of Ages Quarries, Inc. and Rock of Ages Canada, Inc.(incorporated herein by reference to Exhibit 10.20 to the Company's Registration Statement on Form S-1 (Registration No. 333-33685) filed with the Securities and Exchange Commission on August 15, 1997 and declared effective on October 20, 1997)
10.12	Financing Agreement dated December 17, 1997 by and between The CIT Group/Business Credit, Inc., Rock of Ages Corporation, Royalty Granite Corporation, Carolina Quarries, Inc., Pennsylvania Granite Corp., Childs & Childs Granite Company, Inc., Southern Mausoleums, Inc. and Rock of Ages Memorials LLC (incorporated herein by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 filed with the Securities and Exchange Commission on March 31, 1998)

26

EXHIBIT NUMBER	DESCRIPTION
10.13	Exclusive Supply Agreement dated as of December 8, 1997 by and between Rock of Ages Corporation and Eurimex (incorporated herein by reference to Exhibit 10.21 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 filed with the Securities and Exchange Commission on March 31, 1998)
10.14	Supply Agreement dated as of September 7, 2000 by and between Keystone Memorials, Inc. and Rock of Ages Corporation (incorporated herein by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 filed with the Securities and Exchange Commission on March 30, 2001)
10.15	Supply Agreement dated as of January 11, 2002 by and between Rock of Ages Corporation and Adams Granite Co., Inc.
10.16	Supply Agreement dated as of August 20, 2001 by and between Rock of Ages Corporation, Keystone Memorials, Inc. and IMEX International, Inc.
10.17	Promissory Note dated January 11,2002 in the amount of $250,000 from Adams Granite Co., Inc. to Rock of Ages Corporation
10.18	Promissory Note dated October 26,2001 in the amount of $800,000 from Mize Acquisition, Inc. to Rock of Ages Corporation
10.19	Promissory Note dated August 20, 2001 in the amount of $840,000 from Keystone Memorials, Inc. to Rock of Ages Corporation
11.	Statement re:computation of per share earnings (incorporated herein by reference to Note (1)(q) of the Company's consolidated financial statements (filed herewith))
21	Subsidiaries of the Company
23	Consent of KPMG LLP

* This exhibit is a management contract or compensatory plan or arrangement.

27

EX-10

EXHIBIT 10.15

SUPPLY AGREEMENT

     This Supply Agreement made this 11th day of January 2002, by and among ROCK OF AGES CORPORATION, a Delaware corporation with its principal office located at 772 Graniteville Road, Graniteville, Vermont 05654 ("ROCK"); and ADAMS GRANITE CO., INC. a Vermont corporation ("Adams").

RECITALS:

     WHEREAS, ROCK and Adams have entered into a Purchase and Sale Agreement dated January 11, 2002 ("Purchase and Sale Agreement") pursuant to which ROCK has agreed to sell, and Adams has agreed to purchase, certain real estate and manufacturing assets known as the Lawson Manufacturing Plant.

     WHEREAS, capitalized terms shall have the meanings set forth in the Purchase and Sale Agreement, unless otherwise defined herein;

     WHEREAS, Pursuant to the Purchase and Sale Agreement, Adams has agreed to enter into a supply agreement with ROCK upon the terms and conditions set forth therein and herein; and

     WHEREAS, accordingly, ROCK and Adams believe it is in their mutual interests for Adams to supply granite memorials and monuments to be manufactured at the Lawson Manufacturing Plant (collectively referred to as "Monuments") at prices agreed in advance, all upon the terms and conditions as hereinafter set forth.

     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are herein acknowledged, the parties agree as follows:

     1.    Purchase and Supply of Monuments. Adams agrees to supply ROCK and its subsidiaries, affiliates and designees (hereafter in this Agreement, the term "ROCK" shall be deemed to include Rock of Ages Corporation and its subsidiaries, affiliates and designees) with Monuments for a term of seven (7) years (herein the "Term"). ROCK will order Monuments with or without sandblast as determined in its sole discretion. ROCK presently expects that approximately twenty percent (20%) of its annual orders will be sandblast charges.

     2.    Price for Monuments and Delivery.

     a.    The price to be charged by Adams for Monuments during the Term shall be as set forth in Exhibit 2.1. Rock will purchase Monuments on open account by submitting its then current purchase order. Purchase orders may be submitted electronically or in hard copy. Each purchase order shall specify a delivery date for the Monument. Delivery dates shall be set in accordance with the then current average lead times at the ROCK manufacturing plant for the particular type of Monument to be produced. ROCK will provide Adams with a current schedule of lead times, which schedule may be amended from time to time by ROCK to reflect any changes in lead times. In the event of a conflict between the purchase order and this Agreement, this Agreement will prevail. No other terms shall be applicable to the purchase of such memorials, including, but not limited to Adam's standard sales or invoice terms. Adams will invoice ROCK on the first day of each calendar month during the Term for all Monuments shipped during the previous month, which invoice shall be payable within fifteen (15) days from invoice date on a net basis. ROCK shall use its best efforts to place orders with Adams as such orders are received by ROCK from its customers, taking account of customary seasonal patterns in the supply of Monuments.

     b.    ROCK and Adams each agree that it should be the goal of each party to provide the highest level of quality and service in the supply of Monuments. Accordingly, the parties each agrees to cooperate with each other to facilitate increased efficiencies in the manufacture of Monuments, improved quality of Monuments and, where commercially feasible, reduced lead time for the manufacture of Monuments. In furtherance of this goal, Adams agrees to allow representatives of ROCK reasonable periodic access to Adams plant upon prior notice by ROCK for the purpose of assessing order status and quality control. In addition the parties agree to meet annually to review general performance under this agreement and to discuss items of mutual cooperation.

     3.    Minimum Ordering Obligations. During the Term ROCK shall place orders for at least Three Million Dollars ($3,000,000.00) (the "Minimum Order") of Monuments from Adams in each year of the Term, commencing January 1, 2002. The Minimum Order may vary up or down by up to Ten Percent (10%) in the first year of this Agreement, and Fifteen Percent (15%) per year thereafter, provided, however, that the aggregate Minimum Order in each Two (2) year period shall equal, as nearly as possible, Six Million Dollars ($6,000,000.00).

