-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Kh5y8Ui/fcqdGk1B6oZvZYoitJ+D62gmtnjBCcfYKuv/QYEbArkwHWndMTOxCDAA j/YIzdlEGXN9dIWnqjPw6w== 0000950172-97-001002.txt : 19971104 0000950172-97-001002.hdr.sgml : 19971104 ACCESSION NUMBER: 0000950172-97-001002 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19971103 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ROCK OF AGES CORP CENTRAL INDEX KEY: 0000084581 STANDARD INDUSTRIAL CLASSIFICATION: CUT STONE & STONE PRODUCTS [3281] IRS NUMBER: 020212792 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-51813 FILM NUMBER: 97706833 BUSINESS ADDRESS: STREET 1: 369 NORTH STATE STREET CITY: CONCORD STATE: NH ZIP: 03301 BUSINESS PHONE: 6032258397 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SWENSON KURT M CENTRAL INDEX KEY: 0001048741 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 772 GRANITEVILLE ROAD CITY: GRANITEVILLE STATE: VT ZIP: 05654 BUSINESS PHONE: 8024763121 SC 13D 1 SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Rock of Ages Corporation (Name of Issuer) Class A Common Stock, Par Value $.01 Per Share (Title of Class of Securities) 772632 10 5 (CUSIP Number) Kurt M. Swenson Rock of Ages Corporation 772 Graniteville Road Graniteville, Vermont 05654 (802) 476-3121 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copy to: Kent A. Coit, Esq. Skadden, Arps, Slate, Meagher & Flom LLP One Beacon Street Boston, Massachusetts 02108 (617) 573-4800 October 23, 1997 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box . - -------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Kurt M. Swenson SS# 001 36 1003 - -------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ( ) (See Item 5) (b) - -------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------- 4 SOURCE OF FUNDS*OO (See Item 3) - -------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - -------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------- NUMBER OF SHARES 7 SOLE VOTING POWER (See Item 5) BENEFICIALLY 1,125,239 OWNED BY ---------------------------------------- EACH 8 SHARED VOTING POWER (See Item 5) REPORTING 0 PERSON ---------------------------------------- WITH 9 SOLE DISPOSITIVE POWER (See Item 5) 1,125,239 ---------------------------------------- 10 SHARED DISPOSITIVE POWER (See Item 5) 0 - -------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON (See Item 5) 1,125,239 - -------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES* ( ) - -------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 25.3% - -------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! SCHEDULE 13D Item 1. Security and Issuer The title of the class of equity securities to which this Statement relates is the Class A Common Stock, par value $.01 per share (the "Class A Common Stock"), of Rock of Ages Corporation, a Delaware corporation (the "Company"). Under the Company's Amended and Restated Certificate of Incorporation (the "Certificate of Incorporation"), shares of the Company's Class B Common Stock, par value $.01 per share (the "Class B Common Stock," and, together with the Class A Common Stock, the "Common Stock") are convertible at the option of the holder at any time on a share-for-share basis into Class A Common Stock and convert automatically upon a transfer to any person other than a Permitted Transferee (as defined in the Certificate of Incorporation). The principal executive offices of the Company are located at 772 Graniteville Road, Graniteville, Vermont 05654. Item 2. Identity and Background (a) This statement is filed on behalf of Kurt M. Swenson. (b) Mr. Swenson's business address is c/o Rock of Ages Corporation, 772 Graniteville Road, Graniteville, Vermont 05654. (c) Mr. Swenson is President, Chief Executive Officer and Chairman of the Board of the Company. (d) and (e) During the last five years, Mr. Swenson has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) nor has he been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction relating to federal or state securities laws or the violation with respect to such laws. (f) Mr. Swenson is a citizen of the United States. Item 3. Source and Amount of Funds or Other Consideration. Mr. Swenson acquired 1,061,489 shares of Class B Common Stock pursuant to the merger on October 23, 1997 of Swenson Granite Company, Inc. ("Swenson Granite") with and into the Company (the "Swenson Merger"), upon the terms of the Agreement and Plan of Merger and Reorganization, dated as of August 13, 1997, by and among the Company, Swenson Granite, Kurt M. Swenson and Kevin C. Swenson (the "Swenson Merger Agreement"). In the Swenson Merger, each outstanding share of common stock of Swenson Granite ("Swenson Common Stock") was converted into 1,618.123 shares of Class B Common Stock. Mr. Swenson held 656 shares of Swenson Common Stock immediately prior to the consummation of the Swenson Merger, and, accordingly, received 1,061,489 shares of Class B Common Stock upon the consummation thereof. Mr. Swenson did not provide any other consideration in connection with his acquisition of shares of Class B Common Stock. Immediately upon receipt of such 1,061,489 shares of Class B Common Stock pursuant to the Swenson Merger, Mr. Swenson gifted 18,750 shares of Class B Common Stock to an irrevocable trust for the benefit of his children (the "Trust Shares"). Mr. Swenson has no voting or dispositive power over the Trust Shares and he disclaims beneficial ownership of the Trust Shares. An additional 82,500 shares of Class B Common Stock beneficially owned by Mr. Swenson (the "Vested Option Shares") are subject to vested employee stock options granted to Mr. Swenson pursuant to the Company's Amended and Restated 1994 Stock Plan (the "Stock Plan"). Item 4. Purpose of the Transaction. The Swenson Merger was effected as part of a reorganization prior to the Company's initial public offering of its Class A Common Stock (the "Offering") which was consummated on October 24, 1997. Prior to the Swenson Merger, Swenson Granite held approximately 93% of the Class B Common Stock. Pursuant to the Merger Agreement, upon consummation of the Swenson Merger, all of such shares of Class B Common Stock held by Swenson Granite were cancelled. With the exception of gifts of shares of Common Stock from time to time to his family and to charities, possible sales of shares of Class B Common Stock subject to options granted under the Stock Plan, as described below, and sales of shares of Common Stock, if required, to meet currently unforeseen and unanticipated cash requirements, Mr. Swenson intends to continue to hold for investment purposes the 1,125,239 shares of Common Stock of the Company beneficially owned by him. Mr. Swenson may from time to time exercise options granted pursuant to the 1994 Plan. In connection with the exercise of such options, Mr. Swenson may sell some or all of the shares of Class B Common Stock acquired upon such exercise in order to pay the applicable exercise price, income taxes, or for such other uses of the proceeds of such sales as Mr. Swenson may determine. Mr. Swenson intends to review his investment in the Company on a continuing basis and, while he has no current plans to do so, reserves the right to acquire additional shares of Common Stock through market purchases, in privately negotiated transactions or otherwise. Any such acquisition will depend upon, among other things, the availability of shares of Common Stock for purchase at satisfactory price levels; Mr. Swenson's continuing evaluation of the Company's business, financial condition, operations and prospects; general market, economic and other conditions; the relative attractiveness of alternative business and investment opportunities; the availability of financing; and other future developments. Subject to the foregoing, Mr. Swenson does not have any plans or proposals which relate to or would result in any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. (a) As of October 23, 1997, by virtue of his beneficial ownership of 1,125,259 shares of Class B Common Stock, Mr. Swenson beneficially owned 1,125,259 shares of Class A Common Stock, including the 82,500 Vested Option Shares. Such 1,125,259 shares of Class B Common Stock (including the Vested Option Shares and