**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 10-K**

**(MARK ONE)**

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

**FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000**

**OR**

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

**FOR THE TRANSITION PERIOD FROM __________ TO
__________**

**COMMISSION FILE NO. 000-29464**

**ROCK OF AGES
CORPORATION**

(Exact name of registrant as specified in its charter)

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

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

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

|**TITLE OF EACH CLASS** | **NAME OF EACH EXCHANGE ON WHICH
    REGISTERED**
|----------------------- | -------------------------------------------------
|None                    |                                                  

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

**CLASS A COMMON STOCK, PAR VALUE
$0.01**

(Title of Class)

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

Yes [ x ] No [ ]

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. [x]

As of March 23, 2001, 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 $31,516,825. As of March 23, 2001, there were outstanding 4,751,219 shares
of Class A Common Stock and 2,816,438 shares of Class B Common Stock.



---

|**TABLE OF
      CONTENTS**
|---------------------------
|                           
|                           
|**PART I**                 
|ITEM                       
|ITEM                       
|ITEM                       
|ITEM                       
|**PART
      II**          
|ITEM                       
|ITEM                       
|ITEM                       
|ITEM                       
|ITEM                       
|ITEM                       
|**PART
      III**         
|ITEM                       
|ITEM                       
|ITEM                       
|ITEM                       
|**PART
      IV**          
|ITEM                       
|                           
|                           





---

**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 13 active quarry properties and 10
manufacturing and sawing facilities in North America, principally in Vermont,
Georgia and the Province of Quebec. The Company markets and distributes its
memorials on a retail basis through approximately 110 Company-owned retail sales
outlets (including sales outlets located at certain cemeteries owned by the
Company located in the state of Kentucky) as of March 23, 2001 in the states
indicated in Item 2 below. The Company also sells memorials wholesale to
approximately 1,200 independent memorial retailers in the United States and
Canada, including approximately 400 independent authorized Rock of Ages
retailers that, in addition to the Company's owned retail sales outlets, are the
primary outlet for the Company's branded memorials. 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 estimates that 80% or more of all granite memorials manufactured
in North America are made in one of four regions: Barre, Vermont; Beebe, Quebec;
Elberton, Georgia, and an area encompassing Milbank, South Dakota, Cold Spring,
Minnesota, and Wausau, Wisconsin known in the industry as the "Northwest." The
Company has solidified its leading position in the granite memorial business
primarily through acquisitions of quarries and major granite memorial
manufacturers, principally in three of these four regions.

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 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 $6.8 million for the Kentucky cemeteries and retailer acquired in
January 2001, all of which was paid in cash.

See Item 13 - "Certain Relationships and Related Transactions" for more
information regarding the Kentucky cemeteries and retailer acquisitions.

The Company has operations in three business segments: Quarrying,
Manufacturing and Retailing. 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. Although the primary focus
  during fiscal 2000 was to integrate the retail acquisitions made during the
  prior three years, the Company anticipates that it will continue to acquire
  independent granite memorial retailers in selected markets in North America in
  order to further develop its network of Company-owned Rock of Ages retailers,
  thereby capturing 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 Independent Authorized Dealers. The Company will
  seek to increase sales 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.

- Pre-Need Selling Program. The Company is in the process of initiating an
  active pre-need selling program for granite memorials at its Company-owned
  retail locations and to assist its independent Rock of Ages authorized
  retailers in developing similar programs. Currently, the best estimate of the
  Company is that less than 10% of granite memorials are sold pre-need.
- 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 Quarriers and Manufacturers. While the Company
  owns or controls many of the highest quality memorial grade granite quarries
  in North America, the Company will continue to explore the possibility of
  acquiring selected memorial grade granite quarriers and manufacturers 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.
- 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; Elberton, Georgia; 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 granite 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 Company-owned corporation.

Other quarry products include waste pieces not of a shape or size suitable
for manufacturing which are sold for rip rap 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 one of the Company's Barre, Vermont plants. 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 110 retail outlets in 15 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.

**MANUFACTURING AND RAW
MATERIALS**

The Company quarries and manufactures granite in the United States and Canada
at the locations detailed in Item 2 "Properties." In 2000, the Company acquired
new equipment for certain of its quarries and plants. There were no plants
acquired or material additions to plants in 2000. Management believes that the
Company's manufacturing and quarrying capacity 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 $8.5 million as of December 31,
2000 and $9.5 million as of December 31, 1999. 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 $12.4 million as of
December 31, 2000 and $11.1 million as of December 31, 1999. The Company expects
that substantially all of the backlog order will be filled during the 2001
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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**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 1998,1999 or 2000.

**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, 2000, the Company had approximately 940 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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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                                     
|ELBERTON                             |                                                                             
|----------------                     |                                                                             
|*Manufacturing
      Properties*     |                                                                             
|-------------------------------      |                                                                             
|Southern Mausoleum
Plant             | 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                      

6



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

|**QUARRY**        | **APPROXIMATE DATE OF COMMENCEMENT OF
      OPERATIONS** | **PRIOR
      OWNER**
      **(DATE ACQUIRED)**            | **MEANS OF
      ACCESS** | **TOTAL
      ORIGINAL COST OF EACH PROPERTY** | **NET
      SALEABLE RECOVERABLE RESERVES(1) (CUBIC FEET)** | **SALEABLE
      RECOVERABLE RESERVES (YEARS) (2)**
|----------------- | -------------------------------------------------------- | ---------------------------------------------------------- | ------------------------- | ---------------------------------------------- | ----------------------------------------------------------- | ---------------------------------------------------
|----------------- | --------------------                                     | ------------------                                         | ----------------          | --------------------                           | --------------------                                        | ------------------                                 
|E. L. Smith       | 1880                                                     | E.L. Smith Quarry Co. (1948)                               | Paved road                | $7,562,676                                     | 2,459,534,000                                               | 4,918                                              
|Adam-Pirie        | 1880                                                     | J.K. Pirie Quarry (1955)                                   | Paved road                | $4,211,363                                     | 948,886,000                                                 | 6,559                                              
|Bethel            | 1900                                                     | Woodbury Granite Company, Inc.
      (1957)                | Dirt road                 | $174,024                                       | 76,529,000                                                  | 382                                                
|Royalty/Berkeley  | 1923                                                     | Coggins Granite (1991)                                     | Paved road                | $2,794,500                                     | 6,691,000                                                   | 67                                                 
|Millstone         | 1985                                                     | 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                                              | Dirt road                 | $4,633,000                                     | 2,602,000                                                   | 37                                                 
|                  |                                                          | Thomas E. Ebans, Sr.                                       |                           |                                                |                                                             |                                                    
|                  |                                                          | David S. Hooker                                            |                           |                                                |                                                             |                                                    
|                  |                                                          | William L. Comolli (1998)                                  |                           |                                                |                                                             |                                                    



(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.

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 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.

**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 1999 and 2000 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.

|               | **1999** 
|-------------- | ---------
|               | **HIGH** 
|               | ---------
|First Quarter  | 14 15/16 
|Second Quarter | 12       
|Third Quarter  | 11       
|Fourth Quarter | 7 1/8    
|               |          
|               | **2000** 
|               | **HIGH** 
|               | -------- 
|First Quarter  | 9 1/2    
|Second Quarter | 5 3/4    
|Third Quarter  | 6 1/4    
|Fourth Quarter | 6 1/8    

As of March 23, 2001, based upon information provided by the Company's
transfer agent, there were 278 record holders of Class A Common Stock and 28
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
2000.

8



---



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, 2000 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,**          
|----------------------------------------------------------------------------- | -------------------------------------------
|                                                                              | -------------------------------------------
|                                                                              | **1996**                                   
|                                                                              | -------                                    
|**STATEMENT OF OPERATIONS
      DATA:**                                       |                                            
|Net Revenues:                                                                 |                                            
|Quarrying                                                                     | $12,083                                    
|Manufacturing                                                                 | 32,586                                     
|Retailing                                                                     | -                                          
|Total net revenues                                                            | 44,669                                     
|Gross Profit:                                                                 |                                            
|Quarrying                                                                     | 5,158                                      
|Manufacturing                                                                 | 8,248                                      
|Retailing                                                                     | -                                          
|Total gross profit                                                            | 13,406                                     
|Selling, general and administrative expenses                                  | 9,131                                      
|Income from operations                                                        | 4,275                                      
|Interest expense                                                              | 1,723                                      
|Income before provision for income
      taxes                                | 2,552                                      
|Provision for income taxes                                                    | 643                                        
|Net income before cumulative effect of a
      change in accounting principle | $1,909                                     
|Net income per share                                                          | $0.55                                      
|Net income per share assuming
      dilution                                  | $0.45                                      
|Weighted average number of shares
      outstanding                           | 3,500                                      
|Weighted average number of shares
      outstanding assuming dilution         | 4,208                                      

****

|                                                        | ******AS OF DECEMBER 31,**                  
|------------------------------------------------------- | --------------------------------------------
|                                                        | ******------------------------------------**
|                                                        | ******1996**                                
|                                                        | ******-------**                             
|**BALANCE SHEET
      DATA:**                           |                                             
|************************Cash and
      cash equivalents | $763                                        
|****Working
    capital                                 | 13,286                                      
|****Total assets                                        | 47,995                                      
|****Long-term debt, net of
      current maturities     | 13,054                                      
|****Stockholders' equity                                | 17,371                                      

9



---



**GENERAL**

Rock of Ages is an integrated quarrier, manufacturer, distributor and
retailer of granite and products manufactured from granite. 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.

In June 1997, the Company acquired the successor to Keystone Memorials, Inc.
("Keystone") and in October 1997, acquired Childs & Childs Granite Company,
Inc. ("C&C"), both granite memorial manufacturers in Elberton, Georgia. In
connection with the Keystone and C&C acquisitions, the Company also acquired
Southern Mausoleums, Inc. (collectively referred to as the "Acquired
Manufacturing Operations"). Also in connection with the Keystone and C&C
acquisitions, the Company acquired three granite quarrying companies operating
quarries located in Georgia, Pennsylvania, North Carolina, South Carolina and
Oklahoma. In November 1998, the Company acquired another quarry company (the
"White Gardenia Quarry") in North Carolina. In October 1997, the Company
acquired the Keith Monument Company and related companies that are engaged in
the retail sales of granite memorials to consumers in the State of Kentucky.
During the year ended December 31, 1998, the Company acquired 13 more 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
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 $6.8 for the Kentucky
cemeteries and retailer acquired in January 2001, all of which was paid in
cash.

In May 1999, the Company sold certain Keystone assets back to the original
owners from whom it had purchased them in June 1997 (the "Keystone Sale"). In
exchange for these assets, the Company received 263,441 shares of its Class B
common stock held by the 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.

The Company records revenues from quarrying, manufacturing and retailing. The
granite quarried by the Company is sold both to outside customers and used by
the Company's manufacturing division. The Company records revenue and gross
profit related to the sale of granite sold to an outside customer either when
the granite is shipped or when the customer selects and identifies the blocks at
the quarry site. The Company does not record a sale, nor does the Company record
gross profit, at the time granite is transferred to the Company's manufacturing
division. The Company records revenue and gross profit related to internally
transferred granite only after the granite is manufactured into a finished
product and sold to an outside customer. Manufacturing revenues related to
outside customers are recorded when the finished product is shipped from Company
facilities. Manufacturing revenues related to internally transferred finished
products are recorded when ultimately sold at retail to an outside customer.
Retailing revenues are recorded when the finished monument is placed in the
cemetery. For a more detailed description of the Company's revenue recognition,
please see Footnote 1(n) of the Consolidated Financial Statements.

