SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
ROCK OF AGES CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
[ROCK OF AGES CORPORATION LOGO]
ROCK OF AGES CORPORATION
772 GRANITEVILLE ROAD
GRANITEVILLE, VERMONT 05654
May 18, 1998
To our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
Rock of Ages Corporation, to be held at 560 Graniteville Road, Graniteville,
Vermont on Friday, June 26, 1998 at 9:00 a.m., Vermont time.
We encourage you to read the enclosed Notice of Annual Meeting and Proxy
Statement, which contains information about the Board of Directors and its
committees, as well as the enclosed 1997 Annual Report.
After the business items of the meeting are completed, a group of our
officers will make presentations and be available to answer your questions about
our growth strategy and our quarrying, manufacturing and retailing operations.
This will be followed by lunch and tours of our quarries and manufacturing
plants. We want you to learn about your company, and to see for yourself what
our people do, the products we make and our facilities.
We hope to meet you at the meeting. But it is important that your shares
are represented, regardless of whether you are able to attend personally.
Accordingly, you are requested to sign, date and mail promptly the enclosed
proxy card(s) in the envelope provided.
Sincerely,
/s/ Kurt M. Swenson
Kurt M. Swenson
Chairman, President and
Chief Executive Officer
2
<PAGE>
ROCK OF AGES CORPORATION
772 Graniteville Road
Graniteville, Vermont 05654
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
JUNE 26, 1998
------------------
To the Stockholders of
Rock of Ages Corporation:
Notice is hereby given that the Annual Meeting of the stockholders of Rock
of Ages Corporation will be held at 560 Graniteville Road, Graniteville,
Vermont, on Friday, June 26, 1998 at 9:00 a.m., Vermont time, for the following
purposes:
1. To elect three Class I Directors, each for a three-year term expiring
at the annual meeting of stockholders in 2001, and until their
respective successors are duly elected and qualified.
2. To ratify the selection of KPMG Peat Marwick LLP as the Company's
independent auditors for the 1998 fiscal year.
3. To transact any other business that may properly come before the
meeting or any adjournment thereof.
The close of business on May 12, 1998 has been fixed as the record date for
determining the stockholders entitled to notice of, and to vote at, the Annual
Meeting and any adjournment thereof.
It is desirable that the stock of the Company should be represented as
fully as possible at the Annual Meeting. Please sign, date and return the
accompanying proxy card(s) in the enclosed envelope, which requires no postage
if mailed in the United States. Please note that separate proxy cards have been
provided for the Company's Class A Common Stock and Class B Common Stock. If you
are a holder of both classes of stock, please sign, date and return both proxy
cards so that all of your shares may be voted. If you attend the Annual Meeting,
you may vote in person, if you wish, whether or not you have sent in your proxy
card(s).
By Order of The Board of Directors
John R. Monson
Secretary
<PAGE>
ROCK OF AGES CORPORATION
PROXY STATEMENT
SOLICITATION
This Proxy Statement is furnished in connection with the solicitation, by
and on behalf of the Board of Directors (the "Board") of Rock of Ages
Corporation, a Delaware corporation (the "Company"), of proxies (each a "Proxy",
and collectively "Proxies") to be used in voting at the Company's 1998 Annual
Meeting of stockholders (the "Meeting"), and at any adjournments thereof. The
Meeting will be held at 560 Graniteville Road, Graniteville, Vermont, on Friday,
June 26, 1998 at 9:00 a.m., Vermont time, or at such other time and place to
which the Meeting may be adjourned. The principal executive offices of the
Company are located at 772 Graniteville Road, Graniteville, Vermont 05654.
All expenses of this solicitation will be borne by the Company, including
the cost of preparing and mailing this Proxy Statement and the reimbursement of
brokerage firms, banks and other nominees for their reasonable expenses in
forwarding proxy material to beneficial owners of the Company's stock. The
Company has retained The Financial Relations Board, Inc. and Beacon Hill
Partners Inc. to assist in the solicitation of proxies. They will be paid an
aggregate fee for their services estimated to be $3,500, and will be reimbursed
for their out-of-pocket expenses. In addition to solicitation by mail, certain
directors, officers and regular employees of the Company may solicit Proxies by
telephone or otherwise.
This Proxy Statement, the accompanying Proxy and the Company's 1997 Annual
Report are being first mailed to stockholders of the Company on or about May 22,
1998.
RECORD DATE AND VOTING SECURITIES
Only holders of record of the Class A Common Stock, par value $.01 per
share of the Company (the "Class A Common Stock"), and Class B Common Stock, par
value $.01 per share of the Company (the "Class B Common Stock", and, together
with the Class A Common Stock, the "Common Stock"), at the close of business on
May 12, 1998, the record date for the Meeting, are entitled to notice of and to
vote at the Meeting. On that date, the Company had outstanding (i) 3,884,735
shares of Class A Common Stock, each of which is entitled to one vote, or a
total of 3,884,735 votes, and (ii) 3,487,957 shares of Class B Common Stock,
each of which is entitled to ten votes, or a total of 34,879,570 votes.
Accordingly, at the close of business on May 12, 1998, 7,288,598 shares of
Common Stock were outstanding, representing a total of 38,764,305 votes.
The presence at the Meeting, in person or by proxy, of the holders of a
majority of the total voting power of the issued and outstanding shares of Class
A Common Stock and Class B Common Stock is necessary to constitute a quorum to
transact business. In the absence of a quorum at the Meeting, the Meeting may be
adjourned from time to time without notice, other than announcement at the
Meeting, until a quorum shall be formed. If a quorum is present at the Meeting,
the Class I directors will be elected by a plurality of the votes cast at the
Meeting. Ratification of the selection of KPMG Peat Marwick LLP as the Company's
independent auditors for the 1998 fiscal year will require the affirmative vote
of the holders of Common Stock representing a majority of the voting power of
the shares of Common Stock present or represented by Proxies at the Meeting.
All duly executed Proxies received prior to the Meeting will be voted in
accordance with the directions specified thereon. As to any matter for which no
direction has been specified in a duly executed Proxy, the shares represented
thereby will be voted for the election of each of the nominees for Class I
director specified herein, for the proposal to ratify the selection of KPMG Peat
Marwick LLP as the Company's independent auditors for the 1998 fiscal year and
in the discretion of the persons named in the Proxy in connection with any other
business that may properly come before the Meeting. A stockholder giving a Proxy
may revoke it at any time before it is voted at the Meeting by filing with the
Secretary of the Company an instrument revoking it, or by signing and delivering
to the Secretary of the Company a Proxy bearing a later date, or by voting in
person at the Meeting.
1
<PAGE>
ELECTION OF DIRECTORS
General
The Board currently consists of nine members. In accordance with the
Company's Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation"), the members of the Board are divided into three classes,
designated Class I, Class II and Class III, respectively, and are elected for a
term of office expiring at the third succeeding annual stockholders' meeting
following their election to office and until their successors are duly elected
and qualified. The Certificate of Incorporation also provides that each such
class shall consist, as nearly as may be possible, of one-third of the total
number of directors constituting the entire Board. The term of office of the
Class I directors expires at the Meeting. The Class II and Class III directors
are serving terms that expire at the annual meeting of stockholders in 1999 and
2000, respectively.