assuming the conversion of all such 1,125,259 shares of Class B Common Stock into Class A Common Stock) represent approximately 25.3% of the total number of shares of Class A Common Stock outstanding as of October 20, 1997 (plus the 1,125,259 shares of Class A Common Stock which would be outstanding and held by Mr. Swenson upon such conversion and assuming that no other shares of Class B Common Stock held by others have been previously, or are simultaneously, converted to Class A Common Stock), as set forth in the Company's final prospectus dated October 21, 1997, filed with the Securities and Exchange Commission pursuant to Rule 424(b) of the General Rules and Regulations under the Securities Act of 1933, as amended. (b) Kurt M. Swenson has the sole power to vote or to direct the vote and sole power to dispose or to direct the disposition of the 1,125,239 shares of Class B Common Stock (and, accordingly, of the same number of shares of Class A Common Stock into which such shares of Class B Common Stock are convertible) beneficially owned by him. (c) On October 23, 1997, Mr. Swenson transferred an aggregate of 18,750 shares of Class B Common Stock to a trust for the benefit of his children. Mr. Swenson disclaims beneficial ownership of such shares. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. On August 15, 1997, Mr. Swenson entered into a lock-up agreement with Raymond James & Associates, Inc. (the "Lock-Up Agreement"), pursuant to which Mr. Swenson agreed not to, without the prior written consent of Raymond James & Associates, Inc., directly or indirectly sell, offer or contract to sell, or otherwise dispose of, or transfer any shares of Common Stock or securities of the Company convertible into or exchangeable or exercisable for Common Stock legally or beneficially owned or controlled by him before the expiration of the 180-day period commencing on October 21, 1997, subject to certain exceptions as more fully described in the Lock-Up Agreement filed herewith as Exhibit 2. The Lock-Up Agreement was entered into by Mr. Swenson in connection with the Offering, of which Raymond James & Associates, Inc. was the lead underwriter. Except as set forth above, Mr. Swenson does not have any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of the Company, including, but not limited to the transfer or voting of any of the shares of Common Stock, finders fees, joint ventures, loan or option agreements, puts or calls, guarantees of profits or loss, or the giving or withholding of proxies. Item 7. Material to be filed as Exhibits. Exhibit 1: Agreement and Plan of Merger and Reorganization, dated as of August 13, 1997, by and among Rock of Ages Corporation, Swenson Granite Company, Inc., Kurt M. Swenson and Kevin C. Swenson (incorporated by reference to Exhibit 2.4 to the Company's Registration Statement on Form S-1 (File No. 333-33685) filed with the Securities and Exchange Commission on August 15, 1997) Exhibit 2: Lock-Up Agreement, dated as of August 15, 1997, between Raymond James & Associates, Inc. and Kurt M. Swenson Exhibit 3: Stock Option Agreement, dated November 21, 1994, between Kurt M. Swenson and Rock of Ages Corporation Exhibit 4: Stock Option Agreement, dated December 31, 1996, between Kurt M. Swenson and Rock of Ages Corporation SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. Dated: November 3, 1997 /s/ Kurt M. Swenson Kurt M. Swenson EXHIBIT INDEX Sequentially Exhibit Description Numbered Page 1 Agreement and Plan of Merger and Reorganization, dated as of August 13, 1997, by and among Rock of Ages Corporation, Swenson Granite Company, Inc., Kurt M. Swenson and Kevin C. Swenson (incorporated by reference to Exhibit 2.4 to the Company's Registration Statement on Form S-1 (File No. 333-33685) filed with the Securities and Exchange Commission on August 15, 1997) 2 Lock-Up Agreement, dated as of August 15, 1997, between Raymond James & Associates, Inc. and Kurt M. Swenson 3 Stock Option Agreement, dated November 21, 1994, between Kurt M. Swenson and Rock of Ages Corporation 4 Stock Option Agreement, dated December 31, 1996, between Kurt M. Swenson and Rock of Ages Corporation EX-2 2 EXHIBIT 2 - LOCK-UP AGREEMENT EXHIBIT 2 August 15, 1997 Raymond James & Associates, Inc. As Representative of the Several Underwriters c/o Raymond James & Associates, Inc. 880 Carillon Parkway St. Petersburg, Florida 33716 Ladies and Gentlemen: Reference is made to that certain proposed Underwriting Agreement (the "Underwriting Agreement") among Rock of Ages Corporation, a Vermont corporation planning to reincorporate as a Delaware corporation (the "Company"), Raymond James & Associates, Inc., as representative of the several Underwriters named in Schedule I thereto, and the Selling Stockholders named in Schedule II thereto (the "Selling Stockholders"), relating to a proposed underwritten offering of shares of the Company's Common Stock (the "Offering"). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Underwriting Agreement. In order to induce the Underwriters to enter into the Underwriting Agreement and to consummate the transactions contemplated therein, and in further consideration of the execution of agreements similar to that contained herein, by the directors and officers of the Company and certain holders of the Company's securities, the undersigned hereby agrees not to, without the prior written consent of Raymond James & Associates, Inc. (i) directly or indirectly sell, offer or contract to sell, or otherwise dispose of, or transfer any shares of Common Stock of the Company or securities of the Company convertible into or exchangeable or exercisable for, Common Stock of the Company (collectively, "Company Securities") legally or beneficially owned or controlled by the undersigned, now or hereafter, or any rights to purchase any Company Securities, before the expiration of the 180-day period following the date of the Underwriting Agreement (the "Restriction Period"), except that the undersigned may transfer Common Stock of the Company as a bona fide gift or gifts, providing that the undersigned provides prior written notice of such gift or gifts to Raymond James & Associates, Inc. and the donee or donees thereof agree(s) to be bound by the restrictions set forth herein, or (ii) exercise or seek to exercise or effectuate in any manner any rights of any nature that the undersigned has or may hereafter have to require the Company to register, under the Securities Act of 1933, as amended (the "Act"), the undersigned's sale, transfer or other disposition of any Company Securities or other securities of the Company held by the undersigned, or to otherwise participate as a selling security holder in any manner in any registration effected by the Company under the Act, including the registration relating to the Offering, before the expiration of the Restriction Period; provided, however, that (i) the Selling Stockholders may sell shares of Common Stock in accordance with the Underwriting Agreement, and (ii) the Company may issue (A) options to purchase Common Stock or shares of Common Stock issuable upon the exercise of thereof, (B) Common Stock in connection with the C&C Acquisition and the Keith Acquisition and (C) capital stock in connection with other acquisitions, provided such shares of Common Stock issued upon the exercise of options and such shares of capital stock issued in connection with any such other acquisitions shall not be transferable prior to the end of the Restriction Period. The terms "C&C Acquisition" and "Keith Acquisition" shall have the meanings set forth in the Company's Registration Statement referred to in the Underwriting Agreement. Furthermore, the undersigned hereby agrees and consents to the entry of stop transfer instructions with the Company's transfer agent against the transfer of the Company Securities in violation of this agreement. /s/ Kurt M. Swenson EX-99 3 EXHIBIT 3 - INCENTIVE STOCK OPTION AGREEMENT EXHIBIT 3 ROCK OF AGES CORPORATION Incentive Stock Option Agreement Rock of Ages Corporation, a Vermont corporation (the "Company"), hereby grants as of this 21st day of November, 1994, to Kurt M. Swenson (the "Employee"), an option to purchase a maximum of 200,000 shares of its Common Stock, no par value per share, at the price of $2.42 per share, on the following terms and conditions: 1. Grant Under 1994 Stock Plan. This option is granted pursuant to and is governed by the Company's 1994 Stock Plan (the "Plan") and, unless the context otherwise requires, terms used herein shall have the same meaning as in the Plan. Determinations made in connection with this option pursuant to the Plan shall be governed by the Plan as it exists on this date. 2. Grant as Incentive Stock Option; Other Options. This option is intended to qualify as an incentive stock option under Section 422A of the Internal Revenue Code of 1986, as amended (the "Code"). This option is in addition to any other options heretofore or hereafter granted to the Employee by the Company, but a duplicate original of this instrument shall not effect the grant of another option. 