10



---



|                                               | **YEAR ENDED DECEMBER
      31,**          
|---------------------------------------------- | -------------------------------------------
|                                               | -------------------------------------------
|                                               | **1998**                                   
|                                               | ---------                                  
|**STATEMENT OF OPERATIONS
      DATA:**        |                                            
|Net Revenues:                                  |                                            
|Quarrying                                      | 23.2%                                      
|Manufacturing                                  | 54.3%                                      
|Retailing                                      | 22.5%                                      
|Total net revenues                             | 100.0%                                     
|**GROSS PROFIT:**                              |                                            
|Quarrying                                      | 45.7%                                      
|Manufacturing                                  | 24.1%                                      
|Retailing                                      | 58.1%                                      
|Total gross profit                             | 36.7%                                      
|Selling, general & administrative expenses     | 24.6%                                      
|Income from operations                         | 12.1%                                      
|Interest expense                               | 0.6%                                       
|Income before provision for income
      taxes | 11.5%                                      
|Provision for income taxes                     | 2.8%                                       
|Net income                                     | 8.7%                                       
|                                               | =====                                      
|                                               |                                            



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

Revenues for the fiscal year ended December 31, 2000 decreased 6.0% to $90.7
million from $96.6 million for the year ended December 31, 1999. Quarrying
revenues increased $.7 million, mostly due to a greater percentage of its
shipments being made to outside customers. Manufacturing revenues declined $10.2
million, primarily 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 dollars 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 profit decreased $100,000. The quarrying gross profit
percentage decreased to 43.1% in 2000 from 45.0% in 1999, primarily as a result
of slightly 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
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 3.4% 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 decrease 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.

****11



---



Revenues for the fiscal year ended December 31, 1999 increased 16.7% to $96.6
million from $82.7 million for the year ended December 31, 1998. Quarrying
revenues increased $3.0 million, of which $1.1 million was due to owning and
operating the White Gardenia Quarry for the full year and the remaining $1.9
million from stronger sales at existing quarry operations. Manufacturing
revenues declined $7.5 million, primarily as a result of the Keystone Sale.
Retailing revenues increased $18.4 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, 1999 increased 22.7% to
$37.3 million from $30.4 million for the fiscal year ended December 31, 1998.
Quarrying gross profits increased $1.2 million as a result of the increase in
quarry sales. The quarrying gross profit percentage decreased to 45.0% in 1999
from 45.7% in 1998.

Manufacturing gross profit decreased $3.1 million, which was attributable to
lower manufacturing revenues and inadequate pricing in the Company's monumental
operations. The manufacturing gross profit percentage decreased to 20.8% in 1999
from 24.1% in 1998.

Retailing gross profit increased $8.8 million in 1999 as a result of the 1999
Retail Acquisitions and owning and operating the 1998 Retail Acquisitions for
the full 1999 fiscal year. However, the retailing gross profit percentage
declined from 58.1% to 53.0% due to operating the 1998 Retail Acquisitions
during the first quarter of fiscal year 1999, which is historically a poor
quarter due to seasonality, and delays in fully implementing the Company's
branding strategy and pricing policy at its retail locations. See Item 7 -
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Seasonality."

Selling, general and administrative expenses for 1999 increased 57.5% to
$31.2 million from $20.4 million. As a percentage of net sales, these expenses
for 1999 increased to 33.2% from 24.6%. 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
continued investment in people to support and foster the growth in its retail
operations.

Interest expense for the fiscal year ended December 31, 1999 increased to
$2.0 million from $.5 million for the fiscal year ended December 31, 1998. This
increase was due to increased borrowings by the Company to support its retail
acquisition growth strategy.

Income taxes as a percentage of earnings before taxes increased to 43.3% in
1999 from 24.1% in 1998. This was primarily the result of three factors: (1) the
$845,000 loss from the Keystone Sale which was not deductible for tax purposes;
(2) an increase in the relative effect of state taxes; and (3) an increase in
the effect of Canadian taxes due to a relatively high proportion of the
Company's profits being generated by its Canadian subsidiary.

**YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31,
1997.**

Revenues for the fiscal year ended December 31, 1998 increased 52.6% to $82.7
million from $54.2 million for the year ended December 31, 1997. Quarrying
revenues increased $5.1 million, of which $.7 million was from existing quarry
operations and the remaining $4.4 million from Acquired Quarrying Operations,
primarily due to strong exports from the Salisbury quarry. Manufacturing
revenues increased $6.6 million primarily from the Acquired Manufacturing
Operations. Monument manufacturing revenue increases of $1.0 million from
existing operations were more than offset by a reduction of $2.7 million in
precision products revenues. The Company's Acquired Retailing Operations
accounted for the entire increase of $16.8 million in revenues for the retailing
segment.

Gross profit for the fiscal year ended December 31, 1998 increased 88.9% to
$30.4 million from $16.1 million for the fiscal year ended December 31, 1997.
Quarrying gross profit from existing operations increased $1.2 million
reflecting increased productivity at all major quarry locations. The Company's
Acquired Quarrying Operations reported an increase in gross profit of $2.0
million for a total increase of $3.2 million from quarrying operations. The
quarrying gross profit percentage increased to 45.7% in 1998 from 39.8% in
1997.

Manufacturing gross profit increased $1.5 million, which was attributable to
the Acquired Manufacturing Operations. Monumental manufacturing gross profit
increases of $2.2 million were offset by reductions in precision products gross
profit of $.7 million. The manufacturing gross profit percentage decreased from
24.3% in 1997 to 24.1% in 1998 due to a decrease in sales of higher margin
precision products.

The Company's Acquired Retailing Operations accounted for all of the 1998
gross profit of $10.8 million as prior to the Keith Monument acquisition in
October 1997 the Company had no retailing presence. The gross profit percentage
for these operations decreased to 58.1% in 1998 from 67.3% in 1997 principally
because 1997 results for these operations reflected the Company's highest margin
sales (by Keith Monument) and only for a partial year which did not include the
low seasonal first quarter.

12



---



Interest expense for the fiscal year ended December 31, 1998 decreased to $.5
million from $1.6 million for the fiscal year ended December 31, 1997. This
decrease is the result of the reduction of debt levels from the net proceeds of
the IPO. Debt levels did increase during the final two quarters of 1998 due to
the implementation of the retail acquisition strategy.

Income taxes as a percent of earnings before taxes decreased from 24.3% in
1997 to 24.1% in 1998. The Company's taxable income exceeded alternative minimum
tax ("AMT") levels in 1998; however, available AMT credits resulted in the
Company's effective tax rate remaining at historical levels.

**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 2000, net cash provided by operating activities was
$4.7 million. This result was primarily attributable to depreciation, depletion
and amortization of $4.7 million, net income of $2.5 million, and a decrease in
inventories of $500,000. These were partially offset by an increase in trade
receivables of $1.3 million. Net cash used in investing activities was $2.8
million, used primarily for acquisitions and capital expenditures. Net cash
provided by financing activities was $2.9 million, most of which was from net
borrowings under commercial credit facilities.

*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, 2000, the Company had $18.5 million outstanding and $11.5 million
available under the term loan line of credit and $10.3 million outstanding and
$7.4 million available under the revolving line of credit facility.

The Company has a multi-tiered interest rate structure on its outstanding
debt with CIT. As of December 31, 2000, the interest rate structure was as
follows:

|                          | **Amount**   | **Formula**   | **Effective Rate**
|------------------------- | ------------ | ------------- | ------------------
|Revolving Credit Facility | $3.0 million | LIBOR + 1.75% | 8.57%             
|                          | 7.3 million  | Prime - .50%  | 9.00%             
|Term Loans                | 12.0 million | LIBOR +1.75%  | 8.57%             
|                          | 6.0 million  | Prime - .25%  | 9.25%             
|                          | .5 million   | Prime - .50%  | 9.00%             
|                          |              |               |                   

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 $3.0 million budgeted
for capital expenditures in 2001. The Company believes that the combination of
cash flow from operations and its existing credit facilities will be sufficient
to fund its operations for at least the next twelve months.

**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.

13



---

**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.

**YEAR 2000**

The Company did not experience any interruption to its business or operations
as a result of the transition to the year 2000. Costs association with year 2000
remediation were not material to the Company's financial position.



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 xxix, inclusive, and is incorporated herein by
reference.

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

None.

14



---

**PART III**

**ITEM 10. DIRECTORS AND EXECUTIVE
OFFICERS**

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

|**NAME OF DIRECTORS AND EXECUTIVE
      OFFICERS(1)**                                | **AGE** | **POSITIONS WITH THE
      COMPANY**                                                                        
|------------------------------------------------------------------------------------ | ------- | ------------------------------------------------------------------------------------------------------------
|------------------------------------------------------------------------------------ | ------- | --------------------------------------------------------                                                    
|George R. Anderson                                                                   | 61      | Director                                                                                                    
|John L. Forney                                                                       | 39      | Director, President and Chief Operating
      Officer/Memorials Division; Chief Financial Officer,
Treasurer
|James L. Fox                                                                         | 49      | Director                                                                                                    
|Jon M. Gregory                                                                       | 51      | President and Chief Operating Officer/Quarries Division,
      Director                                     
|Richard C. Kimball                                                                   | 59      | Chief Strategic and Marketing Officer,
      Vice Chairman of the Board of Directors                        
|Kurt M. Swenson                                                                      | 56      | President and Chief Executive Officer,
      Chairman of the Board of Directors                             
|Charles M. Waite                                                                     | 68      | Director                                                                                                    
|Frederick E. Webster Jr.                                                             | 63      | 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 in 2002.

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 in 2002.

James L. Fox has been Executive Vice President and General Manager 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 at the 2001 annual shareholders
meeting.

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.

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.

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 at the 2001 annual shareholders
meeting.

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 in 2002.

15



---



**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, 2000, December 31, 1999 and December 31,
1998.

|**SUMMARY COMPENSATION
      TABLE**                                   
|-----------------------------------------------------------------------
|                                                                       
|                                                                       
|                                                                       
|**NAME AND PRINCIPAL
      POSITION**                                  
|Kurt M. Swenson                                                        
|Chief Executive Officer and Chairman of
      the Board of Directors   
|                                                                       
|Richard C. Kimball (2)                                                 
|Chief Strategic and Marketing Officer and Vice Chairman
      of       
|the Board of Directors                                                 
|John L. Forney (3)                                                     
|President and Chief Operating
      Officer/Memorials Division and     
|Chief Financial Officer and Treasurer and
    Director                 
|Jon M. Gregory                                                         
|President and Chief Operating Officer/Quarries Division,
      Director
|                                                                       
|John E. Keith (4)                                                      
|Chief Operating Officer/Keith Business
      Unit                      
|                                                                       

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

(2) Mr. Kimball has been Chief Strategic and Marketing Officer since January
1, 2001.

(3) Mr. Forney has been the President and Chief Operating Officer/Memorials
Division of the Company since January 1, 2001.

(4) Mr. Keith served as President/Memorials Division until December 31, 2000
and is currently service as Chief Operating Officer/Keith Business Unit.

16



---



The following table sets forth information concerning options to purchase
Class A Common Stock granted by the Company to Named Executive Officers during
the 2000 fiscal year. Except as set forth below, the Company did not grant
options to purchase its Class A or Class B Common Stock to any Named Executive
Officer.

**OPTION GRANTS IN LAST FISCAL YEAR**

|              
|--------------
|              
|              
|              
|**Name**      
|              
|John L. Forney
|John E. Keith 



(1) The options vest in 1/3 increments on July 20, 2001, 2002 and 2003,
respectively.

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**

|                  
|------------------
|**NAME**          
|                  
|                  
|                  
|Kurt M. Swenson   
|Richard C. Kimball
|Jon M. Gregory    
|John L. Forney    
|John E. Keith     
|                  

(1) These values are
calculated using the $4.50 per share closing price of the Class A Common Stock
on the NASDAQ National Market on December 31, 2000.

(2) Includes options to purchase 5,000 shares of Class B Common Stock and
10,000 shares of Class A Common Stock.