Mark A. Gherardi, James L. Fox and Charles M. Waite, the Class I directors
whose terms are expiring at the Meeting, have been nominated by the Board for
re-election at the Meeting for a three-year term of office expiring at the
annual meeting of stockholders in 2001 and until their successors are duly
elected and qualified. Proxies may be voted for three directors.
In April 1998, Peter A. Friberg and Jon M. Gregory, each of whom had been a
Class I director, resigned from the Board. Concurrently, Messrs. Fox and Waite
resigned as Class II and Class III directors, respectively, and were elected
Class I directors by the Board to fill the two vacancies in Class I
directorships, and the size of the Board was reduced to nine.
The resignations of Messrs. Friberg and Gregory reflect the Board's
intention to increase the proportion of non-employee directors on the Board, and
to reduce the overall size of the Board. As a result of these resignations and
the actions described above, the Board now consists of nine members, with three
directors in each class.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF EACH OF
THE NOMINEES FOR CLASS I DIRECTORS. UNLESS OTHERWISE DIRECTED IN THE
ACCOMPANYING PROXY, THE PERSONS NAMED THEREIN WILL VOTE "FOR" THE ELECTION OF
EACH OF THE NOMINEES AS CLASS I DIRECTORS.
Stockholders may not cumulate their votes in the election of directors. The
three nominees receiving the highest number of affirmative votes will be elected
to the Board. Stockholders entitled to vote for the election of directors may
withhold authority to vote for any or all nominees for directors. If any nominee
becomes unavailable for any reason, then the shares represented by a Proxy will
be voted FOR the remainder of the listed nominees and for such other nominees as
may be designated by the Board as replacements for those who become unavailable.
Discretionary authority to do so is included in the Proxies.
The following table sets forth the names, ages and position with the
Company or its affiliates of the persons who have been nominated for election as
Class I directors and the other current directors of the Company.
<TABLE>
<CAPTION>
NAME AGE TITLE
---- --- -----
<S> <C> <C>
NOMINEES FOR CLASS I DIRECTOR (FOR
TERM EXPIRING AT 2001 ANNUAL MEETING)
Mark A. Gherardi 39 Senior Vice President - Barre and Canada
Manufacturing Operations
James L. Fox(1) 46 Director
Charles M. Waite(1) 65 Director
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
CONTINUING CLASS II DIRECTORS (TERM
EXPIRES AT 1999 ANNUAL MEETING)
George R. Anderson 58 Senior Vice President, Chief Financial Officer
and Treasurer
G. Thomas Oglesby, Jr. 52 Senior Vice President - Keystone & Childs, Inc.
Frederick E. Webster, Jr.(1) 60 Director
CONTINUING CLASS III DIRECTORS (TERM
EXPIRES AT 2000 ANNUAL MEETING)
John E. Keith 50 President - Rock of Ages Memorials, LLC
Richard C. Kimball 57 President - Memorials Division, Vice Chairman of
the Board of Directors
Kurt M. Swenson 53 Chairman, President and Chief Executive Officer
</TABLE>
(1) Member of the Audit Committee and the Compensation Committee
Certain additional information concerning the directors and executive
officers of the Company is set forth below.
DIRECTORS
George R. Anderson has been a Senior Vice President, Chief Financial
Officer and a director of the Company since 1984. Mr. Anderson joined the
Company in 1969 as the Chief Accountant and subsequently held the positions of
Controller and Treasurer. 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 1999.
James L. Fox is the Chief Operating Officer of First Data Investor Services
Group, a division of First Data Corporation, and has been an officer there since
1989. Mr. Fox has been a director of the Company since October 1997 and his
current term as a director of the Company will expire at the Meeting.
Mark A. Gherardi has been Senior Vice President -- Barre and Canada
Manufacturing Operations and a director of the Company since 1996. Prior to
1996, Mr. Gherardi held various sales and production positions over a 20-year
period with Lawson Granite Company. Mr. Gherardi's current term as a director of
the Company will expire at the Meeting.
John E. Keith became President -- Rock of Ages Memorials, LLC and a
director of the Company upon the consummation of the acquisition by the Company
in October 1997 (the "Keith Acquisition") of substantially all the assets and
liabilities of Keith Monument Co. and its affiliated companies (collectively,
"Keith Monument"). Prior to the Keith Acquisition, Mr. Keith had been an owner
of and President of Keith Monument since 1989. From 1965 to 1989, Mr. Keith held
various officer positions with Keith Monument. Mr. Keith's current term as a
director of the Company will expire in 2000.
Richard C. Kimball has been Vice Chairman of the Board since 1993 and 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 of the Company will expire in 2000.
G. Thomas Oglesby, Jr. became a director of the Company in June 1997 upon
the acquisition by the Company (the "Keystone Acquisition") of the successor to
Keystone Memorials, Inc. ("Keystone"), and became Senior Vice President -
Keystone & Childs, Inc. in October 1997 upon the acquisition by the Company of
Childs & Childs Granite Company, Inc. and a related company (collectively,
"C&C"). Prior to the Keystone Acquisition, Mr. Oglesby had been President
3
<PAGE>
of Keystone since 1982. Mr. Oglesby was a member of the Board and served four
separate terms as President of the Elberton Granite Association from 1979 until
1996. He is a director of the American Monument Association and the
Manufacturers and Wholesalers Division of the Monument Builders of North
America. Mr. Oglesby's current term as a director of the Company will expire in
1999.
Kurt M. Swenson has been President, Chief Executive Officer and Chairman of
the Board of the Company since 1984. Prior to the Company's initial public
offering of Class A Common Stock (the "IPO"), Mr. Swenson had been the Chief
Executive Officer and a director of Swenson Granite Company, Inc. ("Swenson
Granite") since 1974, and currently serves as non-officer Chairman of the Board
of Swenson Granite Company, LLC ("Swenson 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 Funeral and Memorial
Information Council, the National Building Granite Quarries Association and
Group Polycor International. Mr. Swenson's current term as a director of the
Company will expire in 2000.
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 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. Dr. Webster serves as a director
of Vermont Public Radio and the American Marketing Association. He is also a
member of the Corporation of Mary Hitchcock Memorial Hospital. Mr. Webster has
been a director since October, 1997 and his current term as a director will
expire in 1999.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Jon M. Gregory has been President -- Quarry Division since 1993, and served
as a director of the Company from 1995 until his resignation in April 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.
Peter A. Friberg has been Senior Vice President -- Barre Memorial Sales, of
the Company since 1996, and served as a director of the Company from January
1996 until his resignation in April 1998. From 1975 to 1995, Mr. Friberg
co-owned and co-managed the Anderson-Friberg Company, a memorial manufacturing
company, in Barre, Vermont, serving as President from 1991 to 1995. From 1991 to
1993, Mr. Friberg was President of the Barre Granite Association.