3. Extent of Option If Employment Continues. If the Employee has continued to be employed by the Company on the following dates, the Employee may exercise this option for the number of shares set opposite the applicable date: On or after November 21, 1994 and before November 21, 1995 - 40,000 shares On or after November 21, 1995 an additional and before November 21, 1996 - 40,000 shares On or after November 21, 1996 an additional and before November 21, 1997 - 40,000 shares On or after November 21, 1997 an additional and before November 21, 1998 - 40,000 shares On or after November 21, 1998 - an additional 40,000 shares. The foregoing rights are cumulative and, while the Employee continues to be employed by the Company, such option may be exercised on or before November 21, 1999. All of the foregoing rights are subject to Articles 4 and 5, as appropriate, if the Employee ceases to be employed by the Company or dies or becomes disabled while in the employ of the Company. 4. Termination of Employment. If the Employee ceases to be employed by the Company, other than by reason of death or disability as defined in Article 5, no further installments of this option shall become exercisable and this option shall terminate after the passage of ninety (90) days from the date employment ceases, but in no event later than the scheduled expiration date. In such a case, the Employee's only rights hereunder shall be those which are properly exercised before the termination of the option. 5. Death; Disability. If the Employee dies while in the employ of the Company, this option may be exercised, to the extent of the number of shares with respect to which the Employee could have exercised it on the date of his death, by his estate, personal representative or beneficiary to whom this option has been assigned pursuant to Article 10, at any time within 180 days after the date of death, but not later than the scheduled expiration date. If the Employee ceases to be employed by the Company by reason of his disability (as defined in the Plan), this option may be exercised, to the extent of the number of shares with respect to which he could have exercised it on the date of the termination of his employment, at any time within 180 days after such termination, but not later than the scheduled expiration date. At the expiration of such 180-day period or the scheduled expiration date, whichever is the earlier, this option shall terminate and the only rights hereunder shall be those as to which the option was properly exercised before such termination. 6. Partial Exercise. Exercise of this option up to the extent above stated may be made in part at any time and from time to time within the above limits, except that this option may not be exercised for a fraction of a share unless such exercise is with respect to the final installment of stock subject to this option and a fractional share (or cash in lieu thereof) must be issued to permit the Employee to exercise completely such final installment. Any fractional share with respect to which an installment of this option cannot be exercised because of the limitation contained in the preceding sentence shall remain subject to this option and shall be available for later purchase by the Employee in accordance with the terms hereof. 7. Payment of Price. The option price is payable in United States dollars and may be paid in cash, by check, by delivery of shares of the Company's Common Stock having an aggregate fair market value (as determined by the Board of Directors) equal as of the date of exercise to the option price, by delivery of the Employee's personal recourse note bearing interest payable not less than annually at no less than 100% of the lowest applicable Federal rate, as defined in Section 1274(d) of the Code, or by any combination of the foregoing, equal in amount to the option price. Notwithstanding the foregoing, the Employee may not pay any part of the exercise price hereof by transferring Common Stock to the Company if such Common Stock is both subject to a substantial risk of forfeiture and not transferable within the meaning of Section 83 of the Code. If the Employee delivers a personal recourse note as provided above, the Employee shall concurrently execute and deliver to the Company a pledge agreement in a form reasonably satisfactory the Company, together with a stock certificate or certificates representing shares of the Company's Common Stock (having an aggregate fair market value (as determined by the Board of Directors) equal as of the date of exercise to at least the value of the principal amount of the note), duly endorsed or accompanied by a stock power or powers duly endorsed, to secure the Employee's obligations under such personal recourse note. 8. Agreement to Purchase for Investment. By acceptance of this option, the Employee agrees that a purchase of shares under this option will not be made with a view to their distribution, as that term is used in the Securities Act of 1933, as amended (the "Act"), unless in the opinion of counsel to the Company, such distribution is in compliance with or exempt from the registration and prospectus requirements of the Act, and the Employee agrees to sign a certificate to such effect at the time of exercising this option and agrees that the certificate for the shares so purchased may be inscribed with a legend to ensure compliance with the Act. 9. Method of Exercising Option. Subject to the terms and conditions of this Agreement, this option may be exercised by written notice to the Company, at the principal executive office of the Company at 369 North State Street, Concord, NH 03301, or to such transfer agent as the Company shall designate. Such notice shall state the election to exercise this option and the number of shares in respect of which it is being exercised and shall be signed by the person or persons so exercising this option. Such notice shall be accompanied by payment of the full purchase price of such shares, and the Company shall deliver a certificate or certificates representing such shares as soon as practicable after the notice shall be received. The certificate or certificates for the shares as to which this option shall have been so exercised shall be registered in the name of the person or persons so exercising this option (or, if this option shall be exercised by the Employee and if the Employee shall so request in the notice exercising this option, shall be registered in the name of the Employee and another person jointly, with right of survivorship) and shall be delivered as provided above to or upon the written order of the person or persons exercising this option. In the event this option shall be exercised pursuant to Article 5 hereof by any person or persons other than the Employee, such notice shall be accompanied by appropriate proof of the right of such person or persons to exercise this option. All shares that shall be purchased upon the exercise of this option as provided herein shall be fully paid and non-assessable. 10. Option Not Transferable. This option is not transferable or assignable (a) except by will or by the laws of descent and distribution or, if then permitted under Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), pursuant to a qualified domestic relations order as defined under the Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder and (b) if such assignment or transfer violates Section 162(m) of the Code. During the Employee's lifetime, only the Employee or his or her guardian or legal representative can exercise this option. 