**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.

17



---



**PENSION PLAN TABLE**

|**FINAL
      AVERAGE** |              |              |              |              |             
|----------------------- | ------------ | ------------ | ------------ | ------------ | ------------
|**COMPENSATION**        | **15 YEARS** | **20 YEARS** | **25 YEARS** | **30 YEARS** | **35 YEARS**
|$125,000                | $39,098      | $52,078      | $65,097      | $78,117      | $78,117     
|$150,000                | $47,308      | $63,078      | $78,847      | $94,617      | $94,617     
|$175,000                | $55,558      | $74,078      | $92,597      | $111,117     | $111,117    
|$200,000                | $63,808      | $85,078      | $106,347     | $127,617     | $127,617    
|$225,000                | $72,058      | $96,078      | $120,097     | $144,117     | $144,117    
|$250,000                | $80,308      | $107,078     | $133,847     | $160,617     | $160,617    
|$275,000                | $88,558      | $118,078     | $147,597     | $177,117     | $177,117    
|$300,000                | $96,808      | $129,078     | $161,347     | $193,617     | $193,617    
|$325,000                | $105,058     | $140,078     | $175,097     | $210,117     | $210,117    
|$350,000                | $113,308     | $151,078     | $188,847     | $226,617     | $226,617    
|                        |              |              |              |              |             

These calculations are based on the retirement formula in effect as of
December 31, 2000, 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, 2000 and rounded to the full year, are: Mr. Forney, 2 years;
Mr. Gregory, 25 years; Mr. Kimball, 8 years; and Mr. Swenson, 27 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.

|           |                       |                       | **ANNUAL**    
|---------- | --------------------- | --------------------- | --------------
|           |                       | **TOTAL
      YEARS** | **RETIREMENT**
|           | **ANNUAL
      BASE** | **OF
      SERVICE**  | **BENEFIT**   
|**NAME**   | **COMPENSATION**      | **AT AGE 65**         | **AT AGE 65** 
|R. Kimball | $240,000              | 12                    | 28,800        
|K. Swenson | $340,080              | 26                    | 97,263        
|J. Gregory | $192,000              | 39                    | 44,928        

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.

**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

18



---



The Company also has employment with each of the other Named Executive
Officers (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. In addition, Mr. Keith's original employment agreement has
been amended and restated to extend his term of employment to December 31, 2004.
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.

19



---



The following table sets forth, as of March 23, 2001, 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.

|                                                                  |                        | **PERCENT OF**              |                | **PERCENT
      OF**
|----------------------------------------------------------------- | ---------------------- | --------------------------- | -------------- | --------------------
|**NAME AND ADDRESS OF BENEFICIAL OWNER**
      **(1)**            | **NUMBER**             | **CLASS**                   | **NUMBER (2)** | **CLASS (2)**       
|                                                                  | **SHARES OF CLASS B**  | **SHARES OF
      CLASS A**
|                                                                  | **COMMON
      STOCK** | **COMMON
      STOCK**     
|                                                                  | **BENEFICIALLY OWNED** | **BENEFICIALLY OWNED**     
|Wellington Management Company, LLP
      (3)                      |                        |                             |                |                     
|75 State Street                                                   |                        |                             |                |                     
|Boston, MA 02109                                                  | -                      | -                           | 808,000        | 17.0%               
|Douglas M. Schair (4)                                             |                        |                             |                |                     
|PO Box 402                                                        |                        |                             |                |                     
|Portland, ME 04112                                                | -                      | -                           | 385,173        | 8.1%                
|Dimensional Fund Advisors (5)                                     |                        |                             |                |                     
|1299 Ocean Avenue, 11th
      Floor                               |                        |                             |                |                     
|Santa Monica, CA 90401                                            | -                      | -                           | 333,700        | 7.0%                
|Kurt M. Swenson (6) **                                            | 1,005,000              | 35.7%                       | 1,135,000      | 19.7%               
|Kevin C. Swenson (7)                                              | 1,023,489              | 36.3%                       | 1,023,489      | 17.7%               
|Robert L. Pope                                                    | 161,375                | 5.7%                        | 161,375        | 3.3%                
|Richard C. Kimball (8) **                                         | 34,126                 | 1.2%                        | 130,426        | 2.7%                
|John E. Keith**                                                   | -                      | -                           | 40,540         | *                   
|George R. Anderson (9) **                                         | 25,000                 | *                           | 75,000         | 1.6%                
|Jon M. Gregory (10) **                                            | 40,000                 | 1.4%                        | 79,126         | 1.7%                
|Charles M. Waite**                                                | 29,126                 | 1.0%                        | 30,000         | *                   
|James L. Fox **                                                   | -                      | -                           | 2,618          | *                   
|John L. Forney **                                                 | -                      | -                           | -              | -                   
|Frederick E. Webster Jr. **                                       | -                      | -                           | -              | -                   
|All directors and executive officers as
      a group (9 persons) | 1,133,252              | 40.2%                       | 1,492,710      | 25.4%               
|7                                                                 |                        |                             |                |                     

**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 23, 2001 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
13, 2001, 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) Based solely on Mr. Schair's
Schedule 13D dated December 22, 2000 and information provided by Mr. Schair as
of March 9, 2001.

20

(5) According to a Schedule 13G dated February 2, 2001,
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.

(6) Kurt M. Swenson is the brother of Kevin C.
Swenson. Includes 5,000 shares of Class B Common Stock subject to currently
exercisable options. Includes 1,000,000 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.

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

(8) Includes 10,000 shares of Class A Common
Stock subject to currently exerciseable options and 5,000 shares of Class B
Common Stock subject to currently exerciseable options.

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

(10) All 40,000 shares of Class B 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 2000,
the Company received approximately $127,000 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 2000 were approximately $55,000 . Swenson
also purchases granite blocks and slabs from the Company. Such purchases
amounted to approximately $40,000 in 2000. 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 connection with the acquisition of Keith
Monument in 1997, the Company entered into a five-year triple-net lease
agreement with John E. Keith, who was an executive officer of the Company during
fiscal 2000, for office buildings and retail locations. The lease provides for,
and in 2000 the Company paid, annual rental payments of $190,846.

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.
As of March 26, 2001, $130,000 remained outstanding on the loan to Mr. Kimball
and $74,543 remained outstanding on the loan to Mr. Gregory.

On September 22, 2000, the Company repurchased
30,000 shares of Class B Common Stock from Mark A. Gherardi, a Senior Vice
President of the Company, in connection with Mr. Gherardi's resignation from the
Company. The purchase price for the shares was $5.9375 per share, the closing
bid price of the Company's Common Stock on the date prior to the repurchase, for
a total purchase price of $178,125.

21

On January 3, 2001, the Company acquired 16 cemeteries and one
granite memorial retailer in Kentucky owned by the Loewen Group, Inc. ("Loewen")
for $6.8 million. The Company acquired the cemeteries from Loewen as the
designee of Keith & Keith Enterprises, LLC ("Keith"), a limited liability
company owned by John E. Keith and Roy H. Keith Jr. John Keith is currently the
Chief Operating Officer of Keith Monument Company LLC and Rock of Ages Kentucky
Cemeteries LLC, both wholly owned subsidiaries of the Company. Roy Keith Jr. is
a Vice President of Keith Monument Company LLC and Rock of Ages Kentucky
Cemeteries LLC. Keith was the successful bidder in a bankruptcy auction of the
combined package of 31 funeral homes and 19 cemeteries in Kentucky owned by
Loewen. The Company agreed to purchase 16 of the cemetery properties and 1
memorial retailer which were a part of the combined package. The purchase price
of $6.8 million paid by the Company was the result of arms-length negotiations
with Keith and the transaction was approved by the Company's nonemployee
directors. In connection with the transaction, John Keith entered into an
amended and restated employment agreement with the Company, pursuant to which he
receives $182,500 in annual base salary and a bonus based on the annual EBIT of
combined cemetery and memorial sales operations in Kentucky and Southern
Illinois. In addition, Keith agreed to extend the term of his employment
agreement to December 31, 2004.

**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, 2000.

22

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

(With Independent Auditors' Report
Thereon)

******ROCK OF AGES CORPORATION AND
SUBSIDIARIES**

|Table of
    Contents                                                         
|------------------------------------------------------------------------------
|                                                                              
|Independent Auditors'
      Report                                            
|Consolidated Balance Sheets                                                   
|Consolidated Statements
      of Operations                                   
|Consolidated Statements of Stockholders'
      Equity and Comprehensive Income
|Consolidated Statements
      of Cash Flows                                   
|Notes to Consolidated Financial
      Statements                              
|Supplementary
      Information:                                              
|Independent Auditors' Report on
      Supplementary Information               
|Schedule II - Valuation
      and Qualifying Accounts and Reserves            



**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,
2000 and 1999 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, 2000. 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, 2000 and 1999, and the results of their operations and their cash flows for
each of the years in the three-year period ended December 31, 2000, 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 2, 2001

Boston, Massachusetts

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Consolidated Balance
Sheets

December 31, 2000 and
1999

|**ASSETS (note 6)**                                                                                                       | **2000**          | **1999**       
|------------------------------------------------------------------------------------------------------------------------- | ----------------- | ---------------
|                                                                                                                          | --------          | --------       
|Current
      assets:                                                                                                     |                   |                
|Cash and cash equivalents                                                                                                 | $9,501,365        | $4,877,214     
|Trade
      receivables, less allowance for doubtful accounts of $1,303,054 in 2000
      and $1,826,150 in 1999 (note 5) | 15,486,560        | 14,127,848     
|Due from affiliates (note
      11)                                                                                       | 147,429           | 95,289         
|Inventories
      (notes 2 and 5)                                                                                         | 22,910,377        | 23,291,807     
|Income taxes receivable                                                                                                   | 521,259           | -              
|Deferred tax
      assets (note 8)                                                                                        | 576,000           | 585,000        
|Other current assets                                                                                                      | 2,865,856         | 2,250,659      
|                                                                                                                          | --------------    | -------------- 
|Total current assets                                                                                                      | 52,008,936        | 45,227,817     
|Property, plant
      and equipment:                                                                                      |                   |                
|Granite reserves and development
      costs                                                                              | 16,570,984        | 16,549,564     
|Land                                                                                                                      | 7,260,436         | 6,989,004      
|Buildings and land
      improvements                                                                                     | 16,925,559        | 15,905,426     
|Machinery and
      equipment                                                                                             | 32,045,754        | 34,564,968     
|Furniture and fixtures                                                                                                    | 1,544,710         | 1,150,355      
|Construction-in-process                                                                                                   | 203,717           | 156,937        
|                                                                                                                          | ----------------- | -------------- 
|                                                                                                                          | 74,551,160        | 75,316,254     
|Less accumulated depreciation,
      depletion and amortization                                                           | 30,104,619        | 30,537,131     
|                                                                                                                          | ----------------  | ---------------
|Net property, plant and
      equipment                                                                                   | 44,446,541        | 44,779,123     
|                                                                                                                          | ---------------   | ------------   
|Other assets:                                                                                                             |                   |                
|Cash surrender value
      of life insurance, net loans of $95,412 in 2000 and 1999                                       | 1,599,487         | 1,525,132      
|Intangibles, less accumulated
      amortization of $3,326,578 in 2000 and $1,914,343 in 1999 (note
    3)                | 36,083,403        | 37,786,935     
|Debt issuance
      costs, less accumulated amortization of $133,094 in 2000 and $90,469 in
      1999                    | 92,951            | 135,676        
|Due from affiliates (note
      11)                                                                                       | 219,874           | -              
|Deferred tax
      assets (note 8)                                                                                        | -                 | 292,377        
|Intangible
      pension asset (note 9)                                                                                   | 119,483           | -              
|Other                                                                                                                     | 982,883           | 922,279        
|                                                                                                                          | ---------------   | ---------------
|Total other
      assets                                                                                                  | 39,098,081        | 40,662,399     
|                                                                                                                          | ---------------   | ---------------
|Total assets                                                                                                              | $135,553,558      | $130,669,339   
|                                                                                                                          | ===========       | ==========     
|                                                                                                                          |                   |                

