**UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549**

**FORM 10-K**

**(MARK ONE)**

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

**FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001**

**OR**

**oTRANSITION 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 ROADGRANITEVILLE,
      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 EXCHANGEON 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.



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|**TABLE OF
      CONTENTS**
|---------------------------
|                           
|**PART I**                 
|ITEM  1.                   
|ITEM  2.                   
|ITEM  3.                   
|ITEM  4.                   
|**PART
      II**          
|ITEM  5.                   
|ITEM  6.                   
|ITEM  7.                   
|ITEM  7                    
|ITEM  8.                   
|ITEM  9.                   
|**PART
      III**         
|ITEM 10.                   
|ITEM 11.                   
|ITEM 12.                   
|ITEM 13.                   
|**PART
      IV**          
|ITEM 14.                   
|                           
|                           

2

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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

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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

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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

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**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

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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.

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|**QUARRY**           | **APPROXIMATE DATE OFCOMMENCEMENTOF
      OPERATIONS** | **PRIOR
      OWNER(DATE ACQUIRED)**                                       | **MEANSOF
      ACCESS** | **TOTAL
      ORIGINAL COSTOF 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. HookerWilliam 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

---



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

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**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**
|               |         
|First Quarter  | 9  1/2  
|Second Quarter | 5 3/4   
|Third Quarter  | 6 1/4   
|Fourth Quarter | 6 1/8   
|               |         
|               | **2001**
|               | **HIGH**
|               |         
|First Quarter  | 5 2/5   
|Second Quarter | 5 1/4   
|Third Quarter  | 6 1/9   
|Fourth Quarter | 5 2/5   

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

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**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,
|------------------------------------------------------------------------- |  | -----------------------
|
|
|                                                                          |  |                        
|STATEMENT OF OPERATIONS DATA:                                             |  |                        
|Net revenues:                                                             |  |                        
|Quarrying                                                                 |  | $                      
|Manufacturing                                                             |  |                        
|Retailing                                                                 |  |                        
|Cemeteries                                                                |  |                        
|Total net revenues                                                        |  |                        
|                                                                          |  |                        
|Gross Profit:                                                             |  |                        
|Quarrying                                                                 |  |                        
|Manufacturing                                                             |  |                        
|Retailing                                                                 |  |                        
|Cemeteries                                                                |  |                        
|Total gross profit                                                        |  |                        
|                                                                          |  |                        
|Selling, general and administrative expenses                              |  |                        
|Loss on disposal of assets                                                |  |                        
|Income from operations                                                    |  |                        
|Interest expense                                                          |  |                        
|Income before provision for income taxes                                  |  |                        
|Provision for income taxes                                                |  |                        
|Net income before cumulative effect of a change in accounting   principle |  | $                      
|Net income per share                                                      |  | $                      
|Net income per share assuming dilution                                    |  | $                      
|Weighted average number of shares outstanding                             |  |                        
|Weighted average number of shares oustanding assuming dilution            |  |                        





|                                          |  | AS OF DECEMBER 31,
|----------------------------------------- |  | ------------------
|
|                                          |  |                   
|BALANCE SHEET DATA:                       |  |                   
|Cash and cash equivalents                 |  | $                 
|Working capital                           |  |                   
|Total assets                              |  |                   
|Long-term debt, net of current maturities |  |                   
|Stockholders' equity                      |  |                   

10

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**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

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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 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. 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 during 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

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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,
|------------------------------------------ |  | -----------------------
|                                           |  |                        
|STATEMENTS OF OPERATIONS DATA:             |  |                        
|Net Revenues:                              |  |                        
|Quarrying                                  |  |                        
|Manufacturing                              |  |                        
|Retailing                                  |  |                        
|Cemeteries                                 |  |                        
|                                           |  |                        
|Total net revenues                         |  |                        
|GROSS PROFIT:                              |  |                        
|Quarrying                                  |  |                        
|Manufacturing                              |  |                        
|Retailing                                  |  |                        
|Cemeteries                                 |  |                        
|                                           |  |                        
|Total gross profit                         |  |                        
|Selling, general & administrative expenses |  |                        
|Loss on disposal of assets                 |  |                        
|Income from operations                     |  |                        
|Interest expense                           |  |                        
|Income before provision for income taxes   |  |                        
|Provision for income taxes                 |  |                        
|Net Income                                 |  |                        
|                                           |  |                        

13

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**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 from 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 sales. 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.



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 assets.

*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

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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      |  |   |            |  
|-------------------- | - | ---------- |  | - | ---------- | -
|
|
|                     |   |            |  |   |            |  
|Long-Term Debt       | $ | 14,993,815 |  | $ | 14,671,315 | $
|Operating Leases     |   | 2,381,481  |  |   | 1,099,062  |  
|Purchase Obligations |   | 21,000,000 |  |   | 3,000,000  |  
|                     |   |            |  |   |            |  
|Total Obligations    | $ | 38,375,296 |  | $ | 18,770,377 | $

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 over 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 fair 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

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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

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**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

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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

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**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 COMPENSATIONSALARY        BONUS |         | LONG-TERMCOMPENSATIONSECURITIESUNDERLYING OPTIONS(#) |   | ALL OTHERCOMPENSATION | 
|------------------------------------------- |  | ---- |  | -------------------------------------- | ------- | ---------------------------------------------------- | - | --------------------- | 
|Kurt M. Swenson                             |  | 2001 |  | $                                      | 360,000 |                                                      | $ | 30,000                | 
|Chief Executive Officer and Chairman of the |  | 2000 |  | $                                      | 340,080 |                                                      | $ | 0                     | 
|Board of Directors                          |  | 1999 |  | $                                      | 340,080 |                                                      | $ | 0                     | 
|                                            |  |      |  |                                        |         |                                                      |   |                       | 
|John L. Forney                              |  | 2001 |  | $                                      | 250,008 |                                                      | $ | 40,000                | 
|President and Chief Operating               |  | 2000 |  | $                                      | 192,000 |                                                      | $ | 0                     | 
|Officer/Memorials Division, Director        |  | 1999 |  | $                                      | 185,040 |                                                      | $ | 0                     | 
|                                            |  |      |  |                                        |         |                                                      |   |                       | 
|Richard C. Kimball                          |  | 2001 |  | $                                      | 240,000 |                                                      | $ | 30,000                | 
|Chief Strategic and Marketing Officer       |  | 2000 |  | $                                      | 240,000 |                                                      | $ | 0                     | 
|Director                                    |  | 1999 |  | $                                      | 240,000 |                                                      | $ | 0                     | 
|                                            |  |      |  |                                        |         |                                                      |   |                       | 
|Jon M. Gregory                              |  | 2001 |  | $                                      | 230,307 |                                                      | $ | 40,000                | 
|President and Chief Operating               |  | 2000 |  | $                                      | 192,000 |                                                      | $ | 0                     | 
|Officer/Quarries Division, Director         |  | 1999 |  | $                                      | 185,040 |                                                      | $ | 0                     | 
|                                            |  |      |  |                                        |         |                                                      |   |                       | 
|Terry Shipp                                 |  | 2001 |  | $                                      | 180,331 |                                                      | $ | 15,000                | 
|Vice President/Sales                        |  | 2000 |  | $                                      |        |                                                      | $ |                      | 
|and Marketing                               |  | 1999 |  | $                                      |        |                                                      | $ |                      | 