     EXAMPLE:By way of illustration only, ROCK places orders for $2.7 million in Monuments from Adams for the year ending December 31, 2002, and $3.3 million in Monuments for the year ending December 31, 2003. ROCK has met its Minimum Order requirement for each year over the first two years of the Term.

For the purposes of measuring ROCK's compliance with the Minimum Order requirement, the first two year period shall commence on January 1, 2002 and end on December 31, 2003; the second 2 year period shall commence on January 1, 2004 and end on December 31, 2005; the third 2 year period shall commence January 1, 2006 and end on December 31, 2007; the seventh and final year of the Term shall end on December 31, 2008. If ROCK's Minimum Order for a 2 year period exceeds $6 million, then Adams shall credit ROCK's Minimum Order for the ensuing 2 year period by the excess amount. The Minimum Order for the ensuing period as adjusted by the credit is sometimes referred to herein as the "adjusted Minimum Order." Adams shall credit ROCK's Minimum Order for the seventh and last year of the Term by the amount by which the orders placed by ROCK for the fifth and sixth years of the Term exceed the adjusted Minimum Order for that period.

2

     EXAMPLE: By way of illustration only, assume that the adjusted Minimum Order for the 2 year period ending December 31, 2007 is $5.9 million. ROCK places orders for $3.2 million of Monuments in the year ending December 31, 2006 and $3.4 million of Monuments in the year ending December 31, 2007, for a total of $6.6 million in orders. ROCK's Minimum Order for the year ending December 31, 2008 would be calculated by subtracting $700,000 (the amount by which the combined orders placed by ROCK exceeded the adjusted Minimum Order of $5.9 million for the 2 year period ending December 31, 2007) from $3 million. The Minimum Order for the seventh and last year of the Term would thus be $2.3 million.

     During the first year of this Supply Agreement, Adams shall credit ROCK's Minimum Order for 2002 by the amount of the orders and work-in-process assumed by Adams pursuant to the Purchase and Sale Agreement. The Minimum Order in each year of this Agreement may be increased or decreased on January 1 of each year during the term based upon any increase or decrease in the prices that Adams charges to ROCK for Monuments. Any such increase or decrease in the Minimum Order shall be proportionate to the increase or decrease in prices.

      4.    Failure to Meet Minimum Order; Remedy. Adams shall provide ROCK with a report of the orders placed by ROCK under this Agreement within Thirty (30) days of the end of each 2 year period, and a report of its orders placed for the seventh year of the Term. ROCK shall verify Adam's report with its own numbers and communicate any discrepancies to Adams. If the orders over such 2 year periods (or, in the case of the seventh year, the 1 year period) are less than the adjusted Minimum Order, then ROCK shall, at its sole option: (i) place orders for Monuments in the amount of the deficiency; or (ii) pay to Adams the gross margin that Adams would have realized had such orders been placed and filled. For the purposes of this Section 3, the gross margin shall be Adams' average gross margin on sales of Monuments to ROCK over the prior 2 year period, calculated in accordance with generally accepted accounting principles, consistently applied. Adams shall keep adequate books and records sufficient to allow ROCK to calculate the average gross margin, and shall allow ROCK access to such books and records in accordance with Section 8 hereof.

     EXAMPLE: By way of illustration only, assume that ROCK's Minimum Order for the 2 year period ending December 31, 2003 is $6 million. ROCK purchases $5.7 million of Monuments for the 2 year period ending December 31, 2003, leaving of deficiency in the Minimum Order obligation of $300,000. Assume that Adams' average gross margin for the 2 year period at 20%. ROCK may, at its option: (i) place orders for up to $300,000 of Monuments, which amount shall be credited to the Minimum Order for the 2 year period ending December 31, 2003; pay $60,000 to Adams ($300,000 x 20%); or, a combination of the above two options.

3

     The placement of orders and/or the payment of Adams' estimated gross margin, as provided in section 4(i) or (ii) above, shall be Adam's sole and exclusive remedy for ROCK's failure to meet the Minimum Order. In no event shall ROCK be liable to Adams for any claims or demands in equity for specific performance or claims or demands at law for any further amounts or damages of any kind, whether direct or indirect, including, but not limited to, loss of revenue or profits or any special, incidental or consequential damages, even if ROCK has been advised of the possibility of such damages

     5.    Warranty. Adams hereby represents and warrants that each Monument supplied under this Agreement shall be fabricated from the memorial grade granite specified in the applicable purchase order, shall conform in all material respects to ROCK's specifications of quality and workmanship, and shall be merchantable and free from defects in material and workmanship. Adams hereby further represents and warrants to, and agrees with, ROCK that none of the Monuments to be supplied by Adams to ROCK under this Agreement will be treated with any artificial materials or liquids and the finished Monuments are the result of standard accepted polishing methods.

     6.    Defective Memorials. In the event that a Monument sold by Adams to ROCK is flawed, does not conform to the above warranty or is otherwise defective in any respect, Adams shall replace the defective Monument as soon as reasonably possible, it being understood that Adams will use its best efforts to make such replacement as quickly as possible. ROCK shall make any such claim to Adams in writing, identifying the Monument in question and the nature of the flaw, defect or warranty breach. Adams shall respond to each such notice within five (5) days of receipt thereof, and shall provide an estimated time for replacement. If Adams objects to the claim, it shall provide written notice of its objection within the five (5) day period. The parties shall negotiate in good faith to resolve the dispute. If the parties fail to reach agreement within thirty (30) days of notice of claim by ROCK, then the dispute resolution provisions in Section 12.c below shall apply.

     7.  Default; Remedies

     a.  Default. The occurrence of any one or more of the events with respect to Adams shall constitute and event of default hereunder ("Event of Default"):

     (i)      If Adams defaults in its performance of its obligations to ROCK under this Supply Agreement. For the purposes of this Agreement, a default shall include, but not be limited to, repeated and persistent warranty breaches or quality issues in the manufacture and supply of Monuments or repeated and persistent failure to meet the delivery date(s) specified in the applicable purchase orders; or Adams' failure to honor its warranty obligations to Rock.