See accompanying notes to consolidated financial
statements

ii

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Consolidated Balance
Sheets

December 31, 2000 and
1999

|**LIABILITIES AND STOCKHOLDERS'
      EQUITY**                              | **2000**          | **1999**       
|--------------------------------------------------------------------------- | ----------------- | ---------------
|                                                                            | --------------    | ------------   
|Current
      liabilities:                                                  |                   |                
|Borrowings under lines of credit (note
      5)                             | $10,340,260       | $13,619,846    
|Current
      installments of long-term debt                                | 791,697           | 616,118        
|Deferred compensation payable
      (note 9)                                | 163,907           | 163,907        
|Trade
      payables                                                        | 1,687,420         | 1,991,930      
|Accrued
      expenses                                                      | 3,429,512         | 2,404,988      
|Income taxes
      payable                                                  | -                 | 843,780        
|Customer
      deposits                                                     | 6,720,982         | 7,201,254      
|                                                                            | ---------------   | ---------------
|Total current
      liabilities                                             | 23,133,778        | 26,841,823     
|Long-term debt,
      excluding current installments (note 6)               | 18,527,340        | 12,620,306     
|Deferred
      compensation (note 9)                                        | 3,381,305         | 3,494,136      
|Deferred tax
      liability (note 8)                                       | 151,000           | -              
|Accrued pension
      cost (note 9)                                         | 438,597           | 501,190        
|Accrued
      post-retirement benefit cost (note 9)                         | 705,537           | 634,805        
|Other                                                                       | 496,476           | 195,417        
|                                                                            | ----------------  | ---------------
|Total
      liabilities                                                     | 46,834,033        | 44,287,677     
|Commitments (note
      4)                                                  |                   |                
|Stockholders' equity
      (note 10):                                       |                   |                
|Preferred stock - $.01
      par value;                                     |                   |                
|2,500,000 shares
      authorized                                           |                   |                
|No shares issued and
      outstanding                                      |                   |                
|Common stock - Class
      A, $.01 par value; 30,000,000 shares authorized; |                   |                
|4,665,219 shares
      issued and outstanding in 2000                       |                   |                
|and
      4,328,171 in 1999                                                 | 46,652            | 43,282         
|Common stock -
      Class B, $.01 par value;                               |                   |                
|15,000,000 shares
      authorized;                                         |                   |                
|2,826, 438 shares
      issued and outstanding in                           |                   |                
|2000 and 3,115,746
      shares in 1999, convertible                        |                   |                
|into equivalent shares
      of Class A common stock                        | 28,264            | 31,157         
|Additional
      paid-in capital                                            | 67,996,227        | 67,909,375     
|Retained
      earnings                                                     | 21,040,703        | 18,577,207     
|Accumulated other
      comprehensive income                                | (392,321)         | (179,359)      
|                                                                            | ----------------  | ---------------
|                                                                            | 88,719,525        | 86,381,662     
|                                                                            | ----------------- | ---------------
|Total liabilities
      and stockholders' equity                            | $135,553,558      | $130,669,339   
|                                                                            | ===========       | ===========    
|                                                                            |                   |                

iii

**ROCK OF AGES CORPORATION AND
SUBSIDIARIES**

Consolidated Statements of
Operations

Years ended December 31, 2000, 1999
and 1998

|                                                                                                                           | **2000**         | **1999**        | **1998**       
|-------------------------------------------------------------------------------------------------------------------------- | ---------------- | --------------- | ---------------
|                                                                                                                           | -----------      | ------------    | -----------    
|Net
      revenues:                                                                                                        |                  |                 |                
|Quarrying                                                                                                                  | $22,886,916      | $22,180,179     | $19,224,906    
|Manufacturing                                                                                                              | 27,183,417       | 37,414,503      | 44,923,942     
|Retailing                                                                                                                  | 40,622,169       | 36,932,655      | 18,596,932     
|                                                                                                                           | ---------------- | --------------- | ---------------
|Total net revenues                                                                                                         | 90,692,502       | 96,527,337      | 82,745,780     
|                                                                                                                           | --------------   | --------------  | ---------------
|Cost of revenues:                                                                                                          |                  |                 |                
|Quarrying                                                                                                                  | 13,015,779       | 12,206,442      | 10,445,029     
|Manufacturing                                                                                                              | 20,382,475       | 29,623,521      | 34,081,672     
|Retailing                                                                                                                  | 18,233,141       | 17,353,072      | 7,798,111      
|                                                                                                                           | --------------   | --------------- | -------------  
|Total cost of
      revenues                                                                                               | 51,631, 395      | 59,183,035      | 53,324,812     
|                                                                                                                           | ---------------- | --------------- | ---------------
|Gross
      profit:                                                                                                        |                  |                 |                
|Quarrying                                                                                                                  | 9,871,137        | 9,973,737       | 8,779,877      
|Manufacturing                                                                                                              | 6,800,942        | 7,790,982       | 10,842,270     
|Retailing                                                                                                                  | 22,389,028       | 19,579,583      | 10,798,821     
|                                                                                                                           | ---------------- | --------------- | ---------------
|Total gross profit                                                                                                         | 39,061,107       | 37,344,302      | 30,420,968     
|Selling, general
      and administrative expenses                                                                         | 33,163,621       | 32,086,245      | 20,371,776     
|                                                                                                                           | --------------   | --------------- | ---------------
|Income from
      operations                                                                                               | 5,897,486        | 5,258,057       | 10,049,192     
|Interest
      expense                                                                                                     | 2,143,226        | 2,034,129       | 510,341        
|                                                                                                                           | --------------   | --------------- | ---------------
|Income before
      provision for income taxes and cumulative effect of a change in accounting
      principle             | 3,754,260        | 3,223,928       | 9,538,851      
|Provision for
      income taxes (note 8)                                                                                  | 1,290,764        | 1,394,846       | 2,302,824      
|                                                                                                                           | ---------------  | --------------- | ---------------
|Net income before
      cumulative effect of a change in accounting principle                                              | 2,463,496        | 1,829,082       | 7,236,027      
|Cumulative effect
      in prior years of a change in accounting principle (net of tax benefit of
      $47,559) (note 17) | -                | (149,781)       | -              
|                                                                                                                           | --------------   | --------------- | -------------- 
|Net
    income                                                                                                             | $2,463,496       | $1,679,301      | $7,236,027     
|                                                                                                                           | ==========       | =========       | ========       
|Net income per
      share - basic:                                                                                        |                  |                 |                
|Net income before cumulative effect of a
      change in accounting principle                                              | $0.33            | $0.24           | $0.98          
|Cumulative effect
      in prior year of a change in accounting principle (net of tax benefit of
      $47,559)            | -                | (0.02)          | -              
|                                                                                                                           | ---------------  | --------------- | -------------- 
|Net income per
      share                                                                                                 | $0.33            | $0.22           | $0.98          
|                                                                                                                           | ==========       | =========       | ========       
|Net income per
      share - diluted:                                                                                      |                  |                 |                
|Net income before cumulative effect of a
      change in accounting principle                                              | $0.33            | $0.23           | $0.91          
|Cumulative effect
      in prior year of a change in accounting principle (net of tax benefit of
      $47,559)            | -                | (0.02)          | -              
|                                                                                                                           | ---------------  | -------------   | -------------- 
|Net income per
      share                                                                                                 | $0.33            | $0.21           | $0.91          
|                                                                                                                           | =========        | ========        | ========       
|Weighted average
      number of common shares outstanding - basic                                                         | 7,447,460        | 7,509,241       | 7,349,371      
|Weighted average
      number of common shares outstanding - diluted                                                       | 7,575,839        | 7,825,589       | 7,984,094      
|                                                                                                                           |                  |                 |                

See accompanying
notes to consolidated financial statements

iv

**ROCK OF AGES CORPORATION AND
SUBSIDIARIES**

Consolidated Statements of
Stockholders' Equity and Comprehensive Income

Years ended December 31, 2000, 1999
and 1998

|                                        | **NUMBER OF
      SHARES**       |                  |                   |                   |                |                  |                  
|--------------------------------------- | -------------------------------- | ---------------- | ----------------- | ----------------- | -------------- | ---------------- | -----------------
|                                        | **ISSUED AND
      OUTSTANDING** |                  |                   |                   |                |                  |                  
|                                        | **CLASS A**                      | **CLASS B**      |                   |                   |                |                  | **ACCUMULATED**  
|                                        | **COMMON**                       | **COMMON**       | **CLASS
      A** | **CLASS
      B** | **ADDITIONAL** |                  | **OTHER**        
|                                        | **STOCK**                        | **STOCK**        | **COMMON**        | **COMMON**        | **PAID-IN**    | **RETAINED**     | **COMPREHENSIVE**
|                                        | **(SHARES)**                     | **(SHARES)**     | **STOCK**         | **STOCK**         | **CAPITAL**    | **EARNINGS**     | **INCOME**       
|                                        | ---------------                  | ---------------- | --------------    | ------------      | -------------- | ---------------- | ---------------- 
|Balance at
      December 31, 1997      | 3,800,641                        | 3,487, 957       | $38,007           | $34,879           | $68,277,394    | $9,661,879       | $(168,247)       
|Comprehensive income:                   |                                  |                  |                   |                   |                |                  |                  
|Net
    income                          | -                                | -                | -                 | -                 | -              | 7,236,027        | -                
|Cumulative translation
      adjustment | -                                | -                | -                 | -                 | -              | -                | (286,259)        
|Minimum liability
      adjustment      | -                                | -                | -                 | -                 | -              | -                | (30,742)         
|                                        |                                  |                  |                   |                   |                |                  |                  
|Total
      comprehensive income        |                                  |                  |                   |                   |                |                  |                  
|                                        |                                  |                  |                   |                   |                |                  |                  
|Conversion of
      common stock        | 5,000                            | (5,000)          | 50                | (50)              | -              | -                | -                
|Exercise of options                     | -                                | 2,000            | -                 | 20                | 7,460          | -                | -                
|Purchase of
      options               | -                                | -                | -                 | -                 | (381,200)      | -                | -                
|Acquisitions (note 16)                  | 90,537                           | -                | 905               | -                 | 1,446,571      |                  |                  
|                                        | -----------                      | -------------    | -------------     | ------------      | -------------  | -----------      | -----------      
|Balance at December 31,
      1998      | 3,896,178                        | 3,484,957        | 38,962            | 34,849            | 69,350,225     | 16,897,906       | (485,248)        
|Comprehensive
      income:             |                                  |                  |                   |                   |                |                  |                  
|Net income                              | -                                | -                | -                 | -                 | -              | 1,679,301        | -                
|Cumulative
      translation adjustment | -                                | -                | -                 | -                 | -              | -                | 305,889          
|                                        |                                  |                  |                   |                   |                |                  |                  
|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    | $18,577,207      | $(179,359)       
|Comprehensive income:                   |                                  |                  |                   |                   |                |                  |                  
|Net income                              | -                                | -                | -                 | -                 | -              | 2,463,496        | -                
|Cumulative translation
      adjustment | -                                | -                | -                 | -                 | -              | -                | (212,962)        
|                                        |                                  |                  |                   |                   |                |                  |                  
|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        | $46,652           | $28,264           | $67,996,227    | $21,040,703      | $(392,321)       
|                                        | ========                         | ========         | ========          | ========          | ==========     | =========        | ========         
|                                        |                                  |                  |                   |                   |                |                  |                  

See
accompanying notes to consolidated financial statements.