Board Actions; Committees of the Board of Directors
While the respective boards of directors of the Company's predecessors met
numerous times during 1997, after the Company's reincorporation as a Delaware
corporation in October 1997 in connection with the IPO, the Board met one time
and acted by unanimous written consent approximately nine times in 1997. Each of
the directors attended the meeting of the Board and all of the meetings of the
committees of the Board on which he served.
The Board has two standing committees, the Audit Committee and the
Compensation Committee. The functions of these committees and the number of
meetings held during 1997 are described below.
The principal function of the Audit Committee, which consists of Messrs.
Fox, Waite and Webster, is to endeavor to assure the integrity and adequacy of
financial statements issued by the Company. The Audit Committee reviews internal
auditing systems and procedures as well as the activities of the public
accounting firm performing the external audit. The Audit Committee met once as a
committee during 1997.
The principal function of the Compensation Committee, which consists of
Messrs. Fox, Waite and Webster, is to review periodically the suitability of,
and to make recommendations to the Board concerning, the remuneration
arrangements (including benefits) for the executive officers of the Company. The
Compensation Committee also administers, and makes grants of stock based awards
under, the Company's 1994 Amended and Restated Stock Plan (the "1994 Plan"). The
Compensation Committee met once as a committee during 1997.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table, together with the accompanying text and footnotes,
sets forth, as of May 12, 1998, certain information with respect to the
beneficial ownership of the Common Stock by (i) each director, (ii) each
executive officer, (iii) each beneficial owner of more than 5% of either class
of the Company's outstanding Common Stock known to the Company based on
Securities and Exchange Commission (the "Commission") filings and other
available information and (iv) all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
Shares of Class B Shares of Class A
Common Stock Common Stock
Beneficially Owned Beneficially Owned
Name and Address of Beneficial Owner(1) Number Percent of Class Number Percent of Class
- --------------------------------------- ---------- ---------------- ---------- ----------------
<S> <C> <C> <C> <C>
HLM Management Co. Inc.
222 Berkeley Street
Boston, MA 02116............................. -- -- 308,100 7.9
American Express Financial Corporation(2)
IDX Tower 10
Minneapolis, MN 55440....................... -- -- 300,000 7.7
John Hancock Mutual Life Insurance Company(3)
Corporate Law Division
T-55, PO Box 111
Boston, MA 02117............................. -- -- 229,900 5.9
Missouri Red Quarries, Inc.
c/o Keystone Granite
Washington Highway
Elberta, GA 30635 ........................... 263,441 6.6 -- --
Kurt M. Swenson(4)+...................................... 1,108,489 27.8 -- --
Kevin C. Swenson(5)...................................... 1,023,489 25.7 -- --
Mark A. Gherardi(6)+..................................... 292,573 7.3 -- --
G. Thomas Oglesby, Jr.(7)+............................... 263,441 6.6 15,000 *
Robert L. Pope(8)........................................ 221,375 5.6 -- --
Peter A. Friberg (9)+.................................... 221,375 5.6 -- --
Richard C. Kimball (10)+................................. 94,126 2.4 300 *
John E. Keith (11)+...................................... -- -- 93,581 2.4
George R. Anderson(12)+.................................. 79,126 2.0 -- --
Jon M. Gregory(13)+...................................... 69,126 1.7 -- --
Charles M. Waite......................................... 29,126 * 874 *
James L. Fox(14)+........................................ -- -- 6,825 *
Frederick E. Webster, Jr.(15)+........................... -- -- 5,825 *
All directors and executive officers as a group
(11 persons) .......................................... 2,157,382 54.1 122,405 3.2
</TABLE>
- ---------
+ 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) American Express Financial Corporation, a subsidiary of American Express
Company, has beneficial ownership of 300,000 shares of Class A Common
Stock. Through its parent-subsidiary relationship, American Express Company
also has indirect beneficial ownership of the shares owned by American
Express Financial Corporation. This information is based on a Schedule
13G/A filed jointly by American Express Financial Corporation and American
Express Company with the Commission on April 9, 1998.
(3) According to a Schedule 13G/A filed with the Commission on February 6, 1998
(the "Hancock 13G"), John Hancock Advisers, Inc., an indirect, wholly owned
subsidiary of John Hancock Mutual Life Insurance Company, has beneficial
ownership of 220,800 shares of Class A Common Stock. Based on information
made available to the Company, the Company believes that as of May 12,
1998, such beneficial ownership has
5
<PAGE>
increased to 229,900. According to the Hancock 13G, through their
parent-subsidiary relationships, John Hancock Subsidiaries, Inc. and The
Berkeley Financial Group also have indirect beneficial ownership of the
shares owned by John Hancock Advisers, Inc.
(4) Includes 85,000 shares of Class B Common Stock subject to currently
exercisable stock options. Kurt M. Swenson is the brother of Kevin C.
Swenson.
(5) Kevin C. Swenson is the brother of Kurt M. Swenson.
(6) Includes 45,000 shares of Class B Common Stock subject to currently
exercisable stock options.
(7) The 263,441 shares of Class B Common Stock listed are owned of record by
Missouri Red Quarries, Inc. Missouri Red Quarries, Inc. is 100% owned by G.
Thomas Oglesby, Jr. who is its President and sole director. The 15,000
shares of Class A Common Stock listed are subject to currently exercisable
stock options held by Mr. Oglesby.
(8) Includes 45,000 shares of Class B Common Stock subject to currently
exercisable stock options.
(9) Includes 45,000 shares of Class B Common Stock subject to currently
exercisable stock options.
(10) Includes 65,000 shares of Class B Common Stock subject to currently
exercisable stock options.
(11) Includes 12,500 shares of Class A Common Stock subject to currently
exercisable stock options. Also includes 81,081 shares of Class A Common
Stock issued to National Memorial Corporation. Mr. Keith is the president
and a 50% owner of National Memorial Corporation.
(12) Includes 50,000 shares of Class B Common Stock subject to currently
exercisable stock options.
(13) Includes 40,000 shares of Class B Common Stock subject to currently
exercisable stock options.
(14) All 6,825 shares of Class A Common Stock listed are subject to currently
exercisable stock options.
(15) All 5,825 shares of Class A Common Stock listed are subject to currently
exercisable stock options.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and holders of more than 10% of the
Common Stock and other equity securities of the Company to file with the
Commission initial reports of ownership and reports of changes in ownership of
the Common Stock and other equity securities of the Company. Based solely on a
review of the copies of such reports furnished to the Company during fiscal year
ended December 31, 1997, the Company believes all Section 16(a) filing
requirements were satisfied.