11. No Obligation to Exercise Option. The grant and acceptance of this option imposes no obligation on the Employee to exercise it. 12. No Obligation to Continue Employment. The Company and any Related Corporation (as defined in the Plan) are not by the Plan or this option obligated to continue the Employee in employment. 13. No Rights as Shareholder until Exercise. The Employee shall have no rights as a shareholder with respect to shares subject to this Agreement until a stock certificate therefor has been issued to the Employee and is fully paid for. Except as is expressly provided in the Plan with respect to certain changes in the capitalization of the Company, no adjustment shall be made for dividends or similar rights for which the record date is prior to the date such stock certificate is issued. 14. Capital Changes and Business Successions. The Plan contains provisions covering the treatment of options in a number of contingencies such as stock splits and mergers. Provisions in the Plan for adjustment with respect to stock subject to options and the related provisions with respect to successors to the business of the Company are hereby made applicable hereunder and are incorporated herein by reference. In general, you should not assume that options necessarily would survive the acquisition of the Company. In particular, without affecting the generality of the foregoing, it is understood that for the purposes of Articles 3 through 5 hereof, both inclusive, employment by the Company includes employment by a Related Corporation as defined in the Plan. 15. Early Disposition. The Employee agrees to notify the Company in writing immediately after the Employee makes a Disqualifying Disposition of any Common Stock received pursuant to the exercise of this option. A Disqualifying Disposition is any disposition (including any sale) of such Common Stock before the later of (a) two years after the date the Employee was granted this option or (b) one year after the date the Employee acquired Common Stock by exercising this option. If the Employee has died before such stock is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter. The Employee also agrees to provide the Company with any information which it shall request concerning any such disposition. The Employee acknowledges that he or she will forfeit the favorable income tax treatment otherwise available with respect to the exercise of this incentive stock option if he or she makes a Disqualifying Disposition of the stock received on exercise of this option. 16. Withholding Taxes. If the Company in its discretion determines that it is obligated to withhold tax with respect to a Disqualifying Disposition (as defined in Article 15) of Common Stock received by the Employee on exercise of this option, the Employee hereby agrees that the Company may withhold from the Employee's wages the appropriate amount of federal, state and local withholding taxes attributable to such Disqualifying Disposition. If any portion of this option is treated as a Non-Qualified Option, the Employee hereby agrees that the Company may withhold from the Employee's wages the appropriate amount of federal, state and local withholding taxes attributable to the Employee's exercise of such Non-Qualified Option. At the Company's discretion, the amount required to be withheld may be withheld in cash from such wages, or (with respect to compensation income attributable to the exercise of this option) in kind from the Common Stock otherwise deliverable to the optionee on exercise of this Option. The Employee further agrees that, if the Company does not withhold an amount from the Employee's wages sufficient to satisfy the Company's withholding obligation, the Employee will reimburse the Company on demand, in cash, for the amount underwithheld. 17. Company's Right of First Refusal. (a) Exercise of Right: If the Employee desires to sell all or any part of the shares acquired under this option (including any securities received in respect thereof pursuant to any stock dividend, stock split, reclassification, reorganization, recapitalization or the like), and an offeror (the "Offeror") has made an offer therefor, which offer the Employee desires to accept, the Employee shall: (i) obtain in writing an irrevocable and unconditional bona fide offer (the "Bona Fide Offer") for the purchase thereof from the Offeror; and (ii) give written notice (the "Option Notice") to the Company setting forth his or her desire to sell such shares, which Option Notice shall be accompanied by a photocopy of the original executed Bona Fide Offer and shall set forth at least the name and address of the Offeror and the price and terms of the Bona Fide Offer. Upon receipt of the Option Notice, the Company shall have an assignable option to purchase any or all of such shares (the "Option Shares") specified in the Option Notice, such option to be exercisable by giving, within 30 days after receipt of the Option Notice, a written counter-notice to the Employee. If the Company elects to purchase any or all of such Option Shares, it shall be obligated to purchase, and the Employee shall be obligated to sell to the Company, such Option Shares at the price and terms indicated in the Bona Fide Offer within 60 days from the date of receipt by the Company of the Option Notice. (b) Sale of Option Shares to Offeror: The Employee may sell, pursuant to the terms of the Bona Fide Offer, any or all of such Option Shares not purchased or agreed to be purchased by the Company for 60 days after the expiration of the 30-day period during which the Company may give the aforesaid counter-notice; provided, however, that the Employee shall not sell such Option Shares to the Offeror if the Offeror is a competitor of the Company and the Company gives written notice to the Employee, within 30 days of its receipt of the Option Notice, stating that the Employee shall not sell his or her Option Shares to the Offeror; and provided, further, that prior to the sale of such Option Shares to the Offeror, the Offeror shall execute an agreement with the Company pursuant to which the Offeror agrees to be subject to the restrictions set forth in this Article 17. If any or all of such Option Shares are not sold pursuant to a Bona Fide Offer within the time permitted above, the unsold Option Shares shall remain subject to the terms of this Article 17. (c) Adjustments for Changes in Capital Structure: If there shall be any change in the Common Stock of the Company through merger, consolidation, reorganization, recapitalization, stock dividend, split- up, combination or exchange of shares or the like, the restrictions contained in this Article 17 shall apply with equal force to additional or substitute securities, if any, received by the Employee in exchange for, or by virtue of his or her ownership of, Option Shares. (d) Failure to Deliver Option Shares: In the event the Employee fails or refuses to deliver on a timely basis duly endorsed certificates representing Option Shares to be sold to the Company pursuant to this Article 17, the Company shall have the right to deposit the purchase price for the Option Shares in a special account with any bank or trust company in the State of New Hampshire giving notice of such deposit to the Employee, whereupon such Option Shares shall be deemed to have been purchased by the Company. All such monies shall be held by the bank or trust company for the benefit of the Employee. All monies deposited with the bank or trust company but remaining unclaimed for two (2) years after the date of deposit shall be repaid by the bank or trust company to the Company on demand, and the Employee shall thereafter look only to the Company for payment. The Company may place a legend on any stock certificate delivered to the Employee reflecting the restrictions on transfer provided in this Article 17. (e) Expiration of Company's Right of First Refusal: The refusal rights of the Company set forth above shall remain in effect until such time, if ever, when there is a registration of any of the Company's stock under the Exchange Act or the Company otherwise becomes subject to the reporting requirements of the Exchange Act, at which time the refusal rights of the Company set forth herein will automatically expire. 