v

**ROCK OF AGES CORPORATION AND
SUBSIDIARIES**

Consolidated Statements of Cash
Flows

Years ended December 31, 2000, 1999
and 1998

|                                                                          | **2000**         | **1999**        | **1998**        
|------------------------------------------------------------------------- | ---------------- | --------------- | ----------------
|                                                                          | ---------------- | --------------  | ----------------
|Cash flows from
      operating activities:                               |                  |                 |                 
|Net income                                                                | $2,463,946       | $1,679,301      | $7,236,027      
|Adjustments to
      reconcile net cash provided by operating activities: |                  |                 |                 
|Depreciation, depletion and amortization                                  | 4,670,803        | 4,010,012       | 3,308,377       
|Write down of
      goodwill                                              | 382,864          | -               | -               
|Increase in cash
      surrender value of life insurance                  | (74,355)         | (78,076)        | (149,685)       
|Loss on sale of
      property, plant and equipment                       | 172,198          | 842,030         | 34,078          
|Cumulative effect
      of a change in accounting principle               | -                | 149,781         | -               
|Deferred
      taxes                                                      | 452,377          | 2,709           | 207,044         
|Changes in
      operating assets and liabilities:                        |                  |                 |                 
|Decrease (increase) in trade
      receivables                            | (1,353,744)      | 400,648         | 538,321         
|Increase in due
      to/from related parties                             | (272,014)        | (99,701)        | (31,030)        
|Decrease
      (increase) in inventories                                  | 494,930          | 1,671,371       | (3,996,110)     
|Decrease
      (increase) in other current assets                         | (600,559)        | (613,993)       | 241,015         
|Decrease
      (increase) in intangible pension asset                     | (119,483)        | 218,888         | (24,852)        
|Decrease in other
      assets                                            | (58,603)         | 59,413          | 26,462          
|Decrease in trade
      payables                                          | (348,629)        | (987,382)       | (716,437)       
|Increase
      (decrease) in accrued expenses                             | 1,014,791        | (1,196,545)     | (607,247)       
|Increase
      (decrease) in income taxes payable/receivable              | (1,365,039)      | 1,482,531       | (941,723)       
|Increase
      (decrease) in customer deposits                            | (552,117)        | 1,241,789       | (1,090,054)     
|Decrease in
      deferred compensation                                   | (112,831)        | (33,856)        | (29,398)        
|Decrease in
      deferred income                                         | -                | (124,386)       | (400,000)       
|Increase
      (decrease) in accrued pension cost                         | (62,593)         | 467,098         | 34,092          
|Increase in
      accrued post-retirement benefit cost                    | 70,732           | 65,160          | 42,131          
|Increase
      (decrease) in other liabilities                            | (118,941)        | 417             | -               
|                                                                          | -----------      | --------------  | -------------   
|Net cash provided
      by operating activities                           | 4,683,283        | 9,157,209       | 3,681,011       
|                                                                          | ------------     | --------------  | -------------   
|Cash flows from
      investing activities:                               |                  |                 |                 
|Purchases of property, plant and equipment                                | (2,884,389)      | (3,559,510)     | (3,462,286)     
|Proceeds from
      sale of assets                                        | 884,586          | 137,451         | 40,725          
|Decrease (increase) in other
      investments                            | -                | 342,551         | (12,424)        
|Acquisitions, net
      of cash acquired                                  | (655,081)        | (12,919,177)    | (20,451,341)    
|Increase in intangible
      assets                                       | (152,164)        | -               | -               
|Cash included in
      sale of subsidiary                                 | -                | (250,000)       | -               
|                                                                          | -----------      | --------------- | ------------    
|Net cash used in
      investing activities                               | (2,807,048)      | (16,248,685)    | (23,885,326)    
|                                                                          | ------------     | --------------  | --------------  
|Cash flows from
      financing activities:                               |                  |                 |                 
|Net borrowings (repayments) under lines of
      credit                   | (3,279,586)      | 6,933,190       | 5,358,176       
|Decrease
      (increase) in debt issuance costs                          | -                | 11,796          | (147,398)       
|Increase in
      organization costs                                      | -                | -               | (9,717)         
|Proceeds from
      long-term debt                                        | 6,500,000        | -               | 12,000,000      
|Principal
      payments on long-term debt                                | (417,387)        | (608,216)       | (327,016)       
|Net stock option
      transactions                                       | 87,330           | 718,853         | (373,720)       
|                                                                          | -------------    | --------------  | --------------  
|Net cash provided
      by financing activities                           | 2,890,357        | 7,055,623       | 16,500,325      
|                                                                          | --------------   | -------------   | --------------  
|Effect of
      exchange rate changes on cash                             | (142,441)        | 211,899         | (231,702)       
|                                                                          | -------------    | -------------   | ------------    
|Net increase
      (decrease) in cash and cash equivalents                | 4,624,151        | 176,046         | (3,935,692)     
|Cash and cash
      equivalents, beginning of year                        | 4,877,214        | 4,701,168       | 8,636,860       
|                                                                          | --------------   | -------------   | -------------   
|Cash and cash
      equivalents, end of year                              | $9,501,365       | $4,877,214      | $4,701,168      
|                                                                          | =========        | ========        | ========        
|                                                                          |                  |                 |                 

See accompanying
notes to consolidated financial statements

vi

**ROCK OF AGES CORPORATION AND
SUBSIDIARIES**

Consolidated Statements of Cash
Flows

|                                          | **2000**     | **1999**     | **1998**    
|----------------------------------------- | ------------ | ------------ | ------------
|                                          | ------------ | ------------ | ------------
|Supplemental cash
      flow information: |              |              |             
|Cash paid during the year for:            |              |              |             
|Interest                                  | $2,143,226   | $2,112,113   | $432,257    
|Income taxes                              | 2,209,383    | (88,691)     | 3,096,086   
|                                          |              |              |             

Supplemental non-cash investing and financing
activities:

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.

See Note 15 for non-cash activities relating to
the acquisitions.

During 1998 the Company adjusted goodwill and
income tax payable for the 1997 acquisitions in the amount of $163,439 upon
filing of final tax returns.

|                                         | **2000**      | **1999**        | **1998**         
|---------------------------------------- | ------------- | --------------- | -----------------
|                                         | ------------  | --------------  | ---------------  
|Acquisitions:                            |               |                 |                  
|Assets acquired                          | $780,777      | $15,364,803     | $29,187,584      
|Liabilities
      assumed and issued     | (125,696)     | (1,638,803)     | (6,664,933)      
|Common stock issued                      | -             | (639,986)       | (1,447,476)      
|                                         | ------------- | --------------- | -----------------
|Cash paid                                | 655,081       | 13,086,014      | 21,075,175       
|Costs related to
      1998 acquisitions | -             | 336,976         | -                
|Less cash acquired                       | -             | (503,813)       | (623,834)        
|                                         | ------------- | --------------- | --------------   
|Net cash paid for
      acquisitions     | $655,081      | $12,919,177     | $20,451,341      
|                                         | =========     | ==========      | =========        
|                                         |               |                 |                  

See accompanying notes to consolidated financial
statements.

vii

**ROCK OF AGES CORPORATION AND
SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

**(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.

**(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.

**(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 $3,174,615,
$2,658,965 and $2,547,300 in 2000, 1999 and 1998, 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 $41,228, $160,109
and $58,080 in 2000, 1999 and 1998, respectively.

**(e)
INTANGIBLES**

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

viii

******ROCK OF AGES CORPORATION AND
SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

**(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 $42,725, $48,023 and $34,595 in 2000, 1999 and 1998,
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.

Organization costs had previously been
capitalized and were amortized using the straight-line method over 60 months.
Amortization expense amounted to $53,013 in 1998.

**(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, 2000.

**(j) STOCK-BASED EMPLOYEE
COMPENSATION**

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

**(k) PENSION AND OTHER
POSTRETIREMENT PLANS**

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

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

ix

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

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**

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.

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

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

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

x

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

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.

**(o) 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.

**(p) 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.

**(q) 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.

**(r)
RECLASSIFICATIONS**

Certain reclassifications have been made to
prior year's financial statements in order to conform to the 2000
presentation.

**(2)
INVENTORIES**

Inventories consist of the following at December
31, 2000 and 1999:

|                                  | **2000**      | **1999**      
|--------------------------------- | ------------- | --------------
|                                  | ------------- | --------------
|Raw
      materials               | $9,710,070    | $9,650,190    
|Work-in-process                   | 3,500,434     | 1,703,543     
|Finished goods
      and supplies | 9,699,873     | 11,938,074    
|                                  | ------------- | ------------- 
|                                  | $22,910,377   | $23,291,807   
|                                  | ===========   | ==========    
|                                  |               |               

xi

******ROCK OF AGES CORPORATION AND
SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

**(3)
INTANGIBLES**

Intangibles consist of the following at December
31, 2000 and 1999:

|                                    | **ESTIMATED USEFUL LIFE**              | **2000**        | **1999**       
|----------------------------------- | -------------------------------------- | --------------- | ---------------
|                                    | -------------------------------------- | -----------     | -------------  
|Names and
      reputations         | 40
      Years                         | $38,337,567     | $39,206,178    
|Covenants not to
compete            | 5 Years                                | 945,100         | 495,100        
|Trademarks and
      other          | 5-40
      Years                       | 127,314         | -              
|                                    |                                        | --------------- | ---------------
|                                    |                                        | 39,409,981      | 39,701,278     
|Less accumulated
      amortization |                                        | 3,326,578       | 1,914,343      
|                                    |                                        | --------------  | -------------- 
|Total                               |                                        | $36,083,403     | $37,786,935    
|                                    |                                        | =========       | =========      
|                                    |                                        |                 |                

Amortization expense was $1,412,235 in 2000, $1,142,915
in 1999 and $615,389 in 1998.

**(4)
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 $1,222,011, $1,257,320 and
$596,912 during 2000, 1999 and 1998, respectively. Rental expense includes
amounts for related party operating leases of $618,947, $533,047 and $320,330 in
2000, 1999 and 1998, respectively.

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

|**YEAR ENDED DECEMBER 31:**                | **RELATED PARTY**             | **OTHER**      
|------------------------------------------ | ----------------------------- | ---------------
|------------------------------------------ | ----------------------------- | ---------------
|2001                                       | $613,249                      | $443,283       
|2002                                       | 583,297                       | 396,809        
|2003                                       | 321,181                       | 276,706        
|2004                                       | 157,764                       | 155,494        
|2005                                       | 76,800                        | 71,020         
|Thereafter                                 | -                             | 10,050         
|                                           | ---------------               | -------------  
|                                           | $1,752,291                    | $1,353,632     
|                                           | =========                     | =======        
|                                           |                               |                

The Company also is
the lessor of various parcels of land. Rental income was $45,771, $35,239 and
$36,031 in 2000, 1999 and 1998, respectively. Future minimum rentals to be
received under noncancellable leases are as follows:

|**YEAR ENDED DECEMBER
      31:**         |             
|----------------------------------------- | ------------
|----------------------------------------- |             
|2001                                      | $33,341     
|2002                                      | 21,241      
|2003                                      | 17,641      
|2004                                      | 12,386      
|                                          | ------------
|                                          | $84,609     
|                                          | =======     
|                                          |             

****xii****

******ROCK OF
AGES CORPORATION AND SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

**(****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 $10,340,260 and $12,500,000 and $6,000,000 as of December 31, 2000 and
$13,619,846 and $12,000,000 and $0 as of December 31, 1999 on the revolving
credit facility, term loan A and term loan B, respectively. The weighted average
interest rate was 9.08% and 7.25% on the revolving credit facility in 2000 and
1999, respectively.