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth compensation and certain other 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 year ended December 31, 1997.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation ------------
------------------- Securities All Other
Name and Principal Position Year Salary Bonus Options(#) Compensation(1)
--------------------------- ---- ------ ----- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Kurt M. Swenson 1997 $310,320 $29,500 -0- $1,100
President, Chief Executive Officer,
Chairman of the Board of Directors
Richard C. Kimball 1997 $210,360 $26,500 -0- $1,100
President -- Memorials Division,
Vice Chairman of the Board of Directors
George R. Anderson 1997 $161,400 $18,000 -0- $1,100
Senior Vice President, Chief
Financial Officer, Director
Jon M. Gregory 1997 $160,440 $13,500 -0- $1,100
President -- Quarry Division, Director
Mark A. Gherardi 1997 $145,800 $13,500 -0- $726
Senior Vice President -- Barre and Canada
Manufacturing Operations, Director
</TABLE>
- ----------
(1) In each case, represents a matching contribution under the Company's 401K
plan.
Stock Option Grants
No grants of stock options were made during the year ended December 31,
1997 by the Company to the Named Executive Officers.
The following table sets forth information concerning options to purchase
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.
During 1997, no stock options were exercised by any of the Named Executive
Officers. The Company has not granted any stock appreciation rights.
Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options
Options at December 31, 1997 at December 31, 1997(1)
----------------------------- -----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Kurt M. Swenson 85,000 27,500 $1,085,700 $342,550
Richard C. Kimball 65,000 22,500 844,800 284,700
George R. Anderson 50,000 25,000 641,600 307,400
Jon M. Gregory 40,000 35,000 497,200 418,300
Mark A. Gherardi 30,000 45,000 357,300 535,950
</TABLE>
(1) These values are calculated using the $15 1/2 per share closing price of the
Class A Common Stock on the NASDAQ National Market on December 31, 1997.
7
<PAGE>
Pension Plans
The Company maintains a qualified pension plan (the "Pension Plan") and
non-qualified salary continuation agreements (the "Salary Continuation
Agreements") for certain executive officers of the Company. 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 1998 and retires immediately. The Employee Retirement Income Security Act
of 1974 places limitations on the compensation used to calculate pensions and on
pensions which may be paid under federal income tax qualified plans, and some of
the amounts shown on the following table may exceed the applicable limitations.
Such limitations are not currently applicable to the Salary Continuation
Agreements.
The following table shows the total estimated annual retirement benefits
payable upon normal retirement under the Pension Plan for the Named Executive
Officers at the specified executive remuneration and years of continuous
service.
Pension Plan Table
<TABLE>
<CAPTION>
Final Average
Compensation 15 Years 20 Years 25 Years 30 Years 35 Years
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000........................ $ 39,382 $ 52,510 $ 65,637 $ 78,765 $ 78,765
$150,000........................ $ 47,632 $ 63,510 $ 79,387 $ 95,265 $ 95,265
$175,000........................ $ 55,882 $ 74,510 $ 93,137 $111,765 $111,765
$200,000........................ $ 64,132 $ 85,510 $106,887 $128,265 $128,265
$225,000........................ $ 72,382 $ 96,510 $120,637 $144,765 $144,765
$250,000........................ $ 80,632 $107,510 $134,387 $161,265 $161,265
$275,000........................ $ 88,882 $118,510 $148,137 $177,765 $177,765
$300,000........................ $ 97,132 $129,510 $161,887 $194,265 $194,265
$325,000........................ $105,382 $140,510 $175,637 $210,765 $210,765
$350,000........................ $113,632 $151,510 $189,387 $227,265 $227,265
</TABLE>
These calculations are based on the retirement formula in effect as of
December 31, 1997, 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, 1997 and rounded to the full year, are: Mr. G. Anderson, 29
years; Mr. J. Gregory, 22 years; Mr. M. Gherardi, 17 years; Mr. R. Kimball, 5
years; and Mr. K. Swenson, 14 years.
In addition, the Company's Salary Continuation Agreements provide for
supplemental pension benefits to certain executive officers of the Company,
including the Named Executive Officers. The following table sets forth the
supplemental pension benefits for the Named Executive Officers under their
respective Salary Continuation Agreements.
<TABLE>
<CAPTION>
Annual
Total Years Retirement
Annual Base of Service Benefit
Name Compensation at Age 65 at Age 65
- ---- ------------ ----------- ----------
<S> <C> <C> <C>
M. Gherardi.................................. $145,800 27 $23,620
G. Anderson.................................. $161,400 35 $33,894
R. Kimball................................... $210,360 12 $25,243
K. Swenson................................... $310,320 26 $88,752
J. Gregory................................... $160,440 39 $37,543
</TABLE>
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. There is no compensation increases assumed in these calculations.
8
<PAGE>
Compensation Committee Report
Overall Policy
The Company's compensation of its executives is designed to reflect both
corporate performance and individual responsibilities and performance. The
Compensation Committee administers the Company's overall compensation strategy
in an attempt to relate executive compensation appropriately to the Company's
overall growth and success and to an executive's duties, demonstrated abilities
and, where appropriate, the performance of the operating division or subsidiary
for which the executive is responsible. The objectives of this strategy are to
attract and retain the best possible executives, to motivate them to achieve the
Company's business goals and to provide a compensation package that recognizes
individual contributions as well as overall business results.
The Compensation Committee determines the compensation of the individuals
whose compensation is detailed in this Proxy Statement (including in the Summary
Compensation Table) and the Company's other executive officers. In reviewing the
individual performance of the Company's executives (other than Kurt M. Swenson,
the Company's Chairman, President and Chief Executive Officer), the Compensation
Committee consulted, as appropriate, with Kurt M. Swenson.
The key elements of the Company's executive compensation consist of base
salary, annual bonus and stock options. The Compensation Committee's policies
with respect to each of these elements, including the bases for the compensation
awarded to Kurt M. Swenson, are discussed below. In addition, although the
elements of compensation described below are considered separately, the
Compensation Committee takes into account the full compensation package afforded
by the Company to the individual, including pension benefits, insurance and
other benefits, as well as the specific elements described below.
Base Salaries
The base salaries of the Company's executives for 1997 was determined in
January of 1996 by the Compensation Committee of the Board as constituted prior
to October 24, 1997 (the date of consummation of the IPO) namely Kurt M.
Swenson, Guy A. Swenson, Jr. and Charles M. Waite (see "Compensation Committee
Interlocks and Insider Participation"). In determining such base salaries the
Compensation Committee as then comprised considered historical salaries paid by
the Company to officers having certain duties and responsibilities and then
evaluated the current responsibilities of the position, the scope of the
operations under management and the experience of the individual. No adjustments
in such base salaries for 1997 (including in the base salary of Kurt M. Swenson)
were made by the Compensation Committee as comprised after consummation of the
IPO.
With respect to the base salary of Kurt M. Swenson in 1997, the
Compensation Committee as comprised prior to October 24, 1997 (which included
Kurt M. Swenson, who participated in the determination of such base salary) took
into account the Company's performance and growth, Mr. Swenson's individual
leadership and performance as Chief Executive Officer of the Company, the length
of Mr. Swenson's service to the Company and his increasing responsibilities in
the course of such service.