18. No Exercise of Option if Employment Terminated for Misconduct. If the employment of the Employee is terminated for "Misconduct," this option shall terminate on the date of such termination of employment and shall thereupon not be exercisable to any extent whatsoever. "Misconduct" is conduct, as determined by the Board of Directors, involving one or more of the following: (i) the substantial and continuing failure of the Employee to render services to the Company in accordance with his or her assigned duties; (ii) a determination by two-thirds of the members of the Board of Directors that the Employee has inadequately performed the duties of his or her employment; (iii) disloyalty, gross negligence, dishonesty or breach of fiduciary duty to the Company; (iv) the commission of an act of embezzlement, fraud, disloyalty, dishonesty or deliberate disregard of the rules or policies of the Company which results in loss, damage or injury to the Company, whether directly or indirectly; (v) the unauthorized disclosure of any trade secret or confidential information of the Company; or (vi) the commission of an act which constitutes unfair competition with the Company or which induces any customer of the Company to break a contract with the Company. In making such determination, the Board of Directors shall act fairly and in utmost good faith and shall give the Employee an opportunity to appear and to be heard at a hearing before the Board of Directors or any Committee and present evidence on his or her behalf. For the purposes of this Article 18, termination of employment shall be deemed to occur when the Employee receives notice that his or her employment is terminated. 19. Company's Right of Repurchase. (a) Rights of Repurchase. If any of the events specified in Article 19(b) below occur, then: (i) with respect to shares acquired upon exercise of this option prior to the occurrence of such event, within 60 days after the Company receives actual knowledge of the event, and (ii) with respect to shares acquired upon exercise of this option after the occurrence of such event, within 60 days following the later of the date of such exercise or the date the Company receives actual knowledge of such event, (in either case, the "Repurchase Period"), the Company shall have the option, but not the obligation, to repurchase all, but not a portion of, the shares from the Employee, or his or her guardian or legal representatives, as the case may be (the "Repurchase Option"). The Repurchase Option shall be exercised by the Company by giving the Employee, or his or her guardian or legal representatives, written notice of its intention to exercise the Repurchase Option on or before the last day of the Repurchase Period, and, together with such notice, tendering to the Employee, or his or her guardian or legal representatives, an amount equal to the higher of the option exercise price or the fair market value of the shares. The Company may, in exercising the Repurchase Option, designate one or more nominees, whether or not affiliated with or employed by the Company, to purchase the shares. Upon timely exercise of the Repurchase Option in the manner provided in this Article 19(a), the Employee, or his or her guardian or legal representatives, shall deliver to the Company the stock certificate or certificates representing the shares being repurchased, duly endorsed and free and clear of any and all liens, charges and encumbrances. If shares are not purchased under the Repurchase Option, the Employee and his or her successor in interest, if any, will hold any such shares in his or her possession subject to all of the provisions of this Agreement. (b) Company's Right to Exercise Repurchase Option: The Company shall have the Repurchase Option in the event that any of the following events shall occur: (i) the termination of the Employee's employment with the Company or any Related Corporation, voluntarily or involuntarily, for any reason whatsoever, including death or permanent disability, prior to the time this option shall be fully vested as provided in Article 3 hereof; (ii) the receivership, bankruptcy or other creditor's proceeding regarding the Employee or the taking of any of Employee's shares acquired upon exercise of this option by legal process, such as a levy of execution; (iii) distribution of shares held by the Employee to his or her spouse as such spouse's joint or community interest pursuant to a decree of dissolution, operation of law, divorce, property settlement agreement or for any other reason, except as may be otherwise permitted by the Company; or (iv) the termination of the Employee's employment by the Company for Misconduct. (c) Determination of Fair Market Value: The fair market value of the shares subject to this option shall be, for purposes of this Article 19, an amount per share determined on the basis of the price at which shares of the Common Stock could reasonably be expected to be sold in an arms-length transaction, for cash, other than on an installment basis, to a person not employed by, controlled by, in control of or under common control with the Company. Fair market value shall be determined by the Board of Directors, giving due consideration to recent grants of ISOs for shares of Common Stock, recent transactions involving shares of the Common Stock, if any, earnings of the Company, the effect of the transfer restrictions to which the shares are subject under law and this Agreement, the absence of a public market for the Common Stock and such other matters as the Board of Directors deems pertinent. The determination by the Board of Directors of the fair market value shall be conclusive and binding. The fair market value of the shares shall be determined as of the day on which the event occurs. (d) Expiration of Company's Repurchase Option. The Company's Repurchase Option set forth above shall remain in effect until such time, if ever, when there is a registration of any of the Company's stock under the Exchange Act or the Company otherwise becomes subject to the reporting requirements of the Exchange Act, at which time the Repurchase Option of the Company set forth herein will automatically expire. 20. Incorporation of Plan. The Plan is hereby incorporated herein by reference and made a part hereof and the option and this Agreement are subject to all terms and conditions of the Plan. 21. Provision of Documentation to Employee. By signing this Agreement, the Employee acknowledges receipt of a copy of this Agreement and a copy of the Plan. 22. Failure to Enforce Not a Waiver. The failure of the Company to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof. 23. Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Vermont, without regard to the conflicts of laws provisions thereof. 24. Counterparts. This Agreement may be executed in counterparts, each of which shall be an original but all of which shall represent one and the same agreement. IN WITNESS WHEREOF, the Company and the Employee have caused this instrument to be executed, and the Employee whose signature appears below acknowledges receipt of a copy of the Plan incorporated herein by reference and acceptance of an original copy of the Agreement. ROCK OF AGES CORPORATION By:_________________________ Name: Title: ___________________________ Employee ___________________________ Print Name of Employee ___________________________ Street Address ___________________________ City State Zip Code EX-99 4 EXHIBIT 4 - INCENTIVE STOCK OPTION AGREEMENT EXHIBIT 4 ROCK OF AGES CORPORATION Incentive Stock Option Agreement Rock of Ages Corporation, a Vermont corporation (the "Company"), hereby grants as of this 31st day of December, 1996, to Kurt M. Swenson (the "Employee"), an option to purchase a maximum of 25,000 shares of its Common Stock, no par value per share, at the price of $1.65 per share. To the extent the option granted hereby is exercisable pursuant to the terms hereof, such option may be exercised for a period of up to five years from the date granted. The option granted hereby is subject to the following terms and conditions: 1. Grant Under Amended and Restated 1994 Stock Plan. This option is granted pursuant to and is governed by the Company's Amended and Restated 1994 Stock Plan (the "Plan") and, unless the context otherwise requires, terms used herein shall have the same meaning as in the Plan. 2. Grant as Incentive Stock Option; Other Options. This option is intended to qualify as an incentive stock option under Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code"). This option is in addition to any other options heretofore or hereafter granted to the Employee by the Company. 