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, 2000 and 1999.

xiii

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

**(6) LONG-TERM
DEBT**

Long-term debt at December 31, 2000 and 1999
consists of the following:

|                                                                                                                                                                                                 | **2000**        | **1999**        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------- | ----------------
|                                                                                                                                                                                                 | --------------- | --------------  
|Note payable -
      Dutton, interest at 6%, payable in monthly principal and interest payments
      of $674, unsecured, due December 2003                                                      | $22,190         | $28,733         
|Note payable - Plante, interest
      at 8%, payable in monthly payments of $2,563 beginning February 2001,
      unsecured, due January 2021                                                    | 310,000         | 310,000         
|Note payable -
      bank, interest at prime plus 1.5%, payable in monthly installments of $544
      plus interest, due November 2001, secured by property                                      | -               | 12,693          
|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 feet per month                                 | 236,697         | 282,660         
|Note payable -
      Chrysler Financial, interest at 2.9%, payable in monthly installments of
      $598, due December 2001, secured by equipment                                                | 2,122           | 10,508          
|Note payable - GMAC, interest at
      4.9%, payable in monthly installments of $439, due February 2002, secured
      by equipment                                                              | 5,968           | 10,820          
|Note payable -
      GMAC, interest at 2.9%, payable in monthly installments of $716, due
      October 2002, secured by equipment                                                               | 15,332          | 23,360          
|Note payable - Harold, interest
      at 10%, payable in monthly installments of $4,366, due June 2001, secured
      by property and equipment                                                  | 21,298          | 72,688          
|Term loan,
      interest at 9.25% and 7.25% in 2000 and 1999, respectively (see note 5),
      due December 2002, secured by substantially all assets of the
      Company                      | 12,500,000      | 12,000,000      
|Note payable - PNC, interest at
      8.95%, payable in monthly installments of $334, due July 2001, secured by
      equipment                                                                  | 2,811           | 6,482           
|Note payable -
      Remsen Dodge, interest at 2.9%, payable in monthly installments of $598,
      due December 2002, secured by equipment                                                      | 6,483           | 13,362          
|Note payable - Ford Motor Credit
      Corp., interest 2.9%, payable in monthly installments of $392, due
      September 2002, secured by equipment                                             | 7,994           | 11,996          
|Note payable -
      Hilgendorf, paid in February 2000                                                                                                                                           | -               | 62,000          
|Note payable - Hilgendorf, paid
      in February 2000                                                                                                                                           | -               | 50,000          
|Term loan,
      interest at 9.25%, payable in quarterly installments of $212,000 with a
      final balloon payment due December 2002, secured by substantially all
      assets of the Company | 6,000,000       | -               
|Obligation under capital lease,
      interest at 7.99%, payable in monthly installments of $1,505 plus
      interest, due December 2000, secured by equipment                                  | -               | 35,411          
|Obligation under
      capital lease, interest at 7.89%, payable in monthly installments of
      $10,276, due June 2001, secured by equipment                                                   | 188,142         | 305,711         
|                                                                                                                                                                                                 | --------------- | --------------- 
|                                                                                                                                                                                                 | 19,319,037      | 13,236,424      
|Less current
    installments                                                                                                                                                                    | 791,697         | 616,118         
|                                                                                                                                                                                                 | --------------  | ----------------
|Long-term debt, excluding current
      installments                                                                                                                                             | $18,527,340     | $12,620,306     
|                                                                                                                                                                                                 | ===========     | ==========      
|                                                                                                                                                                                                 |                 |                 

xiv

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

Future maturities of the December 31, 2000
long-term debt are as follows:

|**YEAR ENDED DECEMBER
      31:**                    | **OBLIGATIONS UNDER CAPITAL LEASE**                       | **OTHER
      LONG-TERM DEBT**         
|---------------------------------------------------- | --------------------------------------------------------- | ---------------------------------------
|------------------------------------------           | --------------------------------------------------------- | ---------------------------------------
|2001                                                 | $203,193                                                  | $603,555                               
|2002                                                 | -                                                         | 18,222,509                             
|2003                                                 | -                                                         | 15,500                                 
|2004                                                 | -                                                         | 8,323                                  
|2005                                                 | -                                                         | 8,954                                  
|Thereafter                                           | -                                                         | 272,054                                
|                                                     | -----------                                               | -----------                            
|                                                     | 203,193                                                   | 19,130,895                             
|Interest included in obligations under capital lease | 15,051                                                    | ==========                             
|                                                     | -------------                                             |                                        
|                                                     | $188,142                                                  |                                        
|                                                     | =========                                                 |                                        
|                                                     |                                                           |                                        



The cost of the
equipment under capital leases was $670,590 and $786,755 and related accumulated
depreciation was $201,558 and $181,432 as of December 31, 2000 and 1999,
respectively.

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, 2000 the Company
was in compliance with all such covenants.

**(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, 2000.

**(8) INCOME
TAXES**

Income before provision for income taxes,
classified by source of income was as follows:

|                                               | **2000**       | **1999**     | **1998**  
|---------------------------------------------- | -------------- | ------------ | ----------
|                                               | ----------     | ---------    | ----------
|U.S.                                           | $2,555,670     | $2,351,664   | $8,192,513
|Foreign                                        | 1,198,590      | 872,264      | 1,346,338 
|                                               | -------------- | ------------ | ----------
|Income before provision for
      income taxes | $3,754,260     | $3,223,928   | $9,538,851
|                                               | ========       | =========    | ========  
|                                               |                |              |           

xv

******ROCK OF AGES CORPORATION AND
SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

A summary of the significant components of the
provision for income taxes for the years ended December 31, 2000, 1999 and 1998
is as follows:

|                                                            | **2000**       | **1999**      | **1998**      
|----------------------------------------------------------- | -------------- | ------------- | --------------
|                                                            | -----------    | ------------- | ------------- 
|Current:                                                    |                |               |               
|Federal                                                     | $233,446       | $791,319      | $1,572,964    
|State                                                       | 197,003        | 314,787       | 423,833       
|Foreign                                                     | 407,938        | 286,031       | 98,983        
|                                                            | ------------   | ------------  | ------------- 
|Total current                                               | 838,387        | 1,392,137     | 2,095,780     
|                                                            | -------------- | ------------- | ------------- 
|Deferred:                                                   |                |               |               
|Federal                                                     | 295,969        | (1,713)       | -             
|State                                                       | 159,873        | (926)         | -             
|Foreign                                                     | (3,465)        | 5,348         | 207,044       
|                                                            | -----------    | ------------  | --------------
|Total
      deferred                                        | 452,377        | 2,709         | 207,044       
|                                                            | ========       | ========      | ========      
|Cumulative effect
      of a change in accounting principle | -              | (47,559)      | -             
|                                                            | -------------- | ------------- | --------------
|Total provision
      for income taxes                      | $1,290,764     | $1,347,287    | $2,302,824    
|                                                            | =========      | ========      | ========      
|                                                            |                |               |               

The tax effects of temporary differences that give rise
to significant portions of the deferred tax assets and deferred tax liabilities
at December 31, 2000 and 1999 are presented below:

|                                                                                                                                 | **2000**        | **1999**      
|-------------------------------------------------------------------------------------------------------------------------------- | --------------- | --------------
|                                                                                                                                 | -----------     | ------------  
|Deferred tax
      assets:                                                                                                       |                 |               
|Accrued pension, accrued postretirement
      benefit cost and deferred compensation                                             | $1,270,000      | $1,324,000    
|Allowance for
      doubtful accounts                                                                                            | 341,000         | 463,000       
|Accrued expenses                                                                                                                 | 87,000          | 98,000        
|Inventories,
      principally due to additional costs inventoried for tax purposes pursuant
      to the Tax Reform Act of 1986 | 457,000         | 393,000       
|Alternative minimum tax
      credits                                                                                            | 3,318,000       | 2,898,000     
|State net
      operating loss carryovers                                                                                        | 405,000         | -             
|                                                                                                                                 | --------------  | --------------
|Total gross
      deferred tax assets                                                                                            | 5,878,000       | 5,176,000     
|Less valuation
      allowance                                                                                                   | (4,172,000)     | (3,347,000)   
|                                                                                                                                 | --------------  | --------------
|Total net
      deferred tax assets                                                                                              | 1,706,000       | 1,829,000     
|                                                                                                                                 | --------------  | ------------- 
|Deferred tax
      liabilities:                                                                                                  |                 |               
|Quarry
      development                                                                                                         | (394,000)       | (386,000)     
|Names and
      reputations                                                                                                      | (616,000)       | (286,000)     
|Other
      liabilities                                                                                                          | (271,000)       | (279,623)     
|                                                                                                                                 | --------------  | ------------- 
|Total gross
      deferred tax liabilities                                                                                       | (1,281,000)     | (951,623)     
|                                                                                                                                 | --------------- | ------------- 
|Net deferred tax
      assets                                                                                                    | $425,000        | $877,377      
|                                                                                                                                 | =========       | =======       
|                                                                                                                                 |                 |               

xvi

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

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.

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:

|                                          | **2000**      | **1999**       | **1998**       
|----------------------------------------- | ------------- | -------------- | ---------------
|                                          | ------------- | -------------- | ---------------
|U.S. statutory
      rate                 | 34.0%         | 34.0%          | 34.0%          
|State taxes, net of federal
      benefit | 6.3%          | 6.4%           | 2.9%           
|Names and
      reputations amortization  | 10.7%         | 6.0%           | 1.6%           
|Keystone divestiture                      | -             | 10.3%          | -              
|Minimum tax
      credits utilized        | -             | -              | (2.3%)         
|Other, primarily tax
      depletion      | (16.6%)       | (13.4%)        | (12.1%)        
|                                          | ------------  | ------------   | ------------   
|Effective tax rate                        | 34.4%         | 43.3%          | 24.1%          
|                                          | ========      | =======        | =======        
|                                          |               |                |                

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.

xvii

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

|                                                                       | **NON-UNION**        | **DEFERRED**              |                    |                 
|---------------------------------------------------------------------- | -------------------- | ------------------------- | ------------------ | ----------------
|                                                                       | **PENSION BENEFITS** | **COMPENSATION BENEFITS** | **OTHER BENEFITS**
|                                                                       | **2000**             | **1999**                  | **2000**           | **1999**        
|                                                                       | ------------         | --------------            | ---------------    | -------------   
|**CHANGE IN
      BENEFIT OBLIGATION:**                                |                      |                           |                    |                 
|Benefit obligation at beginning of year                                | $16,228,960          | $16,819,615               | $1,592,016         | $1,793,754      
|Service
      cost                                                     | 442,750              | 475,922                   | 62,488             | 96,855          
|Interest cost                                                          | 1,200,929            | 1,127,258                 | 115,417            | 117,612         
|Actuarial
      (gain)/loss                                            | 263,320              | (1,248,952)               | 170,277            | (313,510)       
|Benefits paid                                                          | (949,594)            | (944,883)                 | (106,248)          | (102,695)       
|                                                                       | --------------       | --------------            | ---------------    | --------------  
|Benefit obligation at end of
      year                                | $17,186,365          | $16,228,960               | $1,833,950         | $1,592,016      
|                                                                       | ==========           | ==========                | ==========         | ==========      
|**CHANGE IN PLAN
      ASSETS:**                                       |                      |                           |                    |                 
|Fair value of plan assets at beginning of
      year                   | $16,541,624          | $15,675,425               | $-                 | $ -             
|Actual return on plan
      assets                                     | 292,534              | 1,811,082                 | -                  | -               
|Employer
      contribution                                            | 444,655              | -                         | 106,248            | 102,695         
|Benefits
      paid                                                    | (949,594)            | (944,883)                 | (106,248)          | (102,695)       
|                                                                       | ---------------      | ---------------           | ----------------   | --------------  
|Fair value of
      plan assets at end of year                         | $16,329,219          | $16,083,179               | $ -                | $ -             
|                                                                       | =========            | ==========                | ===========        | =========       
|Funded
      status                                                    | $(857,146)           | $312,664                  | $(1,833,950)       | $(1,592,016)    
|Unrecognized net
      actuarial (gain)/loss                           | (955,138)            | (2,422,189)               | 57,975             | (112,302)       
|Unrecognized
      prior service cost                                  | 1,104,029            | 1,234,433                 | 147,084            | 171,347         
|Unrecognized
      transition obligation                               | 269,658              | 373,902                   | 10,948             | 17,113          
|                                                                       | -------------        | ----------------          | -------------      | --------------- 
|Net amount
      recognized                                            | $(438,597)           | $(501,190)                | $(1,617,943)       | $(1,515,858)    
|                                                                       | -------------        | ----------------          | ----------------   | --------------- 
|Amounts
      recognized in the consolidated balance sheet consist of: |                      |                           |                    |                 
|Accrued benefit liability                                              | $(438,597)           | $(501,190)                | $(1,737,426)       | $(1,515,858)    
|Intangible
      asset                                                 | -                    | -                         | 119,483            | -               
|Minimum liability
      adjustment                                     | -                    | -                         | -                  | -               
|                                                                       | ---------------      | ---------------           | ---------------    | ----------------
|Net amount
      recognized                                            | $(438,597)           | $(501,190)                | $(1,617,943)       | $(1,515,858)    
|                                                                       | ---------------      | --------------            | ----------------   | ----------------
|**WEIGHTED-AVERAGE ASSUMPTIONS AS OF
      DECEMBER 31:**              |                      |                           |                    |                 
|Discount rate                                                          | 7.5%                 | 7.5%                      | 7.5%               | 7.5%            
|Expected return
      on plan assets                                   | 9.0%                 | 9.0%                      | N/A                | N/A             
|Rate of
      compensation increase                                    | 5.5%                 | 5.5%                      | 4.5%               | 4.5%            
|                                                                       |                      |                           |                    |                 