Annual Bonus
The Company's executive officers are eligible for an annual cash bonus. In
1998, the Compensation Committee recommended the establishment of a bonus pool
for the Company's officers in respect of 1997. Based on this recommendation, the
Board of Directors implemented a bonus pool for the Company's officers (other
than Kurt M. Swenson) in respect of 1997 in an amount equal to approximately 2%
of the Company's 1997 earnings before interest and taxes, subject to elimination
or reduction as necessary for the Company to achieve (after giving effect to all
bonuses, including bonus amounts paid to Mr. Swenson) a specified minimum 1997
earnings per fully diluted share of Common Stock. Allocation of the bonus pool
among the participants therein was determined by the Compensation Committee,
which in this regard consulted, as appropriate, with Kurt M. Swenson. Such
determination took into account each individual's responsibilities and relative
experience, contribution to the
9
<PAGE>
Company's growth and implementation of its strategic plan, including the IPO,
and financial performance of the relevant business units with respect to
executives with responsibility for such units.
Mr. Swenson received a bonus for 1997 determined by the Compensation
Committee, based on substantially the same factors as described above with
respect to allocation of the bonus pool, and which were intended to be
commensurate with the bonuses received by the Company's most senior executives
under the bonus pool arrangement described above. In addition, in determining
Mr. Swenson's bonus, the Compensation Committee considered in particular Mr.
Swenson's exceptional performance as the Company's Chief Executive Officer in
promoting the long-term strategic growth of the Company during 1997.
Stock Options
Under the 1994 Plan, stock options may be granted to the Company's
executives by the Compensation Committee. In general, the guidelines for the
grant and size of stock option awards are based on factors similar to those used
to determine base salaries and annual bonus. Stock options are designed to align
the interests of executives with those of the Company's stockholders. Stock
options are typically granted with an exercise price equal to the market price
of the Common Stock on the date of grant and vest over time. This approach is
designed to encourage the creation of stockholder value over the long term since
the full benefit of such options cannot be realized unless stock price
appreciation occurs over time. While certain principals of businesses acquired
by the Company in 1997 and who continued as executives of the Company received
stock option grants under the 1994 Plan in connection with such acquisitions
(see "Certain Relationships and Related Transaction"), no stock option grants
were made in 1997 to any of the Named Executive Officers or to other Company
executives as part of their compensation package for 1997.
Conclusion
Through the programs described above, a significant portion of the
Company's executive compensation is linked directly to individual and corporate
performance. The Compensation Committee intends to continue the policy of
linking executive compensation to corporate and individual performance,
recognizing that the ups and downs of the business cycle from time to time may
result in an imbalance for a particular period.
COMPENSATION COMMITTEE
James L. Fox
Charles M. Waite (Chairman)
Frederick E. Webster, Jr.
10
<PAGE>
Compensation Committee Interlocks and Insider Participation
During the period from January 1, 1997 to October 24, 1997 (the date of
consummation of the IPO), the Compensation Committee of the Board was comprised
of Kurt M. Swenson, Guy A. Swenson, Jr. and Charles M. Waite. During his 1997
service on the Compensation Committee, Kurt Swenson was the President and Chief
Executive Officer of the Company and Kurt Swenson participated in all
compensation decisions, including those related to his own compensation.
Compensation of Directors
Directors who are not also officers of the Company are paid annual
directors' retainers of $5,000, and $250 for each meeting of the Board,
including committee meetings. Directors are also eligible for stock option
grants under the 1994 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 Employment Agreement). The Swenson Employment Agreement also
provides for a lump sum payment to Mr. Swenson equal to the sum of (i) accrued
but unpaid salary, and a prorated bonus amount equal to the greater of the
largest annual bonus paid to Mr. Swenson during the prior three years and the
annual bonus payable in respect of the most recently completed fiscal year (the
"Highest Annual Bonus"), through the date of termination and (ii) three times
the sum of (A) his then annual salary and (B) Highest Annual Bonus, and for
continuation of benefits for three years, if Mr. Swenson's employment is
terminated by the Company (other than for Cause, death or disability) during the
twelve-month period following, or prior to but in connection with, or by Mr.
Swenson during the twelve-month period following, a Change in Control (as
defined in the Swenson Employment Agreement). In the event of a termination
related to a Change in Control, Mr. Swenson may elect in lieu of the lump sum
payment described above, to receive in a lump sum or over the then remaining
term of the Swenson Employment Agreement, an amount equal to the total amount he
would have been entitled to receive if his employment had been terminated by the
Company without Cause or by Mr. Swenson for Good Reason. If any payment or
distribution by the Company to or for the benefit of Mr. Swenson under the
Swenson Employment Agreement would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are incurred by Mr.
Swenson with respect to such excise tax, then Mr. Swenson will generally be
entitled to receive an additional payment such that after payment by Mr. Swenson
of all taxes, Mr. Swenson retains an amount of the additional payment equal to
the excise tax imposed.
The Company has employment agreements with G. Thomas Oglesby, Jr., George
T. Oglesby, III, Robert Otis Childs, III, John E. Keith and Roy H. Keith, Jr.
(such persons the "Acquisition Executives" and such employment agreements with
the Acquisition Executives being referred to collectively as the "Acquisition
Employment Agreements"). The Acquisition Employment Agreement with Mr. G. Thomas
Oglesby, Jr. provides for an initial five-year term commencing on June 27,
1997, and each of the other Acquisition Employment Agreements provides, in
effect, for an initial five-year term commencing on October 24, 1997, the date
of consummation of the IPO. Pursuant to the Acquisition Employment Agreements,
G. Thomas Oglesby, Jr. and John E. Keith hold the positions listed for such
persons under "Election of Directors" and George T. Oglesby, III, Robert Otis
Childs, III and Roy H. Keith, Jr., hold the positions of Vice President --
Keystone Division, President -- C&C Division, and Vice President -- Rock of Ages
Memorials, LLC, respectively. The Acquisition 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 Acquisition Executive's employment is terminated by the Company without
Cause. The Acquisition Employment Agreements and related undertakings generally
prohibit the Acquisition Executives 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. In addition, the Acquisition
Employment Agreements of G. Thomas Oglesby, Jr.
11
<PAGE>
and John E. Keith provide that, so long as they remain employed under their
respective Acquisition Employment Agreements, they will be nominated for
election to the Board of the Company, subject to certain conditions. The Company
also has employment agreements with Richard C. Kimball, George R. Anderson and
Jon M. Gregory (such persons, the "Officers" and such employment agreements with
the Officers being referred to collectively as the "Officer Employment
Agreements"), effective October 24, 1997. Pursuant to the Officer Employment
Agreements, the Officers hold the respective positions listed for such persons
under "Election of Directors." The Officer Employment Agreements contain
substantially the same terms as the Acquisition Employment Agreements, except
that they do not include any right to be nominated for election to the Company's
Board of Directors.
