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                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                            ----------------------

                                   FORM 10-K
                           FOR ANNUAL AND TRANSITION
                   REPORTS PURSUANT TO SECTIONS 13 OR 15(d)
                         OF THE SECURITIES ACT OF 1934

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

     For the fiscal year ended December 31, 2000

                                      OR

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

     For the transition period from _______ to _________

                       Commission file number 333-32518

                     BETTER MINERALS & AGGREGATES COMPANY
            (Exact name of registrant as specified in its charter)

               Delaware                                 55-0749125
     (State or other jurisdiction of                (I.R.S. employer
      incorporation or organization)              identification number)

                         Route 522 North, P.O. Box 187
                     Berkeley Springs, West Virginia 25411
         (Address of principal executive offices, including zip code)

     Registrant's telephone number, including area code:  (304) 258-2500

     Securities registered pursuant to Section 12(b) of the Act:  None

     Securities registered pursuant to Section 12(g) of the Act:  None

     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ ] No [X]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Annual Report on Form 10-K or any
amendment to this Annual Report on Form 10-K. [X]

     Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date:

     Class                                   Outstanding as of March 1, 2001
     -----                                   -------------------------------
     Common Stock                            100 shares

     Documents incorporated by reference:   None
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                               TABLE OF CONTENTS

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Forward-Looking Information.....................................................................      i

Industry Data...................................................................................     ii

Measurements....................................................................................     ii

PART I..........................................................................................      1

   Item 1.     Business.........................................................................      1

   Item 2.     Properties.......................................................................     11

   Item 3.     Legal Proceedings................................................................     12

   Item 4.     Submission of Matters to a Vote of Security Holders..............................     14

PART II.........................................................................................     14

   Item 5.     Market for Registrant's Common Equity and Related Stockholder Matters............     14

   Item 6.     Selected Financial Data..........................................................     14

   Item 7.     Management's Discussion and Analysis of Financial Condition and
                Results of Operations...........................................................     16

   Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.......................     27

   Item 8.     Financial Statements and Supplementary Data......................................     28

   Item 9.     Changes In and Disagreements With Accountants on Accounting and
                Financial Disclosure............................................................     55

PART III........................................................................................     56

   Item 10.    Directors and Executive Officers of the Registrant...............................     56

   Item 11.    Executive Compensation...........................................................     59

   Item 12.    Security Ownership of Certain Beneficial Owners and Management...................     64

   Item 13.    Certain Relationships and Related Transactions...................................     68

PART IV.........................................................................................     70

   Item 14.    Exhibits, Financial Statement Schedules, and Reports on Form 8-K.................     70

SIGNATURES......................................................................................     72

INDEX TO EXHIBITS...............................................................................    E-1
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                          Forward-Looking Information

        This Annual Report on Form 10-K contains statements that constitute
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934. We have based these forward-looking statements on our
current expectations and projections about future events. Although we believe
that our plans, intentions and expectations reflected in or suggested by those
forward-looking statements are reasonable, we can give no assurance that our
plans, intentions or expectations will be achieved. We caution investors that
all forward-looking statements involve risks and uncertainties, including those
arising out of economic, climatic, political, regulatory, competitive and other
factors. The forward-looking statements in this document are intended to be
subject to the safe harbor protection provided by Section 21E. Important factors
that could cause actual results to differ materially from those expressed or
implied by the forward-looking statements we make in this Annual Report on Form
10-K are set forth in this Annual Report on Form 10-K. We believe that the
following factors, among others, could affect our future performance and cause
actual results to differ materially from those expressed or implied by
forward-looking statements made in this Annual Report on Form 10-K:

        -     general and regional economic conditions, including the economy in
              the states in which we have production facilities and in which we
              sell our products;

        -     demand for residential and commercial construction;

        -     demand for automobiles and other vehicles;

        -     interest rate changes and changes in financial markets generally;

        -     levels of government spending on road and other infrastructure
              construction;

        -     the competitive nature of the industrial minerals and aggregates
              industries;

        -     operating risks typical of the industrial minerals and aggregates
              industries;

        -     difficulties in, and unanticipated expense of, assimilating
              newly-acquired businesses;

        -     fluctuations in prices for, and availability of, transportation,
              power, petroleum-based products and other energy products;

        -     unfavorable weather conditions;

        -     regulatory compliance, including compliance with environmental and
              silica exposure regulations, by us and our customers;

        -     litigation affecting us and our customers;

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        -     changes in the demand for our products due to the availability of
              substitutes for products of our customers; and

        -     labor unrest.

Except for our obligations under the federal securities laws, we undertake no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise. In light of these
risks, uncertainties and assumptions, our future performance may differ
materially from that expressed or implied by the forward-looking statements
discussed in this Annual Report on Form 10-K.

                                 Industry Data

        Information contained in this Annual Report on Form 10-K concerning the
industrial minerals and aggregates industries, our general expectations
concerning these industries and our market position and market share within
these industries and the end use markets we serve are based on estimates
prepared by us using data from various sources (primarily the U. S. Geological
Survey, including its web site at www.usgs.gov, the Committee on Environment
and Public Works of the United States Senate and data from our internal
research) and on assumptions made by us, based on that data and our knowledge of
these industries, which we believe to be reasonable. We believe data regarding
the industrial minerals and aggregates industries and our market position and
market share within those industries and the end use markets we serve are
inherently imprecise, but are generally indicative of their size and our market
position and market share within those industries and end use markets. While we
are not aware of any misstatements regarding any industry data presented in this
Annual Report on Form 10-K, our estimates, particularly as they relate to our
general expectations concerning the industrial minerals and aggregates
industries, involve risks and uncertainties and are subject to change based on
various factors, including those discussed under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Significant Factors Affecting Our Business" and elsewhere in this Annual Report
on Form 10-K. Information contained in this Annual Report on Form 10-K relating
to the Transportation Equity Act for the 21st Century comes primarily from the
United States Department of Transportation's web site located at
www.fhwa.dot.gov. The information contained in, or linked to, the web sites
referenced in this paragraph does not constitute part of this Annual Report on
Form 10-K.

                                 Measurements

        When used in this Annual Report on Form 10-K:

        -     data in tons or tonnage is measured in "short" tons (2,000
              pounds);

        -     mesh refers to size measured in sieve openings per square inch and
              thus as mesh size increases, particle size decreases; and

        -     microns refer to size (one micron is equal to 0.00004 of an inch).

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                                    PART I

Item 1.    Business

Overview of Better Minerals & Aggregates Company

        We mine, process and market industrial minerals, principally industrial
silica, in the eastern and midwestern United States. We also mine, process and
market aggregates and produce and market hot mixed asphalt in certain parts of
Pennsylvania and New Jersey.

        We are the second leading producer of industrial silica in the United
States, accounting for approximately 24% of industry volume in 2000, and believe
that we have leading positions in most of our key end use markets for our silica
products, typically occupying the number one or two position by sales. These end
use markets include container glass, fiberglass, specialty glass, flat glass,
fillers and extenders, chemicals and ceramics. We also supply our silica
products to the foundry, building materials and other end use markets.

        Our customers use our aggregates, which consist of high quality crushed
stone, construction sand and gravel, for road construction and maintenance,
other infrastructure projects and residential and commercial construction and to
produce hot mixed asphalt and concrete products. We also use our aggregates to
produce hot mixed asphalt.

        We operate a network of 26 production facilities in 14 states. Many of
our production facilities are located near major modes of transportation and our
significant customers, which reduces transportation costs and enhances customer
service. Our principal industrial minerals and aggregates properties each have
deposits that we believe will support production in excess of 15 years. Our
industrial minerals business (substantially all the sales of which consists of
silica products) and our aggregates business accounted for 64% and 36% of our
sales, respectively, for the year ended December 31, 2000.

Products

        We operate in two business segments: industrial minerals products and
aggregates products.

        Industrial Minerals. Our industrial minerals products are processed to
meet a broad range of chemical purity, particle shape and sizing specifications.
Our key industrial minerals products are known as unground silica, ground
silica, fine ground silica, kaolin and aplite. Our unground silica products
consist of silica of various size grades ranging from 120 to 20 mesh. For the
year ended December 31, 2000, we sold 5.4 million tons of unground silica. Our
ground silica products consist of unground silica that is further processed into
sizes of 40 to 125 microns. For the year ended December 31, 2000, we sold
600,000 tons of ground silica. Our fine ground silica products consist of ground
silica that we have further processed with highly engineered equipment into size
grades of 5 to 40 microns. For the year ended December 31, 2000, we sold 57,000
tons of fine ground silica. In addition to our silica products we also produce a
limited amount of kaolin and aplite. Kaolin is a mineral co-

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product in our production of silica in Kosse, Texas that we sell primarily as a
filler and extender to the paints and coatings industry. Aplite is an alumina
source produced at our Montpelier, Virginia facility that we sell primarily to
the glass industry.

        Aggregates. Our aggregates products include high quality crushed stone,
construction sand and gravel, which we provide in various sizes, and hot mixed
asphalt. Hot mixed asphalt is a densely packed combination of approximately 95%
crushed stone, sand or gravel bound together by asphalt oil. A major component
of the road system in the United States, hot mixed asphalt covers approximately
95% of the paved roads in the United States, and the hot mixed asphalt industry
generates over $10 billion in sales annually in the United States. Market growth
and demand is primarily driven by road construction and population growth. We
sold 4.9 million tons of our aggregates products (excluding sales of hot mixed
asphalt) and 1.8 million tons of our hot mixed asphalt for the year ended
December 31, 2000.

        We produce a high quality, anti-skid asphalt using the Superpave system.
Superpave is a relatively new approach to asphalt mix design, which provides
designers with standards for customizing roadway mixes for specific weather and
traffic conditions. This new set of standards generally requires high quality
aggregates that conform to a variety of specific characteristics, including
hardness, absorption, size and shape. Many state governments have elected to
require their roadways to conform to the Superpave standards. For example, the
Pennsylvania Department of Transportation requires all roadway contracts to
include the use of the Superpave standards. We have the ability both to supply
our customers with the quality of aggregates required by the Superpave system as
well as to manufacture Superpave-compliant asphalt from our own aggregates.

End Use Markets and Customers

        Our industrial minerals and aggregates businesses generate sales from a
diversified base of customers and end use markets. During the year ended
December 31, 2000, we exceeded $10 million in sales in each of 9 distinct end
use markets, and no single customer accounted for more than 6% of our sales.

        Industrial Minerals. Our industrial mineral products are sold into a
variety of end use markets, as described below.

        Container Glass. We supply unground silica and aplite to the container
glass end use market for use in the production of food, beverage and liquor
bottles.

        Fiberglass. We supply unground and ground silica and aplite to the
textile and insulation fiberglass end use markets. Textile fiberglass is used in
the production of roofing products and composites for automotive parts, sports
equipment and boats. Insulation fiberglass is used to maximize energy efficiency
in buildings by insulating heating and cooling ducts, attics, basements and
exterior walls.

        Specialty Glass. We supply unground and ground silica and aplite to the
specialty glass end use market for use in the production of television tubes,
lights and tableware. Because of the higher quality standards in this market,
certain of our industrial minerals for specialty glass are shipped nationally
and regionally and also are exported.

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        Flat Glass. We supply unground silica to the flat glass end use market
for use in the production of automotive glass and windows. Windows are primarily
used in commercial and residential construction and remodeling.

        We estimate that in 2000 our shipments of industrial silica to the
container glass, fiberglass, specialty glass and flat glass end use markets
accounted for approximately 29% of the total volume of industrial silica shipped
to the glass end use markets in the United States.

        Foundry. We supply unground and ground silica to the foundry end use
market for use in the production of automotive, heavy equipment and machine tool
castings. We estimate that in 2000 we accounted for approximately 14% of the
silica volume shipped to the foundry end use market in the United States.

        Fillers and Extenders. We supply unground, ground and fine ground silica
and kaolin to the paints and coatings end use market as fillers and extenders in
the production of architectural, industrial and traffic paints, and to the
rubber and plastic end use market for use in the production of epoxy molded
countertops and silicone rubber. We estimate that in 2000 we accounted for
approximately 30% of the silica volume shipped to the fillers and extenders end
use market in the United States. We are able to ship certain of these products,
which are primarily marketed on a local basis, to customers nationally as well
as regionally. In addition, we are also able to compete internationally with
some of these products.

        Building Materials. We supply unground, ground and fine ground silica
and kaolin to the building materials end use market for use in the production of
bricks, stucco, concrete and asphalt shingles. We estimate that in 2000 we
accounted for approximately 24% of the silica volume shipped to the building
materials end use market in the United States.

        Chemicals. We supply unground and ground silica to the chemicals end use
market where it is used in the manufacture of sodium silicate, which is used in
products such as detergents, paper textile, finishing and dental products. We
estimate that in 2000 we accounted for approximately 73% of the silica volume
shipped to the chemicals end use market in the United States.

        Ceramics. We supply unground, ground and fine ground silica and kaolin
to the ceramics end use market for use in the production of ceramic whiteware,
floor tiles and glaze formulations. We estimate that in 2000 we accounted for
approximately 29% of the silica volume shipped to the ceramics end use market in
the United States.

        Other. We also supply our silica, kaolin and aplite to a variety of
additional markets. For example, our silica is used as fracturing sand in the
oil and gas end use market and in athletic fields, race tracks, sand boxes,
playgrounds and golf courses.

        Aggregates. We supply our aggregates products primarily to the paving
and construction end use market in southern New Jersey and southeastern and
western Pennsylvania for use in pavements. We also supply our aggregates for use
in outside recreational facilities, sport stadiums and residential and
commercial construction. We use the remainder of our aggregates to produce hot
mixed asphalt.

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     Our aggregates business is highly seasonal, due primarily to the effect of
weather conditions on construction activity in the markets that we serve. Poor
weather during the peak season of our aggregates business from April through
November could result in lower sales of aggregates by reducing or delaying road
construction and maintenance, other infrastructure projects and residential and
commercial construction. In the past, significant changes in weather conditions
during this period have caused variations in demand for aggregates. In addition,
because we are not as geographically diverse as some of our aggregates
competitors, we may be more vulnerable than these competitors to poor weather
conditions in the geographic areas in which we operate.

     In 1998, Congress established the Transportation Equity Act for the 21st
Century ("TEA-21"). TEA-21 establishes a $218 billion transportation program
that provides for increased federal funding for highways and related
infrastructure improvements through 2003. TEA-21 authorizes average annual
federal spending on highways and related infrastructure improvements of
approximately $26 billion. In Pennsylvania and New Jersey, our primary
aggregates markets, average annual federal spending on highways and related
infrastructure improvements under TEA-21 is projected to be approximately 47%
and 30% higher, respectively, than under the predecessor program.

     Many of our aggregates customers depend substantially on government funding
of highway construction and maintenance and other infrastructure projects.
Although TEA-21 provides for increased federal funding for highways and related
infrastructure improvements through 2003, there can be no assurance that any
successor program adopted by Congress, if one is adopted at all, will provide
for equivalent or increased government funding. Furthermore, although TEA-21
provides for federal funding through 2003, state and municipal governmental
entities need to provide for matching funds in order to obtain federal funding
under TEA-21, and state and municipal governmental entities have separate
approval processes relating to the matching of any federal funding for highways
that have not been completed. Accordingly, a decrease in federal funding of
highways and related infrastructure improvements after the expiration of TEA-21,
or a failure of states or municipalities to match the federal funding to be
provided by TEA-21, could adversely affect our revenue and profits in our
aggregates business. In addition, unlike some of our competitors, we currently
sell our aggregates products almost entirely in only two states, Pennsylvania
and New Jersey. As a result, we are more vulnerable than our more geographically
diverse competitors to decreases in state government highway spending in those
states.

Sales and Marketing

     We market our industrial minerals products primarily on a local basis. Our
local sales and marketing efforts are each managed by a regional sales person,
and are directed to meet our local customers' specific needs. Our technical and
customer service personnel support our local sales and marketing personnel.
Certain of our smaller local customers are primarily serviced by customer
service representatives located at our facilities. We also sell to distributors
for resale to customers who desire to purchase a combination of our industrial
minerals and other products that the distributor supplies.

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     In the case of our customers that have facilities in multiple states, we
also direct our sales and marketing efforts at the corporate headquarters level.
While competition for these customers generally remains at the local level, the
terms of certain of our agreements are negotiated with the customer at the
corporate level. Our national account managers also coordinate multi-
disciplinary teams that work with these customers and their technical and
engineering departments to jointly develop specifications for industrial
minerals to meet their local product and application needs. In addition, we
provide technical and customer service to these customers' individual facility
locations at the local level.

     We market our aggregates products, including our hot mixed asphalt,
directly through our local sales force, which calls on our customers at their
facilities.

Competition

     We operate in the highly competitive industrial silica and aggregates
industries. Transportation costs are a significant portion of the total cost of
industrial minerals and aggregates to customers, typically representing up to
50% of that cost. As a result, the industrial minerals and aggregates markets
are typically local, and competition from beyond the local area is limited.
Although we experience competition in all of our end use markets, we believe
that we are a leading producer in the key end use markets and geographic areas
that we serve.

     The industrial silica industry is a competitive market that is
characterized by a small number of large, national producers and a larger number
of small, regional producers. We are the second leading producer of industrial
silica in the United States, accounting for approximately 24% of industry volume
in 2000. We compete with, among others, Unimin Corporation, Fairmount Minerals,
Inc., Oglebay Norton Industrial Sands, Inc. and Badger Mining Corporation.
Competition in the industrial minerals industry is based on price, consistency
and quality of product, site location, distribution capability, customer
service, reliability of supply, breadth of product offering and technical
support. In addition, there is significant underutilized capacity in the
industrial minerals industry that could adversely affect the pricing of our
industrial minerals products.

     In recent years, the aggregates industry has seen increasing consolidation,
although competition remains primarily local. Competition in the aggregates
industry is based primarily on price, quality of product, site location,
distribution capability and customer service. Due to the high cost of
transportation relative to the value of the product, competition within the
aggregates industry favors producers with aggregates production facilities in
close proximity to transportation modes and customers. Accordingly, in
Pennsylvania and New Jersey, we compete primarily with local or regional
operations. In addition, in western Pennsylvania, slag, a residue from steel
processing, also competes with our aggregates products.

     Many of our competitors are large companies that have greater financial
resources than we do, may develop technology superior to ours and have
production facilities that are located closer to key customers. We cannot
guarantee that we will be able to compete successfully

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against our competitors in the future or that competition will not have a
material adverse effect on us.

Production and Distribution

        Our production process for our industrial minerals generally consists of
mining mineral ore followed by a number of processing steps. All of our
industrial minerals mining operations involve surface mining. As is customary in
our industry, some of our mining operations, particularly drilling and blasting,
are outsourced to third parties. After the mineral ore is mined we crush it into
various sizes, depending on the specific customer application. We then remove
impurities from the materials in a washing process and remove oversized
particles by screening. Moisture is removed through a drying process and the
product is loaded into trucks or rail cars for shipment or is bagged before
shipping.

        We ship our industrial mineral products direct to our customers by
either truck or rail. Bagged product is generally distributed by truck. We
sometimes utilize rail-truck transfer stations to deliver our products if we can
thereby achieve lower delivery costs to a given customer or region. Almost all
our truck shipments of industrial minerals are carried out by third parties. Our
rail shipments are generally made by railcar equipment owned by the railroad,
although for some customers and regions we lease our own railcars. Given the
value to weight ratio of most of our industrial mineral products, the
cost-effective distribution range is approximately 200 miles. For some of our
high margin fine ground silica and other specialty products such as kaolin, we
can effectively distribute our products nationally and, in some cases,
internationally.

        Our production process for our aggregates consists of mining mineral ore
and then crushing it into various sizes based on customer specifications. All of
our aggregates mining operations involve surface mining, except for two that
involve underground mining. Generally, surface mining is subject to less
operational risk than underground mining. We either ship our aggregates products
directly to our customers by truck, typically within 75 miles of the plant, or
store it at our facility to meet future customer demand. In certain instances we
deliver large orders by rail. Our hot mixed asphalt is produced by mixing our
aggregates with asphalt oil, blending to customer specifications and then
delivering by truck typically within 30 miles of the plant.

        Our Commercial Aggregates Transportation and Sales, LLC ("CATS")
subsidiary runs a cooperative fleet of dump trucks owned by independent
contractors. CATS hires these trucks for hauling aggregates and other bulk
materials. In return, the independent trucking contractors benefit from a steady
source of work and bulk discounts on fuel, tires and other services. CATS
enables us to secure reliable access to a fleet of approximately 200 dump trucks
on a cost-effective basis.

Technical Support

        We operate an industrial minerals laboratory to monitor the quality of
our products, plants and services. The laboratory has four principal functions.
The technical service function provides support to both current and prospective
customers and performs controlled

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tests for a variety of applications. The lab also assists foundries in their
quality control programs through periodic testing of their sand and equipment, a
service that has enabled us to increase our business by acquiring several large
foundries as customers. The application function evaluates the chemical,
physical and performance characteristics of our products and those of our
competitors. These evaluations assist us in developing new products and
applications and enable us to provide our customers with technical support and
recommendations. The analytical function both provides support for plants
lacking the ability to provide certain technical information to customers, and
analyzes drill core samples to provide data for short- and long-term mine
planning. The mineral processing function is designed to simulate all plant
processes, primarily preparing and analyzing drill core samples for mine
planning purposes and providing expertise in plant problem troubleshooting. We
are ISO 9002 registered at nine plants.

Government Regulation

        Environmental Matters. We are subject to a variety of governmental
regulatory requirements relating to the environment, including those relating to
our handling of hazardous materials and air and wastewater emissions. Some
environmental laws impose substantial penalties for noncompliance, and others,
such as the federal Comprehensive Environmental Response, Compensation, and
Liability Act, impose strict, retroactive and joint and several liability upon
persons responsible for releases of hazardous substances.

        We believe that we have all material environmental permits, that our
operations are in substantial compliance with applicable laws and that any
noncompliance is not likely to have a material adverse effect on us. Through
periodic self-audits, we continually evaluate whether we must take additional
steps to ensure compliance with existing environmental laws. However, if we fail
to comply with present and future environmental laws and regulations, we could
be subject to liabilities or our operations could be interrupted. In addition,
future environmental laws and regulations could restrict our ability to expand
our facilities or extract our mineral deposits or could require us to acquire
costly equipment or to incur other significant expenses in connection with our
business. Although we believe we have made sufficient capital expenditures to
achieve substantial compliance with existing environmental laws and regulations,
future events, including changes in any environmental requirements and the costs
associated with complying with such requirements, could have a material adverse
effect on us.

        We have taken a number of steps to minimize potential environmental
liabilities and address environmental activities in a proactive manner,
including performing regular environmental audits, performing Phase 1
environmental assessments on all of our properties in 1995 and, prior to
acquisition, on all properties acquired after that time, removing all known
underground storage tanks, replacing PCB-containing transformers with non-PCB
transformers, entering into a national waste disposal contract that limits our
waste disposal liability and developing and implementing an "environmental
information management system" to allow us to better track permits and
compliance matters.

        Some of our facilities have a long history of industrial operations. As
such, we may have liability for cleanup of contamination from historical
discharges of hazardous materials.