      (ii)     If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (a "Bankruptcy Law") Adams shall: (a) commence a voluntary case or proceeding; (b) consent to the entry of an order for relief against it in an involuntary case; (c) consent to the appointment of a trustee, receiver, assignee, liquidator or similar official; (d) make an assignment for the benefit of creditors; or (e) admit in writing its inability to pay its debts as they become due.

4

     (iii)    If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (a) is for relief against Adams in an involuntary case; (b) appoints a trustee, receiver, assignee, liquidator or similar official for either Adams or substantially all of its properties; or (c) orders the liquidation of Adams, and the order or decree is not dismissed within 90 days.

     b.    Remedies. Upon the occurrence of an Event of Default under this Supply Agreement, ROCK shall give Adams written notice of the nature of such Event of Default. ROCK shall have such remedies as are provided for under applicable law and in this Supply Agreement, including, but not limited to, the right to terminate this Agreement.

     8.    Audit Rights. Each party shall have the right, upon reasonable notice to the other, to review the books and records of the other party to ensure its compliance with the terms of this Supply Agreement.

     9.    Mutual Customer Base. Each party acknowledges that they now service and may in the future service some of the same customers with granite memorial products. In particular, Adams has done a limited amount of business with certain ROCK authorized retailers and ROCK acknowledges that Adams will continue to do so in the future. Adams agrees and acknowledges that it is ROCK's goal to maintain and increase sales of Monuments to its authorized retailer base and that ROCK will encourage its authorized retailers to buy an increasing percentage of Monuments from ROCK. Adams acknowledges that the maintenance and enlargement of ROCK's business with its authorized retailers, and other retailers who are willing to commit to ROCK's authorized retailer program, is critical to ROCK's success and is critical to ROCK's ability to meet the Minimum Order. Accordingly, Adams will not solicit business from Rock of Ages retailers, and the parties each agree that while they may be in competition with one another from time to time, that they will deal with one another on the basis of trust, good faith and fair dealing, taking account of ROCK's stated goals above.

     10.    No Solicitation of Employees. For a period of six (6) months after the effective date of this agreement each party agrees not to, directly or indirectly, solicit or induce any employee of the other party to leave that party's employment for any reason whatsoever or to hire any of such party's employees.

     11.    Non-Disclosure of Confidential Information. Each party acknowledges that they will obtain access to confidential and proprietary information relating to their respective businesses which may or may not be trade secrets, but which is important to the way that the party does business. Each party understands, agrees and covenants that such information is valuable and is intended to be used by such party only in the performance of their respective duties under this Supply Agreement. Therefore, each party covenants and agrees that they will not use, disclose, communicate or divulge such information to any third person or use such information except as may be necessary to perform their respective duties hereunder. Each party's obligations in this section shall survive the expiration or termination of the this Supply Agreement and shall apply as long as any such confidential and proprietary information is not in the public domain.

5

     12.    Miscellaneous

     a.    This Supply Agreement, together with the Purchase and Sale Agreement, including all exhibits thereto, contains the entire agreement among the parties with respect to the subject matter hereof and thereof. This Supply Agreement may only be amended in writing, signed by all of the parties hereto.

     b.     Any notice required or permitted to be given hereunder shall be given in accordance with Section 9.7 of the Purchase and Sale Agreement.

    c.    This Supply Agreement will be governed by the substantive and procedural laws of the State of Vermont without regard to conflicts of laws principles. Any disputes, controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and judgment on the award may be entered in any court having jurisdiction thereof. The arbitration shall take place in the City of Barre, Vermont.

     d.     This Supply Agreement shall be binding on each party's successors and assigns. This Supply Agreement shall not be assigned by any party hereto without the express prior written consent of the other party. Adams shall not subcontract any of the work to be performed hereunder without the written consent of ROCK, which consent shall not be unreasonably withheld.

     e.    Subject to section 12.d above, this agreement shall be binding upon and inure solely to the benefit of each party and to the party's permitted successors and assigns; and nothing in this agreement, express or implied, is intended to or shall confer upon any other person an right, benefit or remedy of any nature whatsoever under or by reason of this agreement.

     f.    The headings of Sections in this Supply Agreement are provided for convenience only and will not affect its construction or interpretation. All references to "Section" or "Sections" refer to the corresponding Section or Sections of this Supply Agreement unless otherwise specified.

6

     g.    Neither party will be deemed in default of this Agreement to the extent that performance of its obligations, or attempts to cure any breach, are delayed or prevented by reason of any act of God, accidents, labor disputes, military conflicts, insurrections, riots, explosions, lightning, earthquake, fires, storms, floods or other cause outside of the party's reasonable control or other force majeure; provided that, such party promptly gives written notice of the condition and undertakes commercially reasonable efforts to circumvent the effects of such force majeure. In any such event, the time for performance will be extended for a period equal to the duration of any delay occasioned by the force majeure, provided, however, that such extension period shall not exceed four (4) weeks.

     h.    Each Exhibit delivered pursuant to the terms of this agreement shall be in writing and shall constitute a part of this agreement. The parties may agree with respect to any Exhibit required to be attached to this agreement, that such Exhibit, if mutually satisfactory, may be attached to this agreement after the date of execution hereof and after mutual approval thereof, such subsequently attached Exhibit shall be treated as if it were attached to this agreement as of the date of execution of this agreement. All Exhibits attached hereto are specifically incorporated herein by reference and made a part hereof. The words "agreement," "herein" and "hereof" as used herein shall in all respects include the entirety of this agreement together with all Exhibits attached hereto and all documents required or permitted to be delivered hereunder.

     IN WITNESS WHEREOF, the parties hereto have executed this agreement all as of the date first above written.

WITNESS                                          ROCK OF AGES CORPORATION

                                                            By: __________________________________
                                                                  Kurt M. Swenson, Chairman/CEO

WITNESS                                          ADAMS GRANITE COMPANY, INC.

                                                            By: __________________________________
                                                                  Kerry F. Zorzi, President

7

EXHIBIT 2.1
TO
SUPPLY AGREEMENT
Between
ADAMS GRANITE CO., INC.
and
ROCK OF AGES CORPORATION

Pricing

Until December 31, 2002

Prices shall be 43.35% below those listed in the 2001 Adams Granite Co. price book (attached to this Exhibit 2.1) for the monuments shown therein, provided, however, that prices for sandblast shall be 49% below those listed in the Adams Granite Co. price book.