In connection with the acquisitions of Lawson Granite Company and the
Anderson - Friberg Company, the Company on January 1, 1996 entered into
five-year employment agreements (the "Lawson-AFCO Employment Agreements") with
Peter Friberg, Albert Gherardi, Jr., Mark Gherardi and Paula Plante providing
for the employment of such persons in the respective positions of Senior Vice
President - Barre Memorial Sales, Vice President of Facilities Management -
Barre, Senior Vice President - Barre and Canada Manufacturing Operations and
Office Manager - Barre Manufacturing Facilities. Effective December 31, 1997,
Mr. Albert Gherardi, Jr. retired. The Lawson-AFCO Employment Agreements contain
substantially the same terms as the Acquisition Employment Agreements except
that they provide for certain severance payments upon certain conditions
occurring.
COMPARATIVE STOCKHOLDER RETURN
The following graph compares on a cumulative basis the percentage change
during the period from October 21, 1997, the date the Class A Common Stock
commenced public trading, to December 31, 1997, in the total stockholder return
on (i) the Class A Common Stock of the Company, (ii) the Standard & Poor's 500
Stock Price Index, and (iii) a peer group index of the following eight other
publicly traded companies: Carriage Services Inc., Equity Corp. International,
Hillenbrand Industries, Loewen Group, Inc., Matthews International Corp.,
Services Corp International, Stewart Enterprises and York Group Inc. (the "Peer
Group"). The graph assumes that the value of the investment in the Company's
Class A Common Stock and in each index was $100 on October 21, 1997 and that all
dividends were reinvested. The returns for each company in the Peer Group are
weighted according to its stock market capitalization at the beginning of each
period for which a return is indicated.
COMPARISON OF STOCKHOLDER TOTAL RETURN AMONG ROCK OF AGES CORPORATION,
THE S&P 500 INDEX, AND AN INDUSTRY PEER GROUP
[TOTAL RETURN LINE CHART]
12
<PAGE>
<TABLE>
<CAPTION>
[Tabular representation of line chart]
COMPARISON OF STOCKHOLDER RETURNS
-------------------------------------------------------------------
OCTOBER 21, 1997 DECEMBER 31, 1997
-------------------------------------------------------------------
<S> <C> <C>
Rock of Ages Corporation......................... $ 100 $ 73.37
S&P 500 Index.................................... $ 100 $ 100.17
Peer Group....................................... $ 100 $ 111.38
</TABLE>
The above data is based upon the closing price of the Class A Common Stock
on its first trading day, October 21, 1997, of $21-1/8 per share. The initial
public offering price for the Class A Common Stock, as shown in the Company's
registration statement, was $18.50 per share.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1997, the Company effected a reorganization as follows: (i) on August
12, 1997 the reincorporation merger of Rock of Ages Corporation, a Vermont
corporation and the immediate predecessor to the Company ("ROA Vermont"), with
and into a newly-formed Delaware corporation, with the Company surviving as a
Delaware corporation, whereby the Class A Common Stock and Class B Common Stock
were created and each outstanding share of common stock of ROA Vermont was
converted into one half of a share of Class B Common Stock; (ii) on October 23,
1997, the merger of Swenson Granite with and into the Company, with the Company
as the surviving corporation (the "Swenson Merger"), in which Swenson Granite's
stockholders received 1,618.123 shares of Class B Common Stock for each share of
Swenson Granite capital stock held by them; and (iii) on October 23, 1997,
immediately prior to the Swenson Merger, Swenson Granite distributed its curb
and landscaping business (essentially all of its operating assets and operating
liabilities) to its stockholders (the "Swenson Granite Distribution") through a
pro rata distribution of all of the member interests in Swenson LLC, a then
newly formed limited liability company. Following the Swenson Granite
Distribution and prior to the Swenson Merger, the sole asset of Swenson Granite
was its 93% stock interest in the Company and its only liabilities were a
$3,340,000 intercompany payable to the Company and a $310,000 note payable
described below. The Swenson Merger exchange ratio of 1,618.123 shares of Class
B Common Stock for each share of Swenson Granite Common Stock was determined by
dividing the number of outstanding shares of the Company held by Swenson Granite
at the time of the Swenson Merger by the total number of shares of common stock
of Swenson Granite outstanding at such time. In determining this ratio, Swenson
Granite and the Company sought to maintain in the Swenson Granite shareholders
as a group the same aggregate percentage ownership of the Company as was held by
Swenson Granite immediately prior to the Swenson Merger, as well as to preserve
the same ownership proportions of such shareholders relative to one another with
respect to the Company as they held with respect to Swenson Granite immediately
prior to the Swenson Merger. Upon consummation of the Swenson Merger, the shares
of the Company held by Swenson Granite were cancelled, the Company forgave an
intercompany payable and the Company assumed a note payable. Kurt M. Swenson,
the Company's Chairman, President and Chief Executive Officer, and his brother
Kevin C. Swenson, own in the aggregate approximately 60.6% of Swenson Granite
LLC. Robert Pope, a security holder of more than five percent of the Class B
Common Stock of the Company, became President and Chief Executive Officer of
Swenson LLC following the Swenson Granite Distribution.
Prior to the Swenson Granite Distribution, Swenson Granite was a party to
certain financing agreements of the Company with CIT Group/Business Credit, Inc.
("CIT") and was a co-maker and/or guarantor of all indebtedness of the Company
due to CIT. Upon consummation of the Swenson Granite Distribution and the IPO,
Swenson LLC was released by CIT as a party, co-maker and/or guarantor of the
Company's indebtedness to CIT, and the Company remained liable with respect
thereto. Of the approximately $4.6 million due from Swenson Granite with respect
to borrowings by the Company under these credit facilities and advanced by the
Company to Swenson Granite, approximately $3.4 million was eliminated in the
Swenson Merger as noted above and the balance of approximately $1.3 million was
assumed and repaid by Swenson LLC to the Company on December 24, 1997.
In connection with the Company's acquisition of Lawson Granite Company and
Anderson-Friberg Company in December 1995, Swenson Granite was obligated under
certain notes and agreements related thereto (the "Lawson-Anderson-Friberg
Obligations"). Except for certain employment agreement and other obligations to
Robert
13
<PAGE>
F. Pope (the "Pope Obligations"), the Chief Operating Officer of Swenson Granite
who, effective upon the Swenson Granite Distribution, became President and Chief
Executive Officer of Swenson LLC, none of the Lawson-Anderson-Friberg
Obligations, including but not limited to a note payable to Paula Plante in the
amount of $310,000, were assumed by Swenson LLC and became direct obligations of
the Company as a result of the Swenson Merger. In connection with the Swenson
Granite Distribution and the Swenson Merger, the Company agreed to indemnify
Swenson LLC with respect to such obligations, other than the Pope Obligations as
to which Mr. Pope has released, and Swenson LLC provided an indemnity to,
Swenson Granite and the Company.
