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