3. Extent of Option If Employment Continues. So long as the Employee continues to be employed by the Company on the following dates, the Employee may exercise this option for the number of shares set opposite the applicable date: On or after December 31, 1996 and before December 31, 1997 - 5,000 shares On or after December 31, 1997 - an additional and before December 31, 1998 5,000 shares On or after December 31, 1998 - an additional and before December 31, 1999 5,000 shares On or after December 31, 2000 - an additional and before December 31, 2001 5,000 shares On or after December 31, 2001 - an additional 5,000 shares. All of the foregoing rights are subject to Articles 4 and 5, as appropriate, if the Employee ceases to be employed by the Company or dies or becomes disabled while in the employ of the Company. 4. Termination of Employment. If the Employee ceases to be employed by the Company, no further installments of this option shall become exercisable and, except as provided in Article 5, this option shall terminate after the passage of ninety (90) days from the date employment ceases, but in no event later than the scheduled expiration date. In such a case, the Employee's only rights hereunder shall be those which are properly exercised before the termination of the option. 5. Death; Disability. If the Employee dies while in the employ of the Company, this option may be exercised, to the extent of the number of shares with respect to which the Employee could have exercised it on the date of his death, by his estate, personal representative or beneficiary to whom this option has been assigned pursuant to Article 10, at any time within 180 days after the date of death, but not later than the scheduled expiration date. If the Employee ceases to be employed by the Company by reason of his disability (as defined in the Plan), this option may be exercised, to the extent of the number of shares with respect to which he could have exercised it on the date of the termination of his employment, at any time within 180 days after such termination, but not later than the scheduled expiration date. At the expiration of such 180-day period or the scheduled expiration date, whichever is the earlier, this option shall terminate and the only rights hereunder shall be those as to which the option was properly exercised before such termination. 6. Partial Exercise. Exercise of this option up to the extent above stated may be made in part at any time and from time to time within the above limits, except that this option may not be exercised for a fraction of a share unless such exercise is with respect to the final installment of stock subject to this option and, absent the provisions of this Article 6, a fractional share would be required to be issued to permit the Employee to exercise completely such final installment. Any fractional share with respect to which an installment of this option cannot be exercised because of the limitation contained in the preceding sentence shall remain subject to this option and shall be available for later purchase by the Employee in accordance with the terms hereof. No fractional shares shall be issued under the Plan, and the Employee shall receive from the Company cash in lieu of such fractional shares. 7. Payment of Price. The option price is payable in United States dollars and may be paid (i) in cash, (ii) by check, (iii) by delivery of shares of the Company's Common Stock having an aggregate fair market value (as determined by the Board of Directors) equal as of the date of exercise to the option price, (iv) at the discretion of the Committee at the time of exercise, by delivery of the Employee's personal recourse note bearing interest payable not less than annually at no less than 100% of the lowest applicable Federal rate, as defined in Section 1274(d) of the Code, or (v) subject to clause (iv), by any combination of the foregoing, equal in amount to the option price. Notwithstanding the foregoing, the Employee may not pay any part of the exercise price hereof by transferring Common Stock to the Company if such Common Stock is both subject to a substantial risk of forfeiture and not transferable within the meaning of Section 83 of the Code. If the Employee delivers a personal recourse note as provided above, the Employee shall concurrently execute and deliver to the Company a pledge agreement in a form reasonably satisfactory to the Company, together with a stock certificate or certificates representing shares of the Company's Common Stock (having an aggregate fair market value (as determined by the Board of Directors) equal as of the date of exercise to at least the value of the principal amount of the note), duly endorsed or accompanied by a stock power or powers duly endorsed, to secure the Employee's obligations under such personal recourse note. 8. Agreement to Purchase for Investment. By acceptance of this option, the Employee agrees that a purchase of shares under this option will not be made with a view to their distribution, as that term is used in the Securities Act of 1933, as amended (the "Act"), unless in the opinion of counsel to the Company, such distribution is in compliance with or exempt from the registration and prospectus requirements of the Act, and the Employee agrees to sign a certificate to such effect at the time of exercising this option and agrees that the certificate for the shares so purchased may be inscribed with a legend to ensure compliance with the Act. 9. Method of Exercising Option. Subject to the terms and conditions of this Agreement, this option may be exercised by written notice to the Company, at the principal executive office of the Company at 369 North State Street, Concord, NH 03301, or to such transfer agent as the Company shall designate. Such notice shall state the election to exercise this option and the number of shares in respect of which it is being exercised and shall be signed by the person or persons so exercising this option. Such notice shall be accompanied by payment of the full purchase price of such shares, and the Company shall deliver a certificate or certificates representing such shares as soon as practicable after the notice shall be received. The certificate or certificates for the shares as to which this option shall have been so exercised shall be registered in the name of the person or persons so exercising this option (or, if this option shall be exercised by the Employee and if the Employee shall so request in the notice exercising this option, shall be registered in the name of the Employee and another person jointly, with right of survivorship) and shall be delivered as provided above to or upon the written order of the person or persons exercising this option. In the event this option shall be exercised pursuant to Article 5 hereof by any person or persons other than the Employee, such notice shall be accompanied by appropriate proof of the right of such person or persons to exercise this option. All shares that shall be purchased upon the exercise of this option as provided herein shall be fully paid and non-assessable. 10. Option Not Transferable. This option is not transferable or assignable except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined under the Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder. During the Employee's lifetime, only the Employee or his or her guardian or legal representative can exercise this option. 