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



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 |        |  |        | 
|------------------ |  | ------ |  | - | ------ | ------------------------------------------------------------------------ | ------ |  | ------ | 
|
|
|
|                   |  |        |  |   |        |                                                                          |        |  |        | 
|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 | 
|Terry Shipp        |  |       |  | $ |       |                                                                          | 5,000  |  | 10,000 | 

(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

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**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 AVERAGECOMPENSATION** | **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
      BASECOMPENSATION** | **TOTAL YEARSOF
      SERVICEAT AGE 65** | **ANNUALRETIREMENTBENEFITAT 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

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**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

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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 OFCLASS** | **NUMBER (2)** | **CLASS (2)**
|------------------------------------------------------------------ | ---------- | ------------------- | -------------- | -------------
|
|                                                                   |            |                     |                |              
|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
    iConsolidated Balance Sheets
    iiConsolidated Statements
      of Operations
    ivConsolidated Statements of Stockholders'
      Equity and Comprehensive Income
    vConsolidated Statements
      of Cash Flows
    viNotes to Consolidated Financial
      Statements
    viiiSupplementary
      Information:Independent Auditors' Report on
      Supplementary Information
    xxxSchedule 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, 2002Boston, Massachusetts
i**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**Consolidated Balance
SheetsDecember 31, 2001 and
2000

|ASSETS (note 6)                                                                                                    |  | 2001 |             | 2000 |  
|------------------------------------------------------------------------------------------------------------------ |  | ---- | ----------- | ---- | -
|Current assets:                                                                                                    |  |      |             |      |  
|Cash and cash equivalents                                                                                          |  | $    | 3,435,181   |      | $
|Trade receivables,less allowance for doubtful accounts of $1,547,923 in 2001 and       $1,303,054 in 2000 (note 5) |  |      | 16,119,068  |      |  
|Due from affiliates (note 11)                                                                                      |  |      | 102,554     |      |  
|Inventories (notes 2 and 5)                                                                                        |  |      | 22,680,187  |      |  
|Income taxes receivable                                                                                            |  |      | 12,974      |      |  
|Deferred tax assets (note 8)                                                                                       |  |      | 694,000     |      |  
|Assets held for sale(note 16)                                                                                      |  |      | 2,546,216   |      |  
|Other current assets                                                                                               |  |      | 4,103,375   |      |  
|                                                                                                                   |  |      |             |      |  
|Total current assets                                                                                               |  |      | 49,693,555  |      |  
|                                                                                                                   |  |      |             |      |  
|                                                                                                                   |  |      |             |      |  
|Property,Plant and Equipment:                                                                                      |  |      |             |      |  
|Granite reserves and development costs                                                                             |  |      | 15,838,230  |      |  
|Land                                                                                                               |  |      | 9,123,662   |      |  
|Buildings and improvements                                                                                         |  |      | 14,465,284  |      |  
|Machinery and equipment                                                                                            |  |      | 25,726,213  |      |  
|Furniture and fixtures                                                                                             |  |      | 1,667,789   |      |  
|Construction-in-process                                                                                            |  |      | 80,923      |      |  
|                                                                                                                   |  |      |             |      |  
|                                                                                                                   |  |      | 66,902,101  |      |  
|Less accumulated depreciation, depletion and amortization                                                          |  |      | 23,758,832  |      |  
|                                                                                                                   |  |      |             |      |  
|Net property, plant and equipment                                                                                  |  |      | 43,143,269  |      |  
|                                                                                                                   |  |      |             |      |  
|Other assets:                                                                                                      |  |      |             |      |  
|Cash surrender value of life insurance, net loans of $65,217 in 2001 and $95,412        2000 and 1999              |  |      | 811,139     |      |  
|Intangibles, less accumulated amortization of $4,667,568 in 2001 and $3,326,578 in        2000 (note 3)            |  |      | 34,492,234  |      |  
|Debt issuance costs, less accumulated amortization of $175,819 in 2001 and       $133,194 in 2000                  |  |      | 50,225      |      |  
|Due from affiliates (note 11)                                                                                      |  |      | 128,928     |      |  
|Deferred tax assets (note 8)                                                                                       |  |      | 873,000     |      |  
|Intangible pension asset (note 9)                                                                                  |  |      | 221,869     |      |  
|Prearranged receivables (note 1)                                                                                   |  |      | 15,388,492  |      |  
|Cemetery property, at cost (note 1)                                                                                |  |      | 5,997,568   |      |  
|Other                                                                                                              |  |      | 2,992,559   |      |  
|                                                                                                                   |  |      |             |      |  
|Total other assets                                                                                                 |  |      | 60,956,014  |      |  
|                                                                                                                   |  |      |             |      |  
|                                                                                                                   |  |      |             |      |  
|Total assets                                                                                                       |  | $    | 153,792,838 |      | $
|                                                                                                                   |  |      |             |      |  

See accompanying notes to consolidated financial statements

ii

---

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**Consolidated Balance
SheetsDecember 31, 2001 and
2000

|LIABILITIES AND STOCKHOLDERS' EQUITY                    |  | 2001 |             | 2000 |  
|------------------------------------------------------- |  | ---- | ----------- | ---- | -
|                                                        | 
|Current liabilities:                                    |  |      |             |      |  
|Borrowings under lines of credit (note 5)               |  | $    | 3,970,402   |      | $
|Current installments of long-term debt (note 6)         |  |      | 14,671,315  |      |  
|Deferred compensation payable (note 9)                  |  |      | 278,649     |      |  
|Trade payables                                          |  |      | 1,945,625   |      |  
|Accrued expenses                                        |  |      | 5,236,561   |      |  
|Income taxes payable                                    |  |      | 85,875      |      |  
|Customer deposits                                       |  |      | 6,711,080   |      |  
|                                                        |  |      |             |      |  
|Total current liabilities                               |  |      | 32,899,507  |      |  
|                                                        |  |      |             |      |  
|Long-term debt, excluding current installments (note 6) |  |      | 322,500     |      |  
|Deferred compensation (note 9)                          |  |      | 4,070,923   |      |  
|Prearranged deferred revenue                            |  |      | 24,224,212  |      |  
|Deferred tax liability(note 8)                          |  |      |            |      |  
|Accrued pension cost (note 9)                           |  |      | 390,987     |      |  
|Accrued postretirement benefit cost(note 9)             |  |      | 779,093     |      |  
|Other                                                   |  |      | 1,435,904   |      |  
|                                                        |  |      |             |      |  
|Total liabilities                                       |  |      | 64,122,496  |      |  
|                                                        |  |      |             |      |  
|                                                        |  |      |             |      |  
|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      |      |  
|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      |      |  
|Additional paid-in capital                              |  |      | 69,066,548  |      |  
|Retained earnings                                       |  |      | 21,473,481  |      |  
|Accumulated other comprehensive income                  |  |      | (947,701    | )    |  
|                                                        |  |      |             |      |  
|Total stockholders' equity                              |  |      | 89,670,342  |      |  
|                                                        |  |      |             |      |  
|Total liabilities and stockholders' equity              |  | $    | 153,792,838 |      | $
|                                                        |  |      |             |      |  