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For example, we may be required to remediate groundwater contamination at our
Rockwood, Michigan facility. Although the contamination has not moved off of our
site and has not affected drinking water supplies, further action may be
required by state authorities. Our Ottawa, Illinois facility has trace levels of
arsenic contamination in the groundwater beneath the quarries. Studies show that
there is no health risk to workers and that the product is not contaminated. We
believe that we have claims against responsible third parties or have insurance
coverage for these matters. We also believe that, even assuming third-party or
insurance recoveries were not successful, all such remediation matters,
individually or in the aggregate, would not have a material adverse effect on
us. We have identified other areas of historic waste disposal on our properties.
Historically, the waste, pallets, bags, scrap metal and other wastes from the
plant sites were dumped on certain of our lands. The presence of the disposal
areas has not materially impacted, and is not expected to materially impact, our
operations or otherwise have a material adverse effect on us.

        Regulation of Silica. The Occupational Safety and Health Administration,
or OSHA, regulates work place exposure to crystalline silica at our customer
locations through a "permissible exposure level," commonly referred to as a PEL.
OSHA has designated crystalline silica as a priority for rulemaking and
announced that it will publish a Notice of Proposed Rule Making, or NPRM, on
crystalline silica in 2001. The NPRM is expected to propose a lower PEL for
crystalline silica. Although we are uncertain as to what OSHA will ultimately
propose, it is probable that a significantly lower PEL will be proposed for
quartz, the form of silica mined, processed and sold by us. However, we do not
expect any final OSHA rule on crystalline silica to be adopted until several
years after the NPRM is published.

        The Mining Safety and Health Administration, or MSHA, regulates
occupational health and safety matters for mining. Accordingly, MSHA regulates
our quarries, underground mines and industrial mineral processing facilities.
The MSHA "threshold limit value" for crystalline silica as quartz is the same as
the current OSHA PEL. MSHA is expected to follow OSHA's actions regarding the
permissible limits of exposure to crystalline silica for mining.

        The Environmental Protection Agency, or EPA, recently announced that it
would begin its review of crystalline silica in 1999 under its Integrated Risk
Information System, or IRIS, program. Essentially, the EPA will conduct a risk
assessment regarding the cancer and non-cancer health effects of crystalline
silica and possibly develop reference concentrations for non-cancer health
effects and unit risk factors for cancer health effects. These reference
concentrations and unit risk factors, if developed, will be entered into the EPA
IRIS database. In addition, several states have considered, and a few have
promulgated, regulations regarding crystalline silica air emissions. For
example, in Oklahoma and Texas, crystalline silica is considered a toxic air
contaminant. As such, these states have established maximum allowable ambient
concentrations, or MAACs, for crystalline silica (quartz). Generally, these
MAACs establish limits for facility crystalline silica emissions, measured at
the facility property line. The IRIS initiative and state MAAC standards could
result in lower permit limits requiring costly equipment upgrades or operational
restrictions.

        In 1999, Massachusetts proposed that crystalline silica be defined as a
toxic substance for purposes of the state's toxic use reduction act program. The
toxic use reduction act

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program imposes fees on the use of toxic substances and requires certain users
of toxic substances to develop plans to reduce the use of the toxic substance.
California requires that a warning accompany any chemical that the state has
published as being known to cause cancer. "Silica, crystalline (airborne
particles of respirable size)" has been included as a carcinogen under these
criteria since 1988. These state programs may have the effect of reducing our
customers' demand for silica products.

        We believe that we materially comply with governmental requirements for
crystalline silica exposure and emissions and other regulations relating to
silica and plan to continue to comply with these regulations. However, we cannot
guarantee that we will be able to comply with any new standards that are adopted
or that these new standards will not have a material adverse effect on us by
requiring us to modify our operations or equipment or shut down some of our
plants. Additionally, we cannot guarantee that our customers will be able to
comply with any new standards or that any such new standards will not have a
material adverse effect on our customers by requiring them to shut down old
plants and to relocate plants to locations with less stringent regulations that
are further away from us. Accordingly, we cannot at this time reasonably
estimate our costs of compliance or the timing of any costs associated with any
new standards, or any material adverse effects that any new standards will have
on our customers and, consequently, on us.

        Mining and Processing of Minerals. In addition to the regulatory matters
described above, the industrial minerals and aggregates industries are subject
to extensive governmental regulation on matters such as permitting and licensing
requirements, plant and wildlife protection, wetlands protection, reclamation
and restoration of mining properties after mining is completed, the discharge of
materials into the environment, surface subsidence from underground mining and
the effects that mining has on groundwater quality and availability. Our future
success depends upon the quantity of our industrial minerals and aggregates
deposits and our ability to extract these deposits profitably. It is difficult
for us to estimate quantities of recoverable deposits, in part due to future
permitting and licensing requirements. We believe we have obtained all material
permits and licenses required to conduct our present mining operations. However,
we will need additional permits and renewals of permits in the future. We may be
required to prepare and present to governmental authorities data pertaining to
the impact that any proposed exploration or production activities may have upon
the environment. New site approval procedures may require the preparation of
archaeological surveys, endangered species studies and other studies to assess
the environmental impact of new sites. Compliance with these regulatory
requirements is expensive, requires an investment of funds well before the
potential producer knows if its operation will be economically successful and
significantly lengthens the time needed to develop a new site. Furthermore,
obtaining or renewing required permits is sometimes delayed or prevented due to
community opposition and other factors beyond our control. New legal
requirements, including those related to the protection of the environment,
could be adopted that could materially adversely affect our mining operations
(including the ability to extract mineral deposits), our cost structure or our
customers' ability to use our industrial minerals or aggregates products.

        For most of our operations, state statutes and regulations or local
ordinances require that mine property be restored in accordance with specific
standards and an approved

                                       9
<PAGE>

reclamation plan. We believe that we are making adequate provisions for all
expected reclamation and other costs relating to expected mine closures in the
reasonably foreseeable future. We believe that future costs associated with
reclamation provisions and mine closures will not have a material adverse effect
on us. Nevertheless, we could be adversely affected if these provisions were
later determined to be insufficient, or if future costs associated with
reclamation are significantly greater than our current estimates. Accordingly,
there can be no assurance that current or future mining regulation will not have
a material adverse effect on our business or that we will be able to obtain or
renew permits in the future.

Employees

        As of March 1, 2001, we had approximately 1,053 employees, of which
approximately 538 were represented by 12 local unions under 12 union contracts.
These union contracts have remaining durations ranging from one to five years.
Over the last 10 years, we have been involved in numerous labor negotiations,
only two of which have resulted in a work disruption at two of our 26
facilities. During these disruptions, the operations of the facilities and our
ability to serve our customers were not materially affected. Although we
consider our current relations with our employees to be good, if we do not
maintain these good relations, or if a work disruption were to occur, we could
suffer a material adverse effect.

                                       10
<PAGE>

Item 2.   Properties

     We own or lease a number of properties located in the eastern and
midwestern United States. Our headquarters is in Berkeley Springs, West
Virginia. Set forth below is the location, use, status and number of years of
remaining reserves as of December 31, 2000 for each of our principal properties:

<TABLE>
<CAPTION>
                                                                                   Number of Years
      Location                          Use                         Status      Remaining Reserves/1/
--------------------     -------------------------------------   ------------   ---------------------
<S>                      <C>                                     <C>            <C>
Berkeley Springs, WV     Corporate offices                       Owned                        N/A

Industrial Minerals
Berkeley Springs, WV     Silica mining and processing            Owned                         25
Cedar Lake, NJ           Silica mining and processing            Owned                          6
Columbia, SC             Silica mining and processing            Leased                        27
Dubberly, LA             Silica mining and processing            Owned/Leased                  35
Dundee, OH               Silica mining and processing            Owned                         78
Hurtsboro, AL            Silica mining and processing            Owned/Leased                   9
Jackson, TN              Silica mining and processing            Owned                         32
Kosse, TX                Silica and kaolin mining and            Owned/Leased                  32
                            processing
Mapleton Depot, PA       Silica mining and processing            Owned/Leased                  26
Mauricetown, NJ          Silica processing                       Owned                        N/A
Mill Creek, OK           Silica mining and processing            Owned/Leased                  25
Millville, NJ            Silica mining and processing            Owned/Leased                  24
Montpelier, VA           Aplite mining and processing            Owned/Leased                  47
Ottawa, IL               Silica mining and processing            Owned                         63
Pacific, MO              Silica mining and processing            Owned                         70
Port Elizabeth, NJ       Silica mining and processing            Owned                         40
Rockwood, MI             Silica processing                       Owned                        N/A

Aggregates
Adamsburg, PA            Hot mixed asphalt plant                 Owned                        N/A
Berlin, NJ               Construction sand mining and            Owned                         14
                            processing
Ottsville, PA            Stone quarry; hot mixed asphalt plant   Owned                         30
Penns Park, PA           Stone quarry; hot mixed asphalt plant   Owned                         31
Rich Hill, PA            Stone quarry                            Owned/Leased                  30
Sewickly, PA             Hot mixed asphalt plant                 Owned                        N/A
Springfield Pike, PA     Stone quarry; hot mixed asphalt plant;  Owned                         46
                            offices
Upper Township, NJ       Construction sand mining and            Owned/Leased                   4
                            processing
Washington, PA           Hot mixed asphalt plant                 Owned                        N/A
</TABLE>

     With respect to each operation at which we mine industrial minerals and
aggregates, we obtain permits from various governmental authorities prior to the
commencement of mining. The current permitted deposits on our properties are
sufficient to support production, based on historical rates of production, for
an average of approximately 10 years, ranging from approximately four years to
approximately 78 years. We obtain permits to mine deposits as needed in the
normal course of business based on our mine plans and state and local regulatory
provisions regarding mine permitting and licensing. Based on our historical
permitting

-----------------------
/1/  The number of years of remaining reserves for each of our principal
     properties as of December 31, 2000 is based on extraction and production
     information collected during 2000.

                                       11
<PAGE>

experience, we expect to be able to continue to obtain necessary mining permits
to support historical rates of production. Industrial minerals and aggregates
properties which have deposits (which include both permitted and unpermitted
deposits) that we believe are sufficient to support production for over 15 years
accounted for approximately 97% of our sales for the year ended December 31,
2000. Additionally, to further assure sufficient deposits and adequate
facilities to meet future demand, we plan to obtain new deposits through
expansion of existing sites, where feasible, and acquisitions of industrial
minerals and aggregates businesses.

        Some of our mining leases can be indefinitely renewed by us on an annual
basis while others have terms ranging from two to 50 years (including unilateral
renewal rights). These leases generally provide for royalty payments to the
lessor based on a specific amount per ton or a percentage of revenue. In
addition, we have a number of non-mining leases that relate to the above
properties that permit us to perform activities that are ancillary to the mining
of industrial minerals or aggregates such as surface use leases that allow haul
trucks to transport material from the mine to the plant site.

Item 3.     Legal Proceedings

General

        We are a defendant in various lawsuits related to our business. These
matters include lawsuits relating to the exposure of persons to silica, as
discussed in detail below. Although we cannot predict what the full effect of
these or other lawsuits will be, we currently believe that these claims and
proceedings in the aggregate are unlikely to have a material adverse effect on
us.

Product Liability

        The inhalation of respirable crystalline silica is associated with
several adverse health effects. First, it has been known since at least the
1930s that prolonged inhalation of respirable crystalline silica can cause
silicosis, an occupational disease characterized by fibrosis, or scarring, of
the lungs. Second, since the mid-1980s, the carcinogenicity of crystalline
silica has been at issue and the subject of much debate and research. In 1987,
the International Agency for Research on Cancer, or IARC, an agency of the World
Health Organization, classified crystalline silica as a probable human
carcinogen. In 1996, a working group of IARC voted to reclassify crystalline
silica as a known human carcinogen. On May 15, 2000, the National Toxicology
Program, part of the Department of Health and Human Services, issued its ninth
report on carcinogens, which reclassified crystalline silica (respirable size)
from its previous classification as "a reasonably anticipated carcinogen" to "a
known human carcinogen." Third, the disease silicosis is associated with an
increased risk of tuberculosis. Finally, there is recent evidence of an
association between crystalline silica exposure or silicosis and lung cancer and
a possible association between crystalline silica exposure or silicosis and
other diseases such as immune system disorders, like scleroderma, and end-stage
renal disease.

                                       12
<PAGE>

        One of our subsidiaries, U.S. Silica, has been named as a defendant in
an estimated 185 product liability claims alleging silica exposure filed in the
period January 1, 2001 to March 1, 2001. U.S. Silica was named as a defendant in
154 similar claims filed in 1998, 497 filed in 1999 and 610 filed in 2000. U.S.
Silica has been named as a defendant in similar suits since 1975; in each of the
years 1983, 1987, 1995 and 1996, more than 100 claims were filed against U.S.
Silica. The plaintiffs, who allege that they are employees or former employees
of our customers, claim that our silica products were defective or that we acted
negligently in selling our silica products without a warning, or with an
inadequate warning. The plaintiffs further claim that these alleged defects or
negligent actions caused them to suffer injuries and sustain damages as a result
of exposure to our products. In almost all cases, the injuries alleged by the
plaintiffs are silicosis or "mixed dust disease," a claim that allows the
plaintiffs to pursue litigation against the sellers of both crystalline silica
and other minerals. There are no pending claims of this nature against any of
our other subsidiaries.

        As of March 1, 2001, there were an estimated 1,472 silica-related
products liability claims pending in which U.S. Silica is a defendant. Almost
all of the claims pending against U.S. Silica arise out of the alleged use of
U.S. Silica products in foundries or as an abrasive blast media and have been
filed in the states of Texas and Mississippi. Our financial liability to date
for all silica-related claims has not been material.

        ITT Industries, Inc., successor to a former owner of U.S. Silica, has
agreed to indemnify U.S. Silica for third party silicosis claims (including
litigation expenses) filed against it prior to September 12, 2005 alleging
exposure to U.S. Silica products for the period prior to September 12, 1985, to
the extent of the alleged exposure prior to that date. This indemnity is subject
to an annual deductible of $275,000, which is cumulative and subject to
carry-forward adjustments. Pennsylvania Glass Sand Corporation, as a predecessor
to U.S. Silica, was a named insured on insurance policies issued to ITT
Industries for the period April 1, 1974 to September 12, 1985 and to U.S. Borax
(another former owner) for the period September 12, 1985 to December 31, 1985.
To date, we have not sought coverage under these policies. Although we cannot
provide any assurance, coverage under these policies may be available to us.
Ottawa Silica Company (a predecessor that merged into U.S. Silica in 1987) had
insurance coverage on an occurrence basis prior to July 1, 1985.

        The silica-related litigation brought against us to date has not
resulted in any material liability to us. However, it is likely that we will
continue to have silica-related product liability claims filed against us,
including claims that allege silica exposure for periods after January 1, 1986.
We cannot guarantee that our current indemnity agreement with ITT Industries
(which currently expires in 2005 and in any event only covers alleged exposure
to U.S. Silica products for the period prior to September 12, 1985), or
potential insurance coverage (which, in any event, only covers periods prior to
January 1, 1986) will be adequate to cover any amount for which we may be found
liable in such suits. Any such claims or inadequacies of the ITT Industries
indemnity or insurance coverage could have a material adverse effect on us.

        The exposure of persons to silica and the accompanying health risks have
been, and will continue to be, a significant issue confronting the industrial
minerals industry. Concerns over silicosis and other potential adverse health
effects, as well as concerns regarding potential

                                       13
<PAGE>

liability arising from the use of silica, may have the effect of discouraging
our customers' use of our silica products. The actual or perceived health risks
of mining, processing and handling silica could materially and adversely affect
silica producers, including us, through reduced use of silica products, the
threat of product liability or employee lawsuits, increased levels of scrutiny
by federal and state regulatory authorities of us and our customers or reduced
financing sources available to the silica industry.

Item 4.     Submission of Matters to a Vote of Security Holders

        No matters were submitted to a vote of security holders during the
fourth quarter of fiscal year 2000.

                                     PART II

Item 5.     Market for Registrant's Common Equity and Related Stockholder
            Matters

        Not applicable.

Item 6.     Selected Financial Data

        The following table sets forth selected historical consolidated
financial and other data of U.S. Silica (Predecessor) and us (Successor) as of
the end of and for the periods presented. We acquired U.S. Silica on February
9, 1996. U.S. Silica is therefore the Predecessor for financial reporting
purposes. The selected historical consolidated financial data as of and for the
years ended December 31, 2000, 1999 and 1998 have been derived from our audited
consolidated financial statements and the notes thereto included elsewhere in
this Annual Report on Form 10-K. The selected historical consolidated financial
data as of and for the years ended December 31, 1997 and 1996 are derived from
the audited consolidated financial statements of the Successor and the
Predecessor, respectively, that are not included in this Annual Report on Form
10-K. This information should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements and the notes thereto included elsewhere
in this Annual Report on Form 10-K.

                                       14
<PAGE>

<TABLE>
<CAPTION>
                                                                          Successor                                   Predecessor
                                             ----------------------------------------------------------------------  ------------
                                                                                                       February 10,   January 1,
                                                                                                       1996 through  1996 through
                                                            Year Ended December 31,                    December 31,   February 9,
                                             ----------------------------------------------------    --------------  ------------
                                                2000           1999(1)     1998(2)         1997            1996          1996
                                             ----------     ---------- ------------   -----------    --------------  ------------
                                                             (Dollars in Thousands)
<S>                                          <C>            <C>        <C>            <C>            <C>             <C>
Statement of Operations Data:
Sales....................................... $  299,335     $  244,802 $  169,943     $  154,470      $  129,061     $   14,247
Cost of goods sold..........................    222,754        175,971    126,127        114,055          95,904         11,814
Depreciation, depletion and amortization....     35,895         28,481     19,888         17,886          15,225          1,033
Selling, general and administrative.........     25,543         21,843     16,930         14,345          12,077          1,404
Incentive stock compensation expense (3)....        998             --     14,227             --              --             --
Operating income (loss).....................     14,145         18,507     (7,229)         8,184           5,855             (4)
Interest expense............................     36,359         19,590     10,269         10,513          10,074             13
Accretion of preferred stock warrants (4)...         --             56      1,254          1,374              --             --
Other income net, including interest income.     (1,575)        (2,171)    (1,881)        (1,742)           (598)          (534)
(Loss) income before income taxes...........    (20,639)         1,032    (16,871)        (1,961)         (3,621)           517
Provision (Benefit) for income taxes........    (11,091)        (2,714)    (2,204)        (2,239)         (2,101)           963
Net income (loss) before extraordinary loss.     (9,548)         3,746    (14,667)           278          (1,520)          (446)
Extraordinary loss (5)......................         --         (2,747)    (2,102)            --              --             --
Net income (loss)........................... $   (9,548)    $      999 $  (16,769)    $      278          (1,520)    $     (446)
Balance Sheet Data:
Cash........................................ $      860     $   13,573 $    2,222     $      402      $      954     $      748
Working capital.............................     38,086         45,715     19,508         12,277          11,724         16,573
Total assets................................    538,286        551,603    274,678        188,647         195,787        104,112
Total debt..................................    289,405        287,505    137,448         88,163          89,154             --
Stockholder's equity........................     53,216         64,335     23,396         26,022          22,755         54,984
Other Financial Data:
Capital expenditures........................ $   20,319     $   14,572 $    9,399     $    5,537      $    7,216     $      567
Cash interest expense.......................     33,266         10,925      9,269          8,731           6,609             --
Ratio of earnings to fixed charges (6)......      -- (7)           1.1      -- (7)         -- (7)          -- (7)          25.6


</TABLE>

(1)  Includes the results of the Morie Assets from April 9, 1999, the date of
     acquisition, and the results of Commercial Stone from October 1, 1999, the
     date of acquisition.
(2)  Includes (i) with respect to the year ended December 31, 1998, the results
     of Pettinos from July 25, 1998, the date of acquisition, and (ii) with
     respect to the year ended December 31, 1998, the results of Better
     Materials from December 14, 1998, the date of acquisition.
(3)  Represents non-cash compensation expense recorded in 2000 for stock grants
     to our new Chief Executive Officer and in 1998 due to the waiver by USS
     Holdings, our parent, of its right to repurchase certain capital stock held
     by our management.
(4)  Represents the non-cash accretion in value of certain warrants granted with
     respect to preferred stock of USS Holdings. We recognize this charge as
     part of push down accounting because the warrants were issued in connection
     with debt issued by U.S. Silica. The obligation to satisfy any payments due
     in connection with these warrants was forgiven by USS Holdings during 1999.
(5)  Represents non-cash charges and write-offs recorded in connection with our
     early retirement of certain subordinated debt in 1998, and the early
     retirement of certain senior debt in 1999.
(6)  Under Item 503 of Regulation S-K, "earnings" for purposes of this
     calculation have been computed by adding to "income before extraordinary
     items" all taxes based on income or profits, total interest charges and the
     estimated interest element of rentals charged to income. "Fixed charges"
     include total interest charges and the estimated interest element of
     rentals charged to income.
(7)  Earnings were insufficient to cover fixed charges by $20.6 million, $16.9
     million, $2.0 million and $3.6 million for the years ended December 31,
     2000, 1998 and 1997 and the period February 10, 1996 through December 31,
     1996, respectively.

                                       15
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

        The following information should be read in conjunction with our audited
consolidated financial statements and the notes thereto included in Item 8 of
this Annual Report on Form 10-K.

Overview

        We mine, process and market industrial minerals, principally industrial
silica, in the eastern and midwestern United States. We also mine, process and
market aggregates and produce and market hot mixed asphalt in certain parts of
Pennsylvania and New Jersey. We are a holding company that conducts
substantially all our operations through our subsidiaries.

        We were incorporated in Delaware in January 1996 and purchased U.S.
Silica Company, which was organized in 1927 as the Pennsylvania Glass Sand
Corporation, from U.S. Borax in February 1996. After purchasing U.S. Silica, we
subsequently completed the following acquisitions and disposition:

        -  In July 1998, we acquired George F. Pettinos, Inc. ("Pettinos"), a
           producer of aggregates with operations in Berlin, New Jersey and a
           processor of silica with operations in Ontario, Canada.

        -  In December 1998, we acquired Better Materials Corporation ("Better
           Materials"), an aggregates producer in southeastern Pennsylvania.

        -  In April 1999, we acquired certain operating assets in southern New
           Jersey from Unimin Corporation (the "Morie Assets"), which are used
           in the production and sale of silica and aggregates.

        -  In October 1999, we acquired Commercial Stone Co., Inc., a crushed
           stone and hot mixed asphalt producer in southwestern Pennsylvania,
           CATS and related quarry properties (collectively, "Commercial
           Stone").

        -  In February 2000, we sold one of our two Canadian subsidiaries,
           George F. Pettinos (Canada) Limited ("PECAL").

In November 2000 we incorporated a new Delaware subsidiary, BMAC Services Co.,
Inc., to provide consulting and management services to our other subsidiaries.

Significant Accounting Policies

        We recognize sales at the time the product is shipped to our customers
and title passes (generally when the product leaves our facility). Sales
includes the costs of transportation borne by our customers when we pay the
costs on their behalf and are reimbursed.

        Cost of goods sold includes the ongoing mining and processing costs of
our operations (primarily labor costs, power costs, repair and maintenance
costs, transportation costs on

                                       16
<PAGE>

customer shipments, costs of hiring third party subcontractors to drill and
blast in our mining operations, as well as lease royalty payments, where
applicable) and non-cash charges associated with estimated net future costs of
restoring and reclaiming operating mine sites. This provision is made at each
operating location based on units of production and engineering estimates of
total deposits. Selling, general and administrative expenses are the costs of
operating our business, including corporate overhead and associated fees and
expenses related to acquisitions. Management fees to our acquisition advisors
and due diligence costs for any acquisitions that we are unable to complete are
also included in this category.