After December 31, 2002

Beginning January 1, 2003 and on each successive January 1 during the term thereafter, Adams may increase its prices from those set in the previous year by an amount equivalent to the increase in Adams's production costs during the prior year, provided, however, that the prices charged hereunder shall remain competitive with the prevailing prices for monuments and sandblast from other manufacturers in the Barre, Vermont area; and provided further that any annual price increase shall not be made more than once annually and shall be capped at Five Percent (5%). Such price increases shall be communicated in writing by Adams to ROCK and shall be effective thirty (30) days from the date that such communication is received by ROCK. Any notice of price increase shall include a breakdown of the increased production costs showing how the new prices were calculated. ROCK shall have full access to Adams's books and records to verify such price increases, and shall have thirty (30) days in which to object to such price increases. If ROCK objects to the price increases, the parties shall negotiate in good faith to reach agreement on the revised pricing. If the parties fail to reach agreement within thirty (30) days of notice of such objection by ROCK, then the dispute resolution provisions in Section 9.c of the Agreement shall apply. During any such dispute, Adams shall continue to supply Monuments to ROCK under the new pricing schedule, provided, however, that the difference between the old and new prices shall be deposited by ROCK into an escrow account pending resolution of the dispute.

For the purposes of this Agreement, production costs shall be limited to:

Direct labor
Indirect labor
Benefits
Power and fuel
Supplies
Materials
Property taxes on Plant and Improvements
Property and Casualty Insurance

8

EXHIBIT 10.16

SUPPLY AGREEMENT

SUPPLY AGREEMENT made this 20th day of August, 2001 is by and between ROCK OF AGES CORPORATION, a Delaware corporation with a principal place of business at 772 Graniteville Road, Graniteville, Vermont 05654 ("Rock"); KEYSTONE MEMORIALS, INC., a Georgia corporation with a principal place of business at Elberton, Georgia ("KMI"); and IMEX INTERNATIONAL, INC., a Georgia corporation with a principal place of business at 1519 Woodyard Road, Elberton, Georgia ("IMEX").

WHEREAS, Rock and KMI have entered into a Purchase and Sale Agreement dated August 20, 2001 ("Purchase and Sale Agreement") pursuant to which Rock has agreed to sell, and KMI has agreed to purchase, certain real property and equipment owned by Rock's wholly-owned subsidiary, Childs & Childs Granite Co., Inc.;

WHEREAS, in payment of the purchase price under the Purchase and Sale Agreement, KMI has executed a Promissory Note dated August 20, 2001 ("Note") in the principal amount of $840,000, together with interest thereon at 8% per annum, payable in 12 quarterly installments of principal and interest in accordance with the terms of a certain amortization schedule attached to the Note as Exhibit A;

WHEREAS, Rock and KMI have agreed that the Note may be paid by KMI in kind rather than in United States currency, provided that KMI is not in default of its obligations under the Purchase and Sale Agreement, the Note and this Agreement;

WHEREAS, IMEX supplies diamond tools and supplies used in the granite quarrying and manufacturing industry and also distributes certain granite products, including curbing and slabs;

WHEREAS, KMI supplies granite products, including slabs, curbing and other products; and

WHEREAS, in exchange for the supply of granite slabs and curbing by KMI to IMEX, IMEX is willing to supply Rock with diamond tools and supplies of equal value, and Rock is willing to accept such supplies in exchange for the payment of KMI's obligations under the Purchase and Sale Agreement and the Note.

NOW THEREFORE, in consideration of the mutual promises and undertakings set forth in this Agreement and in the Purchase and Sale Agreement, the parties, intending to be legally bound, agree as follows:

1. DEFINITIONS

Unless defined below or elsewhere in this Agreement, all capitalized terms shall have the meanings set forth in the Purchase and Sale Agreement or the Note.

a. "KMI Product" shall mean granite curb products and granite slabs used for making granite curb products.

b. "IMEX Product" shall mean diamond tools used in granite quarrying, cutting, polishing and manufacturing applications, including, but not limited to diamond segments and diamond wire used in sawing applications.

c. "Total Quarterly Invoice Amount" shall mean the total dollar amount of invoices for product shipped during a quarter, including any taxes and shipping charges, less any credits given for defective products.

2. KMI's SUPPLY OBLIGATION

a. Products

KMI shall supply IMEX with KMI Product, subject to the terms and conditions set forth below:

b. Price

(i) Prices shall be those in effect at the time the order is placed. KMI shall ensure that the prices charged to IMEX for KMI Product shall be no higher than the lowest prices charged to customers purchasing like quantities of products.

(ii) Any applicable duties and sales, use, excise, value-added, and/or similar taxes will be for the account of IMEX and will be added to the invoice as a separate charge

(iii) Delivery shall be made FOB seller's factory. All transportation charges shall be for the account of IMEX and shall be added to the invoice as a separate charge. IMEX shall designate the freight carrier to be used by KMI for shipment of KMI Product.

(iv) Payment by IMEX for KMI Product shipped shall be made in kind in accordance with section 3.a below.

2

c. Minimum Supply

In each quarter from the date hereof, IMEX shall place orders for, and KMI shall supply IMEX at least that quantity of KMI Products so that the Total Quarterly Invoice Amount for KMI Product is equal (as nearly as possible) to the quarterly payment due under the Note. To facilitate verification of KMI's supply obligation, no later than 15 days after the end of each quarter during the term of this Agreement, KMI shall provide Rock and IMEX copies of all invoices for product shipped during that quarter, together with a statement of credit given for any defective KMI Product.

d. Shipment; Invoicing

IMEX shall place orders for the then current quarter within the first 45 days of that quarter, and KMI shall ship and invoice IMEX for the KMI Product in each quarter during the term of this Agreement. KMI shall use its best efforts to ship that amount of KMI Product so that the Total Quarterly Invoice Amount is equal to the quarterly payment of principal and interest due under the Note.

e. Warranty

KMI warrants that the KMI Product will conform to KMI specifications and will be of KMI's standard quality for granite curbing or granite slabs used in curbing applications. IMEX's exclusive remedy under this warranty shall be the replacement of any product that does not conform to this warranty. KMI shall not be liable for any incidental or consequential damages.