See accompanying notes to consolidated financial statements

iii

---

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

|                                                                                                                  |  | 2001 |            | 2000 |   | 1999       | 
|----------------------------------------------------------------------------------------------------------------- |  | ---- | ---------- | ---- | - | ---------- | 
|Net revenues:                                                                                                     |  |      |            |      |   |            | 
|Quarrying                                                                                                         |  | $    | 25,774,536 |      | $ | 22,886,916 | 
|Manufacturing                                                                                                     |  |      | 22,227,965 |      |   | 27,183,417 | 
|Retailing                                                                                                         |  |      | 43,159,474 |      |   | 40,622,169 | 
|Cemeteries                                                                                                        |  |      | 3,142,682  |      |   |           | 
|                                                                                                                  |  |      |            |      |   |            | 
|Total net revenues                                                                                                |  |      | 94,304,657 |      |   | 90,692,502 | 
|                                                                                                                  |  |      |            |      |   |            | 
|                                                                                                                  |  |      |            |      |   |            | 
|Cost of revenues:                                                                                                 |  |      |            |      |   |            | 
|Quarrying                                                                                                         |  |      | 14,427,461 |      |   | 13,015,779 | 
|Manufacturing                                                                                                     |  |      | 16,806,213 |      |   | 20,382,475 | 
|Retailing                                                                                                         |  |      | 17,698,738 |      |   | 18,233,141 | 
|Cemeteries                                                                                                        |  |      | 2,324,238  |      |   |           | 
|                                                                                                                  |  |      |            |      |   |            | 
|Total cost of revenues                                                                                            |  |      | 51,256,650 |      |   | 51,631,395 | 
|                                                                                                                  |  |      |            |      |   |            | 
|                                                                                                                  |  |      |            |      |   |            | 
|Gross profit:                                                                                                     |  |      |            |      |   |            | 
|Quarrying                                                                                                         |  |      | 11,347,075 |      |   | 9,871,137  | 
|Manufacturing                                                                                                     |  |      | 5,421,752  |      |   | 6,800,942  | 
|Retailing                                                                                                         |  |      | 25,460,736 |      |   | 22,389,028 | 
|Cemeteries                                                                                                        |  |      | 818,444    |      |   |           | 
|                                                                                                                  |  |      |            |      |   |            | 
|Total gross profit                                                                                                |  |      | 43,048,007 |      |   | 39,061,107 | 
|                                                                                                                  |  |      |            |      |   |            | 
|                                                                                                                  |  |      |            |      |   |            | 
|Selling, general and administrative expenses                                                                      |  |      | 36,706,809 |      |   | 33,163,621 | 
|Loss on disposal of assets (note 16)                                                                              |  |      | 2,534,091  |      |   |           | 
|                                                                                                                  |  |      |            |      |   |            | 
|                                                                                                                  |  |      |            |      |   |            | 
|Income from operations                                                                                            |  |      | 3,807,107  |      |   | 5,897,486  | 
|                                                                                                                  |  |      |            |      |   |            | 
|Interest expense                                                                                                  |  |      | 1,757,929  |      |   | 2,143,226  | 
|                                                                                                                  |  |      |            |      |   |            | 
|                                                                                                                  |  |      |            |      |   |            | 
|Income before provision for income taxes and cumulative effect          of a change in accounting principle       |  |      | 2,049,178  |      |   | 3,754,260  | 
|                                                                                                                  |  |      |            |      |   |            | 
|Provision for income taxes (note 8)                                                                               |  |      | 1,616,400  |      |   | 1,290,764  | 
|                                                                                                                  |  |      |            |      |   |            | 
|                                                                                                                  |  |      |            |      |   |            | 
|Net income before cumulative effect of a change in accounting          principle                                  |  |      | 423,778    |      |   | 2,463,496  | 
|                                                                                                                  |  |      |            |      |   |            | 
|Cumulative effect in prior years of a change in accounting principal    (net of tax benefit of $47,559) (Note 17) |  |      |           |      |   |           | 
|                                                                                                                  |  |      |            |      |   |            | 
|Net income                                                                                                        |  | $    | 432,778    |      | $ | 2,463,496  | 
|                                                                                                                  |  |      |            |      |   |            | 
|                                                                                                                  |  |      |            |      |   |            | 
|Net income per share - basic:                                                                                     |  |      |            |      |   |            | 
|Net income before cumulative effect of a change in accounting       principle                                     |  | $    | 0.06       |      | $ | 0.33       | 
|Cumulative effect in prior year of change in accounting principle      (net of tax benefit of $47,599)            |  |      |           |      |   |           | 
|                                                                                                                  |  |      |            |      |   |            | 
|Net income per share                                                                                              |  | $    | 0.06       |      | $ | 0.33       | 
|                                                                                                                  |  |      |            |      |   |            | 
|                                                                                                                  |  |      |            |      |   |            | 
|Net income per share - diluted:                                                                                   |  |      |            |      |   |            | 
|Net income before cumulative effect of a change in accounting       principle                                     |  | $    | 0.06       |      | $ | 0.33       | 
|Cumulative effect in prior year of change in accounting principle      (net of tax benefit of $47,599)            |  |      |           |      |   |           | 
|                                                                                                                  |  |      |            |      |   |            | 
|Net income per share                                                                                              |  | $    | 0.06       |      | $ | 0.33       | 
|                                                                                                                  |  |      |            |      |   |            | 
|Weighted average number of shares outstanding - basic                                                             |  |      | 7,605,785  |      |   | 7,447,460  | 
|Weighted average number of shares outstanding - diluted                                                           |  |      | 7,675,990  |      |   | 7,575,839  | 