        Acquired property and mineral deposits are recorded at cost. The
purchase price of business acquisitions is allocated based on the fair values of
assets acquired and liabilities assumed at that time. Depreciation is computed
using the straight line method over the estimated useful lives of the assets,
which ranges from 3 to 15 years. Depletion of mineral deposits is accounted for
as the minerals or aggregates are extracted, based on units of production and
engineering estimates of total deposits. Accordingly, depletion expense will
increase or decrease with changes in the volumes of minerals or aggregates
extracted or, prospectively, for changes in engineering estimates of total
deposits. Amortization of various non-current assets such as non-competition
agreements are made on a straight line basis over the life of the related
agreement. Goodwill related to purchased acquisitions is amortized over 15
years.

                                       17
<PAGE>

Results of Operations

        The following table sets forth our consolidated statement of operations
data for the three years ended December 31, 2000, 1999 and 1998, and the
percentage of sales of each line item for the periods presented. This statement
of operations data is derived from our consolidated financial statements and the
notes thereto included elsewhere in this Annual Report on Form 10-K.

<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
                                       -----------------------------------------------------------------------------
                                                 2000                       1999                      1998
                                       -----------------------   ------------------------   ------------------------
                                                                   (Dollars in Thousands)
<S>                                    <C>             <C>       <C>             <C>        <C>            <C>
Sales:
     Industrial minerals...........    $  192,280       64.2%      $  191,263      78.1%   $  166,446        97.9%
     Aggregates....................       107,055       35.8           53,539      21.9         3,497         2.1
                                       ----------     ------       ----------    ------    ----------      ------
Total sales........................       299,335      100.0          244,802     100.0       169,943       100.0
Cost of goods sold.................       222,754       74.4          175,971      71.9       126,127        74.2
Depreciation, depletion
  and amortization.................        35,895        12.0          28,481      11.6        19,888        11.7
Selling, general and
  administrative...................        25,543         8.5          21,843       8.9        16,930        10.0
Incentive stock compensation
  expense..........................           998         0.3              --        --        14,227         8.4
                                       ----------     -------      ----------    ------    ----------      ------
Operating income (loss)............        14,145         4.7          18,507       7.6        (7,229)       (4.3)
Interest expense...................        36,359        12.1          19,590       8.0        10,269         6.0
Accretion of preferred stock
  warrants.........................            --          --              56        --         1,254         0.7
Other income, net of interest
  income...........................        (1,575)       (0.5)         (2,171)     (0.9)       (1,881)       (1.1)
                                       ----------     -------      ----------    ------    ----------      ------
(Loss) income before income
  taxes............................       (20,639)       (6.9)          1,032       0.4       (16,871)       (9.9)
Benefit for income taxes...........       (11,091)       (3.7)         (2,714)     (1.1)       (2,204)        1.3
                                       ----------     -------      ----------    ------    ----------      ------
Net income (loss) before
  extraordinary loss...............        (9,548)       (3.2)          3,746       1.5       (14,667)       (8.6)
Extraordinary loss.................            --          --          (2,747)     (1.1)       (2,102)       (1.2)
                                       ----------     -------      ----------    ------    ----------      ------
Net income (loss)..................    $   (9,548)       (3.2)%    $      999       0.4%   $  (16,769)       (9.9)%
                                       ==========                  ==========              ==========
</TABLE>

Year Ended December 31, 2000 Compared with Year Ended December 31, 1999

        Sales. Sales increased $54.5 million, or 22.3%, to $299.3 million in the
year ended December 31, 2000 from $244.8 million in the year ended December 31,
1999.

        Sales of industrial minerals increased $1.0 million to $192.3 million in
the year ended December 31, 2000 from $191.3 million in the year ended December
31, 1999. Sales decreased $7.1 million due to the February 2000 sale of PECAL.
Excluding PECAL's results for both periods, sales of industrial minerals
increased $8.1 million, or 4.4%, to $190.5 million in the year ended December
31, 2000 from $182.4 million in the year ended December 31, 1999. The primary
reasons behind the increase in industrial minerals sales were a $4.6 million
increase in transportation costs billed to customers (increasing from $32.1
million in 1999 to $36.7 million in 2000), $2.4 million from the full year
results from the acquisition of the Morie Assets, and an increase in sales to
the oil and gas extraction market segment, partially offset by a decline in
sales of calcined kaolin to the fillers and extenders market segment.

        Sales of aggregates increased $53.6 million to $107.1 million in the
year ended December 31, 2000 from $53.5 million in the year ended December 31,
1999. The increase was primarily due to the full year results from the
acquisitions of Commercial Stone and the Morie Assets, which resulted in the
inclusion of additional sales of $52.1 million in the year ended December 31,
2000.

                                       18
<PAGE>

        Cost of Goods Sold. Cost of goods sold increased $46.8 million, or
26.6%, to $222.8 million in the year ended December 31, 2000 from $ 176.0
million in the year ended December 31, 1999.

        Cost of goods sold for industrial minerals increased $0.9 million to
$140.7 million in the year ended December 31, 2000 from $139.8 million in the
year ended December 31, 1999. Cost of goods sold decreased $5.9 million due to
the February 2000 sale of PECAL. Excluding PECAL's results for both periods,
cost of goods sold for industrial minerals increased $6.8 million, or 5.1%, to
$139.2 million in the year ended December 31, 2000 from $132.4 million in the
year ended December 31, 1999. The increase was primarily due to an increase of
$4.6 million in transportation costs billed to customers, and a $4.0 million
increase in the cost of drier fuel partially offset by reductions in other
operating expenses.

        Cost of goods sold for aggregates increased $45.3 million to $81.4
million in the year ended December 31, 2000 from $36.1 million in the year ended
December 31, 1999. The increase was primarily due to the inclusion of the full
year results from the acquisitions of Commercial Stone and the Morie Assets,
which resulted in an additional $42.7 million in cost of goods sold in the year
ended December 31, 2000, along with $0.8 million in increased costs for
petroleum based products in our eastern Pennsylvania and New Jersey aggregates
operations, and $0.6 million in additional costs from a new aggregate sand plant
which began operations in mid-2000.

        Depreciation, Depletion and Amortization. Depreciation, depletion and
amortization increased $7.4 million, or 26.0%, to $35.9 million in the year
ended December 31, 2000 from $28.5 million in the year ended December 31, 1999.
The increase was primarily due to a $ 5.1 million increase from the acquisition
of Commercial Stone, including a $0.5 million increase in annual depletion rates
made at Commercial Stone in September 2000 after a reduction in the estimated
available reserves at our related aggregates sites following a reserve analysis.

        Selling, General and Administrative. Selling, general and administrative
expenses increased $3.7 million, or 17.0%, to $25.5 million in the year ended
December 31, 2000 from $21.8 million in the year ended December 31, 1999. The
increase was primarily due to the acquisition of Commercial Stone, which
resulted in the inclusion of $2.6 million in additional expense, partially
offset by a reduction of $0.5 million from the sale of PECAL in February 2000.
Excluding the acquisition and divestiture, selling, general and administrative
expenses increased $1.7 million, or 8.5%, to $21.8 million in the year ended
December 31, 2000 from $20.1 million in the year ended December 31, 1999 due to
a $1.3 million non-recurring compensation charge for the recruitment of our new
chief executive officer.

        Incentive Stock Compensation Expense. Incentive stock compensation
expense amounted to $1.0 million in the year ended December 31, 2000 as a result
of the issuance of stock of our parent as part of the non-recurring costs
associated with the recruitment of our new chief executive officer.

        Operating Income. Operating income decreased $4.4 million to $14.1
million in the year ended December 31, 2000 from $18.5 million in the year ended
December 31, 1999.

                                       19
<PAGE>

        Operating income for industrial minerals increased $0.8 million to $13.7
million in the year ended December 31, 2000 from $ 12.9 million in the year
ended December 31, 1999. The increase is primarily due to the factors noted
earlier, and a reduction of $2.7 million in direct and allocated selling,
general and administrative expense.

        Operating income for aggregates decreased $2.2 million to $4.5 million
in the year ended December 31, 2000 from $6.7 million in the year ended December
31, 1999 due to the factors noted earlier and an increase of $3.1 million in
allocated corporate overhead expense.

        Corporate expenses not allocated to the business segments increased $2.9
million to $4.0 million in the year ended December 31, 2000 from $1.1 million in
the year ended December 31, 1999, primarily as a result of the non-recurring
compensation expenses noted earlier, and an increase in consulting costs.

        Interest Expense. Interest expense increased $16.8 million, or 85.7%, to
$36.4 million in the year ended December 31, 2000 from $19.6 million in the year
ended December 31, 1999. The increase was primarily due to increased borrowings
related to prior year acquisitions and increased interest rates.

        Net Income (Loss). Net income decreased $10.5 million to a $9.5 million
net loss in the year ended December 31, 2000 from $1.0 million in net income in
the year ended December 31, 1999. The decrease in net income is primarily due to
the factors noted earlier, especially the increases in interest expense,
depreciation and non-recurring compensation expenses recognized in 2000,
partially offset by an $8.4 million increase in the benefit for income taxes.
Extraordinary losses incurred in 1999 were $2.7 million, reflecting the after
-tax charge recognized to write off debt issuance fees that were previously
capitalized in connection with our 1998 financing.

Year Ended December 31, 1999 Compared with Year Ended December 31, 1998

        Sales. Sales increased $74.9 million, or 44.1%, to $244.8 million in the
year ended December 31, 1999 from $169.9 million in the year ended December 31,
1998.

        Sales of industrial minerals increased $24.9 million, or 15.0%, to
$191.3 million in the year ended December 31, 1999 from $166.4 million in the
year ended December 31, 1998. The increase was primarily due to the acquisition
of the Morie Assets, which resulted in the inclusion of $8.7 million for the
period of April 8, 1999 through December 31, 1999, and the full year results of
the Pettinos acquisition, which resulted in an increase of $5.3 million in the
year ended December 31, 1999 from the year ended December 31, 1998. Excluding
these results from acquisitions, sales of industrial minerals increased $10.9
million, or 6.6%, to $177.3 million in the year ended December 31, 1999 from
$166.4 million in the year ended December 31, 1998, primarily from $4.1 million
of increased silica sales to the glass container, flat glass, specialty glass
and filler extender and use markets, and $4.5 million in increased
transportation costs billed to customers.

        Sales of aggregates increased $50.0 million to $53.5 million in the year
ended December 31, 1999 from $3.5 million in the year ended December 31, 1998.
The increase was primarily due to the full year results from the 1998
acquisitions of Better Materials and

                                       20
<PAGE>

Pettinos, which resulted in the inclusion of additional sales of $27.9 million
in the year ended December 31, 1999, the acquisition of the Morie Assets, which
resulted in the inclusion of sales of $6.1 million for the period of April 8,
1999 through December 31, 1999 and the acquisition of Commercial Stone, which
resulted in the inclusion of sales of $16.0 million for the period of October 1,
1999 through December 31, 1999.

        Cost of Goods Sold. Cost of goods sold increased $49.9 million, or
39.6%, to $176.0 million in the year ended December 31, 1999 from $126.1
million in the year ended December 31, 1998.

        Cost of goods sold of industrial minerals increased $16.6 million, or
13.5%, to $139.9 million in the year ended December 31, 1999 from $ 123.3
million in the year ended December 31, 1998. The increase was primarily due to
the acquisition of the Morie Assets and the full year results from the Pettinos
acquisition, which resulted in the inclusion of $9.7 million in cost of goods
sold. Excluding acquisitions, cost of goods sold increased $4.5 million on
increased transportation costs billed to customers, and $2.3 million, or 2.5%,
on a volume increase of 4.6% in the year ended December 31, 1999 compared to the
year ended December 31, 1998.

        Cost of goods sold of aggregates increased $33.3 million to $36.1
million in the year ended December 31, 1999 from $2.8 million in the year ended
December 31, 1998. The increase was due to the inclusion of the full year
results from the 1998 acquisitions of Better Materials and Pettinos, and the
1999 acquisition of the Morie Assets and Commercial Stone, which resulted in the
inclusion of $33.3 million in additional cost of goods sold in the year ended
December 31, 1999.

        Depreciation, Depletion and Amortization. Depreciation, depletion and
amortization increased $8.6 million, or 43.2%, to $28.5 million in the year
ended December 31, 1999 from $19.9 million in the year ended December 31, 1998.
The increase was primarily due to the acquisitions of Better Materials, the
Morie Assets and Commercial Stone.

        Selling, General and Administrative. Selling, general and administrative
expenses increased $4.9 million, or 29.0%, to $21.8 million in the year ended
December 31, 1999 from $16.9 million in the year ended December 31, 1998. The
increase was primarily due to the acquisitions of Pettinos, Better Materials,
the Morie Assets and Commercial Stone, which resulted in the inclusion of $4.3
million in additional expense in the year ended December 31, 1999. Excluding
these items, selling, general and administrative expenses increased $ 0.6
million, or 3.6%, to $17.5 million in the year ended December 31, 1999 from
$16.9 million in the year ended December 31, 1998 due to normal annual
increases.

        Operating Income. Operating income increased $25.7 million to $18.5
million in the year ended December 31, 1999 from a $7.2 million operating loss
in the year ended December 31, 1998.

        Operating income of industrial minerals increased $4.5 million to $12.9
million in the year ended December 31, 1999 from $8.4 million in the year ended
December 31, 1998. The increase is primarily due to the results from the
acquisitions and other factors noted earlier.

                                       21
<PAGE>

        Operating income of aggregates increased $7.0 million to $6.7 million in
the year ended December 31, 1999 from an operating loss of $0.3 million in the
year ended December 31, 1998 as a result of the acquisitions noted earlier.

        Corporate expenses not allocated to the business segments decreased
$14.2 million to $1.1 million in the year ended December 31, 1999 from $15.3
million in the year ended December 31, 1998 primarily due to the non-recurring
incentive stock compensation recognized in 1998.

        Interest (Income) Expense. Interest expense increased $9.3 million, or
90.3%, to $19.6 million in the year ended December 31, 1999 from $10.3 million
in the year ended December 31, 1998. The increase was primarily due to increased
borrowings related to acquisitions and increased interest rates.

        Net Income (Loss). Net income increased $17.8 million to $1.0 million in
the year ended December 31, 1999 from a $16.8 million net loss in the year ended
December 31, 1998. The increase in net income is primarily due to the factors
noted above, especially the incentive stock compensation expense recognized in
1998. This is partially offset by an increase of $0.6 million in extraordinary
losses to $2.7 million in the year ended December 31, 1999 from $2.1 million in
the year ended December 31, 1998. The 1999 loss reflects the after-tax charge
recognized to write off debt issuance fees that were previously capitalized in
connection with our 1998 financing. The 1998 extraordinary loss reflects the
after-tax charge to write off capitalized debt issuance fees for subordinated
debt first issued in 1996 and retired in 1998.

Liquidity and Capital Resources

        Our principal liquidity requirements have historically been to service
our debt, meet our working capital, capital expenditure and mine development
expenditure needs and finance acquisitions. We are a holding company and as such
we conduct substantially all our operations through our subsidiaries. As a
holding company, we are dependent upon dividends or other intercompany transfers
of funds from our subsidiaries to meet our debt service and other obligations,
and have historically met our liquidity and capital investment needs with
internally generated funds. Conversely, we have funded our acquisitions through
borrowings and equity investments. Our total debt as of December 31, 2000 was
$289.4 million and our total stockholder's equity as of that date was $53.2
million, giving us total debt representing 84% of total capitalization. Our debt
level makes us more vulnerable to economic downturns and adverse developments in
our business.

        Net cash provided by operating activities was $7.7 million for the year
ended December 31, 2000 compared to $29.5 million of net cash provided by
operating activities in the year ended December 31, 1999. Cash provided by
operating activities decreased $21.8 million in 2000 due primarily to reduced
earnings, including increased interest expense. Cash interest paid in the year
ended December 31, 2000 was $33.3 million, an increase of $22.4 million from the
$10.9 million paid in the year ended December 31, 1999, primarily as a result of
increased borrowings in 1999.

                                       22
<PAGE>

        Net cash used for investing activities decreased $161.5 million to $24.1
million in the year ended December 31, 2000 from $185.6 million for the year
ended December 31, 1999. This decrease primarily resulted from the $172.4
million acquisition of Commercial Stone and the Morie Assets that occurred in
1999, the $3.1 million received from the PECAL sale in February 2000 partially
offset by a $5.7 million increase in capital expenditures, and the $6.1 million
spent to acquire a fourth hot mixed asphalt plant in Pittsburgh.

        Cash flow provided by financing activities was $3.6 million for the year
ended December 31, 2000 and $167.5 million for the year ended December 31, 1999.
There was a $3.6 million reduction in long-term debt in the year ended December
31, 2000 and a $155.8 million increase in long-term debt in the same period in
1999. Advances under the revolving credit facility were $5.5 million in the year
ended December 31, 2000, compared to a $6.1 million reduction in the same period
in 1999. In addition, we received a $35.0 million equity contribution from USS
Holdings, our parent, in 1999. Financing fees decreased $15.4 million to $0.4
million in 2000 from $15.8 million in 1999.

        Interest payments on our 13% senior subordinated notes due 2009 ($150
million outstanding as of December 31, 2000), which are unconditionally and
irrevocably guaranteed, jointly and severally, by each of our domestic
subsidiaries, debt service under our senior secured credit agreement, working
capital, capital expenditures and mine development expenditures, incurred in the
normal course of business as current deposits are depleted, represent our
significant liquidity requirements. Future acquisition opportunities will also
represent potentially significant liquidity requirements.

        Under our senior secured credit agreement, as of December 31, 2000, we
had $39.1 million outstanding under the tranche A term loan facility and $94.0
million outstanding under the tranche B term loan facility. In addition, this
credit agreement provides us with a $50 million revolving credit facility. The
revolving credit facility was partially drawn for $5.5 million as of December
31, 2000, and $6.6 million was allocated for letters of credit, leaving $37.9
million available for our use. As of March 15, 2001, borrowings under the
revolving credit facility increased to $19.1 million, and $6.7 million was
allocated for letters of credit, leaving $24.2 million available for our use.
The revolving credit facility is available for general corporate purposes,
including working capital and capital expenditures, but excluding acquisitions,
and includes sublimits of $12.0 million and $3.0 million, respectively, for
letters of credit and swingline loans. Debt under the senior secured credit
agreement is collateralized by substantially all of our assets, including our
real and personal property, inventory, accounts receivable and other
intangibles. For a further description of our senior secured credit agreement,
including certain restrictions that it imposes upon us and certain financial
covenants that it requires us to maintain, please see note 6 to our consolidated
financial statements included elsewhere in this Annual Report on Form 10-K.

        On February 22, 2001, the lenders under our senior secured credit
agreement approved an amendment effective December 31, 2000 that revised the
required leverage ratio and interest coverage ratio covenants under the credit
agreement for the period of December 31, 2000 through December 31, 2001. As a
result of this amendment, we were in compliance with these financial ratio
covenants, as revised, as of December 31, 2000. In connection with this
amendment, we agreed to a 25 basis point increase in interest rates for any
period in which our

                                       23
<PAGE>

leverage ratio is greater than 5.0. In addition, we agreed to cancel the undrawn
$40.0 million acquisition term loan facility, which also resulted in a $300,000
reduction in our annual loan commitment fees, as of February 22, 2001. A
one-time amendment fee of approximately $400,000 was paid to the lenders as part
of the amendment. This amendment to our credit agreement was filed as an exhibit
to our Current Report on Form 8-K dated February 22, 2001.

        We believe, based on our calendar year 2001 forecast, that we will be in
compliance with the amended leverage ratio and interest coverage ratio covenants
contained in the senior secured credit agreement throughout calendar year 2001.
In the event that we do not substantially achieve our 2001 forecast, it will be
necessary to seek further amendments to the senior secured credit agreement
covenants. While we obtained amendments and waivers under the senior secured
credit agreement in the past, there can be no assurance that future amendments
or waivers will be granted or that such amendments or waivers, if granted, would
be on terms satisfactory to us.

        Capital expenditures increased $5.7 million, or 39%, to $20.3 million in
the year ended December 31, 2000 from $14.6 million in the year ended December
31, 1999. Excluding possible acquisitions, our expected capital expenditure and
mine development requirements for 2001 is $18.5 million.

        Our ability to satisfy our debt obligations and to pay principal and
interest on our debt, fund working capital, mine development and acquisition
requirements and make anticipated capital expenditures will depend on the future
performance of our subsidiaries, which is subject to general economic, financial
and other factors, some of which are beyond our control. We cannot be certain
that the cash earned by our subsidiaries will be sufficient to allow us to pay
principal and interest on our debts and meet our other obligations. We believe,
however, that based on current levels of operations and anticipated growth, cash
flow from operations, together with borrowings under the revolving credit
facility, will be adequate for at least the next twelve months to make required
payments of principal and interest on our debt and fund working capital, mine
development and capital expenditure requirements. There can be no assurance,
however, that our business will generate sufficient cash flow from operations or
that future borrowings will be available under the revolving credit facility in
an amount sufficient to enable us to service our debt or to fund our other
liquidity needs. If we do not have enough cash, we may be required to refinance
all or part of our existing debt, including the notes, sell assets, borrow more
money or raise equity. We cannot guarantee that we will be able to refinance our
debt, sell assets, borrow more money or raise equity on terms acceptable to us,
or at all.

Significant Factors Affecting Our Business

        Our Business Is Subject to Operating Risks, Including Fluctuations in
Oil and Energy Prices. All of our revenue is and will be derived from our
industrial minerals and aggregates businesses. The mining, processing and
related infrastructure facilities of these businesses are subject to risks
normally encountered in the industrial minerals and aggregates industries. These
risks include environmental hazards, industrial accidents, technical
difficulties or failures, late delivery of supplies, the price and availability
of power, the price and availability of transportation, unusual or unexpected
geological formations or pressures,

                                       24
<PAGE>

cave-ins, pit wall failures, rock falls, unanticipated ground, grade or water
conditions, flooding and periodic or extended interruptions due to the
unavailability of materials and equipment, inclement or hazardous weather
conditions, fires, explosions or other accidents or acts of force majeure. Any
of these risks could result in damage to, or destruction of, our mining
properties or production facilities, personal injury, environmental damage,
delays in mining or processing, losses or possible legal liability. Any
prolonged downtime or shutdowns at our mining properties or production
facilities could have a material adverse effect on us.

        In addition, the price or availability of oil, a raw material used in
making hot mixed asphalt, could adversely affect operating costs, which could in
turn adversely affect our operating results if we cannot pass these increased
costs through to our customers or if customers use less asphalt due to higher
prices. Furthermore, increased energy prices, particularly relating to natural
gas, propane, diesel fuel and other petroleum-based products, could adversely
affect operating costs and, therefore, operating results.

        Demand for Our Products Is Affected by External Factors. Demand in the
markets served by the industrial minerals and aggregates industries is affected
by many external factors, including the general and regional economic conditions
in the states in which we produce and sell our products, demand for automobiles
and other vehicles, the substitution of plastic or other materials for glass,
levels of government spending on road and other infrastructure construction and
demand for residential and commercial construction. General or localized
economic downturns or other external factors adversely affecting demand in the
areas where we sell our products could result in a decrease in sales and
operating income and, therefore, could have a material adverse effect on us. For
example, because our aggregates business is more geographically concentrated
than the businesses of some of our competitors, we may be more vulnerable to
local economic conditions in Pennsylvania and New Jersey.