11. No Obligation to Exercise Option. The grant and acceptance of this option imposes no obligation on the Employee to exercise it. 12. No Obligation to Continue Employment. The Company and any Related Corporation (as defined in the Plan) are not by the Plan or this option obligated to continue the Employee in employment. 13. No Rights as Shareholder until Exercise. The Employee shall have no rights as a shareholder with respect to shares subject to this Agreement until a stock certificate therefor has been issued to the Employee and is fully paid for. Except as is expressly provided in the Plan with respect to certain changes in the capitalization of the Company, no adjustment shall be made for dividends or similar rights for which the record date is prior to the date such stock certificate is issued. 14. Capital Changes and Business Successions. The Plan contains provisions covering the treatment of options in a number of contingencies such as stock splits and mergers. Provisions in the Plan for adjustment with respect to stock subject to options and the related provisions with respect to successors to the business of the Company are hereby made applicable hereunder and are incorporated herein by reference. In general, you should not assume that options necessarily would survive the acquisition of the Company. In particular, without affecting the generality of the foregoing, it is understood that for the purposes of Articles 3 through 5 hereof, both inclusive, employment by the Company includes employment by a Related Corporation as defined in the Plan. 15. Early Disposition. The Employee agrees to notify the Company in writing immediately after the Employee makes a Disqualifying Disposition of any Common Stock received pursuant to the exercise of this option. A Disqualifying Disposition is any disposition (including any sale) of such Common Stock before the later of (a) two years after the date the Employee was granted this option or (b) one year after the date the Employee acquired Common Stock by exercising this option. If the Employee has died before such stock is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter. The Employee also agrees to provide the Company with any information which it shall request concerning any such disposition. The Employee acknowledges that he or she will forfeit the favorable income tax treatment otherwise available with respect to the exercise of this incentive stock option if he or she makes a Disqualifying Disposition of the stock received on exercise of this option. 16. Withholding Taxes. If the Company in its discretion determines that it is obligated to withhold tax with respect to a Disqualifying Disposition (as defined in Article 15) of Common Stock received by the Employee on exercise of this option, the Employee hereby agrees that the Company may withhold from the Employee's wages the appropriate amount of federal, state and local withholding taxes attributable to such Disqualifying Disposition. If any portion of this option is treated as a Non-Qualified Option, the Employee hereby agrees that the Company may withhold from the Employee's wages the appropriate amount of federal, state and local withholding taxes attributable to the Employee's exercise of such Non-Qualified Option. At the Company's discretion, the amount required to be withheld may be withheld in cash from such wages, or (with respect to compensation income attributable to the exercise of this option) in kind from the Common Stock otherwise deliverable to the optionee on exercise of this Option. The Employee further agrees that, if the Company does not withhold an amount from the Employee's wages sufficient to satisfy the Company's withholding obligation, the Employee will reimburse the Company on demand, in cash, for the amount underwithheld. 17. Company's Right of First Refusal. (a) Exercise of Right: If the Employee desires to sell all or any part of the shares acquired under this option (including any securities received in respect thereof pursuant to any stock dividend, stock split, reclassification, reorganization, recapitalization or the like), and an offeror (the "Offeror") has made an offer therefor, which offer the Employee desires to accept, the Employee shall: (i) obtain in writing an irrevocable and unconditional bona fide offer (the "Bona Fide Offer") for the purchase thereof from the Offeror; and (ii) give written notice (the "Option Notice") to the Company setting forth his or her desire to sell such shares, which Option Notice shall be accompanied by a photocopy of the original executed Bona Fide Offer and shall set forth at least the name and address of the Offeror and the price and terms of the Bona Fide Offer. Upon receipt of the Option Notice, the Company shall have an assignable option to purchase any or all of such shares (the "Option Shares") specified in the Option Notice, such option to be exercisable by giving, within 30 days after receipt of the Option Notice, a written counter-notice to the Employee. If the Company elects to purchase any or all of such Option Shares, it shall be obligated to purchase, and the Employee shall be obligated to sell to the Company, such Option Shares at the price and terms indicated in the Bona Fide Offer within 60 days from the date of receipt by the Company of the Option Notice. (b) Sale of Option Shares to Offeror: The Employee may sell, pursuant to the terms of the Bona Fide Offer, any or all of such Option Shares not purchased or agreed to be purchased by the Company for 60 days after the expiration of the 30- day period during which the Company may give the aforesaid counter-notice; provided, however, that the Employee shall not sell such Option Shares to the Offeror if the Offeror is a competitor of the Company and the Company gives written notice to the Employee, within 30 days of its receipt of the Option Notice, stating that the Employee shall not sell his or her Option Shares to the Offeror; and provided, further, that prior to the sale of such Option Shares to the Offeror, the Offeror shall execute an agreement with the Company pursuant to which the Offeror agrees to be subject to the restrictions set forth in this Article 17. If any or all of such Option Shares are not sold pursuant to a Bona Fide Offer within the time permitted above, the unsold Option Shares shall remain subject to the terms of this Article 17. (c) Adjustments for Changes in Capital Structure: If there shall be any change in the Common Stock of the Company through merger, consolidation, reorganization, recapitalization, stock dividend, split-up, combination or exchange of shares or the like, the restrictions contained in this Article 17 shall apply with equal force to additional or substitute securities, if any, received by the Employee in exchange for, or by virtue of his or her ownership of, Option Shares. (d) Failure to Deliver Option Shares: In the event the Employee fails or refuses to deliver on a timely basis duly endorsed certificates representing Option Shares to be sold to the Company pursuant to this Article 17, the Company shall have the right to deposit the purchase price for the Option Shares in a special account with any bank or trust company in the State of New Hampshire giving notice of such deposit to the Employee, whereupon such Option Shares shall be deemed to have been purchased by the Company. All such monies shall be held by the bank or trust company for the benefit of the Employee. All monies deposited with the bank or trust company but remaining unclaimed for two (2) years after the date of deposit shall be repaid by the bank or trust company to the Company on demand, and the Employee shall thereafter look only to the Company for payment. The Company may place a legend on any stock certificate delivered to the Employee reflecting the restrictions on transfer provided in this Article 17. (e) Expiration of Company's Right of First Refusal: The refusal rights of the Company set forth above shall remain in effect until such time, if ever, when there is a registration of any of the Company's stock under the Exchange Act or the Company otherwise becomes subject to the reporting requirements of the Exchange Act, at which time the refusal rights of the Company set forth herein will automatically expire. 