See accompanying
notes to consolidated financial statements

iv

---

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

|                              |                                   | NUMBER OF SHARES
ISSUED AND OUTSTANDING |           |  |           |           |   |        |        |   |        |        |   |            |           
|----------------------------- | --------------------------------- | --------------------------------------- | --------- |  | --------- | --------- | - | ------ | ------ | - | ------ | ------ | - | ---------- | ----------
|
|
|
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|Balance at December 31, 1998  |                                   | 3,896,178                               |           |  | 3,484,957 |           |   | 38,962 |        |   | 34,849 |        |   | 69,350,225 |           
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|Comprehensive income:         |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|                              | Net income                        |                                         |          |  |           |          |   |        |       |   |        |       |   |            |          
|                              | Cumulative translation adjustment |                                         |          |  |           |          |   |        |       |   |        |       |   |            |          
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|Total comprehensive income    |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|Retirement of stock           |                                   | (1,000                                  | )         |  |          |           |   | (10    | )      |   |       |        |   |           |           
|Conversion of common stock    |                                   | 380,370                                 |           |  | (380,370  | )         |   | 3,804  |        |   | (3,804 | )      |   |           |           
|Exercise of options           |                                   |                                        |           |  | 274,600   |           |   |       |        |   | 2,746  |        |   | 716,117    |           
|Repurchase of stock (note 16) |                                   |                                        |           |  | (263,441  | )         |   |       |        |   | (2,634 | )      |   | (2,796,427 | )         
|Acquisitions (note 15)        |                                   | 52,623                                  |           |  |          |           |   | 526    |        |   |       |        |   | 639,460    |           
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|Balance at December 31, 1999  |                                   | 4,328,171                               |           |  | 3,115,746 |           | $ | 43,282 |        | $ | 31,157 |        | $ | 67,909,375 | $         
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|Comprehensive income:         |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|                              | Net income                        |                                         |          |  |           |          |   |        |       |   |        |       |   |            |          
|                              | Cumulative translation adjustment |                                         |          |  |           |          |   |        |       |   |        |       |   |            |          
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|Total comprehensive income    |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|Conversion of common stock    |                                   | 343,626                                 |           |  | (343,626  | )         |   | 3,436  |        |   | (3,436 | )      |   |           |           
|Exercise of options           |                                   |                                        |           |  | 84,318    |           |   |       |        |   | 843    |        |   | 303,257    |           
|Repurchase of stock           |                                   | (6,578                                  | )         |  | (30,000   | )         |   | (66    | )      |   | (300   | )      |   | (216,405   | )         
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|                              | Balance at December 31, 2000      |                                         | 4,665,219 |  |           | 2,826,438 |   | $      | 46,852 |   | $      | 28,264 |   | $          | 67,996,227
|Comprehensive income:         |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|                              | Net income                        |                                         |          |  |           |          |   |        |       |   |        |       |   |            |          
|                              | Cumulative translation adjustment |                                         |          |  |           |          |   |        |       |   |        |       |   |            |          
|                              | Minimum pension liability         |                                         |          |  |           |          |   |        |       |   |        |       |   |            |          
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|Total comprehensive income    |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|Conversion of common stock    |                                   | 359,999                                 |           |  | (359,999  | )         |   | 3,600  |        |   | (3,600 | )      |   |           |           
|Exercise of options           |                                   |                                        |           |  | 320,582   |           |   |       |        |   | 3,206  |        |   | 1,186,421  |           
|Repurchase of stock           |                                   | (10,810                                 | )         |  |          |           |   | (108   | )      |   |       |        |   | (116,100   | )         
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           
|                              | Balance at December 31, 2001      |                                         | 5,104,408 |  |           | 2,787,021 |   | $      | 50,144 |   | $      | 27,870 |   | $          | 69,066,548
|                              |                                   |                                         |           |  |           |           |   |        |        |   |        |        |   |            |           

See
accompanying notes to consolidated financial statements.

v

---

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

|                                                                                          |  |   |           
|----------------------------------------------------------------------------------------- |  | - | ----------
|
|Cash Flows From Operating Activities:                                                     |  |   |           
|Net income                                                                                |  | $ | 432,778   
|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 
|Write down of goodwill                                                                    |  |   |          
|Decrease (increase) in cash surrender value of life insurance                             |  |   | 788,348   
|Loss on assets held for sale                                                              |  |   | 800,003   
|Loss on sale of property, plant and equipment                                             |  |   | 196,905   
|Cumulative effect of a change in accounting principle                                     |  |   |          
|Deferred taxes                                                                            |  |   | (72,092   
|Changes in operating assets and liabilities:                                              |  |   |           
|Decrease (increase) in trade receivables                                                  |  |   | 1,643,054 
|Decrease (increase) in due to/from related parties                                        |  |   | 135,821   
|Decrease (increase) in inventories                                                        |  |   | (100,095  
|Decrease (increase) in other current assets                                               |  |   | 368,823   
|Decrease (increase) in tangible pension asset                                             |  |   | (102,386  
|Decrease in prearranged receivables                                                       |  |   | 449,714   
|Increase in cemetery property                                                             |  |   | (211,917  
|Decrease (increase) in other assets                                                       |  |   | (79,292   
|Increase (decrease) in payables                                                           |  |   | 258,203   
|Increase (decrease) in accruals                                                           |  |   | 1,612,702 
|Increase (decrease) in income taxes payable/receivable                                    |  |   | 594,160   
|Increase (decrease) in customer deposits                                                  |  |   | (56,457   
|Decrease in deferred compensation                                                         |  |   | 803,730   
|Decrease in deferred income                                                               |  |   |          
|Increase (decrease) in accrued pension cost                                               |  |   | (47,610   
|Increase in accrued postretirement benefit cost                                           |  |   | 73,556    
|Decrease in prearranged deferred revenue                                                  |  |   | (1,029,438
|Increase (decrease) in other liabilities                                                  |  |   | (1,083,457
|                                                                                          |  |   |           
|Net cash provided by operating activities                                                 |  |   | 11,570,838
|                                                                                          |  |   |           
|                                                                                          |  |   |           
|Cash flows from investing activities                                                      |  |   |           
|Purchases of property, plant and equipment                                                |  |   | (3,752,960
|Proceeds from sale of assets                                                              |  |   | 3,263,038 
|Decrease in other investments                                                             |  |   |          
|Acquisitions, net of cash acquired                                                        |  |   | (7,043,366
|Increase in intangible assets                                                             |  |   | (28,050   
|Cash included in sale of subsidiary                                                       |  |   |          
|                                                                                          |  |   |           
|Net cash used in investing activities                                                     |  |   | (7,561,338
|                                                                                          |  |   |           
|                                                                                          |  |   |           
|Cash flows from financing activities:                                                     |  |   |           
|Net borrowings (repayments) under lines of credit                                         |  |   | (6,369,858
|Decrease in debt issuance costs                                                           |  |   |          
|Proceeds from long-term debt                                                              |  |   |          
|Principal payments on long-term debt                                                      |  |   | (4,325,222
|Net stock option transactions                                                             |  |   | 1,073,419 
|                                                                                          |  |   |           
|Net cash provided by (used in) financing activities                                       |  |   | (9,621,661
|                                                                                          |  |   |           
|                                                                                          |  |   |           
|Effect of exchange rate exchanges on cash                                                 |  |   | (454,023  
|                                                                                          |  |   |           
|Net increase (decrease) in cash and cash equivalents                                      |  |   | (6,066,184
|                                                                                          |  |   |           
|Cash and cash equivalents, beginning of year                                              |  |   | 9,501,365 
|                                                                                          |  |   |           
|Cash and cash equivalents, end of year                                                    |  | $ | 3,435,181 
|                                                                                          |  |   |           
|                                                                                          |  |   |           