        We Rely Heavily on Third Party Transportation. We rely heavily on
railroads and trucking companies to ship our industrial minerals and aggregates
products to our customers. Because freight costs represent a significant portion
of the total cost to the customer, fluctuations in freight rates can change the
relative competitive position of our production facilities. Rail and trucking
operations are subject to various hazards, including extreme weather conditions,
work stoppages and operating hazards. If we are unable to ship our products as a
result of the railroads or trucking companies failing to operate or if there are
material changes in the cost or availability of railroad or trucking services,
we may not be able to arrange alternative and timely means to ship our products,
which could lead to interruptions or slowdowns in our businesses and, therefore,
have a material adverse effect on us.

        Future Acquisitions May Adversely Affect Our Operations. We intend to
actively pursue acquisition opportunities, some of which could be material. We
may finance future acquisitions through internally generated funds, bank
borrowings, public offerings or private placements of equity or debt securities,
or a combination of these sources. We might not be able to make acquisitions on
terms that are favorable to us, or at all. If we do complete any future
acquisitions, we will face many risks, including the possible inability to
integrate an acquired business into our operations, diversion of our
management's attention, failure to retain key acquired personnel and
unanticipated problems or liabilities, some or all of which could have a
material adverse effect on us. Acquisitions could place a significant strain on

                                       25
<PAGE>

management, operating, financial and other resources and increased demands on
our systems and controls.

Inflation

        We do not believe that inflation has had a material impact on our
financial position or results of operations during the periods covered by the
financial statements included in this Annual Report on Form 10-K.

Seasonality

        Our aggregates business is seasonal, due primarily to the effect of
weather conditions in winter months on construction activity in our Pennsylvania
and New Jersey markets. Due to this, peak sales of aggregates occur primarily in
the months of April through November. Accordingly, our results of operations in
any individual quarter may not be indicative of our results of operations for
the full year.

Environmental and Related Matters

        We discuss certain environmental matters relating to our various
production and other facilities, certain regulatory requirements relating to
human exposure to crystalline silica and our mining activity and how such
matters may affect our business in the future under "Business--Government
Regulation."

Recent Accounting Pronouncements

        During 2000, the Emerging Issues Task Force ("EITF") issued EITF No.
00-10, "Accounting for Shipping and Handling Fees and Costs." EITF No. 00-10
addresses the statement of earnings classification of shipping and handling
costs billed to customers and became effective in the fourth quarter of 2000. We
adopted the provisions of EITF No. 00-10 in our consolidated financial
statements for all periods presented contained in this Annual Report on Form
10-K. Accordingly, our sales and cost of goods sold include shipping and
handling costs billed to customers in the years ended December 31, 2000, 1999
and 1998 totaling $60.8 million, $35.7 million and $27.7 million, respectively.

        On December 3, 1999, the Securities and Exchange Commission released
Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements." The guidelines set forth in SAB No. 101 stipulate that revenue
should not be recognized until it is realized or realizable and earned. We
adopted SAB No. 101 on January 1, 2000 without effect on our consolidated
financial position and results of operations.

        In June 1998, Statement of Financial Accounting Standards ("SFAS") No.
133, "Accounting for Derivative Instruments and Hedging Activities," was issued.
SFAS No. 133 requires that all derivatives be recognized either as assets or
liabilities in the statement of financial position and be measured at fair
value. SFAS No. 133, as amended by SFAS 137, "Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB," is
effective for fiscal years beginning after June 15, 2000. The effect of

                                       26
<PAGE>

adopting this standard at January 1, 2001 was immaterial to our consolidated
financial position and results of operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

        We do not expect to enter into financial instruments for trading
purposes. We anticipate periodically entering into interest rate swap agreements
to effectively convert all or a portion of our floating-rate debt to fixed-rate
debt in order to reduce our exposure to movements in interest rates. Such
agreements would involve the exchange of fixed and floating interest rate
payments over the life of the agreement without the exchange of the underlying
principal amounts. The impact of fluctuations in interest rates on the interest
rate swap agreements is expected to be offset by the opposite impact on the
related debt. We record the payments or receipts on the agreements as
adjustments to interest expense. Swap agreements will only be entered into with
syndicate banks. In addition, we may enter into interest rate cap agreements,
which limit our variable rate interest to a specified level. In the future, we
may enter into natural gas and other energy related hedge arrangements in order
to reduce our exposure to changes in commodity energy prices. At this time, we
have no energy hedge agreements outstanding.

        We are exposed to various market risks, including changes in interest
rates. Market risk related to interest rates is the potential loss arising from
adverse changes in interest rates.

        At December 31, 2000, we had outstanding interest rate swap agreements
maturing in 2001 with an aggregate notional principal amount of $30.0 million.
At December 31, 1999, we had outstanding interest rate swap agreements maturing
in 2001 with an aggregate notional principal amount of $30.0 million. At
December 31, 1998, we had outstanding interest rate swap agreements maturing in
1999 and 2001 with an aggregate notional principal amount of $85.0 million.
These swaps effectively convert the variable interest rates on the notional
principal amounts to a fixed interest rate. In addition, we had interest rate
cap agreements at December 31, 2000, 1999 and 1998 with aggregate notional
principal amounts of $57.0 million, $51.0 million and $30.0 million,
respectively. These agreements effectively limit the variable interest rate on
the notional principal amount of variable rate debt to 6.5%.

        The fair value of interest rate swap and cap agreements represents the
estimated receipts or payments that we would make to terminate the agreements.
At December 31, 2000, we would have received $100,000 to terminate the interest
rate swap agreements and $10,000 to terminate the interest rate cap agreements.

        The fair market value of our long-term fixed interest rate debt is
subject to interest rate risk. Generally, the fair market value of the fixed
interest rate debt will increase as the interest rates fall and decrease as
interest rates rise. At December 31, 2000, the estimated fair value of our fixed
interest rate long-term debt (including current portion) was approximately $33.0
million less than its carrying value of $150.0 million due to changes in market
conditions for the senior subordinated notes, which were trading at 78% of their
face value as of December 28, 2000. If the prevailing interest rates at December
31, 2000 increased by 1.0%, the fair market value of our total long-term debt
would decrease by approximately $5.2 million.

                                       27
<PAGE>

Item 8. Financial Statements and Supplementary Data

                  Index to Consolidated Financial Statements

<TABLE>

<S>                                                                                             <C>
Report of Independent Accountants..........................................................     29
Consolidated Balance Sheets at December 31, 2000 and 1999..................................     30
Consolidated Statement of Operations for the years ended December 31, 2000, 1999
and 1998...................................................................................     31
Consolidated Statement of Stockholder's Equity for the years ended December 31, 2000,
1999 and 1998..............................................................................     32
Consolidated Statement of Cash Flows for the years ended December 31, 2000, 1999
and 1998...................................................................................     33
Notes to Consolidated Financial Statements.................................................     34
</TABLE>

                                       28
<PAGE>

                       Report of Independent Accountants

To the Board of Directors and Stockholder of Better Minerals & Aggregates
Company:

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, stockholder's equity and cash flows
present fairly, in all material respects, the financial position of Better
Minerals & Aggregates Company at December 31, 2000 and 1999, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2000 in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

March 16, 2001
New York, New York

                                       29
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                       December 31,
Assets                                                              2000          1999
<S>                                                              <C>            <C>
Current:
   Cash and cash equivalents                                     $     860      $  13,573
   Accounts receivable:
     Trade, less allowance for doubtful accounts of
       $1,327 and $1,278                                            44,817         41,658
     Other                                                           1,173          1,060
     Due from parent                                                     -            834
   Inventories                                                      27,890         23,058
   Prepaid expenses and other current assets                         3,221          2,018
   Income tax deposit                                                2,070          1,056
   Deferred income taxes                                            12,809          8,148
                                                                 ---------      ---------
          Total current assets                                      92,840         91,405

Property, plant and equipment:
   Mining property                                                 264,175        263,083
   Mine development                                                  8,156          2,945
   Land                                                             28,249         28,086
   Land improvements                                                 5,043          5,005
   Buildings                                                        36,556         37,143
   Machinery and equipment                                         156,297        143,082
   Furniture and fixtures                                            1,395          1,331
   Construction-in-progress                                          5,317          4,387
                                                                 ---------      ---------

                                                                   505,188        485,062

   Accumulated depletion, depreciation and amortization            (89,502)       (59,838)
                                                                 ---------      ---------

          Property, plant and equipment, net                       415,686        425,224

Other noncurrent:
   Goodwill and non compete agreements, net                         16,649         19,907
   Debt issuance costs                                              12,958         14,601
   Other noncurrent assets                                             153            466
                                                                 ---------      ---------

          Total other noncurrent                                    29,760         34,974
                                                                 ---------      ---------

          Total assets                                           $ 538,286      $ 551,603
                                                                 =========      =========

                                                                       December 31,
Liabilities                                                         2000          1999

Current:
   Book overdraft                                                $   7,264      $   5,026
   Accounts payable                                                 15,908         16,845
   Accrued liabilities                                              11,490         13,053
   Due to parent                                                     2,362              -
   Payable to related party                                              -            898
   Accrued interest                                                  8,654          7,829
   Current portion of long-term debt                                 9,076          2,039
                                                                 ---------      ---------

     Total current liabilities                                      54,754         45,690

Noncurrent liabilities:
   Deferred income taxes                                           110,676        117,637
   Long-term debt, net of current portion                          280,329        285,466
   Other noncurrent liabilities                                     39,311         38,475
                                                                 ---------      ---------

     Total noncurrent liabilities                                  430,316        441,578

Commitments and contingencies

Stockholder's Equity

Common stock, par value $.01, authorized 5,000 shares,
   issued 100 shares                                                     -              -
Loans to related party                                              (1,507)             -
Additional paid-in capital                                          81,377         81,377
Retained deficit                                                   (26,560)       (17,012)
Accumulated other comprehensive (loss)                                 (94)           (30)
                                                                 ---------      ---------

     Total stockholder's equity                                     53,216         64,335
                                                                 ---------      ---------

     Total liabilities and stockholder's equity                  $ 538,286      $ 551,603
                                                                 =========      =========
</TABLE>

  The accompanying notes are an integral part of these financial statements.

                                       30
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Consolidated Statements of Operations
(Dollars in thousands)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                      Years Ended
                                                                      December 31,
                                                                2000            1999           1998
<S>                                                         <C>             <C>            <C>
Sales                                                       $  299,335      $  244,802     $  169,943
Cost of goods sold                                             222,754         175,971        126,127
Depreciation, depletion and amortization                        35,895          28,481         19,888
Selling, general and administrative                             25,543          21,843         16,930
Incentive stock compensation expense (Note 13)                     998               -         14,227
                                                            ----------      ----------     ----------
     Operating income (loss)                                    14,145          18,507         (7,229)

Interest expense                                                36,359          19,590         10,269
Accretion of preferred stock warrants                                -              56          1,254
Other income net, including interest income                     (1,575)         (2,171)        (1,881)
                                                            ----------      ----------     ----------
     Income (loss) before income taxes                         (20,639)          1,032        (16,871)

Benefit for income taxes                                       (11,091)         (2,714)        (2,204)
                                                            ----------      ----------     ----------
     Net income (loss) before extraordinary loss                (9,548)          3,746        (14,667)

Extraordinary loss (less applicable income
   taxes of $1,752, and $713 in 1999 and 1998) (Note 7)              -          (2,747)        (2,102)
                                                            ----------      ----------     ----------
     Net income (loss)                                      $   (9,548)     $      999     $  (16,769)
                                                            ==========      ==========     ==========
</TABLE>

  The accompanying notes are an integral part of these financial statements.

                                       31
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Consolidated Statements of Stockholder's Equity
(Dollars in thousands)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                             Accumulated Other
                                                                                           Comprehensive Income
                                                                                       -----------------------------
                                                    Additional               Loans to    Foreign     Minimum              Total
                                            Common    Paid-In     Retained    Related    Currency    Pension           Stockholder's
                                             Stock    Capital     Deficit      Party   Translation  Liability  Total      Equity
<S>                                         <C>     <C>         <C>          <C>       <C>          <C>        <C>     <C>
Balance, December 31, 1997                  $       $   27,264  $   (1,242)  $         $            $          $       $     26,022

Comprehensive income, net of income taxes:
   Net (loss)                                                      (16,769)                                                 (16,769)
   Foreign currency translation                                                               (44)               (44)           (44)
   Minimum pension liability                                                                             (40)    (40)           (40)
                                            ------  ----------  ----------   --------  ----------   --------   -----   ------------
     Total comprehensive (loss)                                                                                             (16,853)

Issuance of incentive stock                             14,227                                                               14,227
                                            ------  ----------  ----------   --------  ----------   --------   -----   ------------

Balance, December 31, 1998                              41,491     (18,011)                   (44)               (84)        23,396

Comprehensive income, net of income taxes:
   Net income                                                          999                                                      999
   Foreign currency translation                                                                14                 14             14
   Minimum pension liability                                                                              40      40             40
                                                                                                                       ------------
     Total comprehensive (loss)                                                                                               1,053

Capital contributed by parent                           39,886                                                               39,886
                                            ------  ----------  ----------   --------  ----------   --------   -----   ------------

Balance, December 31, 1999                              81,377     (17,012)                   (30)               (30)        64,335

Comprehensive income, net of income taxes:
   Net income                                                       (9,548)                                                  (9,548)
   Foreign currency translation                                                                30                 30             30
   Minimum pension liability                                                                             (94)    (94)           (94)
                                                                                                                       ------------
     Total comprehensive income                                                                                              (9,612)

Loans to related party                                                         (1,507)                                       (1,507)
                                            ------  ----------  ----------   --------  ----------   --------   -----   ------------

Balance, December 31, 2000                  $       $   81,377  $  (26,560)  $ (1,507) $        -   $    (94)  $ (94)  $     53,216
                                            ======  ==========  ==========   ========  ==========   ========   =====   ============
</TABLE>

  The accompanying notes are an integral part of these financial statements.

                                       32
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Consolidated Statements of Cash Flows
(Dollars in thousands)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                         Years Ended December 31,
                                                                                    2000          1999           1998
<S>                                                                             <C>            <C>          <C>
Cash flows from operating activities:
   Net income (loss)                                                            $     (9,548)  $       999  $    (16,769)
   Adjustments to reconcile net income (loss) to cash flows from operations:
     Depreciation                                                                     22,663        17,950        13,012
     Depletion                                                                         6,412         4,111         1,108
     Non compete agreements amortization                                               5,542         5,713         5,593
     Accretion of preferred stock warrants                                                 -            56         1,254
     Debt issuance amortization                                                        2,078         1,148         1,237
     Extraordinary loss                                                                    -         4,499         2,815
     Incentive stock compensation                                                          -             -        14,227
     Deferred income taxes                                                           (11,218)       (6,962)       (3,380)
     Disposal of property, plant and equipment gain                                     (237)         (165)         (208)
     Loss on sale of investment                                                           83             -             -
     Other                                                                             3,026         1,806         1,712
     Changes in current assets and liabilities, net of the effects
       from acquired companies:
         Trade receivables                                                            (4,868)         (360)        1,429
         Non-trade receivables                                                          (229)          563          (949)
         Receivable from parent                                                        3,196          (838)          922
         Payable to related party                                                       (898)          898             -
         Inventories                                                                  (5,098)       (1,250)         (256)
         Prepaid expenses and other current assets                                    (1,256)         (668)         (103)
         Accounts payable and accrued liabilities                                     (1,711)       (4,565)       (3,618)
         Accrued interest                                                                825         7,153          (753)
         Income taxes                                                                 (1,064)         (569)       (1,921)
                                                                                ------------   -----------  ------------
           Net cash provided by operating activities                                   7,698        29,519        15,352
Cash flows from investing activities:
   Capital expenditures                                                              (20,319)      (14,572)       (9,399)
   Proceeds from sale of property, plant and equipment                                   670         1,310           362
   Proceeds from sale of investment                                                    3,136             -             -
   Loans to related party                                                             (1,507)            -             -
   Purchase of non compete agreements                                                      -             -        (2,796)
   Purchases of businesses, net of cash acquired                                      (6,050)     (172,379)      (54,752)
                                                                                ------------   -----------  ------------
           Net cash used for investing activities                                    (24,070)     (185,641)      (66,585)
Cash flows from financing activities:
   Change in book overdraft                                                            2,238        (1,402)        3,930
   Issuance of long-term debt                                                              -       325,006       136,382
   Repayment of long-term debt                                                        (3,600)     (169,205)      (84,370)
   Change in Working Capital Facility                                                  5,500        (6,100)            -
   Principal payments on capital lease obligations                                       (73)          (44)          (24)
   Prepayment penalties                                                                    -             -        (1,255)
   Financing fees                                                                       (435)      (15,796)       (1,550)
   Capital contributed by parent                                                           -        35,000             -
                                                                                ------------   -----------  ------------
           Net cash provided by financing activities                                   3,630       167,459        53,113
Effect of exchange rate on cash                                                           29            14           (60)
                                                                                ------------   -----------  ------------
           Net increase (decrease) in cash                                           (12,713)       11,351         1,820
Cash and cash equivalents, beginning of period
Cash and cash equivalents, ending of period                                           13,573         2,222           402
                                                                                ------------   -----------  ------------
                                                                                $        860   $    13,573  $      2,222

Schedule of noncash investing and financing activities:

Assets acquired by assuming notes payable and capital lease obligations         $          -   $         -  $      1,058
                                                                                ============   ===========  ============
Forgiveness of Series A and B Preferred Stock warrants of Holdings              $          -   $     3,836  $          -
                                                                                ============   ===========  ============
Forgiveness of payable to parent                                                $          -   $     1,050  $          -
                                                                                ============   ===========  ============

Cash paid during the year for:
   Interest                                                                     $     33,266   $    10,925  $      9,269
                                                                                ============   ===========  ============
   Income taxes                                                                 $      2,447   $     3,232  $      2,393
                                                                                ============   ===========  ============
</TABLE>

  The accompanying notes are an integral part of these financial statements.

                                       33
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements
--------------------------------------------------------------------------------

   1.   Organization

        Better Minerals & Aggregates Company (the "Company"), an indirect wholly
        owned subsidiary of USS Holdings, Inc. ("Holdings"), was organized in
        January 1996. BMAC Holdings, Inc. ("BMAC Holdings"), a wholly owned
        subsidiary of Holdings, is the direct parent of the Company.

        On December 14, 1998 and July 24, 1998, U.S. Silica Company ("U.S.
        Silica"), a subsidiary of the Company, acquired Better Materials
        Corporation and George F. Pettinos, Inc., respectively (Note 3). On
        April 8, 1999, U.S. Silica acquired the assets (the "Morie Assets") of
        five New Jersey-based operations owned by Unimin Corporation (Note 3).
        On October 1, 1999, the Company acquired Commercial Stone Co., Inc. and
        Commercial Aggregates Transportation and Sales, L.P. and their related
        quarry properties (Note 3). Commercial Stone Co., Inc. and Commercial
        Aggregates Transportation and Sales, L.P. and their related quarry
        properties are collectively referred to in the notes to the financial
        statements as "Commercial Stone."

        The Company and its subsidiaries are collectively referred to as the
        "Company" in the accompanying financial statements and footnotes.

   2.   Summary of Significant Accounting Policies

        a.   Principles of Consolidation

             The consolidated financial statements include the accounts of the
             Company and its direct and indirect wholly owned subsidiaries. All
             significant intercompany balances and transactions have been
             eliminated in consolidation.

        b.   Reclassifications

             Certain prior years' amounts have been reclassified to conform with
             the current year's presentation.

        c.   Use of Estimates and Assumptions

             The preparation of financial statements in conformity with
             generally accepted accounting principles requires management to
             make estimates and assumptions that affect the reported amounts of
             assets and liabilities and the disclosure of contingent assets and
             liabilities at the dates of the financial statements and the
             reported amounts of revenues and expenses during the reporting
             periods. Actual results could differ from those estimates.

        d.   Cash and Cash Equivalents

             All highly liquid investments with a maturity of three months or
             less are considered cash equivalents.

                                       34
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

        e.   Inventories

             Inventories are stated at the lower of cost or market. Cost is
             determined using the first-in, first-out and average cost methods.

        f.   Revenue Recognition

             Revenue is recorded when legal title passes at the time of shipment
             to the customer.

        g.   Deferred Financing Costs

             Deferred financing costs consist of loan origination costs, which
             are being amortized over the term of the related debt principal.
             Amortization included in interest expense for each of the three
             years in the period ended December 31, 2000 totaled approximately
             $2.1 million, $1.1 million and $1.0 million, respectively.

        h.   Depreciable Properties

             Depreciable properties, mining properties and mineral deposits
             acquired in connection with the acquisitions of U.S. Silica, George
             F. Pettinos, Inc., Better Materials Corporation, the Morie Assets
             and Commercial Stone are recorded at fair market value as of the
             date of acquisition. Additions and improvements occuring through
             the normal course of business are capitalized at cost.

             Upon retirement or disposal of assets, other than those of U.S.
             Silica acquired on February 9, 1996, the cost and accumulated
             depreciation or amortization are eliminated from the accounts and
             any gain or loss is reflected in the statement of operations. Group
             asset accounting is utilized for the U.S. Silica assets acquired on
             February 9, 1996. Gains and losses on normal retirements or
             dispositions of these assets are excluded from net income and
             proceeds for dispositions are recorded as a reduction of the
             acquired cost. Expenditures for normal repairs and maintenance are
             expensed as incurred. Construction-in-progress is primarily
             comprised of machinery and equipment which has not yet been placed
             in service.

             Depreciation is computed using the straight-line method over the
             estimated useful lives of the assets, ranging from 3 to 15 years.

             Depletion and amortization of mineral deposits are provided as the
             minerals are extracted, based on units of production and
             engineering estimates of total reserves. The impact of revisions to
             reserve estimates is recognized on a prospective basis.

             In September 2000 the Company revised its estimated aggregate ore
             reserves related to properties at Commercial Stone. This revision
             is estimated to increase annual depletion by approximately $500,000
             based on existing production levels.

        i.   Mine Exploration and Development

             Costs to develop new mining properties are capitalized and
             amortized based on units of production.

                                       35
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

        j.   Mine Reclamation Costs

             The estimated net future costs of dismantling, restoring and
             reclaiming operating mines and related mine sites, in accordance
             with federal, state and local regulatory requirements, are accrued
             during operations. The provision is made based upon units of
             production and estimated minable reserves as of the balance sheet
             date. The effect of changes in estimated costs, production, and
             minable reserves is recognized on a prospective basis.

        k.   Intangible Assets

             The Company's intangible assets include goodwill and non-compete
             agreements. The cost of goodwill is being amortized on a straight-
             line basis over 15 years. The costs of the non-compete agreements
             are being amortized on a straight-line basis over the terms of the
             agreements, which range from three to five years.