3. IMEX's SUPPLY OBLIGATION

a. Products

In exchange for KMI's supply of product to IMEX, IMEX shall supply Rock with IMEX Product, subject to the terms and conditions set forth below:

b. Price

(i) Prices shall be those in effect at the time the order is placed. IMEX shall ensure that the prices charged to Rock for IMEX Product shall be no higher than the lowest prices charged to customers purchasing like quantities of products.

(ii) Any applicable duties and sales, use, excise, value-added, and/or similar taxes will be for the account of Rock and will be added to the invoice as a separate charge

3

(iii) Delivery shall be made FOB seller's factory. All transportation charges shall be for the account of Rock and shall be added to the invoice as a separate charge. Rock shall designate the freight carrier to be used by IMEX for shipping IMEX Product.

(iv) Payment by Rock for product shipped shall be made in kind in accordance with section 3.e below.

c. Minimum Supply

In each quarter from the date hereof, IMEX shall supply Rock at least that quantity of IMEX Products that is equal in value to the quarterly amount due under the Note, or the Total Quarterly Invoice Amount for KMI Product shipped to IMEX during that quarter, whichever is lower. For the purposes of this section, the value of IMEX Product supplied shall be the Total Quarterly Invoice Amount for IMEX Product during the quarter. To facilitate verification of IMEX's supply obligation, no later than 15 days from the end of each quarter during the term of this Agreement, IMEX shall provide Rock and KMI copies of all invoices for product shipped during that quarter, together with a statement of credits for defective IMEX Product.

d. Order Placement

Rock shall place orders on IMEX for the IMEX Product from time to time during each quarter. Rock shall place, and IMEX shall ship, such orders so that the Total Quarterly Invoice Amount for the IMEX Product will equal, as nearly as possible, the total quarterly payment due under the Note.

d. Warranty

IMEX warrants that the products conform to Rock's specifications and will be of IMEX's highest quality and will be merchantable and fit for the applications in which such products are used. In the event that a product supplied by IMEX proves defective or otherwise does not conform to warranty, IMEX shall replace the product or, if such IMEX product proves unsuitable for the application in which it is used, IMEX shall supply Rock with suitable product from a different manufacturer.

e. Note Payments

In exchange for the supply of diamond tool products by IMEX, Rock shall apply the Total Quarterly Invoice Amount for the IMEX Product shipped during a quarter to the quarterly amount due on the Note.

4

4. PROCEDURE FOR APPLYING NOTE PAYMENTS

It is the general intent of the parties that the Total Quarterly Invoice Amount of the products supplied under this Agreement in each quarter equal as nearly as possible the amount of principal and interest due under the Note each quarter. Each party recognizes that it will be impossible for the quarterly payments in kind to exactly equal the amount due in a particular quarter under the Note. Accordingly, the parties agree that the following procedures apply:

a. Quarterly Reporting and Revised Amoritzation Schedule

Within 30 days of the end of each quarter, Rock shall prepare a report showing:

(i) The Total Quarterly Invoice Amount for KMI Product shipped to IMEX during the quarter;

(ii) the Total Quarterly Invoice Amount of IMEX Product shipped to Rock during the quarter;

(iii) the total amount applied against the outstanding principal and interest due on the Note (which amount shall be equal to the lesser of the quarterly payment due under the Note or the Total Quarterly Invoice Amount of IMEX Product shipped to Rock during that quarter); and

(iv) a calculation of the remaining principal balance of the Note and a revised amortization schedule, with a demand for payment of any deficiency, if applicable.

b. Overpayment/Deficiency

In the event that the Total Quarterly Invoice Amount for IMEX Product supplied during a quarter is greater than the quarterly amount due under the Note, the excess over the amount due shall be treated as a prepayment under the Note. Subject to the limitations below, any such prepayment shall be applied first to interest due on the outstanding principal balance and then to reduction of principal. In the event that the Total Quarterly Invoice Amount of the IMEX Product supplied during a quarter is less than the amount due under the Note, the payment shall be applied first to the interest due on the outstanding principal balance and then to reduction of principal, and any unpaid principal shall continue to bear interest until it is paid. KMI and IMEX shall have 15 days from the date that they receive Rock's quarterly report to cure any deficiency, unless Rock waives such deficiency in writing and allows it to be carried over to the next quarterly payment, in which case Rock shall issue a revised amortization schedule. KMI and IMEX each agree and understand that while they must use their best efforts to ensure that the Total Quarterly Invoice Amount for their respective products will equal as nearly as possible the quarterly payment due under the Note, in no event shall the Total Quarterly Invoice Amount exceed 5% of the total quarterly payment due under the Note. If the Total Quarterly Invoice Amount does exceed 5% in a quarter, then any amount over the 5% shall be applied to the next quarterly payment under the Note and shall not be treated as a prepayment.

5

c. KMI and IMEX Supply Relationship

IMEX shall only be obligated to supply that amount of IMEX Product as is equal in value to the amount of KMI Product supplied to IMEX. Notwithstanding the foregoing, KMI and IMEX may agree amongst themselves, with written notice of such agreement given to Rock, to purchase and ship more or less KMI Product in a given quarter, provided, however that such an agreement shall have no effect on IMEX's supply obligation to Rock and IMEX shall continue to meet the minimum supply obligation to Rock.

5. DEFAULT; REMEDIES

a. KMI and IMEX

The occurrence of any one or more of the events with respect to KMI or IMEX shall constitute and event of default hereunder ("Event of Default"):

(i) If KMI or IMEX defaults in their performance of their respective obligations, whether to Rock or to each other, under this Supply Agreement.

(ii) If KMI defaults in its performance of its obligations to Rock under the Purchase and Sale Agreement or the Note.

(iii) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (a "Bankruptcy Law") either KMI or IMEX shall: (a) commence a voluntary case or proceeding; (b) consent to the entry of an order for relief against it in an involuntary case; (c) consent to the appointment of a trustee, receiver, assignee, liquidator or similar official; (d) make an assignment for the benefit of creditors; or (e) admit in writing its inability to pay its debts as they become due.