See accompanying notes to consolidated financial statements

vi

---

ROCK OF AGES CORPORATION AND SUBSIDIARIESConsolidated Statements of Cash Flows

|                                    |  |   |          
|----------------------------------- |  | - | ---------
|
|Supplemental cash flow information: |  |   |          
|Cash paid during the year for:      |  |   |          
|Interest                            |  | $ | 1,757,929
|Income taxes                        |  |   | 1,003,249

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.

|                               |  |   |            
|------------------------------ |  | - | -----------
|
|Acquisitions:                  |  |   |            
|Assets acquired                |  | $ | 34,560,804 
|Liabilities assumed and issued |  |   | (27,517,438
|Common stock issued            |  |   |           
|                               |  |   |            
|Cash paid                      |  |   | 7,043,366  
|Costs related to acquisitions  |  |   |           
|Less cash acquired             |  |   |           
|                               |  |   |            
|Net cash paid for acquisitions |  | $ | 7,043,366  
|                               |  |   |            

See accompanying notes to consolidated financial statements.

vii

---

**ROCK OF AGES CORPORATION AND
SUBSIDIARIES**Notes to Consolidated Financial
StatementsDecember 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
StatementsDecember 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
StatementsDecember 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
StatementsDecember 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 over 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 fair 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
StatementsDecember 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  |      | $
|Work-in-process             |  |      | 1,536,417  |      |  
|Finished goods and supplies |  |      | 11,193,989 |      |  
|                            |  |      |            |      |  
|                            |  | $    | 22,680,187 |      | $
|                            |  |      |            |      |  



**(3) 
Intangibles**

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

|                              |  |  |           
|----------------------------- |  |  | ----------
|
|Names and reputations         |  |  | 40 Years  
|Covenants not to compete      |  |  | 5-11 Years
|Trademarks and other          |  |  | 5-40 Years
|                              |  |  |           
|                              |  |  |           
|                              |  |  |           
|Less accumulated amortization |  |  |           
|                              |  |  |           
|Total                         |  |  |           
|                              |  |  |           

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
StatementsDecember 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:

|           |  |   |        
|---------- |  | - | -------
|
|2002       |  | $ | 422,384
|2003       |  |   | 321,181
|2004       |  |   | 157,764
|2005       |  |   | 76,800 
|2006       |  |   |       
|Thereafter |  |   |       
|           |  |   |        
|           |  | $ | 978,129
|           |  |   |        

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:

|     |  |  | 
|---- |  |  | 
|
|2002 |  |  | 
|2003 |  |  | 
|2004 |  |  | 
|2005 |  |  | 
|2006 |  |  | 
|     |  |  | 
|     |  |  | 
|     |  |  | 

*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
StatementsDecember 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
StatementsDecember 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     |      | $
|Note payable - Plante, interest at 8%, payable in monthly payments of $2,593 beginning February 2001,    unsecured, due January 2021                                                                                                 |  |      | 303,448    |      |  
|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    |      |  
|Note payable - Chrysler Financial, interest at 2.9%, payable in monthly installments of $598, due December   2001, secured by equipment                                                                                              |  |      |           |      |  
|Note payable - GMAC, interest at 4.9%, payable in monthly installments of $439, due February 2002, secured    by equipment                                                                                                           |  |      | 874        |      |  
|Note payable - GMAC, interest at 2.9%, payable in monthly installments of $716, due October 2002, secured   by equipment                                                                                                             |  |      | 7,070      |      |  
|Note payable - Harold, interest at 10%, payable in monthly installments of $4,366, due June 2001, secured   by property and equipment                                                                                                |  |      |           |      |  
|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 |      |  
|Note payable - PNC, interest at 8.95%, payable in monthly installments of $334, due July 2001, secured   by equipment                                                                                                                |  |      |           |      |  
|Note payable - Remsen Dodge, interest at 2.9%, payable in monthly installments of $598, due October 2002,   secured by equipment                                                                                                     |  |      |           |      |  
|Note payable - Ford Motor Credit Corp., interest at 2.9%, payable in monthly installments of $392, due   September 2002, secured by equipment                                                                                        |  |      | 3,462      |      |  
|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  |      |  
|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                                                                                                 |  |      |           |      |  
|                                                                                                                                                                                                                                     |  |      |            |      |  
|                                                                                                                                                                                                                                     |  |      | 14,993,815 |      |  
|Less current installments                                                                                                                                                                                                            |  |      | 14,671,315 |      |  
|                                                                                                                                                                                                                                     |  |      |            |      |  
|Long-term debt, excluding current installments                                                                                                                                                                                       |  | $    | 322,500    |      |  
|                                                                                                                                                                                                                                     |  |      |            |      |  

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

|           |  |   |           
|---------- |  | - | ----------
|
|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
StatementsDecember 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 | 
|Foreign                                  |  |      | 1,218,512 |      |   | 1,198,590 | 
|                                         |  |      |           |      |   |           | 
|Income before provision for income taxes |  | $    | 2,049,178 |      | $ | 3,754,260 | 
|                                         |  |      |           |      |   |           | 