             The Company periodically evaluates the recoverability of its
             goodwill and measures any impairment by comparison to estimated
             undiscounted cash flows from future operations.

        l.   Income Taxes

             The Company accounts for income taxes pursuant to the provisions
             under Statement of Financial Accounting Standards ("SFAS") No. 109,
             "Accounting for Income Taxes", which requires recognition of
             deferred tax liabilities and assets for the expected future tax
             consequences of events that have been included in the financial
             statements or tax returns. Under this method, deferred tax
             liabilities and assets are determined based upon the difference
             between the financial statement and tax basis of assets and
             liabilities using enacted tax rates in effect for the year in which
             the expenses are expected to reverse. The Company is included in
             the consolidated federal tax return of Holdings. The tax provision
             (benefit) included in the accompanying financial statements has
             been computed on a separate return basis.

        m.   Concentration of Credit Risk

             The Company's five largest customers accounted for approximately
             13% and 20% of net product sales for the two years ended December
             31, 2000 and 1999. The five largest customers accounted for
             approximately 30% of net product sales and one customer accounted
             for more than 10% of net product sales of the Company for the year
             ended December 31, 1998. Management believes it maintains adequate
             reserves for potential credit losses; ongoing credit evaluations
             are performed and collateral is generally not required.

        n.   Financial Instruments

             The Company uses interest rate swap and cap agreements to manage
             interest costs and the risk associated with changing interest
             rates. Amounts to be paid or received under interest rate swap
             agreements are accrued as interest rates change and are recognized
             over the life of the swap agreements as an adjustment to interest
             expense. The Company's practice is to not hold or issue derivative
             financial instruments for trading or speculative purposes. When
             entered into, these financial instruments are designated as hedges
             of underlying exposures, associated with the Company's long-term
             debt, and are monitored to determine if they

                                       36
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

             remain effective hedges. The fair value of the interest rate
             agreements and changes in these fair values as a result of changes
             in market interest rates are not recognized in the consolidated
             financial statements.

        o.   Environmental Costs

             Environmental costs, other than qualifying capital expenditures,
             are accrued at the time the exposure becomes known and costs can be
             reasonably estimated. Costs are accrued based upon management's
             estimates of all direct costs, after taking into account expected
             reimbursement by third parties (primarily the sellers of acquired
             businesses), and are reviewed by outside consultants. Environmental
             costs are charged to expense unless a settlement with an
             indemnifying party has been reached.

        p.   Comprehensive Income

             Comprehensive income is defined as the change in equity from
             transactions and other events from nonowner sources and consists of
             net income and other comprehensive income. The Company includes
             foreign currency translation adjustments and minimum pension
             liability adjustments in other comprehensive income.

        q.   Impact of Recent Accounting Standards/Pronouncements

             During 2000, the Emerging Issues Task Force ("EITF") issued EITF
             No.00-10, "Accounting for Shipping and Handling Fees and Costs."
             EITF No. 00-10 addresses the statement of earnings classification
             of shipping and handling costs billed to customers and was
             effective for the fourth quarter of 2000. The Company adopted the
             provisions of EITF No. 00-10 in these financial statements for all
             periods presented. Accordingly, the Company's sales and cost of
             goods sold for each of the three years in the period ended December
             31, 2000, include shipping and handling costs billed to customers,
             aggregating to $60.8 million, $ 35.7 million and $ 27.7 million,
             respectively.

             On December 3, 1999, the SEC released Staff Accounting Bulletin
             ("SAB") No. 101, "Revenue Recognition in Financial Statements." The
             guidelines set forth in SAB No. 101 stipulate that revenue should
             not be recognized until it is realized or realizable and earned.
             The Company adopted SAB No. 101 on January 1, 2000 without effect
             on the Company's consolidated financial position and results of
             operations.

             In June 1998, SFAS No. 133 "Accounting for Derivative Instruments
             and Hedging Activities" was issued. SFAS No. 133 requires that all
             derivatives be recognized either as assets or liabilities in the
             statement of financial position and be measured at fair value.
             SFAS No. 133, as amended by SFAS 137, "Accounting for Derivative
             Instruments and Hedging Activities - Deferral of the Effective Date
             of FASB", is effective for fiscal years beginning after June 15,
             2000. The effect of adopting this standard at January 1, 2001 was
             immaterial to the Company's consolidated financial position and
             results of operations.

   3.   Acquisitions

        On October 1, 1999, the Company acquired Commercial Stone for total
        consideration of $139.0 million in cash, $8.0 million of which was
        placed in escrow to satisfy any future indemnity claims

                                       37
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

        the Company may have against the sellers. The Company financed the
        acquisition through the issuance of $150.0 million Senior Subordinated
        Notes and the refinancing of its existing senior debt by entering into
        new Senior Secured Credit Facilities (Note 6). The acquisition was
        accounted for as a purchase and the purchase price was allocated to the
        assets acquired and liabilities assumed based on their fair values at
        the date of acquisition. Approximately $175.9 million, inclusive of
        deferred income taxes of $76.0 million, has been allocated to mineral
        reserves and is being amortized based on production. The allocation of
        the purchase price was as follows:

                                                            (In thousands)

        Working capital, other than cash                     $      7,443
        Property, plant and equipment                              27,207
        Goodwill                                                    7,403
        Mineral reserves                                          175,856
        Other assets                                                1,739
        Other liabilities                                            (818)
        Deferred income taxes                                     (79,830)
                                                             ------------
           Purchase price, net of cash received              $    139,000
                                                             ============

        On April 8, 1999, the Company acquired the assets of five New Jersey-
        based operations formerly owned by the Morie Company and owned at the
        time by Unimin Corporation for total consideration of $33.4 million.
        Also on April 8, 1999, the Company amended its $155.0 million Credit
        Agreement to add a $35.0 million dollar Senior Term C Facility (Note 6).
        The purchase price was financed with proceeds from the addition of the
        Senior Term C Facility. The acquisition was accounted for as a purchase
        and the purchase price was allocated to the assets acquired and
        liabilities assumed based on their fair values at the date of
        acquisition. Approximately $11.1 million has been allocated to mineral
        reserves and is being amortized based on production. The allocation of
        the purchase price was as follows:

                                                            (In thousands)

        Working capital, other than cash                     $      1,569
        Property, plant and equipment                              15,102
        Goodwill                                                    5,844
        Mineral reserves                                           11,053
        Other liabilities                                            (308)
        Deferred income taxes                                         120
                                                             ------------
           Purchase price, net of cash received              $     33,380
                                                             ============

        On December 14, 1998, the Company acquired the stock of Better Materials
        Corporation for total consideration of $40.6 million. The purchase price
        was financed with cash and available borrowings under the Company's
        $155.0 million Credit Agreement's Acquisition and Working Capital
        Facilities (Note 6). The acquisition was accounted for as a purchase and
        the purchase price was allocated to the assets acquired and liabilities
        assumed based on their fair values at the date of acquisition. The
        excess of the purchase price over the fair value of the net assets
        acquired of approximately $43.3 million, inclusive of deferred income
        taxes of $20.1 million, has been allocated to mineral reserves and is
        being amortized based on production. The allocation of the purchase
        price was as follows:

                                       38
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

                                                           (In thousands)

        Working capital, other than cash                    $        708
        Property, plant and equipment                             17,206
        Mineral reserves                                          43,266
        Other liabilities                                         (2,445)
        Deferred income taxes                                    (20,331)
                                                            ------------
           Purchase price, net of cash received             $     38,404
                                                            ============

        On July 24, 1998, the Company acquired George F. Pettinos, Inc. for
        total consideration of $14.9 million including a covenant not to compete
        for $1.1 million. The purchase price was financed with proceeds from the
        Company's $155.0 million Credit Agreement (Note 6). The acquisition was
        accounted for as a purchase and the purchase price was allocated to the
        assets acquired and liabilities assumed based on their fair values at
        the date of acquisition. The excess of the purchase price over the fair
        value of the net assets acquired of approximately $14.5 million,
        inclusive of deferred income taxes of $5.3 million, has been allocated
        to mineral reserves and is being amortized based on production. The
        allocation of the purchase price was as follows:

                                                             (In thousands)

        Working capital, other than cash                      $      1,162
        Property, plant and equipment                                3,234
        Mineral reserves                                            14,531
        Other assets                                                   601
        Other liabilities                                           (1,252)
        Deferred income taxes                                       (5,490)
                                                              ------------
           Purchase price, net of cash received               $     12,786
                                                              ============

        The following unaudited proforma consolidated results of operations have
        been prepared as if the acquisitions of Commercial Stone, the Morie
        Assets, Better Materials Corporation and George F. Pettinos, Inc. had
        occurred as of the beginning of the periods presented, and reflect
        proforma adjustments for the excess of the purchase price over the fair
        value of the net assets acquired, salaries, mining royalties, interest
        expense and tax expense:

                                       39
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                            For the Year Ended
                                                             December 31, 1999
                                                              (In thousands)
                                        --------------------------------------------------------
                                                        Commercial
                                          Company         Stone       Morie Assets      Total
                                        -----------    -----------    ------------   -----------
        <S>                             <C>            <C>            <C>            <C>
        Sales                           $   244,802    $    50,101    $     3,548    $   298,451
                                        ===========    ===========    ===========    ===========

        Net income (loss) before
           extraordinary loss           $     3,746    $    (4,212)   $      (557)   $    (1,023)
                                        ===========    ===========    ===========    ===========

        Net income (loss) (1)           $       999    $    (4,212)   $      (557)   $    (3,770)
                                        ===========    ===========    ===========    ===========
        <CAPTION>
                                                            For the Year Ended
                                                             December 31, 1998
                                                              (In thousands)
                                        --------------------------------------------------------------
                                                        Commercial
                                          Company         Stone       Acquisitions (2)        Total
                                        -----------    -----------    ----------------    ------------
        <S>                             <C>            <C>            <C>                 <C>
        Sales                           $   169,943    $    53,794       $    52,240      $    275,977
                                        ===========    ===========       ===========      ============

        Net income (loss) before
           extraordinary loss           $   (14,667)   $    (6,016)      $       512      $    (20,171)
                                        ===========    ===========       ===========      ============

        Net income (loss) (1)           $   (16,769)   $    (6,016)      $       512      $    (22,273)
                                        ===========    ===========       ===========      ============
</TABLE>

        (1)  The Company recorded after-tax charges of $2.7 million and $2.1
             million associated with the early extinguishment of U.S. Silica's
             senior debt and subordinated debt during 1999 and 1998,
             respectively. These after-tax charges are reflected within the
             Company's historical results of operations.

        (2)  Amounts include the Morie Assets, Better Materials Corporation and
             George F. Pettinos, Inc.

        The proforma consolidated results do not purport to be indicative of
        results that would have occurred had the acquisitions been in effect for
        the periods presented, nor do they purport to be indicative of the
        results that will be obtained in the future.

                                       40
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

   4.   Inventories

        At December 31, 2000 and 1999, inventory consisted of the following:

<TABLE>
<CAPTION>
        (In thousands)                                               2000          1999
        <S>                                                      <C>            <C>
        Supplies (net of $66 and $38 obsolescence reserve)       $   11,820     $   11,171
        Raw materials and work in process                             4,563          6,165
        Finished goods                                               11,507          5,722
                                                                 ----------     ----------
                                                                 $   27,890     $   23,058
                                                                 ==========     ==========
</TABLE>

   5.   Lease Commitments

        The Company is obligated under certain operating leases for railroad
        cars, mining property, mining/processing equipment, office space and
        transportation and other equipment. Certain of these agreements include
        options to purchase the equipment for fair market value at the end of
        the original lease term. Future minimum annual commitments under such
        leases at December 31, 2000 are as follows:

        Year Ending
        December 31,                                             (In thousands)

        2001                                                      $      2,056
        2002                                                             1,191
        2003                                                               504
        2004                                                               286
        2005                                                               132
        Thereafter                                                          51
                                                                  ------------
                                                                  $      4,220
                                                                  ============

        Rental expense for operating leases for each of the three years in the
        period ended December 31, 2000 totaled approximately $2.7 million, $2.0
        million and $0.9 million, respectively.

        In general, the above leases include renewal options and provide that
        the Company pay for all utilities, insurance, taxes and maintenance.

                                       41
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------
   6.   Long-Term Debt

        At December 31, 2000 and 1999, long-term debt consisted of the
        following:

<TABLE>
<CAPTION>
        (In thousands)                                                      2000           1999
        <S>                                                            <C>            <C>
        Senior Secured Credit Facilities
           Tranche A Term Loan Facility (final maturity                $     39,057   $     39,057
             September 30, 2005)
           Tranche B Term Loan Facility (final maturity
             September 30, 2007)                                             93,500         94,750
           Canadian Term Facility (final maturity
             September 30, 2005)                                                  -          2,043
        Senior Subordinated Notes (final maturity
           September 15, 2009)                                              150,000        150,000
        Working Capital Facility (final maturity
           September 30, 2005)                                                5,500              -
        Secured Note (due December 31, 2001)                                     72            141
        Mortgage Notes
           0% Note, imputed at 10.0% (due January 16, 2008)                     990          1,162
           8.5% Note (due July 1, 2003)                                          49             65
           7.0% Note (due July 31, 2004)                                        237            287
                                                                       ------------   ------------
                                                                            289,405        287,505
           Less, current portion                                              9,076          2,039
                                                                       ------------   ------------
                                                                       $    280,329   $    285,466
                                                                       ============   ============
</TABLE>

        At December 31, 2000, contractual maturities of long-term debt are as
        follows:

                                                                 (In thousands)

        2001                                                      $      9,076
        2002                                                            10,711
        2003                                                            10,711
        2004                                                            10,857
        2005                                                            17,162
        Thereafter                                                     230,888
                                                                  ------------
                                                                  $    289,405
                                                                  ============

        Debt Agreements

        On September 30, 1999, the Company entered into a new $230.0 million
        Credit Agreement (the "Agreement"), which consisted of a $50.0 million
        revolving credit facility (the "Revolving Credit Facility"), a $45.0
        million Tranche A Term Loan Facility ("Term A Loan"), a $95.0 million
        Tranche B Term Loan Facility ("Term B Loan") and a $40.0 million term
        loan acquisition facility (the "Acquisition Term Loan Facility"). The
        Term A Loan included a tranche of loans denominated in Canadian dollars
        (the "Canadian Term Facility") equal to $2.0 million, which was borrowed
        by George F. Pettinos (Canada) Limited, an indirect wholly owned
        subsidiary of

                                       42
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

        the Company. The Revolving Credit Facility, Term A Loan, Term B Loan,
        Acquisition Term Loan Facility and the Canadian Term Facility are
        collectively referred to in the notes to the financial statements as the
        "Senior Secured Credit Facilities. "In addition, on October 1, 1999 the
        Company issued $150.0 million of Senior Subordinated Notes. Pursuant to
        an Exchange and Registration Rights Agreement, in April 2000, the
        Company consummated an exchange offer pursuant to which it exchanged the
        Senior Subordinated Notes for registered notes having substantially the
        same terms. The proceeds from the Senior Secured Credit Facilities and
        the Senior Subordinated Notes were primarily used to pay off the
        outstanding senior debt and to finance the acquisition of Commercial
        Stone.

        Under the Agreement, the Company has available, until September 30,
        2005, the Revolving Credit Facility, which provides for the borrowings
        of up to $50.0 million with a sublimit of $12.0 million for letters of
        credit and a sublimit of $3.0 million for swingline loans. The borrowing
        capacity of the Revolving Credit Facility is reduced by outstanding
        letters of credit and swingline loans. At December 31, 2000, outstanding
        letters of credit totaled $6.6 million. There were $5.5 million in
        borrowings under the Revolving Credit Facility at December 31,
        2000. There were no borrowings under the swingline loans at December 31,
        2000. In addition, there were no borrowings under the Acquisition Term
        Loan Facility at December 31, 2000.

        Borrowings under the Senior Secured Credit Facilities bear variable
        interest at the Company's option at either (1) the bank's base rate plus
        a margin percentage, ranging from 1.00% to 2.50% or (2) the London
        Interbank Offered Rate ("LIBOR") plus a margin percentage, ranging from
        2.00% to 3.50%. Commitment fees, ranging from .375% to .75%, on the
        average daily unused Revolving Credit Facility and the unused
        Acquisition Term Loan Facility are payable quarterly. Letter of credit
        fees are also payable quarterly based upon the average daily balance of
        all letters of credit outstanding. The Senior Subordinated Notes bear
        interest at a rate of 13% per annum, payable semi-annually.

        The obligations of the Company under the Senior Secured Credit
        Facilities are unconditionally and irrevocably guaranteed, jointly and
        severally, by BMAC Holdings and each of the Company's direct or indirect
        domestic subsidiaries. BMAC Holdings has no operations or assets other
        than its investment in its subsidiaries. In addition, the Senior Secured
        Credit Facilities are secured by a first priority pledge of (i) all the
        capital stock of BMAC Holdings, the Company, each of the Company's
        direct or indirect domestic subsidiaries and 65% of the capital stock of
        each direct foreign subsidiary of the Company or any of its domestic
        subsidiaries and (ii) substantially all of the tangible and intangible
        assets held by BMAC Holdings, the Company and each of the Company's
        direct or indirect domestic subsidiaries.

        The Agreement contains various restrictive covenants that, among other
        things, limit the ability of the Company to engage in certain
        transactions with affiliates, incur additional indebtedness, repay other
        indebtedness or amend other debt instruments, create liens on assets,
        make investments or acquisitions, engage in mergers or consolidations,
        dispose of assets, or pay dividends. In addition, the Agreement requires
        the Company to maintain certain financial covenants, including a
        leverage ratio, an interest coverage ratio and a capital expenditures
        covenant. The Senior Subordinated Notes are also subject to certain
        restrictive covenants that are similar to those of the Senior Secured
        Credit Facilities.

        On February 22, 2001 the lenders under the Senior Secured Credit
        Facilities approved an amendment effective December 31, 2000 that
        revised the required leverage ratio and interest coverage ratio
        covenants under the Agreement for the period of December 31, 2000
        through

                                       43
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

        December 31, 2001. As a result of this amendment, the Company was in
        compliance with all of its financial covenants, as revised, as of
        December 31, 2000. In connection with this amendment, the Company agreed
        to a 25 basis point increase in interest rates for any period in which
        the leverage ratio is greater than 5.0. In addition, the Company agreed
        to cancel the undrawn $40.0 million Acquisition Term Loan Facility,
        which also resulted in a $300,000 reduction in the annual loan
        commitment fees, as of February 22, 2001. A one-time amendment fee of
        approximately $400,000 was paid to the lenders as part of the amendment.

        The Company believes, based on its calendar year 2001 forecast, that it
        will be in compliance with the amended leverage ratio and interest
        coverage ratio covenants contained in the Agreement throughout calendar
        year 2001. In the event that the Company does not substantially achieve
        its 2001 forecast, it will be necessary to seek further amendments to
        the Agreement covenants. While the Company obtained amendments and
        waivers under the Agreement in the past, there can be no assurance that
        future amendments or waivers will be granted or that such amendments or
        waivers, if granted, would be on terms satisfactory to the Company.

        The obligation of the Company under the Senior Subordinated Notes is
        unconditionally and irrevocably guaranteed, jointly and severally, on an
        unsecured senior subordinated basis to the Company's Senior Secured
        Credit Facilities, by each of the Company's domestic subsidiaries. The
        Senior Subordinated Notes are not guaranteed by the Company's inactive
        Canadian subsidiary.

        On February 29, 2000, the Company completed the sale of the stock of its
        Canadian operating subsidiary, George F. Pettinos (Canada) Limited for
        $3.2 million. The proceeds from the sale were used to retire the
        Canadian Term Facility and for general corporate uses.

        At December 31, 2000, the fair value of the Company's long-term debt
        approximated $256 million. At December 31, 1999 the carrying value
        approximated the fair value of the Company's long-term debt.

        Warrants

        Warrants to purchase 41,667 shares of Series A Preferred Stock ("Series
        A warrants") and 83,334 shares of Series B Preferred Stock ("Series B
        warrants") of the Company's ultimate parent, Holdings, were issued to
        holders of subordinated debt as part of a Note Purchase Agreement dated
        February 9, 1996.

        The Series A warrants and Series B warrants are exercisable at any time
        until December 19, 2005 at an exercise price of $.01 per share or less
        as defined by the warrant issuance agreement. The holder of the warrants
        has the right to require Holdings to purchase any and all of the
        warrants and shares subject to the warrants at fair value in cash after
        December 19, 2001 and prior to a "liquidity event" which is defined as
        the sale or liquidation of Holdings or the consummation of a public
        offering. Holdings may call all of the outstanding warrants and shares
        subject to warrants after December 19, 2002, subject to approval of the
        holders of the senior debt. Fair value is defined as the liquidation
        preference value of $7.78 per share (plus all accrued and unpaid
        dividends thereon) for the Series A warrants and the common equity value
        per share as determined by the Board of Directors for the Series B
        warrants. The accretion of the Series A warrants and the Series B
        warrants to fair value is accounted for by charges to earnings. The
        holders of the Series A warrants and the Series B warrants are entitled
        to dividends as if they had held underlying shares from February 9,
        1996.

                                       44
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

        Effective December 31, 1999, Holdings agreed to forgive the Company and
        its subsidiaries for the obligation associated with the Series A
        warrants and the Series B warrants. The forgiveness of the obligation
        resulted in a credit to additional paid-in capital of approximately $3.8
        million during the year ended December 31, 1999.

   7.   Extraordinary Items

        During the year ended December 31, 1999, the Company recorded an
        extraordinary after-tax charge of $2.7 million in connection with the
        early extinguishment of outstanding senior debt under its $155.0 million
        Credit Agreement. The extraordinary loss of $4.5 million (before an
        income tax benefit of $1.8 million) consisted of the write-off of
        related unamortized debt issuance costs.

        The Company recorded an extraordinary after-tax charge of $2.1 million
        during the year ended December 31, 1998 in connection with the early
        extinguishment of subordinated debt. The extraordinary loss of $2.8
        million (before an income tax benefit of $713,000) consisted of the
        subordinated debt's discount, prepayment penalties and the write-off of
        related unamortized debt issuance costs of approximately $983,000, $1.3
        million and $577,000, respectively.

   8.   Financial Instruments

        Interest rate swap and cap agreements are utilized in the normal course
        of business to manage the Company's interest costs and the risk
        associated with changing interest rates. Interest rate swap agreements
        are used to exchange the difference between fixed and variable-rate
        interest amounts calculated by reference to an agreed-upon notional
        principal amount. In addition, the Company utilizes interest rate cap
        agreements to limit the impact of increases in interest rates on its
        floating rate debt. Interest rate cap agreements entitle the Company to
        receive from the counterparties the amounts, if any, by which the
        selected market interest rates exceed the strike rates stated per the
        agreements. The Company does not use derivative financial instruments
        for trading or speculative purposes. By their nature, all such
        instruments involve risk, including the possibility that a loss may
        occur from the failure of another party to perform according to the
        terms of a contract (credit risk) or the possibility that future changes
        in market price may make a financial instrument less valuable or more
        onerous (market risk). As is customary for these types of instruments,
        the Company does not require collateral or other security from other
        parties to these instruments. In management's opinion there is no
        significant risk of loss in the event of nonperformance of the
        counterparties to these financial instruments.

        The fair value of the interest rate agreements represents the estimated
        receipts or payments that would be required to settle the agreements at
        year-end. Quoted market prices were used to estimate the fair values of
        the interest rate swap and cap agreements. The notional amount
        represents agreed upon amounts on which calculations of dollars to be
        exchanged are based. They do not represent amounts exchanged by the
        parties and, therefore, are not a measure of the Company's exposure. The
        Company's credit exposure is limited to the fair value of the contracts
        with a positive fair value plus interest receivable, if any, at the
        reporting date.