Swenson LLC owns two granite quarries, one in Concord, New Hampshire and
another in Woodbury, Vermont. Both have been owned by Swenson Granite for more
than 40 years. The Company purchases Woodbury granite from Swenson LLC at the
same price Swenson LLC charges its landscape manufacturing operations. The
Company expects that it will continue to be able to purchase all of the excess
output of the Woodbury quarry (beyond that required by Swenson LLC for its curb
and landscaping operations) for resale for both memorial and other uses. Because
of the proximity of the Woodbury quarry to Barre, Vermont, the Company provides,
and expects to continue to provide, certain maintenance services and equipment
to the Woodbury quarry. 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's sales of Woodbury granite provided by Swenson Granite represented
approximately 0.6% of 1997 sales of the Company. The Company believes these
arrangements with Swenson LLC are as favorable, or more favorable, than would be
available from an unrelated party for comparable granite blocks.
Effective upon the Swenson Granite Distribution, ongoing pension
liabilities under the Pension Plan (which was sponsored jointly by the Company
and Swenson Granite) in respect of the employees of Swenson Granite were assumed
by Swenson LLC. In connection with the Swenson Granite Distribution, the 401(k)
accounts of former Swenson Granite employees who, as of the Swenson Granite
Distribution, participated in 401(k) plans jointly sponsored by the Company and
Swenson Granite remained, in a plan jointly sponsored by the Company and Swenson
LLC since each employee's account is fully funded and vested as each
contribution is made.
Upon consummation of the Swenson Granite Distribution, Kurt M. Swenson, the
Company's Chairman and Chief Executive Officer, owned approximately 30% of all
outstanding member interests of Swenson LLC. Mr. Kurt M. Swenson, who has served
as Chairman of the Board and Chief Executive Officer of Swenson Granite since
1974, resigned as President, Chief Executive Officer of Swenson Granite,
effective upon the consummation of the Swenson Granite Distribution. However,
Mr. Kurt M. Swenson continues to serve as a non-officer Chairman of the Board of
Swenson LLC, but has no involvement with the day to day operations of Swenson
LLC. Neither Mr. Kurt M. Swenson nor any other officer of the Company, will
receive salary, bonus, expenses or other compensation from Swenson LLC except
for any pro rata share of earnings attributable to their ownership interest.
In connection with the Keystone Acquisition, the Company entered into a
Supply and Distribution Agreement with Missouri Red Quarries, Inc., the owner of
Keystone immediately prior to the Keystone Acquisition ("Missouri Red"), and G.
Thomas Oglesby, Jr., (the "Missouri Red Supply Agreement"), and a Supply and
Distribution Agreement with Keystone Granite Company, Inc., an affiliate of
Missouri Red ("KGCI"), and Missouri Red (the "Keystone Supply Agreement"), and,
together with the Missouri Red Supply Agreement, the "Supply Agreements"). G.
Thomas Oglesby, Jr. is the sole owner of Missouri Red and the trustee of a trust
for the benefit of his mother and others which hold 100% of KGCI. G. Thomas
Oglesby, Jr. is an officer and a director of the Company. The Company believes
the terms and conditions of the Supply Agreements are as favorable as would be
available from unrelated suppliers. Also in connection with the Keystone
Acquisition, the Company agreed to grant, and granted, to G. Thomas Oglesby, Jr.
and George T. Oglesby, III, principal owners and officers of Keystone, options
under the 1994 Plan to purchase 75,000 shares and 50,000 shares of Class A
Common Stock, respectively, at an exercise price per share of $18.50, the
initial public offering price per share of the Class A Common Stock.
In connection with the C&C Acquisition, the Company granted to Robert Otis
Childs, III, one of the principal owners of C&C, an option under the 1994 Plan
to purchase 75,000 shares of Class A Common Stock at an exercise price per share
of $18.50, the initial public offering price per share of the Class A Common
Stock.
In connection with the Keith Acquisition, the Company (i) entered into a
five year triple net lease agreement with John E. Keith, who became an officer
and director of the Company upon consummation of the Keith Acquisition, and Roy
Keith, Jr., the principal owners of Keith Monument, for office buildings and
retail locations
14
<PAGE>
containing 28,000 square feet at an annual rent of $120,000; and (ii) granted to
John E. Keith and Roy Keith, Jr. options under the 1994 Plan to purchase an
aggregate of 125,000 shares of Class A Common Stock at an exercise price per
share of $18.50, the initial public offering price per share of the Class A
Common Stock.
Upon consummation of the IPO, the Company granted to each of James L. Fox
and Frederick E. Webster, Jr., each of whom became non-employee directors of the
Company at that time, options under the 1994 Plan to purchase 29,126 shares of
Class A Common Stock at an exercise price per share of $18.50, the initial
public offering price per share of the Class A Common Stock.
For a description of certain employment agreements between the Company and
certain persons, see "Executive Compensation and Other Information -- Employment
Agreements."
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board has selected KPMG Peat Marwick LLP as the Company's independent
auditors for the fiscal year 1998, and has further directed that management
submit the selection of the independent auditors for ratification by the
stockholders at the Meeting. KPMG Peat Marwick LLP has audited the Company's
financial statements since 1990. Representatives of KPMG Peat Marwick LLP are
expected to be present at the Meeting and will have an opportunity to make a
statement if they so desire, and will be available to respond to appropriate
questions.
Stockholder ratification of the selection of KPMG Peat Marwick LLP as the
Company's independent auditors is not required by the Company's By-Laws or
otherwise. In the event the Company's stockholders fail to ratify the selection,
the Board will reconsider whether to retain that firm. Even if the selection is
ratified, the Board, in its discretion may direct the appointment of a different
auditing firm at any time during the year if the Board feels that such a change
would be in the best interests of the Company and its stockholders. The
affirmative vote of the holders of Common Stock representing a majority of the
voting power of the shares of Common Stock present or represented by Proxies at
the Meeting will be required to ratify the selection of KPMG Peat Marwick LLP.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION OF THE
SELECTION OF KPMG PEAT MARWICK LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY
FOR FISCAL 1998. UNLESS OTHERWISE DIRECTED IN THE ACCOMPANYING PROXY, THE
PERSONS NAMED THEREIN WILL VOTE "FOR" SUCH RATIFICATION.
OTHER MATTERS
Management of the Company has no knowledge of any other matters which may
come before the Meeting and does not itself intend to present any such other
matters. However, if any such other matters shall properly come before the
Meeting or any adjournment thereof, the persons named as proxies will have
discretionary authority to vote the shares represented by the accompanying
Proxies in accordance with their best judgment.
STOCKHOLDER PROPOSALS
Under the rules and regulations of the Commission, proposals of
stockholders intended to be presented in the proxy statement for the 1999 Annual
Meeting of stockholders of the Company must be received by the Company at its
principal executive offices no later than February 25, 1999.
By Order of the Board of Directors
John R. Monson
Secretary
Graniteville, Vermont
May 18, 1998
15
<PAGE>
CLASS A COMMON STOCK
ROCK OF AGES CORPORATION
Proxy Solicited by the Board of Directors
Annual Meeting of Stockholders-June 26, 1998
The undersigned hereby appoints each of Kurt M. Swenson and Richard C.