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   |  
|State                                               |  |      | 191,057   |      |   | 197,003   |  
|Foreign                                             |  |      | 402,276   |      |   | 407,938   |  
|                                                    |  |      |           |      |   |           |  
|                                                    |  |      | 1,688,097 |      |   | 838,387   |  
|                                                    |  |      |           |      |   |           |  
|                                                    |  |      |           |      |   |           |  
|Deferred:                                           |  |      |           |      |   |           |  
|Federal                                             |  |      | (23,072   | )    |   | 295,969   |  
|State                                               |  |      | (12,462   | )    |   | 159,873   |  
|Foreign                                             |  |      | (36,163   | )    |   | (3,465    | )
|                                                    |  |      |           |      |   |           |  
|                                                    |  |      | (71,697   | )    |   | 452,377   |  
|                                                    |  |      |           |      |   |           |  
|                                                    |  |      |           |      |   |           |  
|Cumulative effect of change in accounting principle |  |      |          |      |   |          |  
|                                                    |  |      |           |      |   |           |  
|Total provision for income taxes                    |  | $    | 1,616,400 |      | $ | 1,290,764 |  
|                                                    |  |      |           |      |   |           |  

xviii

---

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**Notes to Consolidated Financial
StatementsDecember 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  |      | $
|Allowance for doubtful accounts                                                                                             |  |      | 280,000    |      |  
|Accrued expenses                                                                                                            |  |      | 428,000    |      |  
|Inventories, principally due to additional costs inventoried for tax purposes        pursuant to the Tax Reform Act of 1986 |  |      | 434,000    |      |  
|Prearranged deferred revenue                                                                                                |  |      | 3,654,000  |      |  
|Alternative minimum tax credits                                                                                             |  |      | 3,898,000  |      |  
|State net operating loss carryovers                                                                                         |  |      | 481,000    |      |  
|                                                                                                                            |  |      |            |      |  
|Total gross deferred tax assets                                                                                             |  |      | 10,591,000 |      |  
|Less valuation allowance                                                                                                    |  |      | (4,904,000 | )    |  
|                                                                                                                            |  |      |            |      |  
|Total net deferred tax assets                                                                                               |  |      | 5,687,000  |      |  
|                                                                                                                            |  |      |            |      |  
|                                                                                                                            |  |      |            |      |  
|Deferred tax liabilities:                                                                                                   |  |      |            |      |  
|Cemetery Property                                                                                                           |  |      | (2,134,000 | )    |  
|Quarry development                                                                                                          |  |      | (376,000   | )    |  
|Names and reputations                                                                                                       |  |      | (789,000   | )    |  
|Other liabilities                                                                                                           |  |      | (195,000   | )    |  
|Property and Equipment                                                                                                      |  |      | (626,000   | )    |  
|                                                                                                                            |  |      |            |      |  
|Total gross deferred tax liabilities                                                                                        |  |      | (4,120,000 | )    |  
|                                                                                                                            |  |      |            |      |  
|Net deferred tax assets                                                                                                     |  | $    | 1,567,000  |      |  
|                                                                                                                            |  |      |            |      |  

xviii

---

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**Notes to Consolidated Financial
StatementsDecember 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%   | 
|State taxes, net of federal benefit |  |      | 5.8%    |      |  | 6.3%    | 
|Names and reputations               |  |      | 7.7%    |      |  | 10.7%   | 
|Divesture                           |  |      | 62.0%   |      |  |        | 
|Change in valuation allowance       |  |      | 35.7%   |      |  | 22.0%   | 
|Other, primarily tax depletion      |  |      | (66.3%) |      |  | (38.6%) | 
|                                    |  |      |         |      |  |         | 
|                                    |  |      |         |      |  |         | 
|Effective tax rate                  |  |      | 78.9%   |      |  | 34.4%   | 
|                                    |  |      |         |      |  |         | 

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
StatementsDecember 31, 2001, 2000 and 1999

|                                                                  |   | NON-UNION
PENSION BENEFITS |   | DEFERRED
COMPENSATION BENEFITS |            | OTHER BENEFITS
|----------------------------------------------------------------- | - | -------------------------- | - | ------------------------------ | ---------- | --------------
|
|CHANGE IN BENEFIT OBLIGATION:                                     |   |                            |   |                                |            |               
|Benefit obligation at beginning of year                           | $ | 17,186,365                 |   | $                              | 16,228,960 | $             
|Service cost                                                      |   | 434,532                    |   |                                | 442,750    |               
|Interest cost                                                     |   | 1,229,210                  |   |                                | 1,200,929  |               
|Actuarial (gain)/loss                                             |   | (1,262                     | ) |                                | 263,320    |               
|Benefits paid                                                     |   | (957,118                   | ) |                                | (949,594)  |               
|                                                                  |   |                            |   |                                |            |               
|Benefit obligation at end of year                                 | $ | 17,891,727                 |   | $                              | 17,186,365 | $             
|                                                                  |   |                            |   |                                |            |               
|                                                                  |   |                            |   |                                |            |               
|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    |               
|Benefits paid                                                     |   | (957,118                   | ) |                                | (949,594)  |               
|                                                                  |   |                            |   |                                |            |               
|Fair value of plan assets at end of year                          | $ | 15,237,895                 |   | $                              | 16,329,219 | $             
|                                                                  |   |                            |   |                                |            |               
|                                                                  |   |                            |   |                                |            |               
|Funded status                                                     | $ | (2,653,832                 | ) | $                              | (857,146)  | $             
|Unrecognized net acturial (gain)/loss                             |   | 986,922                    |   |                                | (955,138)  |               
|Unrecognized prior service cost                                   |   | 1,110,509                  |   |                                | 1,104,029  |               
|Unrecognized transition obligation                                |   | 165,414                    |   |                                | 269,658    |               
|                                                                  |   |                            |   |                                |            |               
|Net amount recognized                                             | $ | (390,987                   | ) | $                              | (438,597)  | $             
|                                                                  |   |                            |   |                                |            |               
|                                                                  |   |                            |   |                                |            |               
|Amounts recognized in the consolidated balance sheet consists of: |   |                            |   |                                |            |               
|Accrued benefit liability                                         | $ | (390,987                   | ) | $                              | (438,597)  | $             
|Intangible asset                                                  |   |                           |   |                                |           |               
|Maximum liability adjustment                                      |   |                           |   |                                |           |               
|                                                                  |   |                            |   |                                |            |               
|Net amount recognized                                             | $ | (390,987                   | ) | $                              | (438,597)  | $             
|                                                                  |   |                            |   |                                |            |               
|                                                                  |   |                            |   |                                |            |               
|WEIGHTED-AVERAGE ASSUMPTIONS AS OF DECEMBER 31:                   |   |                            |   |                                |            |               
|Discount rate                                                     |   | 7.25%                      |   |                                | 7.5%       |               
|Expected return on plan assets                                    |   | 9.0%                       |   |                                | 9.0%       |               
|Rate of compensation increase                                     |   | 5.5%                       |   |                                | 5.5%       |               

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
StatementsDecember 31, 2001, 2000, and 1999

|                                         |   | NON-UNION
PENSION BENEFITS |   | DEFERRED
COMPENSATION BENEFITS |   | OTHER BENEFITS
|---------------------------------------- | - | -------------------------- | - | ------------------------------ | - | --------------
|
|COMPONENTS OF NET PERIODIC BENEFIT COST: |   |                            |   |                                |   |               
|Service cost                             | $ | 434,532                    | $ | 442,750                        | $ | 475,922       
|Interest cost                            |   | 1,229,210                  |   | 1,200,929                      |   | 1,127,258     
|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       
|Amortization of transition  obligation   |   | 104,244                    |   | 104,244                        |   | 104,244       
|Recognized net actuarial   (gain)/loss   |   |                           |   | (37,644                        | ) |              
|                                         |   |                            |   |                                |   |               
|Net periodic benefit cost                | $ | 452,390                    | $ | 382,062                        | $ | 467,098       
|                                         |   |                            |   |                                |   |               