                                       45
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                         December 31, 2000                    December 31, 1999
                                               ----------------------------------   ----------------------------------
                                                Contract/                            Contract/
                                   Maturity     Notional     Carrying      Fair      Notional     Carrying      Fair
        (In thousands)               Date        Amount       Amount      Value       Amount       Amount      Value
                                   --------    -----------   --------   ---------   -----------   --------   ---------
        <S>                        <C>         <C>           <C>        <C>         <C>           <C>        <C>
        Derivatives
           Interest rate swap
             agreements              2001      $ 30,000(1)   $      -   $     97    $ 30,000(1)   $      -   $     389

           Interest rate cap
             agreements              2001      $ 30,000(2)   $      -   $     15    $ 30,000(2)   $      -   $      83
                                     2002      $ 21,000(2)   $     57   $    (25)   $ 21,000(2)   $     99   $     256
</TABLE>

        (1)  Agreement effectively exchanges the LIBOR floating interest rate
             for a fixed interest rate of 5.74%.
        (2)  Agreement limits the LIBOR floating interest rate to 6.50%.

   9.   Commitments and Contingencies

        The Company and its subsidiaries are involved in legal proceedings,
        claims and litigation arising in the ordinary course of business.
        Management believes, through discussions with counsel, that its
        liability arising from or the resolution of these legal proceedings,
        claims and litigation, in the aggregate will not have a material adverse
        effect on the consolidated financial position, results of operations or
        cash flows of the Company.

        U.S. Silica is self-insured for product liability insurance as it
        relates to occupational disease. In addition, U.S. Silica is self-
        insured for health care costs and, in some states, workers'
        compensation. The Company provides for estimated future losses based on
        reported cases and past claim history. Management believes that the
        provision for estimated future losses is adequate.

        Certain product liability claims related to occupational disease are
        indemnified by ITT Corporation under an agreement whereby claims
        presented with an exposure period prior to September 12, 1985 are shared
        ratably based on the claimant's total exposure period. The indemnity is
        subject to a cumulative annual deductible and expires September 12,
        2005.

                                       46
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

   10.  Income Taxes

        The provision (benefit) for income taxes consisted of the following for
        each of the three years in the period ended December 31, 2000:

<TABLE>
<CAPTION>
        (In thousands)                                          2000          1999           1998
        <S>                                                 <C>           <C>             <C>
        Current:
           Federal                                          $       26    $        -      $      375
           State                                                   358           378              39
           Foreign                                                 (52)          180              23
                                                            ----------    ----------      ----------
                                                                   332           558             437
        Deferred:
           Federal                                              (9,981)       (4,307)         (2,819)
           State                                                (1,416)         (642)           (439)
           Foreign                                                 (26)          (75)            (96)
                                                            ----------    ----------      ----------
                                                               (11,423)       (5,024)         (3,354)
                                                            ----------    ----------      ----------

        Tax effect of extraordinary items                            -         1,752             713
                                                            ----------    ----------      ----------

           Benefit for income taxes                         $  (11,091)   $   (2,714)     $   (2,204)
                                                            ==========    ==========      ==========
</TABLE>

        Under SFAS No. 109, deferred tax assets and liabilities are recognized
        for the estimated future tax effects, based on enacted tax laws, of
        temporary differences between the values of assets and liabilities
        recorded for financial reporting and for tax purposes and of net
        operating loss and other carryforwards. The tax effects of the types of
        temporary differences and carryforwards that gave rise to deferred tax
        assets and liabilities at December 31, 2000 and 1999 consisted of the
        following:

                                       47
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
        (In thousands)                                                 2000                1999
        <S>                                                      <C>
        Gross deferred tax liabilities

        Land and mineral property basis difference               $    (114,891)     $    (116,743)
        Fixed assets and depreciation                                  (29,274)           (31,971)
        Restricted stock vesting                                          (562)              (525)
        Debt fee amortization                                              (90)                 -
        Other                                                           (5,176)            (7,025)
                                                                 -------------      -------------
             Total deferred tax liabilities                           (149,993)          (156,264)
                                                                 -------------      -------------

        Gross deferred tax assets

        Royalty                                                          2,025              2,025
        Post retirement benefit costs                                    7,789              8,100
        Reserves for self-insurance                                      2,415              2,652
        Plant closure liability                                          3,010              2,762
        State deferred tax                                               8,994              9,369
        Covenants not to compete                                         7,155              5,618
        Alternative minimum tax credit carryforward                      5,295              5,483
        Reserves for vacation                                            1,040                910
        Pensions                                                         1,587              2,100
        Inventories                                                        840                535
        Net operating loss carryforward                                  9,308              4,605
        Bad debts                                                          512                496
        Reclamation                                                      1,028              1,032
        Other                                                            1,128              1,088
                                                                 -------------      -------------
             Total deferred tax assets                                  52,126             46,775
                                                                 -------------      -------------

             Net deferred tax liabilities                              (97,867)          (109,489)

           Less net current deferred tax assets                        (12,809)            (8,148)
                                                                 -------------      -------------

        Net long-term deferred tax liabilities                   $    (110,676)     $    (117,637)
                                                                 =============      =============
</TABLE>

        At December 31, 2000 and 1999, the Company had a federal net operating
        loss carryforward ("NOL") of $24.0 million and $11.1 million,
        respectively, which begins to expire in 2011.

        The Company believes that it is more likely than not that the NOL
        carryforward will be utilized prior to its expiration. The NOL
        carryforward and existing deductible temporary differences are offset by
        existing taxable temporary differences reversing within the carryforward
        period.

        In addition, the Company has an alternative minimum tax credit
        carryforward at December 31, 2000 and 1999 of approximately $5.3 million
        and $5.5 million, respectively. The credit carryforward may be carried
        forward indefinitely to offset any excess of regular tax liability over
        alternative minimum tax liability subject to certain limitations. This
        alternative minimum tax credit carryforward has been reflected as a
        reduction of net noncurrent deferred income tax liabilities for
        financial reporting purposes.

                                       48
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

        The effective income tax rate on pretax earnings before extraordinary
        items differed from the U.S. federal statutory rate for each of the
        three years in the period ended December 31, 2000 for the following
        reasons:

<TABLE>
<CAPTION>
                                                                          2000           1999           1998
        <S>                                                           <C>            <C>            <C>
        Provision (benefit) computed at U.S. federal statutory rate        (35.0%)        35.0%          (35.0%)
        Increase (decrease) resulting from:
           Percentage depletion                                            (19.4)       (253.7)           (9.6)
           Disallowed interest expense                                         -             -              .4
           Restricted stock vesting                                            -             -            29.5
           Accretion of preferred stock warrants                               -           1.9             2.6
           Prior year tax return reconciliation                             (3.1)        (61.2)              -
           State income taxes, net of federal benefit                       (3.0)          5.4            (1.2)
           Sale of Canadian operation                                        5.5             -               -
           Other, net                                                        1.3           9.6              .2
                                                                      ------------   -----------    ------------
             Provision for income taxes                                    (53.7%)      (263.0%)         (13.1%)
                                                                      ============   ===========    ============
</TABLE>

   11.  Pension and Postretirement Benefits

        The Company maintains a number of single-employer noncontributory
        defined benefit pension plans covering substantially all employees. The
        plans provide benefits based on each covered employee's years of
        qualifying service. The Company's funding policy is to contribute
        amounts within the range of the minimum required and maximum deductible
        contributions for each plan consistent with a goal of appropriate
        minimization of the unfunded projected benefit obligation. The majority
        of the Company's pension plans use a benefit level per year of service
        (hourly) with one plan using final average pay method (salaried). All
        Company plans use the projected unit credit cost method to determine the
        actuarial valuation.

        In addition, the Company provides defined benefit postretirement
        healthcare and life insurance benefits to substantially all
        employees. Covered employees become eligible for these benefits at
        retirement after meeting minimum age and service requirements. The
        projected future cost of providing postretirement benefits, such as
        healthcare and life insurance, is recognized as an expense as employees
        render services.

        The Company contributes to a Voluntary Employees' Beneficiary
        Association trust that will be used to partially fund health care
        benefits for future retirees. Benefits are funded to the extent
        contributions are tax deductible, which under current legislation is
        limited. In general, retiree health benefits are paid as covered
        expenses are incurred.

                                       49
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

        Net pension and postretirement cost consisted of the following for each
        of the three years in the period ended December 31, 2000:

<TABLE>
<CAPTION>
                                                          Pension Benefits                       Postretirement Benefits
                                             ---------------------------------------      --------------------------------------
        (In thousands)                         2000           1999           1998           2000           1999          1998
                                             ---------      ---------      ---------      ---------      ---------     ---------
        <S>                                  <C>            <C>            <C>            <C>            <C>           <C>
        Service cost - benefits earned
           during the period                 $     974      $   1,040      $     920      $     140      $     144     $     128
        Interest cost                            4,306          3,886          3,791            844            946           958
        Expected return on plan assets          (4,739)        (3,739)        (3,585)           (18)           (19)          (18)
        Net amortization and deferral               71            235            109           (764)          (449)         (551)
                                             ---------      ---------      ---------      ---------      ---------     ---------

           Net pension and
             postretirement cost             $     612      $   1,422      $   1,235      $     202      $     622     $     517
                                             =========      =========      =========      =========      =========     =========
</TABLE>

        The changes in benefit obligations and plan assets, as well as the
        funded status of the Company's pension and postretirement plans at
        December 31, 2000 and 1999 were as follows:

<TABLE>
<CAPTION>
                                                             Pension Benefits          Postretirement Benefits
                                                       --------------------------    ---------------------------
        (In thousands)                                    2000            1999          2000            1999
                                                       ---------      ------------   -----------    -------------
        <S>                                            <C>            <C>            <C>            <C>
        Benefit obligation at January 1                $  55,640      $    56,697    $   13,173     $     14,683
           Service cost                                      974            1,040           140              144
           Interest cost                                   4,306            3,886           844              946
           Actuarial (gain)/loss                           2,411           (5,664)       (1,683)          (1,716)
           Acquisitions                                        -            3,039             -                -
           Benefits paid                                  (3,978)          (3,636)       (1,117)          (1,097)
           Other                                             240              278           236              213
                                                       ---------      ------------   -----------    -------------
        Benefit obligation at December 31                 59,593           55,640        11,593           13,173
                                                       ---------      ------------   -----------    -------------

        Fair value of plan assets at January 1            66,711           56,078           198              236
           Actual return on plan assets                      373            8,991           (11)             (38)
           Acquisitions                                        -            4,871             -                -
           Employer contributions                            190              407           881              884
           Benefits paid                                  (3,978)          (3,636)       (1,117)          (1,097)
           Other                                               -                -           236              213
                                                       ---------      ------------   -----------    -------------
        Fair value of plan assets at December 31          63,296           66,711           187              198
                                                       ---------      ------------   -----------    -------------

        Plan assets in excess (less than)
           benefit obligations at December 31              3,703           11,071       (11,406)         (12,975)
             Unrecognized net loss (gain)                 (7,709)         (14,486)       (7,674)          (6,785)
             Unrecognized prior service cost                 932              763             -                -
                                                       ---------      ------------   -----------    -------------
        Accrued benefit cost recognized in the
           Company's consolidated balance sheet
           before additional pension liability            (3,074)          (2,652)      (19,080)         (19,760)
                                                       ---------      ------------   -----------    -------------
        Adjustment to recognize minimum
           pension liability                                (145)               -             -                -
                                                       ---------      ------------   -----------    -------------
               Net accrued benefit cost
                 recognized in the Company's
                 consolidated balance sheet            $  (3,219)     $    (2,652)   $  (19,080)    $    (19,760)
                                                       =========      ============   ===========    =============
</TABLE>

        The adjustment to recognize the minimum pension liability on the
        Company's consolidated balance sheet of $145,000 at December 31, 2000
        provides financial statement recognition to the unfunded status of the
        pension plans. The pension liability adjustment has been recorded as a

                                       50
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

        long-term liability offset by a reduction to stockholder's equity and
        deferred taxes of $94,000 and $51,000, respectively, at December 31,
        2000.

        The following weighted-average assumptions were used to determine the
        Company's obligations under the plans:

<TABLE>
<CAPTION>
                                                         Pension Benefits   Postretirement Benefits
                                                       -------------------  -----------------------
                                                         2000       1999         2000      1999
                                                       --------   --------     --------  --------
        <S>                                            <C>        <C>       <C>          <C>
        Discount rate                                    7.50%      7.75%        7.50%     7.75%
        Long-term rate of compensation increase          3.50%      3.50%           -         -
        Long-term rate of return on plan assets          9.00%      8.00%        9.00%     8.00%
        Health care cost trend rate                         -          -         5.00%     6.00%
</TABLE>

        The assumed health care cost trend rate used in measuring the
        accumulated postretirement benefit obligation was 5.00% in 2000 and for
        all periods thereafter. For the 1999 obligation, the rate used was
        6.00%, gradually declining to 3.00% by the year 2014 and remaining at
        that level thereafter.

        A one-percentage-point increase in the assumed health care cost trend
        rates for each year would increase the accumulated postretirement
        benefit obligation at December 31, 2000 and net postretirement health
        care cost (service cost and interest cost) for the year then ended by
        approximately $1.3 million and $131,000, respectively. A one-percentage-
        point decrease in the assumed health care cost trend rates for each year
        would decrease the accumulated postretirement benefit obligation at
        December 31, 2000 and net postretirement health care cost (service cost
        and interest cost) for the year then ended by approximately $1.1 million
        and $109,000, respectively.

        Certain hourly employees are covered under a multi-employer defined
        benefit pension plan. The pension cost recognized for these plans for
        each of the three years in the period ended December 31, 2000 totaled
        approximately $186,000, $176,000, and $147,000, respectively.

        The Company also sponsors a defined contribution plan covering certain
        employees. The Company contributes to the plan in two ways. For certain
        employees not covered by the defined benefit plan, the Company makes a
        contribution equal to 4% of their salary. The Company also contributes
        an employee match which can range from 25 to 100 cents, based on
        financial performance, for each dollar contributed by an employee, up to
        8% of their earnings. Contributions for each of the three years in the
        period ended December 31, 2000 totaled approximately $680,000, $746,000
        and $678,000, respectively. The Company also sponsors a defined
        contribution thrift plan for hourly employees to which employees may
        contribute up to 15% of their earnings. There is no contributing match
        for the thrift plan.

   12.  Related Party Transactions

        Pursuant to an agreement between the Company and principals of D. George
        Harris & Associates, LLC ("DGH&A"), who are also stockholders of the
        Company's ultimate parent, DGH&A provides certain management advisory
        services to the Company. The Company paid approximately $923,000,
        $877,000 and $583,000 to DGH&A for each of the three years in the period
        ended December 31, 2000, respectively, associated with these management
        services. The agreement also provides that the Company will pay DGH&A an
        acquisition fee in the event of a

                                       51
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

        business acquisition by the Company. The Company paid approximately
        $325,000 for services in connection with the acquisition of the Morie
        Assets during 1999. In addition, approximately $600,000 was paid to
        DGH&A during 1999 associated with the Better Materials Corporation and
        George F. Pettinos, Inc. acquisitions. The management advisory services
        and acquisition fees have been charged to selling, general and
        administrative expense during each of the respective periods noted
        above.

        Prior to the acquisition of Commercial Stone, certain operations of
        DGH&A were conducted as a subsidiary of the Company. Subsequent to the
        acquisition, the DGH&A operations have been handled separately from the
        Company. The Company does not have an ownership interest in DGH&A.
        Consequently, the DGH&A acquisition fee of approximately $1,387,000
        associated with the acquisition of Commercial Stone was capitalized and
        allocated to mineral reserves as part of the purchase price.

        The agreement also provides that, at DGH&A's request, U.S. Silica
        provide DGH&A with an interest-free loan not to exceed $1.0 million
        annually. At December 31, 2000, a loan receivable from DGH&A of $1.0
        million is currently outstanding. The loan is guaranteed by certain
        principals of DGH&A. Additionally, at December 31, 2000, there is a
        receivable of $507,000 from DGH&A, principally related to reimbursement
        of general and administrative costs.

        On occasion, the Company and its ultimate parent make non-interest
        bearing cash advances to each other. At December 31, 2000, the Company
        had a payable to its ultimate parent of approximately $2.4 million. At
        December 31, 1999, the Company had a receivable from its ultimate parent
        of approximately $834,000.

   13.  Incentive Stock Compensation

        On April 10, 2000, the Company entered into an employment agreement with
        an executive to manage its aggregates business segment. In the second
        quarter of 2000, a one-time charge of approximately $2.3 million was
        recorded representing the cost to replace certain benefits forfeited by
        the executive officer in order to join the Company, of which $998,000 is
        the cost of non-cash stock grants in the Company's ultimate parent
        company, Holdings, and is recorded as incentive stock compensation
        expense.

        Under the terms of a repurchase agreement between Holdings and holders
        of Holdings' Class A Common Stock (the "Class A Holders"), the Class A
        Holders were required to sell some or all of their Class A Common Stock
        to Holdings at par value if the holders of Holdings' Series A and Series
        B Preferred Stock did not achieve a specified internal rate of return
        upon the occurrence of certain liquidity events as described in the
        Stockholders Agreement. In 1998, Holdings agreed to waive the repurchase
        requirements associated with the Class A Common Stock, which effectively
        gave the Class A Holders the right to put the Class A Common Stock back
        to Holdings for fair value consideration subject to certain conditions.
        This resulted in a $14.2 million one-time, non-cash charge to the
        Company's operations, which was the difference between the fair market
        value of the Class A Common Stock and its par value at the time the
        repurchase requirements were waived.

   14.  Segment Information

        The Company operates in the industrial minerals and aggregates business
        segments, principally in the United States, and conducts limited
        operations in Canada. Industrial minerals includes the mining,
        processing and marketing of industrial minerals, principally industrial
        silica, to a wide

                                       52
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

        variety of end use markets, including foundry, glass, chemicals, fillers
        and extenders (primarily used in paints and coatings), building
        materials, ceramics, and oil and gas. Aggregates includes the mining,
        processing and marketing of high quality crushed stone, construction
        sand and gravel. The Company's customers use its aggregates for road
        construction and maintenance, other infrastructure projects and
        residential and commercial construction and to produce hot mixed asphalt
        and concrete products. The Company also uses its aggregates to produce
        hot mixed asphalt at production facilities the Company owns or operates.
        The industrial minerals and aggregates business segments constitute
        the reportable segments of the Company.

        The Company's management reviews operating company income to evaluate
        segment performance and allocate resources. Certain corporate expenses
        (income) including unusual items, business development costs and fees
        paid to DGH&A, interest expense, the accretion of preferred stock
        warrants, other income (net of interest income) and the provision
        (benefit) for income taxes are not included in segment operating income
        since they are excluded from the measure of segment profitability
        reviewed by the Company's management. The Company's assets are managed
        based on segment and accordingly, asset information is reported for the
        commercial aggregates and industrial minerals segments. Corporate assets
        consist primarily of cash and cash equivalents, debt issuance costs and
        equipment. The accounting policies of the segments are the same as
        those described in the Summary of Significant Accounting Policies.

                                       53
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

        Reportable segment information for each of the three years in the period
        ended December 31, 2000 was as follows:

<TABLE>
<CAPTION>
        (In thousands)                                          2000           1999           1998
        <S>                                                 <C>            <C>            <C>
        Sales:
           Aggregates                                       $   107,055    $    53,539    $     3,497
           Industrial Minerals                                  192,280        191,263        166,446
                                                            -----------    -----------    -----------
             Total sales                                    $   299,335    $   244,802    $   169,943
                                                            ===========    ===========    ===========
        Operating company income (loss):
           Aggregates                                       $     4,496    $     6,725    $      (258)
           Industrial Minerals                                   13,696         12,887          8,352
                                                            -----------    -----------    -----------
             Total operating company income (loss)               18,192         19,612          8,094

           General corporate expense                             (4,047)        (1,105)       (15,323)
                                                            -----------    -----------    -----------
             Total operating income (loss)                  $    14,145    $    18,507    $    (7,229)
                                                            ===========    ===========    ===========

        Depreciation, depletion and amortization expense:
           Aggregates                                       $    11,729    $     6,328    $       309
           Industrial Minerals                                   24,104         22,152         19,579
           Corporate                                                 62              1              -
                                                            -----------    -----------    -----------
             Total depreciation, depletion and
               amortization expense                         $    35,895    $    28,481    $    19,888
                                                            ===========    ===========    ===========

        Capital expenditures:
           Aggregates                                       $     7,628    $     3,282    $       517
           Industrial Minerals                                   12,507         11,120          8,882
           Corporate                                                184            170              -
                                                            -----------    -----------    -----------

             Total capital expenditures                     $    20,319    $    14,572    $     9,399
                                                            ===========    ===========    ===========
</TABLE>

        Reportable segment information at December 31, 2000, 1999 and 1998 was
        as follows:

<TABLE>
<CAPTION>
        (In thousands)                                       2000          1999          1998
        <S>                                              <C>           <C>           <C>
        Assets:
           Aggregates                                    $   332,324   $   323,470   $    86,928
           Industrial Minerals                               223,321       201,390       187,574
           Corporate                                          20,533        29,169           176
           Elimination of intersegment receivables           (37,892)       (2,426)            -
                                                         -----------   -----------   -----------

             Total assets                                $   538,286   $   551,603   $   274,678
                                                         ===========   ===========   ===========
</TABLE>

   15.  Guarantor Financial Data

        Except for the Company's Canadian subsidiary, which is an inactive
        company with an immaterial amount of assets and liabilities, each of the
        Company's subsidiaries has fully and unconditionally

                                       54
<PAGE>

Better Minerals & Aggregates Company and Subsidiaries
Notes to Consolidated Financial Statements, cont.
--------------------------------------------------------------------------------

        guaranteed the Senior Subordinated Notes on a joint and several basis.
        The separate financial statements of the subsidiary guarantors are not
        included in this report because (a) the Company is a holding company
        with no independent assets or operations other than its investments in
        its subsidiaries, (b) the subsidiary guarantors each are wholly owned by
        the Company, comprise all of the direct and indirect subsidiaries of the
        Company (other than a minor subsidiary) and have jointly and severally
        guaranteed the Company's obligations under the Senior Subordinated Notes
        on a full and unconditional basis, (c) the aggregate assets,
        liabilities, earnings and equity of the subsidiary guarantors are
        substantially equivalent to the assets, liabilities, earnings and equity
        of the Company on a consolidated basis and (d) management has determined
        that separate financial statements and other disclosures concerning the
        subsidiary guarantors are not material to investors.

Item 9.   Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure

        Not applicable.

                                       55
<PAGE>

                                   PART III

Item 10.  Directors and Executive Officers of the Registrant

     The following table identifies members of the Board of Directors and the
executive officers of USS Holdings, Inc., our indirect parent, and us.