(iv) If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (a) is for relief against either KMI or IMEX in an involuntary case; (b) appoints a trustee, receiver, assignee, liquidator or similar official for either KMI or IMEX or substantially all of their respective properties; or (c) orders the liquidation of either KMI or IMEX, and in each case the order or decree is not dismissed within 90 days.

6

b. Remedies

Upon the occurrence of an Event of Default under this Supply Agreement, Rock shall have such remedies as are provided for in this Supply Agreement, the Note and the Mortgage, including, but not limited to, the right to declare the entire unpaid principal balance of the Note, together with interest thereon, due and payable in lawful currency of the United States. Rock shall also have any and all rights to foreclose on any security and collateral taken in connection with the execution and delivery of the Note.

6. AUDIT RIGHTS

Rock, KMI and IMEX shall each have the right, upon reasonable notice to the other, to review the books and records of each party to ensure their compliance with the terms of this Supply Agreement, the Purchase and Sale Agreement, and the Note.

7. MISCELLANEOUS

a. This Supply Agreement, together with the Purchase and Sale Agreement, the Note and the Mortgage, including all exhibits thereto, contains the entire agreement among the parties with respect to the subject matter hereof and thereof. This Supply Agreement may only be amended in writing, signed by all of the parties hereto.

b. Any notice required or permitted to be given hereunder shall be given in accordance with Section 14.f of the Purchase and Sale Agreement.

c. This Supply Agreement will be governed by the laws of the State of Georgia without regard to conflicts of laws principles.

d. Any disputes, controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and judgment on the award may be entered in any court having jurisdiction thereof. The arbitration shall take place in the City of Baltimore, Maryland.

e. This Supply Agreement shall be binding on each party's successors and assigns. This Supply Agreement shall not be assigned by any party hereto without the express prior written consent of each of the other parties.

7

f. The headings of Sections in this Supply Agreement are provided for convenience only and will not affect its construction or interpretation. All references to "Section" or "Sections" refer to the corresponding Section or Sections of this Supply Agreement unless otherwise specified.

IN WITNESS WHEREOF, the parties have executed this Supply Agreement as of the date first above written.

WITNESSES:                                          KEYSTONE MEMORIALS, INC.

                                                            By: __________________________________
                                                                  George T. Oglesby, III, Duly Authorized

WITNESS                                          IMEX INTERNATIONAL, INC.

                                                            By: __________________________________
                                                                  Massoud Besharat, President

WITNESS                                          ROCK OF AGES CORPORATION

                                                            By: __________________________________
                                                                  Kurt M. Swenson, Chairman/Chief Executive Officer

EXHIBIT 10.17

PROMISSORY NOTE

$250,000.00

January 11, 2002
Barre, Vermont

     For value received, the undersigned Borrower promises to pay to Rock of Ages Corporation, a Delaware corporation ("Lender"), or order, the principal sum of Two Hundred Fifty Thousand Dollars ($250,000.00) U.S., together with interest on the outstanding principal balance at a fixed rate of Six and 75/100 Percent (6.75 %) per annum, calculated on the basis of the actual number of days elapsed in a 365 or 366 day year.

     Principal and interest shall be paid as follows:

     a.    A single payment of interest only in the sum of Nine Hundred Twenty-Four and 66/100 Dollars ($924.66) shall be due and payable on February 1, 2002.

     b.    A monthly installment of principal and interest in the sum of One Thousand Nine Hundred One and 7/100 Dollars ($1,901.01) shall be due and payable on March 1, 2002, and on the first day of each month thereafter until the entire principal amount has been paid in full.

     c.    The entire outstanding principal balance, together with all accrued interest and any other charges due hereunder, shall be due and payable in full on February 1, 2022.

     Borrower shall pay to the Note holder the late charge of five (5%) percent of any payment not received by the Note holder within five days after the payment is due.

     This Note may be prepaid in whole or in part at any time without prepayment premium or penalty. Any partial prepayment shall be applied against the outstanding principal balance and shall not postpone the due date of any subsequent installments or change the amount of such installment, unless the Note holder shall otherwise agree in writing.

     Presentment for payment, protest, notice of protest, demand, and notice of non-payment are hereby waived by all makers, sureties, guarantors and endorsers. This Note shall be the joint and several obligations of all makers, sureties, guarantors and endorsers.

     Installment payments of principal and interest shall be applied first to pay interest and then to pay principal. If any installment under this Note is not paid when due and remains unpaid after a date specified by a notice to Borrower, the entire outstanding principal balance and accrued interest thereon shall at once become due and payable in full at the option of the Note holder. The date specified shall not be less than thirty days from the date such notice is mailed. The Note holder may exercise this option to accelerate during any default by Borrower regardless of any prior forbearance.

     Failure by the Note holder to exercise any rights or remedies hereunder shall not constitute a waiver of such right in the event of a subsequent default. Upon the occurrence of a default or event of default, Borrower promises to pay all costs of collection, including reasonable attorney's fees.

     Any notice to Borrower provided for in this Note shall be given by mailing such notice by certified mail, return receipt requested, addressed to Borrower at 58 Pittman Road, Barre, Vermont 05641, or to such other address as Borrower may designate by notice to the Note holder. Payments shall be made to the Note holder, and any notice to the Note holder shall be given, by personally delivering such payment or notice, or by mailing such payment notice by certified mail, return receipt requested, to the Note holder at 772 Graniteville Road, Graniteville, Vermont 05654, Attn: Kurt M. Swenson, Chairman/CEO, or to such other person and address as may have been designated by notice to Borrower.

     If any provision of this Note should conflict with applicable law, such conflict shall not affect any other provision that can be given effect without the conflicting provision, and the provisions of this Note shall be severable. All rights and obligations under this Note shall be governed by and construed in accordance with the laws of the State of Vermont.

     This Note is secured by Junior Mortgages and security interests granted by Borrower on even date with respect to granite monument manufacturing facilities having addresses of 58 and 90 Pitman Road, Barre, Vermont. This Note evidences indebtedness incurred to finance an income producing business. Borrower's principal shareholder has executed this Note as co-signer, to induce Lender to make the loan.

     IN WITNESS WHEREOF, the undersigned Borrower and Co-signer have executed this Note as of the date set forth above.