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
StatementsDecember 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:

|                                            |  | NUMBEROF OPTIONS |           | WEIGHTEDAVERAGEEXERCISE PRICE |  
|------------------------------------------- |  | ---------------- | --------- | ----------------------------- | -
|                                            |  |                  |           |                               |  
|Outstanding, December 31, 1998              |  |                  | 1,288,252 |                               | $
|Granted during 1999                         |  |                  | 175,000   |                               |  
|Exercised during 1999                       |  |                  | (274,600  | )                             |  
|Surrendered during 1999                     |  |                  | (658,252  | )                             |  
|                                            |  |                  |           |                               |  
|Outstanding, December 31, 1999              |  |                  | 530,400   |                               | $
|Granted during 2000                         |  |                  | 392,500   |                               |  
|Lapsed during 2000                          |  |                  | (84,318   | )                             |  
|Exercised during 2000                       |  |                  | (5,500    | )                             |  
|                                            |  |                  |           |                               |  
|Outstanding, December 31, 2000              |  |                  | 833,082   |                               | $
|Granted during 2001                         |  |                  |          |                               |  
|Exercised during 2001                       |  |                  | (320,582  | )                             |  
|Surrendered during 2001                     |  |                  | (95,000   | )                             |  
|                                            |  |                  |           |                               |  
|Oustanding December 31, 2001                |  |                  | 417,500   |                               |  
|                                            |  |                  |           |                               |  
|Exercisable, December 31, 2001              |  |                  | 153,208   |                               | $
|Weighted average remaining contractual life |  |                  | 2.3 years |                               |  

|        |  | WEIGHTED AVERAGE |  |                             |  |      
|------- |  | ---------------- |  | --------------------------- |  | -----
|
|
|
|$ 3.74  |  | 15,000           |  | $                      3.74 |  |  
|$ 4.94  |  | 377,500          |  | $                      4.94 |  |      
|$ 12.68 |  | 25,000           |  | $                    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 | 
|Net income, pro forma                               |  |      | 89,342  |      |   | 2,202,163 | 
|Net income per share, pro forma                     |  |      | .01     |      |   | .30       | 
|Net income per share - assuming dilution, pro forma |  |      | .01     |      |   | .29       | 

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

1999Net revenues

$
25,223

$
14,934

$
26,013Cost of revenues


12,842


54,379


320,247Amounts due from related parties as of December 31,
2001 and 2000 are as follows:

|                                      |  | 2001 |         | 2000 |  
|------------------------------------- |  | ---- | ------- | ---- | -
|                                      |  |      |         |      |  
|Due from Swenson Granite Company, LLC |  | $    | 16,263  |      | $
|Due from Granite Accents, Inc.        |  |      | 37,242  |      |  
|Due from Kotecki Family Enterprises   |  |      | 3,233   |      |  
|Due from Rock of Ages Asia            |  |      | 128,928 |      |  
|Due from Maple Farms Japan            |  |      | 45,816  |      |  
|                                      |  |      |         |      |  
|                                      |  | $    | 231,482 |      | $
|                                      |  |      |         |      |  

See note 4 for operating lease obligations with related
parties.

xxiii

---

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**Notes to Consolidated Financial
StatementsDecember 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):

|               |            | NETREVENUES |   | NET INCOME
(LOSS) |  | NET INCOME(LOSS)
PER SHARE |        | NET INCOME
(LOSS)PER SHARE-ASSUMINGDILUTION |  
|-------------- | ---------- | ----------- | - | ----------------- |  | -------------------------- | ------ | ------------------------------------------- | -
|2001 Quarters: |            |             |   |                   |  |                            |        |                                             |  
|               | First      |             | $ | 13,319            |  | $                          | (3,682 | )                                           | $
|               | Second     |             |   | 31,297            |  |                            | 4,089  |                                             |  
|               | Third      |             |   | 24,722            |  |                            | (1,033 | )                                           |  
|               | Fourth     |             |   | 24,967            |  |                            | 1,059  |                                             |  
|               |            |             |   |                   |  |                            |        |                                             |  
|               | Total      |             | $ | 94,305            |  | $                          | 433    |                                             | $
|               |            |             |   |                   |  |                            |        |                                             |  
|               |            |             |   |                   |  |                            |        |                                             |  
|2000 Quarters: |            |             |   |                   |  |                            |        |                                             |  
|               | First      |             | $ | 14,233            |  | $                          | (2,693 | )                                           | $
|               | Second     |             |   | 28,813            |  |                            | 3,211  |                                             |  
|               | Third      |             |   | 23,528            |  |                            | 1,355  |                                             |  
|               | Fourth (1) |             |   | 24,119            |  |                            | 590    |                                             |  
|               |            |             |   |                   |  |                            |        |                                             |  
|               | Total      |             | $ | 90,693            |  | $                          | 2,463  |                                             | $
|               |            |             |   |                   |  |                            |        |                                             |  
|               |            |             |   |                   |  |                            |        |                                             |  
|1999 Quarters: |            |             |   |                   |  |                            |        |                                             |  
|               | First      |             | $ | 17,518            |  | $                          | (2,012 | )                                           | $
|               | Second     |             |   | 28,986            |  |                            | 1,336  |                                             |  
|               | Third      |             |   | 24,413            |  |                            | 1,062  |                                             |  
|               | Fourth     |             |   | 25,610            |  |                            | 1,293  |                                             |  
|               |            |             |   |                   |  |                            |        |                                             |  
|               | Total      |             | $ | 96,527            |  | $                          | 1,679  |                                             | $
|               |            |             |   |                   |  |                            |        |                                             |  

**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
StatementsDecember 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 | 
|                                                                                         |  |      |           |      |   |           | 
|Denominator:                                                                             |  |      |           |      |   |           | 
|Denominator for basic earnings per share:                                                |  |      |           |      |   |           | 
|Weighted average shares                                                                  |  |      | 7,605,785 |      |   | 7,447,460 | 
|Effect of dilutive securities:                                                           |  |      |           |      |   |           | 
|Stock options                                                                            |  |      | 70,205    |      |   | 128,379   | 
|                                                                                         |  |      |           |      |   |           | 
|Denominator for diluted earnings per share:                                              |  |      |           |      |   |           | 
|Adjusted weighted average shares                                                         |  |      | 7,675,990 |      |   | 7,575,839 | 
|                                                                                         |  |      |           |      |   |           | 
|Basic earnings per share                                                                 |  | $    | .06       |      | $ | .33       | 
|                                                                                         |  |      |           |      |   |           | 
|Diluted earnings per share                                                               |  | $    | .06       |      | $ | .33       | 