<TABLE>
<CAPTION>
Name                      Age    Present Position at  Year         Other Positions and Other
----                      ---    ------------------   ---          -------------------------
                                 March 1, 2001        Assumed      Business Experience Within
                                 -------------        -------      --------------------------
                                                      Present      the Last Five Years
                                                      -------      -------------------
                                                      Position(s)
                                                      ----------
<S>                       <C>    <C>                  <C>          <C>
D. George Harris........   67    Chairman and         1996         Chairman and director, D.
                                 Director                          George Harris & Associates,
                                                                   LLC (1987-present); officer
                                                                   or director of various
                                                                   companies, including Harris
                                                                   Chemical Group, Inc. (1993-
                                                                   1998), Harris Specialty
                                                                   Chemicals, Inc. (1994-1999)
                                                                   and Penrice Pty Ltd. (1996-
                                                                   1998); Chairman,
                                                                   Shareholders Committee,
                                                                   Vestolit Holdings GmbH &
                                                                   Co., KG (1999-present);
                                                                   director, McWhorter
                                                                   Technologies, Inc. (1994-
                                                                   2000)
Anthony J. Petrocelli...   63    Vice Chairman and    1996         Vice Chairman, D. George
                                 Director                          Harris & Associates, LLC
                                                                   (1987-present); officer or
                                                                   director of various
                                                                   companies, including Harris
                                                                   Chemical Group, Inc. (1993-
                                                                   1998), Harris Specialty
                                                                   Chemicals, Inc. (1994-1999)
                                                                   and Penrice Pty Ltd. (1996-
                                                                   1998); Vice Chairman,
                                                                   Shareholders Committee,
                                                                   Vestolit Holdings GmbH &
                                                                   Co., KG (1999-present)
</TABLE>

                                       56
<PAGE>

<TABLE>
<S>                       <C>    <C>                  <C>          <C>
Richard E. Goodell......   56    Vice Chairman;       2001; 1996   Chief Executive Officer
                                 Director                          (1999-2000); President
                                                                   (1996-2000); President,
                                                                   Pennsylvania Glass Sand
                                                                   Corporation (renamed U.S.
                                                                   Silica Company) (our
                                                                   subsidiary) (1985-1998)
Roy D. Reeves...........   55    President and Chief  2001         President, Stone Materials
                                 Executive Officer                 Company, LLC (our
                                                                   subsidiary) (2000); President
                                                                   and Chief Operating Officer,
                                                                   Hanson Aggregates East
                                                                   (1997-2000); President and
                                                                   Chief Operating Officer,
                                                                   Sloan Construction Company
                                                                   (1993-1997)
Gary E. Bockrath........   48    Vice President and   1996         Senior Vice President of
                                 Chief Financial                   Finance, U.S. Silica (1993-
                                 Officer                           present); director, U.S. Silica
                                                                   (1994-present)
Craig S. Cinalli........   42    President and Chief  1989
                                 Operating Officer,
                                 Better Materials
                                 Corporation (our
                                 subsidiary)
Walter C. Pellish.......   60    Vice President--     2000         Vice President--
                                 Administration                    Administration, U.S. Silica
                                                                   (1981-present)
Richard J. Donahue......   57    Vice President,      1996         Managing Director, D.
                                 Assistant Treasurer,              George Harris & Associates,
                                 Assistant Secretary               LLC (1987-present); officer
                                 and Director                      of various companies,
                                                                   including Harris Chemical
                                                                   Group, Inc. (1993-1998) and
                                                                   Harris Specialty Chemicals,
                                                                   Inc. (1994-1999)
Richard J. Nick.........   57    Vice President,      1996         Managing Director, D.
                                 Treasurer and                     George Harris & Associates,
                                 Assistant Secretary               LLC (1989-present); officer
                                                                   of various companies,
                                                                   including Harris Chemical
                                                                   Group, Inc. (1993-1998) and
                                                                   Harris Specialty Chemicals,
                                                                   Inc. (1994-1999)

</TABLE>

                                       57
<PAGE>

<TABLE>
<S>                       <C>    <C>                  <C>          <C>
Richard J. Shearer......   50    President, U.S.      1999       Executive Vice President,
                                 Silica Company                  U.S. Silica (1997-1999); Vice
                                 (our subsidiary)                President, General Manager,
                                                                 North American Chemical
                                                                 Company (1996-1997)
John A. Ulizio..........   45    Vice President,      1996       Associate General Counsel,
                                 General Counsel                 U.S. Silica (1991-1995);
                                 and Assistant                   manager of environmental,
                                 Secretary                       health and safety matters
                                                                 (1994-present)
Arnold L. Chavkin.......   49    Director             1996       Executive Partner, J.P.
                                                                 Morgan Partners, LLC
                                                                 (formerly Chase Capital
                                                                 Partners) (1992-present);
                                                                 director, American Tower
                                                                 Corporation, Carrizo Oil &
                                                                 Gas, Inc., Crown Media
                                                                 Holdings, Inc., Encore
                                                                 Acquisition Partners, Triton
                                                                 PCS, Inc.
Ruth Dreessen...........    45   Director             1996       Managing Director, Chase
                                                                 Securities Inc. (1997-
                                                                 present); Vice President,
                                                                 Chase Securities Inc. (prior to
                                                                 1997)
Timothy J. Walsh........    37   Director             1998       Partner, J.P. Morgan
                                                                 Partners, LLC (formerly
                                                                 Chase Capital Partners)
                                                                 (1999-present); associate, J.P.
                                                                 Morgan Partners, LLC
                                                                 (1993-1999); director,
                                                                 MetoKote Corporation, Inc.,
                                                                 Pliant Corporation
</TABLE>

                                       58
<PAGE>

Item 11.  Executive Compensation

Executive Compensation

     The following table sets forth information regarding annual compensation
for services rendered to us during the fiscal years ended December 31, 2000,
1999 and 1998 by our (i) chief executive officer and (ii) five most highly
compensated executive officers (collectively, the "Named Executive Officers").

<TABLE>
<CAPTION>
                                                   Summary Compensation Table

                                                                                                  Long-term
                                                                                                 Compensation
                                                         Annual Compensation                        Awards
                                                  ------------------------------------------   -----------------
                                                                                Other Annual                         All Other
                                                                                Compensation   Restricted Stock    Compensation
 Name and Principal Position             Year     Salary ($)     Bonus ($)           ($)       Award(s)/(4)/ ($)   /(6)/(7)/ ($)
-----------------------------           ------    ----------     ---------      ------------   -----------------   -------------
<S>                                     <C>       <C>            <C>            <C>            <C>                 <C>
   Richard E. Goodell                    2000       404,367            --              --            57,260             4,690
     Chief Executive Officer/(1)/        1999       238,125       196,685              --            61,350             8,569
                                         1998       215,700        94,512              --                --             8,929

   Roy D. Reeves                         2000       300,000       200,000       2,103,368/(3)/      102,250           112,168/(8)/
     President and Chief Operating       1999            --            --              --                --                --
     Officer/(2)/                        1998            --            --              --                --                --

   Richard J. Shearer                    2000       240,400            --              --                --            15,114
     President                           1999       219,675       123,018              --            69,530            19,244
     (U.S. Silica Company)               1998       196,200        78,480          40,825/(5)/           --            14,479

   Gary E. Bockrath                      2000       176,400            --              --                --            11,034
     Vice President and Chief            1999       168,000       109,672              --            24,540            14,100
     Financial Officer                   1998       164,400        59,184              --                --            13,716

   Craig S. Cinalli                      2000       175,000            --              --                --            13,228/(9)/
     President                           1999       175,000       138,600              --            24,540            10,536
     (Better Materials Corporation)      1998         8,000            --              --                --           165,000

   John A. Ulizio                        2000       175,000            --              --                --            10,950
     Vice President and General          1999       150,000        75,600              --            24,540            12,376
     Counsel                             1998       135,800        48,888              --                --            11,703
</TABLE>

-------------------
(1)  Mr. Goodell served as our Chief Executive Officer until December 31, 2000.
     Effective January 1, 2001, Mr. Goodell became our Vice Chairman.
(2)  Mr. Reeves served as our President and Chief Operating Officer until
     December 31, 2000. Effective January 1, 2001, Mr. Reeves became our Chief
     Executive Officer.
(3)  Includes reimbursement by us to Mr. Reeves for his purchase of 25,000
     shares of Class A common stock at $39.90 per share, the purchase by Mr.
     Reeves for $0.01 per share of 25,000 shares of Class C common stock valued
     at $4.10 per share, and the gross-up for the tax liability attributable to
     these purchases and to his signing bonus of $100,000, described in footnote
     8 below.
(4)  As of December 31, 2000, the Named Executive Officers held the following
     amounts of restricted stock: Mr. Goodell, 29,000 shares; Mr. Reeves, 25,000
     shares; Mr. Shearer, 17,000 shares; Mr. Bockrath, 6,000 shares; Mr.
     Cinalli, 6,000 shares; and Mr.Ulizio, 6,000 shares. The value of the
     restricted stock as of December 31, 2000 is equal to the value as of the
     date of grant reflected in the above table.
(5)  Reflects payment by us of expenses for relocation.
(6)  Includes life insurance premiums paid by us in 2000 on behalf of the Named
     Executive Officers as follows: Mr. Goodell, $1,290; Mr. Reeves, $8,768; Mr.
     Shearer, $690; Mr. Bockrath, $450; Mr. Cinalli, $60; and Mr. Ulizio, $450.
(7)  Includes matching contributions by us to the U.S. Silica Company Retirement
     Savings and Investment Plan for Salaried Employees in 2000 on behalf of the
     Named Executive Officers as follows: Mr. Goodell, $3,400; Mr. Reeves,
     $3,400; Mr. Shearer, $4,808; Mr. Bockrath, $3,528; Mr. Cinalli, $2,692; and
     Mr. Ulizio, $3,500. Also includes other contributions by us to this plan in
     2000 on behalf of certain Named Executive Officers as follows: Mr. Shearer,
     $9,616; Mr. Bockrath, $7,056; and Mr. Ulizio, $7,000.
(8)  Includes a one-time signing bonus of $100,000 received by Mr. Reeves upon
     entering into his employment agreement with us.
(9)  Includes income imputed to Mr. Cinalli from the personal use of a company-
     owned vehicle and residence in the amount of $10,476.

                                       59
<PAGE>

          U.S. Silica Company Retirement Plan for Salaried Employees

<TABLE>
<CAPTION>
                                               Years of Service
                    -----------------------------------------------------------------------
  Remuneration           15            20             25              30             35
----------------    -----------   -----------    -----------     -----------    -----------
<S>                 <C>           <C>            <C>             <C>            <C>
  $   125,000       $    29,100   $    38,800    $    48,400     $    58,100    $    67,800
      150,000            35,400        47,200         59,000          70,700         82,500
      175,000            41,700        55,600         69,500          83,400         97,200
      200,000            48,000        64,000         80,000          96,000        112,000
      225,000            54,300        72,400         90,500         108,600        126,700
      250,000            60,600        80,800        101,000         121,200        141,400
      300,000            73,200        97,600        122,000         146,400        170,800
      400,000            98,400       131,300        164,100         196,900        229,700
</TABLE>

     At December 31, 2000, credited years of service under the U.S. Silica
Company Retirement Plan for Salaried Employees (the "Retirement Plan") for the
only Named Executive Officer who participates, Mr. Goodell, were 19 years. The
compensation covered by the Retirement Plan includes the amount listed in the
salary column of the Summary Compensation Table only. The estimated annual
retirement benefit indicated in the Retirement Plan table includes enhanced
pension provisions under the U.S. Silica Company Pension Restoration Plan, which
is an unfunded plan providing benefits to participants in the Retirement Plan
that are not payable under the Retirement Plan because of the limitations
stipulated by the Internal Revenue Code. Estimated benefits set forth in the
Retirement Plan table were calculated on the basis of a single life annuity.
Annual benefits payable under the Retirement Plan are not offset by any amount.

                      Better Materials Corporation Pension Plan

<TABLE>
<CAPTION>
                                               Years of Service
                    -----------------------------------------------------------------------
  Remuneration           15            20             25              30             35
----------------    -----------   -----------    -----------     -----------    -----------
<S>                 <C>           <C>            <C>             <C>            <C>
  $   125,000       $    18,710   $    24,947    $    31,183     $    37,420    $    43,657
      150,000            23,142        30,857         38,571          46,285         53,999
      175,000            27,120        36,160         45,199          54,239         63,279
      200,000            27,749        36,998         46,248          55,497         64,747
</TABLE>

     At December 31, 2000, credited years of service under the Better Materials
Corporation Pension Plan (the "BMC Plan") for the only Named Executive Officer
who participates, Mr. Cinalli, were 20 years. The compensation covered under the
BMC Plan includes total cash remuneration paid to the Named Executive Officer up
to the statutory limits stipulated by the Internal Revenue Service. Estimated
benefits set forth in the BMC Plan table were calculated on the basis of a
single life annuity and are not offset by any amount.

                                       60
<PAGE>

                       Supplemental Executive Retirement Plan

<TABLE>
<CAPTION>
                                               Years of Service
                    -----------------------------------------------------------------------
  Remuneration           15            20             25              30             35
----------------    -----------   -----------    -----------     -----------    -----------
<S>                 <C>           <C>            <C>             <C>            <C>
  $   125,000       $         0   $         0    $     4,123     $    12,330    $    20,537
      150,000                 0         3,190         13,215          23,240         33,266
      175,000                 0        10,463         22,307          34,151         45,994
      200,000             4,075        17,737         31,399          45,061         58,723
      225,000             9,530        25,010         40,491          55,971         71,452
      250,000            14,985        32,284         49,583          66,882         84,180
      300,000            25,895        46,831         67,767          88,702        109,638
      400,000            47,716        75,925        104,134         132,343        160,552
      450,000            58,626        90,472        122,318         154,164        186,010
      500,000            69,537       105,019        140,502         175,984        211,467
</TABLE>

     At December 31, 2000, credited years of service under a Supplemental
Executive Retirement Plan ("SERP") for Mr. Reeves were 16 years. The
compensation covered under the SERP includes total cash remuneration paid to the
Named Executive Officer. Estimated benefits set forth in the SERP table were
calculated on the basis of a single life annuity and are offset by the benefit
Mr. Reeves will receive under a retirement plan with his previous employer in
the amount of $36,911.

Employment Contracts and Termination of Employment and Change-in-Control
Arrangements

     Employment Agreement with Mr. Cinalli. In December 2000, Better Materials
Corporation, one of our subsidiaries, renewed Mr. Cinalli's two-year term
employment agreement. The agreement provides for annual compensation of at least
$195,000, a performance-based bonus, eligibility to receive restricted stock and
the use of a company-owned vehicle and residence.

     Under this agreement, Better Materials Corporation may terminate Mr.
Cinalli for any reason other than "cause," as defined in the agreement, with
thirty days' prior written notice. This agreement provides for severance in the
amount of two years' annual salary upon termination without "cause." This
agreement contains confidentiality and non-compete covenants.

     Severance Agreement with Mr. Shearer. In August 2000, U.S. Silica Company,
one of our subsidiaries, entered into a severance agreement with Mr. Shearer to
provide for severance and benefits in the event his employment is terminated for
any reason other than "cause," as defined in the agreement. Under this severance
agreement, Mr. Shearer is entitled to continue to receive his salary for a
maximum period of two years following termination of employment. In addition,
U.S. Silica will pay medical premiums for Mr. Shearer and his family under the
U.S. Silica Health Plan for a maximum period of six months beyond the required
COBRA continuation coverage period and, upon the sale of Mr. Shearer's house,
U.S. Silica will pay a percentage of the unrecovered cost of improvements to his
residence up to approximately $47,000. This agreement contains confidentiality
and non-compete covenants.

     Employment and Change-in-Control Agreements with Mr. Reeves. In April 2000,
we entered into an employment agreement with Mr. Reeves with an initial three-
year term,

                                       61
<PAGE>

automatically renewable annually, which provides for annual compensation of
$400,000 (subject to salary reviews), a performance-based bonus, a signing bonus
of $100,000, net of applicable taxes, and supplemental retirement benefits.

     Mr. Reeves is also entitled to a number of stock incentives under this
agreement. First, he purchased from USS Holdings, our indirect parent, 25,000
restricted shares of USS Holdings Class C common stock for one cent ($.01) per
share. If we terminate Mr. Reeves' employment under certain circumstances, or in
the event of certain corporate transactions, such as a sale, merger or initial
public offering involving USS Holdings, we may be obligated to repurchase these
shares, depending on the value of USS Holdings Class A common stock at the time
of such event. We reimbursed Mr. Reeves for the tax liability for these shares
at the time of purchase. Second, Mr. Reeves purchased 25,000 shares of USS
Holdings Class A common stock, for which we reimbursed him at a price of $39.90
per share, plus tax liability resulting from this reimbursement.

     We may terminate Mr. Reeves for any reason other than for "cause," as
defined in the agreement, or he may resign for "good reason," as defined in the
agreement, with thirty days' prior written notice. If we terminate Mr. Reeves
without "cause," he is entitled to severance in an amount equal to his annual
salary plus full bonus for the remainder of the term of the agreement. If Mr.
Reeves' employment is terminated following a change in control involving us, as
defined in the agreement, he is entitled to severance in an amount equal to his
annual salary plus full bonus for the remainder of the term of the agreement,
which is reduced to 18 months following the change in control. This agreement
contains confidentiality and non-compete covenants.

     Mr. Reeves has also entered into an agreement with USS Holdings that
provides for payment upon the occurrence of certain corporate transactions
involving USS Holdings, such as a sale, merger or initial public offering. If
one of these events occurs, Mr. Reeves will be entitled to a bonus based on the
extent to which the price for USS Holdings Class A common stock, as valued in
such event, exceeds a target price set for the year in which the event occurs.
If the target price is exceeded by 100% or more, Mr. Reeves will receive a bonus
of $8 million net of any excise tax liability to Mr. Reeves if the payment is
determined to be an excess parachute payment under IRS regulations. If the
target price is exceeded by less than 100%, Mr. Reeves will receive a prorated
portion of the $8 million maximum. No bonus is payable if the target price for
the year of the triggering event is not exceeded. If we experience a change in
control as a result of the triggering event and Mr. Reeves' employment is
terminated following the change in control, USS Holdings may cause us to pay the
bonus amount to Mr. Reeves.

     Employment and Consulting Agreement with Mr. Goodell. In December 2000, Mr.
Goodell entered into an employment and consulting agreement with USS Holdings,
BMAC Holdings, Inc., U.S. Silica Company and us extending the term of his
employment through July 7, 2004 at an annual base salary of $212,500, plus
participation in employee benefit plans, rights to use of certain property of
ours for hunting purposes and eligibility for a performance-based bonus.

     Under his agreement, in the event of a change in control, as defined in the
agreement, Mr. Goodell is entitled to terminate his employment and receive
severance in the amount of his

                                       62
<PAGE>

salary through July 7, 2004. Alternatively, if Mr. Goodell remains employed
following a change in control, he is entitled to receive at the time of the
change in control a bonus equal to one year's salary and to receive a stay bonus
equal to one year's salary payable and conditioned upon his continued employment
until a period of six months after the change in control. If his employment is
terminated following a change in control, he is deemed to have been employed
through July 7, 2004 for purposes of determining eligibility for, and
calculation of benefits under, the U.S. Silica benefit plans.

     For a period of ten years following his termination of employment, Mr.
Goodell will serve as a consultant to USS Holdings, BMAC Holdings, Inc., U.S.
Silica Company and us for which he will be compensated at an annual salary of
$50,000 for up to 30 days of consulting plus $1,000 per day for his services for
a maximum additional period of 30 days.

     This agreement may be terminated for cause, as defined in the agreement,
upon Mr. Goodell's death, or in the event of disability. This agreement contains
non-compete and non-solicitation provisions.

Director Compensation

     Members of our Board of Directors are not compensated for their services as
directors, but may be reimbursed for actual expenses incurred in attending
meetings of the Board of Directors or committees thereof.

                                       63
<PAGE>

Item 12.  Security Ownership of Certain Beneficial Owners and Management

Security Ownership

     All of our outstanding capital stock is directly owned by BMAC Holdings,
which in turn is wholly owned by USS Holdings. The following table sets forth,
to the best of our knowledge, certain information regarding the ownership of the
capital stock of USS Holdings as of March 1, 2001 with respect to the following:
(i) each person known by us to own beneficially more than 5% of the outstanding
shares of any class of capital stock of USS Holdings; (ii) each of our
directors; (iii) each of the Named Executive Officers set forth in the table
under "Executive Compensation" above; and (iv) all of our directors and
executive officers as a group.

     Except as otherwise indicated, each person listed in the following table
has sole voting and investment power with respect to the shares listed opposite
that person's name.

<TABLE>
<CAPTION>
              Beneficial Owners/(1)/                          Shares of Common Stock               Percentage of Common Stock/(2)/*
--------------------------------------------------  -------------------------------------------   ----------------------------------
                                                    Class A/(3)/   Class B/(4)/   Class C/(5)/      Class A    Class B    Class C
                                                    ------------   ------------   -------------    ---------  ---------  ---------
<S>                                                 <C>            <C>            <C>             <C>         <C>        <C>
J.P. Morgan Chase & Co. /(9)(10)/................            0        340,069           8,800        **        79.9%        2.0%
Massachusetts Mutual Life Insurance                          0        104,211           2,697        **        27.1%       **
Company /(11)/ ..................................
D. George Harris /(12)/..........................      124,653          8,186          42,291        22.7%      2.2%        9.8%
Anthony J. Petrocelli /(13)(15)/.................       73,222          5,184          41,850        13.3%      1.4%        9.7%
Richard E. Goodell...............................       11,640              0          29,000         2.1%     **           6.7%
Richard J. Donahue...............................       65,972          1,950          41,376        12.0%     **           9.6%
Richard J. Shearer...............................        5,203              0          17,000         1.0%     **           4.0%
Craig S. Cinalli.................................        2,000              0           6,000        **        **           1.4%
Walter C. Pellish................................        5,755              0           6,000         1.1%     **           1.4%
Richard J. Nick /(15)/...........................       34,296          1,744          41,346         6.2%     **           9.6%
Donald G. Kilpatrick /(13)/......................       50,962              0          41,090         9.3%     **           9.5%
Roy D. Reeves....................................       27,500              0          25,000         5.0%     **           5.8%
John A. Ulizio...................................        5,755              0           6,000         1.1%     **           1.4%
Gary E. Bockrath.................................        6,109              0           6,000         1.1%     **           1.4%
Arnold L. Chavkin /(10)(14)/.....................            0              0               0        **        **          **
Ruth Dreessen....................................            0              0               0        **        **          **
Timothy J. Walsh /(10)(14)/......................            0              0               0        **        **          **
All directors and executive officers as a group
(14 persons) /(10)(12)(14)/......................      362,104         17,063         261,863        65.8%      4.5%       60.2%

<CAPTION>
              Beneficial Owners/(1)/                          Shares of Common Stock               Percentage of Common Stock/(2)/*
--------------------------------------------------  -------------------------------------------   ----------------------------------
                                                    Series A/(6)/  Series B/(7)/  Series D/(8)/     Series A   Series B   Series D
                                                    -------------  -------------  -------------    ---------  ---------  ---------
<S>                                                 <C>            <C>            <C>             <C>         <C>        <C>
J.P. Morgan Chase & Co. /(9)(10)/................      678,035      1,356,070           9,232        75.0%     66.9%       52.2%
Massachusetts Mutual Life Insurance                    207,778        415,556           2,829        22.7%     20.2%       16.0%
Company /(11)/ ..................................
D. George Harris /(12)/..........................       15,268         58,016           1,260         1.7%      2.9%        7.1%
Anthony J. Petrocelli /(13)/.....................        9,035         27,070             798         1.0%      1.4%        4.5%
Richard E. Goodell...............................            0         20,000               0        **         1.0%       **
Richard J. Donahue...............................        1,104         16,291             300        **        **           1.7%
Richard J. Shearer...............................          596          1,775               0        **        **          **
Craig S. Cinalli.................................            0              0               0        **        **          **
Walter C. Pellish................................            0         10,000               0        **        **          **
Richard J. Nick..................................        3,312         17,771             268        **        **           1.5%
Donald G. Kilpatrick /(13)/......................        1,534          9,422               0        **        **          **
Roy D. Reeves....................................            0              0               0        **        **          **
John A. Ulizio...................................            0         10,000               0        **        **          **
Gary E. Bockrath.................................            0         10,000               0        **        **          **
Arnold L. Chavkin /(10)(14)/.....................            0              0               0        **        **          **
Ruth Dreessen....................................            0              0               0        **        **          **
Timothy J. Walsh /(10)(14)/......................            0              0               0        **        **          **
All directors and executive officers as a group
(14 persons) /(10)(12)(14)/......................       29,315        170,923           2,626         3.3%      8.6%       14.9%
</TABLE>

-----------------------
*    All share percentages assume that each respective beneficial owner, and
     only that owner, has exercised its warrants to purchase shares of preferred
     stock or common stock, as the case may be, of USS Holdings, if any.