In the Presence of:                                         Borrower
                                                                     Adams Granite Co., Inc.

Witness                                                         By: __________________________________
                                                                     Kerry F. Zorzi, President

NOTICE TO CO-SIGNER: YOUR SIGNATURE ON THIS NOTE MEANS THAT YOU ARE EQUALLY LIABLE FOR REPAYMENT OF THIS LOAN. IF THE BORROWER DOES NOT PAY, THE LENDER HAS A LEGAL RIGHT TO COLLECT FROM YOU.

                                                                       Co-signer

Witness                                                         __________________________________
                                                                     Kerry F. Zorzi, Individually

EXHIBIT 10.18

PROMISSORY NOTE

$800,000.00

October 26, 2001

FOR VALUE RECEIVED, the undersigned MIZE ACQUISITION, INC. (Maker) promises to pay to ROCK OF AGES CORPORATION (Payee) the sum of Eight Hundred Thousand Dollars ($800,000.00) together with interest per annum theeon at the New York Prime Rate, as the same may be published in the Wall Street Journal, Eastern Edition, from time to time, payable as follows:

This Note has been executed and delivered pursuant to and in accordance with the terms and conditions of the Purchase and Sale Agreement, dated October 26, 2001 by and between Maker, Payee and Childs & Childs Granite Company, Inc. (the "Agreement"), and is subject to the terms and conditions of the Agreement, which are, by this reference, incorporated herein and made a part hereof. Capitalized terms used in this Note without definition shall have the respective meanings set forth in the Agreement.

1. PAYMENT.

1.1 PRINCIPAL AND INTEREST.

The principal amount of this Note shall be due and payable in six (6) installments of Eighty Five Thousand Dollars ($85,000.00) commencing on December 31, 2002 and on December 31 of each year thereafter, followed by a balloon payment of Two Hundred Ninety Thousand Dollars ($290,000.00) (together with any accrued unpaid interest) on October 26, 2008. Interest on the unpaid balance of this Note shall be due and payable quarterly, beginning on December 31, 2001 and on the last day of each calendar quarter thereafter.

1.2 MANNER OF PAYMENT.

All payments of principal and interest on this Note shall be made by certified or bank cashier's check at Payee's principal office or at such other place in the Unted States of America as Payee shall designate to Maker in writing, or by wire transfer of immediately avaiable funds to an account designated by Payee in writing. If any payment of principal or interest on this Note is due on a day that is not a Business Day, such payment shall be due ont he next succeeding Business Day, and such extension of time shall be taken into account in calculating the amount of interest payable under this Note. "Business Day" means any day other than a Saturday, Sunday or legal holiday in the State of Georgia.

1.3 PREPAYMENT.

Maker may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note, provided that each such prepayment is accompanied by accrued interest on the amount of principal prepaid calculated to the date of such prepayment. Any partial prepayments shall be applied to installments of principal in inverse order of their maturity.

1.4 RIGHT OF SET-OFF.

If there is an Event of Default under this Note, Payee shall have the right to set-off against any amount due hereunder any amount due from Maker under the Supply Agreement, as provided in Section 7.b thereof.

2. DEFAULTS.

2.1 EVENTS OF DEFAULT.

The occurrence of any one or more of the following events with respect to Maker shall constitute and event of default hereunder ("Event of Default"):

(a)  If Maker shall fail to pay when due any payment of principal or interest on this Note and such failure continues for fifteen (15) days after Payee notified Maker therein writing.

(b) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (a "Bankruptcy Law"), Maker shall (i) commence a voluntary case or proceeding; (ii) consent to the entry of an order for relief against it in an involuntary case; (iii) consent to the appointment of a trustee, receiver, assignee, liquidator or similar official; (iv) make an assignment for the benefit of its creditors; or (v) admit in writing its inability to pay its debts as they become due.

(c) If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Maker in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Maker or substantially all of Maker's properties, or (iii) orders the liquidation of Maker, and in each case the order or decree is not dismissed within ninety (90) days.

(d) If Maker shall breach any of its obligations to Payee under the Purchase and Sale Agreement or the Supply Agreement or the Mortgage.

2.2 NOTICE BY MAKER.

Maker shall notify Payee in writing within five (5) days after the occurrence of any Event of Default of which Maker acquires knowledge.

2

2.3 REMEDIES.

Upon the occurrence of an Event of Default hereunder (unless all Events of Default have been cured or waived by Payee), Payee may, at its option, (i) by written notice to Maker, declare the entire unpaid principal balance of this Note, together with all accrued interest thereon, immediately due and payable regardless of any prior forbearance, (ii) exercise its setoff rights as provided in section 1.4 above, and (iii) exercise any and all rights and remedies available to it under applicable law, including, without limitation, the right to collect from Maker all sumes due under this Note. Maker shall pay all reasonable costs and expenses incurred by or on behalf of Payee in connection with Payee's exercise of any or all of its rights and remedies under this Note, including, without limitation, reasonable attorneys' fees.

3. MISCELLANEOUS.

3.1 WAIVER.

The rights and remedies of Payee under this Note shall be cumulative and not alternative. No waiver by Payee of any right or remedy under this Note shall be effective unless in a writing signed by Payee. Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege and no single or partial exercise of any such right, power or privilege by Payee will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by applicable law, (a) no claim or right of Payee arising out of this Note can be dicharged by Payee, in whole or in part, by a waiver or renunciation of the claim or right unless in a writing, signed by Payee; (b) no waiver that may be given by Payee will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on Maker will be deemed to be a waiver of any obligation of Maker or of the right of Payee to take further action without notice or demand as provided in this Note. Maker hereby waives presentment, protest and notice of dishonor and protest.

3.2 NOTICES.

Any notice required or permitted to be given hereunder shall be given in accordance with Section 16.i of the Agreement.

3.3 SEVERABILITY.

If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full and effect to the extent not held invalid or unenforceable.

3

3.4 GOVERNING LAW;DISPUTE RESOLUTION.

This Note will be governed by the substantive and procedural laws of the State of Georgia without regard to conflicts of laws principles. Any disputes, controvery or claim arising out of this Note shall be settled by arbitration as provided in Section 19.e of this Agreement.