For measurement
purposes, a 6 % annual rate of increase in the per capita cost of covered health
care benefits was assumed for 1999. The rate was assumed to decrease gradually
to 5% for 2000 and 4% for 2001 and remain at that level
thereafter.

xviii

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

|                                             |                                      | **DEFERRED**              |                   
|-------------------------------------------- | ------------------------------------ | ------------------------- | ------------------
|                                             | **NON-UNION PENSION
      BENEFITS** | **COMPENSATION BENEFITS** | **OTHER BENEFITS**
|                                             | **2000**                             | **1999**                  | **1998(1)**       
|                                             | -----------                          | -----------               | -------------     
|**COMPONENTS OF NET PERIODIC BENEFIT
COST:** |                                      |                           |                   
|Service cost                                 | $442,750                             | $475,922                  | $451,249          
|Interest
      cost                          | 1,200,929                            | 1,127,258                 | 1,146,229         
|Expected return on plan
      assets         | (1,458,621)                          | (1,370,730)               | (1,283,875)       
|Amortization of
      prior service cost     | 130,404                              | 130,404                   | 173,318           
|Amortization of transition
      obligation  | 104,244                              | 104,244                   | 138,644           
|Recognized net
      actuarial (gain)/loss   | (37,644)                             | -                         | -                 
|                                             | ------------                         | ------------              | ------------      
|Net periodic
      benefit cost              | $382,062                             | $467,098                  | $625,565          
|                                             | ========                             | =======                   | =======           
|                                             |                                      |                           |                   

(1)
In addition, there was a special charge under SFAS No. 88 of $58,115 due to the
spin-off of the Swenson Granite Company, LLC salaried employees as of December
1, 1998.

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
$641,358, $641,150 and $740,941 in 2000, 1999 and 1998, 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 $1,807,786,
$2,142,185 and $2,070,171 as of December 31, 2000, 1999 and 1998 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.

**401(k) BENEFITS**

The Company's contributions were $104,032,
$156,205 and $93,263 in 2000, 1999 and 1998, respectively. Acquisitions during
2000, 1999 and 1998 have significantly increased the number of participants in
the plans.

xix





**ROCK OF AGES CORPORATION
AND SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

**(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 higher term and vest at 25% per year.

The following table sets forth the stock option
transactions for the years ended December 31, 2000, 1999 and 1998:

|                                        | **NUMBER OF OPTIONS**                | **WEIGHTED AVERAGE EXERCISE PRICE**                    
|--------------------------------------- | ------------------------------------ | -------------------------------------------------------
|                                        | ------------------------------------ | -------------------------------------------------------
|Outstanding,
      December 31, 1997    | 1,245,752                            | $7.98                                                  
|Granted during 1998                     | 125,000                              | 14.44                                                  
|Lapsed during
      1998                | (40,500)                             | (3.57)                                                 
|Exercised during 1998                   | (42,000)                             | (3.10)                                                 
|                                        | -------------                        | ------------                                           
|Outstanding, December 31,
      1998    | 1,288,252                            | $8.90                                                  
|Granted during
      1999               | 175,000                              | 11.68                                                  
|Exercised during
      1999             | (274,600)                            | (2.62)                                                 
|Surrendered
      during 1999           | (658,252)                            | (16.17)                                                
|                                        | -----------                          | -------------                                          
|Outstanding,
      December 31, 1999    | 530,400                              | $4.04                                                  
|Granted during
      2000               | 392,500                              | 4.94                                                   
|Lapsed during 2000                      | (84,318)                             | (3.61)                                                 
|Exercised during
      2000             | (5,500)                              | (3.74)                                                 
|                                        | -------------                        | -------------                                          
|Outstanding,
      December 31, 2000    | 833,082                              | $4.45                                                  
|                                        | =========                            | ========                                               
|Exercisable,
      December 31, 2000    | 338,716                              | $3.78                                                  
|Weighted average
      remaining shares | 2.1
      years                      |                                                        
|                                        |                                      |                                                        

|                    |                                         | **WEIGHTED AVERAGE** | **OPTIONS EXERCISABLE**             
|------------------- | --------------------------------------- | -------------------- | ------------------------------------
|**EXERCISE PRICE**  | **NUMBER OF OPTIONS
      OUTSTANDING** | **EXERCISE PRICE**   | **REMAINING CONTRACTUAL
      LIFE**
|$3.59 -
      $3.76 | 415,582                                 | $3.68                | 1 Year                              
|$4.94               | 392,500                                 | $4.94                | 3.5 Years                           
|$12.38              | 25,000                                  | $12.38               | 2 Years                             
|                    |                                         |                      |                                     

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 2000, 1999 and 1998
consistent with the provisions of SFAS No. 123, the Company's net income would
have been reduced to the pro forma amount indicated below:

|                                                          | **2000**         | **1999**        | **1998**    
|--------------------------------------------------------- | ---------------- | --------------- | ------------
|                                                          | ---------------- | --------------- | ------------
|Net income, as
      reported                             | $2,463,496       | $1,679,301      | $7,236,027  
|Net income, pro forma                                     | 2,297,059        | 1,518,030       | 6,616,927   
|Net income per share, pro
      forma                     | .31              | .20             | .90         
|Net income per
      share - assuming dilution, pro forma | .29              | .19             | .83         
|                                                          |                  |                 |             

xx

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,
1999 and 1998 was $2.32, $6.08, and $3.99, 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%, 47% and 49%, respectively; and expected lives of four or five
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, 2000, 1999 and 1998:

|                       | **2000**         | **1999**          | **1998**      
|---------------------- | ---------------- | ----------------- | --------------
|                       | ---------------- | ----------------- | --------------
|Net revenues           | $14,934          | $26,013           | $196,032      
|Cost of
      revenues | 54,379           | 320,247           | 2,084,292     
|                       |                  |                   |               

Amounts due to (from) related parties as of December 31,
2000 and 1999 are as follows:

|                                            | **2000**       | **1999**        
|------------------------------------------- | -------------- | ----------------
|                                            | -------------- | --------------  
|Due from Swenson
      Granite Company, LLC | $1,376         | $8,370          
|Due from Granite Accents, Inc.              | 62,135         | 83,723          
|Due from Kotecki
      Family Enterprises   | 3,233          | 3,196           
|Due from Rock of
      Ages Asia            | 178,433        | -               
|Due from Maple
      Farms Japan            | 122,126        | -               
|                                            | -------------  | ----------------
|                                            | $367,303       | $95,289         
|                                            | ========       | =========       
|                                            |                |                 

See note 4 for operating lease obligations with related
parties.

xxi

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

**(12) UNAUDITED QUARTERLY
SUMMARY INFORMATION**

The following is a summary of unaudited
quarterly summary information for the years ended December 31, 2000, 1999 and
1998 (in thousands, except per share data):

|                     |                         |                        |                          | **NET INCOME**        
|-------------------- | ----------------------- | ---------------------- | ------------------------ | ----------------------
|                     |                         |                        |                          | **(LOSS)**            
|                     |                         |                        | **NET INCOME**           | **PER SHARE-**        
|                     | **NET**                 | **NET INCOME**         | **(LOSS)**               | **ASSUMING**          
|                     | **REVENUES**            | **(LOSS)**             | **PER SHARE**            | **DILUTION**          
|                     | ----------------------- | ---------------------- | ------------------------ | ----------------------
|2000
      Quarters: |                         |                        |                          |                       
|First                | $14,233                 | (2,693)                | (.36)                    | (.36)                 
|Second               | 28,813                  | 3,211                  | .43                      | .42                   
|Third                | 23,528                  | 1,355                  | .18                      | .18                   
|Fourth
    (1)       | 24,119                  | 590                    | .08                      | .09                   
|                     | ------------------      | -------------------    | --------------------     | -----------------     
|Total                | $90,693                 | 2,463                  | .33                      | .33                   
|                     | ===========             | ============           | ============             | ==========            
|1999
      Quarters: |                         |                        |                          |                       
|First                | $17,518                 | $(2,012)               | $(.27)                   | $(.27)                
|Second               | 28,986                  | 1,336                  | .18                      | .17                   
|Third                | 24,413                  | 1,062                  | .14                      | .14                   
|Fourth               | 25,610                  | 1,293                  | .17                      | .17                   
|                     | ------------------      | -------------------    | ------------------       | ---------------       
|Total                | $96,527                 | $1,679                 | $.22                     | $.21                  
|                     | ==========              | ===========            | ===========              | =========             
|1998
      Quarters: |                         |                        |                          |                       
|First                | $15,171                 | $(431)                 | $(.06)                   | $(.06)                
|Second               | 22,955                  | 2,787                  | .38                      | .35                   
|Third                | 22,006                  | 2,754                  | .37                      | .35                   
|Fourth               | 22,614                  | 2,126                  | .29                      | .27                   
|                     | -----------------       | -------------------    | -------------------      | -----------------     
|Total                | $82,746                 | $7,236                 | .98                      | .91                   
|                     | ========                | =========              | =========                | ========              
|                     |                         |                        |                          |                       

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. The Company made a significant number of acquisitions in the
second and third quarters of 1998.

(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.

xxii

**ROCK OF AGES CORPORATION AND
SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

**(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, 2000, 1999 and
1998:

|                                                                                           | **2000**          | **1999**           | **1998**          
|------------------------------------------------------------------------------------------ | ----------------- | ------------------ | ------------------
|                                                                                           | ----------------- | ------------------ | ------------------
|Numerator:                                                                                 |                   |                    |                   
|Income available to common shareholders used in basic and diluted
      earnings per share | $2,463,496        | $1,679,301         | $7,236,027        
|                                                                                           | ==========        | =========          | =========         
|Denominator:                                                                               |                   |                    |                   
|Denominator for basic earnings per
      share:                                            |                   |                    |                   
|Weighted average shares                                                                    | 7,447,460         | 7,509,241          | 7,349,371         
|Stock
      options                                                                        | 128,379           | 316,348            | 634,723           
|                                                                                           | --------------    | ---------------    | ----------------  
|Denominator for
      diluted earnings per share:                                          |                   |                    |                   
|Adjusted weighted average shares                                                           | 7,575,839         | 7,825,589          | 7,984,094         
|                                                                                           | ==========        | =========          | =========         
|Basic earnings per
    share:                                                              | $.33              | $.22               | $.98              
|Diluted earnings
      per share:                                                          | $.33              | $.21               | $.91              
|                                                                                           |                   |                    |                   

Options to purchase 25,000, 25,000 and 478,252
shares of Class A common stock at exercises prices ranging from $12.38 to $18.50
per share were outstanding in 2000, 1999 and 1998, 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.