Kimball as proxies, each with the full power to appoint a substitute, to
represent and to vote, as designated on the reverse side, all shares of Class A
Common Stock of Rock of Ages Corporation, a Delaware corporation (the
"Company"), the undersigned may be entitled to vote, with all powers the
undersigned would possess if personally present, at the Annual Meeting of
stockholders to be held on June 26, 1998 and any adjournment or postponement
thereof (the "Meeting"). In their discretion, such proxies are authorized to
vote upon such other business as may properly come before the Meeting, the
election of an alternative person to serve as a director if for any reason any
of Mark A. Gherardi, James L. Fox or Charles M. Waite is unable to or will not
serve, and matters incident to the conduct of the Meeting. This proxy revokes
all prior proxies given by the undersigned.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR the election of Mark A. Gherardi, James L. Fox and Charles M. Waite
as directors and FOR ratification of the selection of KPMG Peat Marwick LLP as
the independent auditors of the Company for fiscal 1998. Additionally, this
proxy will be voted in the discretion of the proxies named above upon such other
business as may properly come before the Meeting, the election of an alternative
person to serve as a director if for any reason any of Mark A. Gherardi, James
L. Fox or Charles M. Waite is unable to or will not serve, and matters incident
to the conduct of the Meeting. The undersigned acknowledges receipt of the
Company's definitive Proxy Statement in connection with the Meeting, the related
Notice of Annual Meeting of Stockholders and the Company's 1997 Annual Report.
(continued -- to be dated and signed on reverse side)
<PAGE>
<TABLE>
<CAPTION>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
ROCK OF AGES CORPORATION
June 26, 1998
-------------------------
| |
| CLASS A COMMON STOCK |
| |
-------------------------
|| Please detach and Mail in the Envelope Provided ||
- ------------------------------------------------------------------------------------------------------------------------------------
A [X] Please mark your votes
as indicated in this example.
FOR all
nominees WITHHOLD
listed at right AUTHORITY The Company recommends a vote FOR the election of Mark A.
(except as to vote for all Gherardi, James L. Fox and Charles M. Waite as directors and
marked to nominees FOR ratification of the selection of KPMG Peat Marwick LLP as the
the contrary) listed at right independent auditors of the Company for fiscal 1998.
<S> <C> <C> <C> <C> <C> <C> <C>
1. Election of [ ] [ ] Nominees: 2. Ratification of the selection
Directors duly Mark A. Gherardi of KPMG Peat Marwick
nominated James L. Fox LLP as the independent FOR AGAINST ABSTAIN
Charles M. Waite auditors of the Company [ ] [ ] [ ]
for fiscal 1998.
(INSTRUCTIONS: To withhold authority to vote for any Please mark, date and sign your name as it appears on the
individual nominee, write that nominee's name in the proxy card and return it in the enclosed envelope.
space provided below.)
- -----------------------------------------------------
(Signature) ____________________(Signature) ____________________(Title or Authority) ________________________Dated: _________, 1998
Note: Please mark, date and sign your name as it appears on this proxy card and return it in the enclosed envelope. Please sign
exactly as your name appears hereon. If shares are held by two or more holders, each holder should sign. If shares are held in
more than one capacity, this proxy will be deemed valid for all shares held in all capacities. When signing as attorney,
executor, administrator, trustee or guardian, please give full title. If a corporation, please sign in full corporate name by
Chairman of the Board, President, Secretary, Treasurer, or other duly authorized officer. If a partnership, please sign in
partnership name by authorized person.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
CLASS B COMMON STOCK
ROCK OF AGES CORPORATION
Proxy Solicited by the Board of Directors
Annual Meeting of Stockholders-June 26, 1998
The undersigned hereby appoints each of Kurt M. Swenson and Richard C.
Kimball as proxies, each with the full power to appoint a substitute, to
represent and to vote, as designated on the reverse side, all shares of Class B
Common Stock of Rock of Ages Corporation, a Delaware corporation (the
"Company"), the undersigned may be entitled to vote, with all powers the
undersigned would possess if personally present, at the Annual Meeting of
stockholders to be held on June 26, 1998 and any adjournment or postponement
thereof (the "Meeting"). In their discretion, such proxies are authorized to
vote upon such other business as may properly come before the Meeting, the
election of an alternative person to serve as a director if for any reason any
of Mark A. Gherardi, James L. Fox or Charles M. Waite is unable to or will not
serve, and matters incident to the conduct of the Meeting. This proxy revokes
all prior proxies given by the undersigned.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR the election of Mark A. Gherardi, James L. Fox and Charles M. Waite
as directors and FOR ratification of the selection of KPMG Peat Marwick LLP as
the independent auditors of the Company for fiscal 1998. Additionally, this
proxy will be voted in the discretion of the proxies named above upon such other
business as may properly come before the Meeting, the election of an alternative
person to serve as a director if for any reason any of Mark A. Gherardi, James
L. Fox or Charles M. Waite is unable to or will not serve, and matters incident
to the conduct of the Meeting. The undersigned acknowledges receipt of the
Company's definitive Proxy Statement in connection with the Meeting, the related
Notice of Annual Meeting of Stockholders and the Company's 1997 Annual Report.
(continued -- to be dated and signed on reverse side)
<PAGE>
<TABLE>
<CAPTION>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
ROCK OF AGES CORPORATION
June 26, 1998
-------------------------
| |
| CLASS B COMMON STOCK |
| |
-------------------------
|| Please detach and Mail in the Envelope Provided ||
- ------------------------------------------------------------------------------------------------------------------------------------
B [X] Please mark your votes
as indicated in this example.
FOR all
nominees WITHHOLD
listed at right AUTHORITY The Company recommends a vote FOR the election of Mark A.
(except as to vote for all Gherardi, James L. Fox and Charles M. Waite as directors and
marked to nominees FOR ratification of the selection of KPMG Peat Marwick LLP as the
the contrary) listed at right independent auditors of the Company for fiscal 1998.
<S> <C> <C> <C> <C> <C> <C> <C>
1. Election of [ ] [ ] Nominees: 2. Ratification of the selection
Directors duly Mark A. Gherardi of KPMG Peat Marwick
nominated James L. Fox LLP as the independent FOR AGAINST ABSTAIN
Charles M. Waite auditors of the Company [ ] [ ] [ ]
for fiscal 1998.
(INSTRUCTIONS: To withhold authority to vote for any Please mark, date and sign your name as it appears on the
individual nominee, write that nominee's name in the proxy card and return it in the enclosed envelope.
space provided below.)
- -----------------------------------------------------
(Signature) ____________________(Signature) ____________________(Title or Authority) ________________________Dated: _________, 1998
Note: Please mark, date and sign your name as it appears on this proxy card and return it in the enclosed envelope. Please sign
exactly as your name appears hereon. If shares are held by two or more holders, each holder should sign. If shares are held in
more than one capacity, this proxy will be deemed valid for all shares held in all capacities. When signing as attorney,
executor, administrator, trustee or guardian, please give full title. If a corporation, please sign in full corporate name by
Chairman of the Board, President, Secretary, Treasurer, or other duly authorized officer. If a partnership, please sign in
partnership name by authorized person.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