3.5 PARTIES IN INTEREST.

This Note shall bind Maker and its successors and assigns. This Note shall not be assigned or transferred by Payee without the express prior written consent of Maker, except by will or, in default thereof, by operation of law.

3.5 PARTIES IN INTEREST.

The headings of Sections in this Note are provided for convenience only and will not affect its construction or interpretation. All references to "Section" or "Sections" refer to the corresponding Section or Sections of this Note unless otherwise specified.

All words used in this Note will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the words "hereof" and "hereunder" and similar references refer to this Note in its entirety and not to any specific section or subsection hereof.

IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the date first stated above.

                                                                      MIZE ACQUISITION, INC.

Witness                                                         By: __________________________________
                                                                     Robert W. Mize, III, President

4

EXHIBIT 10.19

PROMISSORY NOTE

$840,000

August 20, 2001

FOR VALUE RECEIVED, KEYSTONE MEMORIALS, INC., a Georgia corporation ("KMI"), promises to pay to ROCK OF AGES CORPORATION, a Delaware corporation ("Rock"), in accordance with the terms of a certain Supply Agreement among KMI, Rock and IMEX INTERNATIONAL, INC. ("Supply Agreement"), the principal sum of Eight Hundred Forty Thousand Dollars ($840,000), together with interest on the unpaid principal balance at an annual rate equal to 8%, in the manner provided in the Supply Agreement.

This Note has been executed and delivered pursuant to and in accordance with the terms and conditions of the Purchase and Sale Agreement, dated August 20, 2001, by and between KMI, Rock and Childs & Childs Granite Co., Inc., (the "Purchase and Sale Agreement"), and is subject to the terms and conditions of the Purchase and Sale Agreement and the Supply Agreement, which are, by this reference, incorporated herein and made a part hereof.

1. PAYMENTS.

a. This Note shall be paid over a thirty-five (35) month period in consecutive quarterly installments of principal and interest, payable in arrears as shown on the amortization schedule attached as Exhibit A, commencing on August 20, 2001, until paid in full, within such 35 month period.

b. All payments of principal and interest on this Note shall be made in accordance with the terms of the Supply Agreement.

2. DEFAULTS.

a. The occurrence of any one or more of the following events with respect to KMI shall constitute an event of default hereunder ("Event of Default"):

(1) If KMI shall fail to pay when due any payment of principal or interest on this Note (whether such payment is to be made is cash or in kind under the terms of the Supply Agreement).

(2) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (a "Bankruptcy Law"), KMI shall (i) commence a voluntary case or proceeding; (ii) consent to the entry of an order for relief against it in an involuntary case; (iii) consent to the appointment of a trustee, receiver, assignee, liquidator or similar official; (iv) make an assignment for the benefit of its creditors; or (v) admit in writing its inability to pay its debts as they become due.

(3) If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against KMI in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for KMI or substantially all of KMI's properties, or (iii) orders the liquidation of KMI, and in each case the order or decree is not dismissed within 90 days.

(4) If either KMI or IMEX otherwise defaults in their respective obligations under the Supply Agreement.

b. Upon the occurrence of an Event of Default hereunder (unless all Events of Default have been cured or waived), Rock may, at its option, (i) by written notice to KMI, declare the entire unpaid principal balance of this Note, together with all accrued interest thereon, immediately due and payable in lawful money of the United States, regardless of any prior forbearance, and (ii) exercise any and all rights and remedies available to it under applicable law, including, without limitation, the right to collect from KMI all sums due under this Note and the right to foreclose any security interest taken by Rock to secure KMI's obligations hereunder. KMI shall pay all reasonable costs and expenses incurred by or on behalf of Rock in connection with Rock's exercise of any or all of its rights and remedies under this Note, including, without limitation, reasonable attorneys' fees.

3. PREPAYMENT.

a. This Note may be prepaid in cash at any time without penalty.

b. This Note may not be prepaid in kind, except as provided in the Supply Agreement.

4. MISCELLANEOUS.

a. The rights and remedies of Rock under this Note shall be cumulative and not alternative. No waiver by Rock of any right or remedy under this Note shall be effective unless in writing signed by Rock. Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege and no single or partial exercise of any such right, power or privilege by Rock will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by applicable law, (a) no claim or right of Rock arising out of this Note can be discharged by Rock, in whole or in part, by a waiver or renunciation of the claim or right unless in a writing, signed by Rock; (b) no waiver that may be given by Rock will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on KMI will be deemed to be a waiver of any obligation of KMI or of the right of Rock to take further action without notice or demand as provided in this Note. KMI hereby waives presentment, demand, protest and notice of dishonor and protest.

2

b. Any notice required or permitted to be given hereunder shall be given in accordance with Section 14.f of the Purchase and Sale Agreement.

c. If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

d. This Note will be governed by the laws of the State of Georgia without regard to conflicts of laws principles.

e. This Note shall bind KMI and its successors and assigns. This Note shall not be assigned or transferred by Rock without the express prior written consent of KMI, except by operation of law.

f. The headings of Sections in this Note are provided for convenience only and will not affect its construction or interpretation. All references to "Section" or "Sections" refer to the corresponding Section or Sections of this Note unless otherwise specified.

g. All words used in this Note will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the words "hereof" and "hereunder" and similar references refer to this Note in its entirety and not to any specific section or subsection hereof.

THIS NOTE IS SECURED BY A FIRST PRIORITY SECURITY DEED DATED OF EVEN DATE.

IN WITNESS WHEREOF, KMI has executed and delivered this Note as of the date first stated above.

                                                                      KEYSTONE MEMORIALS, INC.

Witness                                                         By: __________________________________
                                                                     George T. Oglesby, III, Duly Authorized

EX-23

EXHIBIT 23

CONSENT OF KPMG LLP

The Board of Directors
Rock of Ages Corporation:

We consent to the inclusion of our report dated March 14, 2002 with respect to the consolidated balance sheets of Rock of Ages Corporation as of December 31, 2001 and 2000, and the related consolidated statements of operations, stockholders' equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2001, which report appears in the December 31, 2001 annual report on Form 10-K of Rock of Ages Corporation.

/s/KPMG LLP
KPMG LLP

Boston, Massachusetts
March 29, 2002