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

xxiii

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

The following is the segment information for the
years ended December 31, 2000, 1999 and 1998 (in thousands):

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



|                                                   |                        |                                 |                     | **CORPORATE**   |                
|-------------------------------------------------- | ---------------------- | ------------------------------- | ------------------- | --------------- | ---------------
|**1999**                                           | **QUARRYING**          | **MANUFACTURING**               | **RETAILING**       | **OVERHEAD**    | **TOTAL**      
|--------                                           | ---------------------- | ------------------------------- | ------------------- | --------------- | -------------- 
|Total net
      revenues                           | $27,972                | $44,790                         | $36,933             | $ -             | $109,695       
|Inter-segment net
    revenues                     | 5,792                  | 7,376                           | -                   | -               | 13,168         
|                                                   | --------------         | ------------                    | -------------       | --------------  | ---------------
|Net revenues                                       | 22,180                 | 37,414                          | 36,933              | -               | 96,527         
|Total gross
      profit                           | 12,565                 | 5,595                           | 19,184              | -               | 37,344         
|Inter-segment gross
    profit                     | 2,591                  | (2,195)                         | (396)               | -               | -              
|                                                   | ---------------        | -------------                   | --------------      | -------------   | -------------  
|Gross profit                                       | 9,974                  | 7,790                           | 19,580              | -               | 37,344         
|Selling, general
      and administrative expenses | 3,068                  | 7,107                           | 19,154              | 2,757           | 32,086         
|                                                   | --------------         | --------------                  | -------------       | ----------      | -------------- 
|Income (loss)
      from operations                | $
      6,906          | $683                            | $426                | $(2,757)        | $5,258         
|                                                   | =========              | =========                       | =======             | =======         | =========      
|                                                   |                        |                                 |                     |                 |                

|                                                   |                        |                               |                    | **CORPORATE**    | ****           
|-------------------------------------------------- | ---------------------- | ----------------------------- | ------------------ | ---------------- | ---------------
|**1998**                                           | **QUARRYING**          | **MANUFACTURING**             | **RETAILING**      | **OVERHEAD**     | **TOTAL**      
|---------                                          | ---------------------- | ----------------------------- | ------------------ | ---------------- | ---------------
|Total net
      revenues                           | $26,448                | $48,858                       | $18,597            | $-               | $93,903        
|Inter-segment net
    revenues                     | 7,223                  | 3,934                         | -                  | -                | 11,157         
|                                                   | ------------           | --------------                | -------------      | ------------     | -------------  
|Net revenues                                       | 19,225                 | 44,924                        | 18,597             | -                | 82,746         
|Total gross
      profit                           | 11,672                 | 7,950                         | 10,799             | -                | 30,421         
|Inter-segment gross
    profit                     | 2,892                  | (2,892)                       | -                  | -                | -              
|                                                   | ------------           | --------------                | -------------      | --------------   | -------------- 
|Gross profit                                       | 8,780                  | 10,842                        | 10,799             | -                | 30,421         
|Selling, general
      and administrative expenses | 2,837                  | 6,506                         | 9,369              | 1,660            | 20,372         
|                                                   | ------------           | --------------                | -------------      | -------------    | ------------   
|Income from
      operations                       | $5,943                 | $4,336                        | $1,430             | $(1,660)         | $10,049        
|                                                   | ========               | =========                     | ========           | ========         | =======        
|                                                   |                        |                               |                    |                  |                

xxiv

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Notes to Consolidated
Financial Statements

December 31, 2000, 1999 and
1998

Net revenues by geographic area are as
follows for the years ended December 31, 2000, 1999 and 1998 (in
thousands):

|                         | **2000**       | **1999**         | **1998**       
|------------------------ | -------------- | ---------------- | ---------------
|                         | -------------- | ---------------- | ---------------
|Net revenues
      (1):  |                |                  |                
|United States            | $82,886        | $87,045          | $74,174        
|Canada                   | 7,807          | 9,482            | 8,572          
|                         | -----------    | -------------    | -------------- 
|Total net
      revenues | $90,693        | $96,527          | $82,746        
|                         | ========       | =========        | ========       
|                         |                |                  |                

(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, 2000, 1999 and 1998 (in thousands):

|                         | **2000**         | **1999**        | **1998**         
|------------------------ | ---------------- | --------------- | -----------------
|                         | ---------------- | --------------- | -----------------
|Long-lived
      assets: |                  |                 |                  
|United States            | $42,543          | $42,798         | $42,810          
|Canada                   | 1,904            | 1,976           | 1,660            
|Japan                    | -                | 5               | 5                
|                         | -------------    | ------------    | -----------      
|                         | $44,447          | $44,779         | $44,475          
|                         | ========         | ========        | =======          
|                         |                  |                 |                  



**(15)
ACQUISITIONS**

For the period April through December 1998 the
Company, through its subsidiary Rock of Ages Memorials, Inc., acquired Clark
Memorials, Inc., Watertown Monument Works, Inc., Aberdeen Monument Works, Inc.,
Owatonna Granite Works, Inc., Desch-Paine Monuments, Inc., Mount Rushmore
Granite Corp., Gallagher & Sons Monuments, Inc., Owatonna Granite &
Monument Works, Inc. and all of the outstanding stock of Maumee Valley
Memorials, Inc., Miller Bros. Monument, Inc., Sioux Falls Monument Co., Portage
Marble & Granite Co., Nor-Por Granite , Inc., North Hill Marble &
Granite Co., Kotecki Monuments, Inc., Edward T. Christiansen & Sons, Inc.,
and Joseph Uras Monument Corp. In connection with these acquisitions, certain
assets were acquired and liabilities assumed of Fremont Forsberg, JUM
Corporation and Joseph Uras Management Cemeteries, Inc.

In November 1998 the Company, through its
subsidiary Carolina Quarries, Inc., acquired the White Gardenia Quarry, its
related operating entity, Piedmont Quarries Limited Liability Company, and
certain undeveloped land in proximity to the Company's existing Salisbury Pink
Quarry.

The aggregate consideration for the 1998
acquisitions was $21,075,175 in cash and $1,447,476 representing 90,537 shares
of the Company's Class A common stock ranging from $14.6875 to $17.625 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 $16,547,323 of cost in excess of net assets acquired of which
$2,274,392 has been allocated to property, plant and equipment and the remaining
$14,272,931 to names and reputations.

Proceeds of $261,022 from certain of the 1998
purchases are being held by the Company for a period of one year per the
purchase and sale agreements for the settlement of certain conditions. These
amounts were recorded as accrued expenses as of December 31, 1998.

xxv

**ROCK OF AGES
CORPORATION AND SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998

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, Bristol and Urbach.

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.

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

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 costs in excess of net assets
acquired.

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

|                                               | **(UNAUDITED)**                   
|---------------------------------------------- | ----------------------------------
|                                               | **YEARS
      ENDED DECEMBER 31,**
|                                               | **2000**                          
|                                               | -----------                       
|Net
      revenues                             | $90,952,502                       
|Net income                                     | 2,463,522                         
|Net income per
      share                     | .33                               
|Net income per share - assuming
      dilution | .33                               
|                                               |                                   



**(16) SIGNIFICANT EVENT**

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.

****xxvi

**ROCK OF AGES CORPORATION AND
SUBSIDIARIES**

Notes to Consolidated Financial
Statements

December 31, 2000, 1999 and
1998****

**(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.

The following table summarizes the pro forma net
income and per share amounts assuming a change in application of accounting
principles applied retroactively.

**DECEMBER
  31,****2000**
    **1999**
    **1998**--------------
    ----------------
    -------------Net income
    $ -
    $1,829,082
    $7,268,889Net income per
      share - basic
    -
    .24
    .99Net income per share -
      diluted
    -
    .23
    .91**(18) SUBSEQUENT EVENT**

Effective January 2, 2001 the Company completed
the acquisition of 16 cemeteries and one granite memorial retailer in Kentucky.
The purchase price was $6.8 million in cash representing approximately 90% of
the 1999 revenues of the acquired entities.

****xxvii

**INDEPENDENT
AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION**

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

Under date of March 2, 2001, we reported on the
consolidated balance sheets of Rock of Ages Corporation and subsidiaries as of
December 31, 2000 and 1999, 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, 2000. 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 2, 2001

Boston, Massachusetts

xxix

**ROCK OF AGES CORPORATION AND
SUBSIDIARIES**

Schedule II - Valuation and
Qualifying Accounts and Reserves

Years ended December 31, 2000, 1999
and 1998

(In Thousands)

|**COLUMN A**                     | **COLUMN B**            | **COLUMN C**                             | **COLUMN D**         | **COLUMN E**           
|-------------------------------- | ----------------------- | ---------------------------------------- | -------------------- | -----------------------
|-------------------              | --------------------    | ---------------------------------------- | -------------------  | -----------------      
|                                 |                         | **ADDITIONS**                            |                      |                        
|                                 |                         | ------------------------                 |                      |                        
|                                 | **BALANCE AT**          | **INCREASE**                             | **CHARGED TO**       |                        
|                                 | **BEGINNING**           | **DUE TO**                               | **COSTS AND**        |                        
|**DESCRIPTION**                  | **OF PERIOD**           | **ACQUISITIONS**                         | **EXPENSES**         | **DEDUCTIONS**         
|-----------------------          | ----------------------- | -----------------------                  | -------------------- | -----------------------
|2000                             |                         |                                          |                      |                        
|Allowances for doubtful accounts | $1,826                  | -                                        | 362                  | 885                    
|1999                             |                         |                                          |                      |                        
|Allowances for doubtful accounts | $2,124                  | -                                        | 555                  | 853                    
|1998                             |                         |                                          |                      |                        
|Allowances for doubtful accounts | $2,231                  | 120                                      | 238                  | 465                    
|                                 |                         |                                          |                      |                        

See accompanying independent auditors' report on
supplementary information.

xxix

**SIGNATURES**

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

**ROCK OF AGES
CORPORATION**

By: /s/ Kurt M. Swenson

Kurt M. Swenson

President, Chief Executive Officer
and

Chairman of the Board of Directors

Date: March 30, 2001

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 March ,
2000.

|**SIGNATURE**               | **TITLE**                                                                                                                                           
|--------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|------------------          | ----------                                                                                                                                          
|/s/ Kurt M.
      Swenson   | President, Chief
      Executive Officer and Chairman of the Board of Directors (Principal
      Executive Officer)                                 
|Kurt M.
      Swenson       |                                                                                                                                                     
|/s/ John
      L. Forney    | Director, President and Chief Operating
      Officer/Memorials Division, Chief Financial Officer and Treasurer
      (Principal Accounting Officer)
|John L.
      Forney        |                                                                                                                                                     
|/s/Richard
      C. Kimball | Chief Strategic and Marketing
      Officer; Vice Chairman of the Board of Directors                                                                
|Richard C.
      Kimball    |                                                                                                                                                     
|/s/Jon M.
      Gregory     | Director, President and Chief Operating
      Officer/Quarries Division                                                                             
|Jon M.
      Gregory        |                                                                                                                                                     
|/s/George
      R. Anderson | Director                                                                                                                                            
|George R.
      Anderson    |                                                                                                                                                     
|/s/James
      L. Fox       | Director                                                                                                                                            
|James L.
      Fox          |                                                                                                                                                     
|/s/
      Charles M. Waite  | Director                                                                                                                                            
|Charles M.
      Waite      |                                                                                                                                                     
|/s/Frederick Webster        | Director                                                                                                                                            
|Frederick
      Webster     |                                                                                                                                                     

24

**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 of 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 10.15 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*              | Restated Employment Agreement
      with John Keith                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|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.                                                                                                                                                                                                                                                                                                                                                      
|10.9               | Form of Collective Bargaining
      Agreement dated May 1, 2000 by and between Rock of Ages Corporation -
      Quarries Division and the United Steelworkers of America, AFL-CIO-CIC on
      behalf of USWA Amalgamated Local #4.                                                                                                                                                                                                                                                                                                                                  
|10.10              | Form of Collective Bargaining
      Agreement dated April 29, 2000 by and between Rock of Ages Corporation and
      the Granite Cutters Association.                                                                                                                                                                                                                                                                                                                                                                                                                
|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)

25

10.13
    Exclusive Supply Agreement dated
      as of December 8, 1997 by and between Rock of Ages Corporation and Eurimex
      (incorporated herein by reference to Exhibit 10.21 to the Company's Annual
      Report on Form 10-K for the fiscal year ended December 31, 1997 filed with
      the Securities and Exchange Commission on March 31, 1998)10.14
    Supply Agreement dated as of
      September 7, 2000 by and between Keystone Memorials, Inc. and Rock of Ages
      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.

26