18. No Exercise of Option if Employment Terminated for Misconduct. If the employment of the Employee is terminated for "Misconduct," this option shall terminate on the date of such termination of employment and shall thereupon not be exercisable to any extent whatsoever. "Misconduct" is conduct, as determined by the Board of Directors, involving one or more of the following: (i) the substantial and continuing failure of the Employee to render services to the Company in accordance with his or her assigned duties; (ii) a determination by two-thirds of the members of the Board of Directors that the Employee has inadequately performed the duties of his or her employment; (iii) disloyalty, gross negligence, dishonesty or breach of fiduciary duty to the Company; (iv) the commission of an act of embezzlement, fraud, disloyalty, dishonesty or deliberate disregard of the rules or policies of the Company which results in loss, damage or injury to the Company, whether directly or indirectly; (v) the unauthorized disclosure of any trade secret or confidential information of the Company; or (vi) the commission of an act which constitutes unfair competition with the Company or which induces any customer of the Company to break a contract with the Company. In making such determination, the Board of Directors shall act fairly and in utmost good faith and shall give the Employee an opportunity to appear and to be heard at a hearing before the Board of Directors or any Committee and present evidence on his or her behalf. For the purposes of this Article 18, termination of employment shall be deemed to occur when the Employee receives notice that his or her employment is terminated. 19. Company's Right of Repurchase. (a) Rights of Repurchase. If any of the events specified in Article 19(b) below occur, then: (i) with respect to shares acquired upon exercise of this option prior to the occurrence of such event, within 60 days after the Company receives actual knowledge of the event, and (ii) with respect to shares acquired upon exercise of this option after the occurrence of such event, within 60 days following the later of the date of such exercise or the date the Company receives actual knowledge of such event, (in either case, the "Repurchase Period"), the Company shall have the option, but not the obligation, to repurchase all, but not a portion of, such shares from the Employee, or his or her guardian or legal representatives, as the case may be (the "Repurchase Option"). The Repurchase Option shall be exercised by the Company by giving the Employee, or his or her guardian or legal representatives, written notice of its intention to exercise the Repurchase Option on or before the last day of the Repurchase Period, and, together with such notice, tendering to the Employee, or his or her guardian or legal representatives, an amount equal to the aggregate option exercise price with respect to such shares. The Company may, in exercising the Repurchase Option, designate one or more nominees, whether or not affiliated with or employed by the Company, to purchase the shares. Upon timely exercise of the Repurchase Option in the manner provided in this Article 19(a), the Employee, or his or her guardian or legal representatives, shall deliver to the Company the stock certificate or certificates representing the shares being repurchased, duly endorsed and free and clear of any and all liens, charges and encumbrances. If shares are not purchased under the Repurchase Option, the Employee and his or her successor in interest, if any, will hold any such shares in his or her possession subject to all of the provisions of this Agreement. (b) Company's Right to Exercise Repurchase Option: The Company shall have the Repurchase Option in the event that any of the following events shall occur: (i) the termination of the Employee's employment with the Company or any Related Corporation, voluntarily or involuntarily, for any reason whatsoever, including death or permanent disability, prior to the time this option shall be fully vested as provided in Article 3 hereof; (ii) the receivership, bankruptcy or other creditor's proceeding regarding the Employee or the taking of any of Employee's shares acquired upon exercise of this option by legal process, such as a levy of execution; (iii) distribution of shares held by the Employee to his or her spouse as such spouse's joint or community interest pursuant to a decree of dissolution, operation of law, divorce, property settlement agreement or for any other reason, except as may be otherwise permitted by the Company; or (iv) the termination of the Employee's employment by the Company for Misconduct. (c) Determination of Fair Market Value: The fair market value of the shares subject to this option shall be, for purposes of this Article 19, an amount per share determined on the basis of the price at which shares of the Common Stock could reasonably be expected to be sold in an arms-length transaction, for cash, other than on an installment basis, to a person not employed by, controlled by, in control of or under common control with the Company. Fair market value shall be determined by the Board of Directors, giving due consideration to recent grants of ISOs for shares of Common Stock, recent transactions involving shares of the Common Stock, if any, earnings of the Company, the effect of the transfer restrictions to which the shares are subject under law and this Agreement, the absence of a public market for the Common Stock and such other matters as the Board of Directors deems pertinent. The determination by the Board of Directors of the fair market value shall be conclusive and binding. The fair market value of the shares shall be determined as of the day on which the event occurs. (d) Expiration of Company's Repurchase Option. The Company's Repurchase Option set forth above shall remain in effect until such time, if ever, when there is a registration of any of the Company's stock under the Exchange Act or the Company otherwise becomes subject to the reporting requirements of the Exchange Act, at which time the Repurchase Option of the Company set forth herein will automatically expire. 20. Lock-up Agreement. In the event of an underwritten public offering of the Company's securities, the Employee (or any permitted transferee pursuant to Article 10), whether or not such Employee's shares issuable upon exercise of the option granted herein are included in such registration, hereby agrees not to effect any public sale or distribution, including any sale pursuant to Rule 144 under the Act, of any equity securities of the Company (other than as part of such underwritten offering), without the consent of the managing underwriter(s) for such offering (the "Managing Underwriter"), during a period commencing on the effective date of such registration and ending 180 calendar days thereafter, or such lesser period as the Board of Directors and the Managing Underwriter shall reasonably determine is required to effect a successful offering. 21. Incorporation of Plan. The Plan is hereby incorporated herein by reference and made a part hereof and the option and this Agreement are subject to all terms and conditions of the Plan. 22. Provision of Documentation to Employee. By signing this Agreement, the Employee acknowledges receipt of a copy of this Agreement and a copy of the Plan. 23. Failure to Enforce Not a Waiver. The failure of the Company to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof. 24. Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Vermont, without regard to the conflicts of laws provisions thereof. 25. Counterparts. This Agreement may be executed in counterparts, each of which shall be an original but all of which shall represent one and the same agreement. IN WITNESS WHEREOF, the Company and the Employee have caused this Agreement to be executed, and the Employee whose signature appears below acknowledges receipt of a copy of the Plan incorporated herein by reference and acceptance of an original copy of the Agreement. ROCK OF AGES CORPORATION By: /s/ Richard C. Kimball Name: Richard C. Kimball Title: Kurt M. Swenson Employee Kurt M. Swenson Print Name of Employee 336 Putney Hill Road Street Address Hopkinton, N.H. 03229 City State Zip Code -----END PRIVACY-ENHANCED MESSAGE-----