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
StatementsDecember 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 |   | CORPORATEOVERHEAD |   | TOTAL  |  
|-------------------------------------------- | - | --------- |  | ------------- | ------- | --------- | ------ | ---------- | - | ----------------- | - | ------ | -
|                                             |   |           |  |               |         |           |        |            |   |                   |   |        |  
|Total net revenues                           | $ | 28,648    |  | $             | 31,446  | $         | 43,159 |            | $ | 3,143             | $ |       |  
|Inter-segment net revenues                   |   | 2,873     |  |               | 9,218   |           |       |            |   |                  |   |       |  
|                                             |   |           |  |               |         |           |        |            |   |                   |   |        |  
|                                             |   |           |  |               |         |           |        |            |   |                   |   |        |  
|Net revenues                                 |   | 25,775    |  |               | 22,228  |           | 43,159 |            |   | 3,143             |   |       |  
|                                             |   |           |  |               |         |           |        |            |   |                   |   |        |  
|Total gross profit                           |   | 12,450    |  |               | 5,249   |           | 24,531 |            |   | 818               |   |       |  
|Inter-segment gross profit                   |   | 1,103     |  |               | (173    | )         | (930   | )          |   |                  |   |       |  
|                                             |   |           |  |               |         |           |        |            |   |                   |   |        |  
|                                             |   |           |  |               |         |           |        |            |   |                   |   |        |  
|Gross Profit                                 |   | 11,347    |  |               | 5,422   |           | 25,461 |            |   | 818               |   |       |  
|                                             |   |           |  |               |         |           |        |            |   |                   |   |        |  
|Selling, general and administrative expenses |   | 4,388     |  |               | 4,833   |           | 22,555 |            |   | 1,203             |   | 3,728  |  
|Loss on disposal of assets                   |   | 197       |  |               | 2,337   |           |       |            |   |                  |   |       |  
|                                             |   |           |  |               |         |           |        |            |   |                   |   |        |  
|                                             |   |           |  |               |         |           |        |            |   |                   |   |        |  
|Income (loss) from operations                | $ | 6,762     |  | $             | (1,748) | $         | 2,906  |            | $ | (385)             | $ | (3,728 | )
|                                             |   |           |  |               |         |           |        |            |   |                   |   |        |  



|2000                                         |   | QUARRYING |  | MANUFACTURING |        | RETAILING |        | CEMETERIES |   | CORPORATEOVERHEAD |   | TOTAL  |  
|-------------------------------------------- | - | --------- |  | ------------- | ------ | --------- | ------ | ---------- | - | ----------------- | - | ------ | -
|                                             |   |           |  |               |        |           |        |            |   |                   |   |        |  
|Total net revenues                           | $ | 26,588    |  | $             | 35,763 | $         | 40,622 |            | $ |                  | $ |       |  
|Inter-segment net revenues                   |   | 3,701     |  |               | 8,579  |           |       |            |   |                  |   |       |  
|                                             |   |           |  |               |        |           |        |            |   |                   |   |        |  
|                                             |   |           |  |               |        |           |        |            |   |                   |   |        |  
|Net revenues                                 |   | 22,887    |  |               | 27,184 |           | 40,622 |            |   |                  |   |       |  
|                                             |   |           |  |               |        |           |        |            |   |                   |   |        |  
|Total gross profit                           |   | 11,249    |  |               | 6,254  |           | 21,558 |            |   |                  |   |       |  
|Inter-segment gross profit                   |   | 1,378     |  |               | (547   | )         | (831   | )          |   |                  |   |       |  
|                                             |   |           |  |               |        |           |        |            |   |                   |   |        |  
|                                             |   |           |  |               |        |           |        |            |   |                   |   |        |  
|Gross Profit                                 |   | 9,871     |  |               | 6,801  |           | 22,389 |            |   |                  |   |       |  
|                                             |   |           |  |               |        |           |        |            |   |                   |   |        |  
|Selling, general and administrative expenses |   | 3,011     |  |               | 5,721  |           | 21,476 |            |   |                  |   | 2,956  |  
|                                             |   |           |  |               |        |           |        |            |   |                   |   |        |  
|                                             |   |           |  |               |        |           |        |            |   |                   |   |        |  
|Income (loss) from operations                | $ | 6,860     |  | $             | 1,080  | $         | 913    |            | $ |                  | $ | (2,956 | )
|                                             |   |           |  |               |        |           |        |            |   |                   |   |        |  



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

xxvi

---

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**Notes to Consolidated
Financial StatementsDecember 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 | 
|Canada             |  |      | 7,989  |      |   | 7,807  | 
|                   |  |      |        |      |   |        | 
|Total net revenues |  | $    | 94,305 |      | $ | 90,693 | 
|                   |  |      |        |      |   |        | 

(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 | 
|Canada             |  |      | 1,940  |      |   | 1,904  | 
|Japan              |  |      |       |      |   |       | 
|                   |  |      |        |      |   |        | 
|                   |  | $    | 43,143 |      | $ | 44,447 | 
|                   |  |      |        |      |   |        | 

**(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
StatementsDecember 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)
|---------------------------------------- |  | -----------
|
|
|                                         |  |            
|Net Revenues                             |  | $          
|Net income                               |  |            
|Net income per share                     |  |            
|Net income per share - assuming dilution |  |            

**(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
StatementsDecember 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

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**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, 2002Boston, 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
|-------- |  | -------------------------------- |  | -------- | ----- | -------- |  | --------
|
|         |  |                                  |  |          |       |          |  |         
|2001     |  |                                  |  |          |       |          |  |         
|         |  | Allowances for doubtful accounts |  | $        | 1,303 |          |  | 534     
|         |  |                                  |  |          |       |          |  |         
|2000     |  |                                  |  |          |       |          |  |         
|         |  | Allowances for doubtful accounts |  | $        | 1,826 |          |  |        
|         |  |                                  |  |          |       |          |  |         
|1999     |  |                                  |  |          |       |          |  |         
|         |  | Allowances for doubtful accounts |  | $        | 2,124 |          |  |        

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:                     

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. SwensonKurt 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

DESCRIPTION10.13

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 Corporation10.18

Promissory Note dated October 26,2001 in the amount of $800,000 from Mize Acquisition, Inc. to Rock of Ages Corporation10.19

Promissory Note dated August 20, 2001 in the amount of $840,000 from Keystone Memorials, Inc. to Rock of Ages Corporation11.

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 Company23

Consent of KPMG LLP* This exhibit is a
management contract or compensatory plan or arrangement.
27