                                       64
<PAGE>

**   Less than 1%.
(1)  The address of J.P. Morgan Chase & Co. ("J.P. Morgan Chase") and its
     affiliates referred to in note (9) below is 270 Park Avenue, New York, New
     York, New York 10017. The address of Massachusetts Mutual Life Insurance
     Company and its affiliates is 1295 State Street, Springfield, Massachusetts
     01111. The address of Mr. Kilpatrick is c/o Pillsbury Winthrop LLP, One
     Battery Park Plaza, New York, New York 10004. The address of each other
     person is c/o D. George Harris & Associates, Inc., 399 Park Avenue, 32nd
     Floor, New York, New York 10022.
(2)  Notwithstanding the enumerated percentage shares of beneficial ownership of
     common and preferred stock, a stockholders agreement dated as of February
     9, 1996, as amended (the "stockholders agreement"), among all of the
     stockholders of USS Holdings (the "Stockholders") governs the Stockholders'
     exercise of their voting rights with respect to election of directors and
     certain other material events. The parties to the stockholders agreement
     have agreed to vote their shares of USS Holdings to elect the Board of
     Directors as set forth therein. See "--The Stockholders Agreement."
(3)  Holders of Class A common stock are entitled to one vote with respect to
     all matters to be voted on by USS Holdings' Stockholders for each share of
     Class A common stock held, subject to the stockholders agreement.
(4)  Holders of Class B common stock, except as otherwise required by law, have
     no voting rights. The Class B common stock will automatically be converted
     into shares of Class A common stock on a one-for-one basis at the time of a
     trigger event or an event of conversion. A "trigger event" is defined in
     the stockholders agreement as (i) a default under certain debt documents or
     a failure to achieve a designated level of EBITDA (as defined in the
     stockholders agreement), (ii) after February 9, 2000, the passage of 180
     days after JPMP (23A SBIC) (as defined in note (9)) has exercised its right
     to demand a sale of USS Holdings and the failure of the principals of D.
     George Harris & Associates, LLC ("DGHA") to sell USS Holdings or purchase
     the shares of the Institutional Stockholders (as defined below) or (iii)
     both D. George Harris and Anthony J. Petrocelli no longer serving on the
     USS Holdings' Board of Directors due to death, disability or resignation.
     An "event of conversion" is defined in the stockholders agreement as (i)
     the consummation of an initial public offering resulting in net proceeds to
     USS Holdings and/or any selling stockholders of not less than $30 million
     or (ii) the conversion of more than 50% of the Series B preferred stock
     originally issued. Holders (other than Mass Mutual (as defined in note
     (11))) of at least 50% of the then outstanding common stock purchase
     warrants and shares issued or issuable under the stockholders agreement,
     and Mass Mutual, if it holds at least 50% of the then outstanding common
     stock purchase warrants and shares issued or issuable under the
     stockholders agreement upon the exercise of the warrants then outstanding
     and held by Mass Mutual, have the right to require USS Holdings to purchase
     their warrants to purchase Class B common stock and shares issued
     thereunder held by JPMP (23A SBIC), Mass Mutual and certain DGHA principals
     at any time after October 1, 2004 and prior to a sale, public offering of
     common stock or liquidation of USS Holdings. Upon the exercise of those put
     rights, if USS Holdings cannot obtain the consents from third parties
     necessary to purchase those shares after using reasonable efforts, USS
     Holdings will be released from its obligation to purchase the warrants. At
     any time after October 1, 2005, USS Holdings has the right to purchase all
     (but not less than all) of the warrants to purchase shares of Class B
     common stock held by JPMP (23A SBIC), Mass Mutual and certain DGHA
     principals.
(5)  Holders of Class C common stock are entitled to one vote with respect to
     all matters to be voted on by USS Holdings' stockholders for each share of
     Class C common stock held, subject to the stockholders agreement. Those
     shares are subject to repurchase by USS Holdings in certain circumstances
     upon the occurrence of certain liquidity events, including the sale of all
     or substantially all of the assets of USS Holdings and its subsidiaries, a
     merger of USS Holdings or any subsidiary and a sale of USS Holdings and
     upon the occurrence of certain termination events, including death,
     disability, retirement or termination of employment. The total number of
     shares of Class C common stock issuable under the warrants will be reduced
     by the number of shares of Class C common stock which did not vest and/or
     which are repurchased in accordance with the terms of the restricted stock
     purchase agreements pursuant to which the shares of Class C common stock
     are issued. Holders (other than Mass Mutual (as defined in note (11))) of
     at least 50% of the then outstanding common stock purchase warrants and
     shares issued or issuable under the stockholders agreement, and Mass
     Mutual, if it holds at least 50% of the then outstanding common stock
     purchase warrants and shares issued or issuable under the stockholders
     agreement upon the exercise of the warrants then outstanding and held by
     Mass Mutual, have the right to require USS Holdings to purchase their
     warrants to purchase shares of common stock and shares issued thereunder
     held by JPMP (23A SBIC) (as defined in note (9)), Mass Mutual and certain
     DGHA principals at any time after October 1, 2004 and prior to a sale,
     public offering of common stock or liquidation of USS Holdings. Upon the
     exercise of those put rights, if USS Holdings cannot obtain the consents
     from third parties necessary to purchase those shares after using
     reasonable efforts, USS Holdings will be released from its obligation to
     purchase the warrants. At any time after October 1, 2005, USS Holdings has
     the right to purchase all (but not less than all) of the warrants to
     purchase shares of Class C common stock held by JPMP (23A SBIC), Mass
     Mutual and certain DGHA principals.
(6)  Holders of Series A preferred stock, except as otherwise required by law,
     have no voting rights, except in the event that there is a proposal to
     amend the terms of the Series A preferred stock so as to affect it
     adversely or a proposal to authorize or issue (i) any equity or convertible
     debt securities or (ii) certain rights to purchase equity or convertible
     debt securities, in either case ranking equal or superior to the Series A
     preferred stock (with certain exceptions), which shall then require the
     consent of the holders of two-thirds of the outstanding shares of Series A
     preferred stock. Holders of more than 50% of the Series B preferred stock
     originally issued have the right to require USS Holdings to purchase all
     (but not less than all) of the shares of Series A preferred stock and
     warrants to purchase Series A preferred stock held by JPMP (SBIC) (as
     defined in note (9)) and Mass Mutual (as defined in note (11)) at any time
     after October 1, 2004 and prior to a sale, public offering of common stock
     or liquidation of USS Holdings. Upon the exercise of those put rights, if
     USS Holdings cannot obtain the consents from third parties necessary to
     purchase those shares and warrants after using reasonable efforts, USS
     Holdings will be released from its obligation to purchase the shares and
     warrants. At any time after October 1, 2005, USS Holdings has the right to
     purchase all (but not less than all) of the Series A preferred stock held
     by JPMP (SBIC) and Mass Mutual.
(7)  Holders of Series B preferred stock shall not, prior to the occurrence of a
     "trigger event" (as defined in note (4) above), have any voting rights,
     except as otherwise required by law and except in the event of a proposal
     to authorize or issue additional shares of Series B preferred stock or
     change the preferences, rights or powers of the Series B preferred stock so
     as to affect it adversely, which shall then require the consent of the
     holders of a majority of the outstanding shares of Series B preferred
     stock. After a trigger event, the holders of Series B preferred stock shall
     vote, together with the holders of Class A common stock, as one class, with
     each share of Series B preferred stock entitling its holder to that number
     of votes equal to the number of shares of common stock issuable upon
     conversion thereof (currently one share of Class B common stock for each
     share of Series B preferred stock (subject to adjustment)) on the date of
     any such vote, subject to the Stockholders Agreement. Holders of more than
     50% of the Series B preferred stock originally issued have the right to
     require USS Holdings to purchase all (but not less than all) of the shares
     of Series B preferred stock and warrants to purchase Series B preferred
     stock held by JPMP (SBIC) (as defined in note (9)) and Mass Mutual (as
     defined in note (11)) at any time after October 1, 2004

                                       65
<PAGE>

     and prior to a sale, public offering of common stock or liquidation of USS
     Holdings. Upon the exercise of those put rights, if USS Holdings cannot
     obtain the consents from third parties necessary to purchase those shares
     and warrants after using reasonable efforts, USS Holdings will be released
     from its obligation to purchase the shares and warrants. At any time after
     October 1, 2005, USS Holdings has the right to purchase all (but not less
     than all) of the Series B preferred stock held by JPMP (SBIC) and Mass
     Mutual. The Series B preferred stock will automatically be converted into
     an equal number of shares of Class B common stock (before a trigger event)
     or Class A common stock (after a trigger event) upon an event of conversion
     (as defined in note (4) above). Moreover, any holder of the Series B
     preferred stock can at any time and from time to time convert all or a
     portion of his Series B preferred stock into an equal number of shares of
     Class B common stock (before a trigger event) or Class A common stock
     (after a trigger event).
(8)  Holders of Series D preferred stock, except as otherwise required by law,
     have no voting rights, except in the event there is a proposal to amend the
     terms of the Series D preferred stock so as to affect it adversely or a
     proposal to authorize or issue (i) any equity or convertible debt
     securities or (ii) certain rights to purchase equity or convertible debt
     securities, in either case ranking equal or superior to the Series D
     preferred stock, which shall then require the consent of the holders of a
     majority of the outstanding shares of Series D preferred stock.
(9)  Includes (i) 664,146 shares of Series A preferred stock, 1,328,292 shares
     of Series B preferred stock, 9,232 shares of Series D preferred stock,
     280,076 shares of Class B common stock, 59,993 shares of Class B common
     stock issuable upon exercise of common stock warrants and 8,800 shares of
     Class C common stock issuable upon exercise of common stock purchase
     warrants, in each case held by J.P. Morgan Partners (23A SBIC), LLC ("JPMP
     (23A SBIC)"), the managing member of which is J.P. Morgan Partners (23A
     SBIC Manager), Inc. ("JPMP (23A SBIC Manager)"), the sole stockholder of
     which is The Chase Manhattan Bank ("CMB"), the sole stockholder of which is
     J.P. Morgan Chase and (ii) 13,889 shares of Series A preferred stock
     issuable upon exercise of preferred stock warrants and 27,778 shares of
     Series B preferred stock issuable upon exercise of preferred stock
     warrants, in each case held by J.P. Morgan Partners (SBIC), LLC ("JPMP
     (SBIC)"), the sole member of which is J.P. Morgan Partners (BHCA), L.P.
     ("JPMP (BHCA)"), the general partner of which is JPMP Master Fund Manager,
     L.P. ("JPMP MFM"), the general partner of which is JPMP Capital Corp.
     ("JPMP CC"), the sole stockholder of which is J.P. Morgan Chase. Each of
     JPMP (23A SBIC), JPMP (23A SBIC Manager), CMB, JPMP (SBIC), JPMP (BHCA),
     JPMP MFM, JPMP CC and J.P. Morgan Chase may be deemed the beneficial owner
     of the foregoing shares. Messrs. Chavkin and Walsh are executive officers
     of JPMP (23A SBIC Manager), JPMP (SBIC), JPMP CC and J.P. Morgan Partners,
     LLC ("JPMP LLC"), which serves as investment advisor to JPMP (23A SBIC),
     JPMP (SBIC) and JPMP (BHCA). JPMP (23A SBIC) and JPMP (SBIC) are licensed
     small business investment companies (an "SBIC") and as such are subject to
     certain restrictions imposed upon SBICs by the regulations established and
     enforced by the United States Small Business Administration. Among these
     restrictions are certain limitations on the extent to which an SBIC may
     exercise control over companies in which it invests.
(10) Messrs. Chavkin and Walsh may be deemed the beneficial owners of the shares
     of common stock and preferred stock and warrants to purchase preferred and
     common stock referred to in note (9) above given their positions as
     executive officers of JPMP (23A SBIC Manager), JPMP (SBIC), JPMP CC and
     JPMP LLC.
(11) Includes (i) 180,000 shares of Series A preferred stock and warrants to
     purchase 27,778 shares of Series A preferred stock, (ii) 360,000 shares of
     Series B preferred stock and warrants to purchase 55,556 shares of Series B
     preferred stock (iii) 2,829 shares of Series D preferred stock, (iv) 85,827
     shares of Class B common stock, (v) warrants to purchase 18,384 shares of
     Class B common stock issuable upon exercise of common stock purchase
     warrants and (vi) 2,697 shares of Class C common stock issuable upon
     exercise of common stock purchase warrants owned by Massachusetts Mutual
     Life Insurance Company, Mass Mutual Participation Investors, Mass Mutual
     Corporate Investors and Gerlach & Co. (collectively, "Mass Mutual").
(12) Does not include 19,691 shares of Class A common stock, 938 shares of
     Series A preferred stock, 31,575 shares of Series B preferred stock, 219
     shares of Series D preferred stock, 1,420 shares of Class B common stock
     issuable upon exercise of common stock purchase warrants and 208 shares of
     Class C common stock issuable upon exercise of common stock purchase
     warrants held in two trusts over which Mr. Harris, as co-trustee, shares
     voting control and investment control.
(13) Does not include 7,075 shares of Class A common stock, 18,537 shares of
     Series B preferred stock, 78 shares of Series D preferred stock, 84 shares
     of Class B common stock issuable upon exercise of common stock purchase
     warrants and 12 shares of Class C common stock issuable upon exercise of
     common stock purchase warrants held in twelve trusts over which Messrs.
     Petrocelli and Kilpatrick, as co-trustees, share voting control and
     investment control.
(14) Does not include the shares of common stock and preferred stock and
     warrants to purchase preferred and common stock referred to in note (9)
     above.
(15) Does not include 750 shares of Class A Common held in two trusts over which
     Messrs. Nick and Petrocelli as co-trustees share voting control and
     investment control.

The Stockholders Agreement

        The holders of all of the capital stock of USS Holdings are party to a
stockholders agreement. The stockholders agreement governs the holders' exercise
of their voting rights with respect to the election of directors and certain
other material events. The parties to the agreement have agreed to vote their
shares of USS Holdings to elect (i) for as long as Mr. Harris owns 50% or more
of the securities of USS Holdings (subject to certain exceptions set forth in
the agreement) held by him on February 9, 1996 (the date of the U.S. Silica
acquisition), two directors designated by Mr. Harris, including himself, (ii)
for as long as Mr. Petrocelli owns 50% or more of the securities of USS Holdings
(subject to certain exceptions set forth in the agreement) held by him on
February 9, 1996, one director designated by Mr. Petrocelli, and (iii) three
directors designated by a majority of the institutional stockholders party to
the stockholders agreement (the "Institutional Stockholders"). JPMP (23A SBIC)
and JPMP (SBIC) currently

                                       66
<PAGE>

hold 76.5% of the stock owned by the Institutional Stockholders. For so long as
each shall be a director, Mr. Harris will always be elected as Chairman of the
Board of Directors, and Mr. Petrocelli will always be elected as Vice Chairman
of the Board of Directors. Upon a trigger event, a majority of the Institutional
Stockholders have the right to designate two additional directors, thus enabling
them to choose the majority of directors serving on the Board of Directors.

        The provisions of the stockholders agreement also govern:

        -  restrictions on certain actions by USS Holdings and its subsidiaries
           without the consent of (i) prior to the occurrence of a trigger
           event, a majority of the Institutional Stockholders and the DGHA
           Stockholders (as defined in the stockholders agreement), and (ii)
           after the occurrence of a trigger event, a majority of the
           Institutional Stockholders only; these restricted actions include,
           among other things, the consummation of a public offering, the
           issuance of certain equity securities, the merger or consolidation
           with or into another entity, the acquisition of another entity,
           certain sales of assets, the liquidation or reorganization of USS
           Holdings and the incurrence of certain debt;

        -  stockholder rights of first refusal to purchase certain capital stock
           or equity securities to be issued by USS Holdings;

        -  USS Holdings' and stockholder rights of first offer to purchase
           certain shares of USS Holdings to be sold by stockholders;

        -  USS Holdings' and stockholder rights to purchase, and stockholder
           rights to sell, certain shares of USS Holdings held by stockholders
           in certain instances (including a person's termination of
           employment);

        -  rights of certain stockholders to cause all of the other stockholders
           to sell stock in connection with the sale of USS Holdings; and

        -  rights of certain stockholders to participate in certain sales of the
           shares of USS Holdings by other stockholders.

                                       67
<PAGE>

Item 13.  Certain Relationships and Related Transactions

Loans to Management

        In 2000, our indirect parent, USS Holdings, made loans to certain of its
management stockholders to finance their purchase of shares of USS Holdings'
Class A common stock and Series D preferred stock. The loans are evidenced by
promissory notes that accrue interest at 9% per annum payable quarterly, and are
collateralized by the stock. During 2000, the largest aggregate amount of
indebtedness under these loans for Richard E. Goodell, our Vice Chairman, was
$200,000, and for Richard J. Shearer, the President of U.S. Silica, was $83,000.
As of December 31, 2000, Mr. Goodell's outstanding loan was $100,000 and Mr.
Shearer's was $83,000.

Relationship with J.P. Morgan Chase & Co.

        The Chase Manhattan Bank, an affiliate of Chase Securities Inc. ("CSI"),
is a lender under our senior secured credit agreement. From time to time, CSI
acts as a principal or agent in connection with offers and sales of our senior
subordinated notes in market-making transactions. Both CSI and CMB are
affiliates of JPMP LLC, which serves as investment advisor to JPMP (23A SBIC)
and JPMP (SBIC). Certain affiliates of J.P. Morgan Chase own a majority of the
outstanding preferred stock of USS Holdings and thus have the right under the
stockholders agreement to appoint three directors of USS Holdings. Arnold L.
Chavkin, one of our directors, is also an executive partner at JPMP LLC. Ruth
Dreessen, one of our directors, is also a managing director of CSI. Timothy J.
Walsh, one of our directors, is also a partner at JPMP LLC. Messrs. Chavkin and
Walsh are also executive officers of the managing member of JPMP (23A SBIC) and
executive officers of JPMP (SBIC).

Management Services Agreement

        Pursuant to an agreement among USS Holdings, BMAC Holdings, D. George
Harris & Associates, LLC ("DGHA") and us, DGHA (the principals of which are
stockholders of USS Holdings) provides management advisory services to us from
time to time. In consideration of these management services, we have agreed to
pay an annual management fee to DGHA. The base annual fee is $500,000 but is
adjusted based on the amount that our actual EBITDA (as defined in the
agreement) for a fiscal year exceeds or falls short of a budgeted EBITDA for
that fiscal year. Pursuant to the agreement, the budgeted EBITDA for a fiscal
year and the amount of the fee are adjusted for acquisitions approved by the
stockholders as provided in the stockholders agreement or any disposition of
stock or assets. The agreement provides that in the event of a business
acquisition by us, we will pay DGHA an acquisition fee equal to 1% of the total
purchase price of the acquisition, including all third party indebtedness
assumed by us in connection with the acquisition.

        The agreement also provides that, at DGHA's request, we are obligated to
provide DGHA with one or more interest-free loans not exceeding an aggregate of
$1.0 million in any calendar year. As of December 31, 2000, a loan of $1.0
million was currently outstanding. This loan is guaranteed by D. George Harris,
Anthony J. Petrocelli, Richard J. Donahue, Donald G. Kilpatrick and Richard J.
Nick. Finally, pursuant to the agreement, the other companies party to

                                       68
<PAGE>

the agreement will reimburse DGHA for all transaction expenses incurred in
relation to completed acquisitions; those companies will also reimburse DGHA for
other expenses incurred relating to company business up to $100,000 in any
calendar year. The agreement initially terminated on December 31, 2000, but,
pursuant to its terms, was automatically extended and will continue in full
force and effect unless terminated (i) by USS Holdings or DGHA upon nine months'
prior written notice, (ii) upon certain events of sale, merger, change of stock
ownership or appointment of additional directors or (iii) at the option of USS
Holdings if neither Messrs. Harris or Petrocelli is actively involved in the
management of DGHA.

        We paid approximately $1,209,000 in management fees and $925,000 in
acquisition fees to DGHA for the year ended December 31, 2000 under this
agreement, and we expect to pay approximately $668,000 in management fees to
DGHA for the year ended December 31, 2001.

Tax Sharing Agreement

        Pursuant to a tax sharing agreement, USS Holdings has agreed to file
consolidated federal income tax returns (and, in certain circumstances, state
and local income tax returns) with us and our domestic subsidiaries. Under this
agreement, we have agreed to pay USS Holdings amounts designed to approximate
the amount of income tax that we and our domestic subsidiaries would have paid
had we filed consolidated federal income tax returns (and, if applicable, state
and local income tax returns) separate from USS Holdings.

                                       69
<PAGE>

                                    PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a) (1) Financial Statements Filed as Part of This Annual Report on Form 10-K

        The report of the independent accountants and the financial statements
and notes thereto for Better Minerals & Aggregates Company are listed in the
Index to Consolidated Financial Statements under Item 8 of this Annual Report on
Form 10-K.

(2) Financial Statement Schedules

                REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL
                              STATEMENT SCHEDULE

To the Board of Directors and Stockholder of
Better Minerals & Aggregates Company:

Our audits of the consolidated financial statements of Better Minerals &
Aggregates Company referred to in our report dated March 16, 2001 included in
Item 8 of this Annual Report on Form 10-K also included an audit of the
financial statement schedule on page 71 of this Annual Report on Form 10-K. In
our opinion, the financial statement schedule presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements.

New York, New York
March 16, 2001

                                       70
<PAGE>

         Schedule II - Valuation and Qualifying Accounts and Reserves

                     Better Minerals & Aggregates Company

             For the Years Ended December 31, 2000, 1999 and 1998
                           (in thousands of dollars)

<TABLE>
<CAPTION>
                                             Additions
                                    -------------------------
                      Balance at    Charged to    Resulting                            Balance at
                     Beginning of    Costs and       from             Accounts           End of
                                                               ----------------------
Description             Period       Expenses    Acquisitions  Written Off  Recovered    Period
-----------          ------------   ----------   ------------  -----------  ---------  ----------
<S>                  <C>            <C>          <C>           <C>          <C>        <C>
Allowance for
Doubtful Accounts
2000                  $     1,278    $     638   $         --  $      (624) $      35   $   1,327
1999                  $     1,060    $     222   $        100  $      (145) $      41   $   1,278
1998                  $       422    $     146   $        520  $       (29) $       1   $   1,060
</TABLE>

                               ----------------

All other schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.

(3) Exhibits

        The list of exhibits on the accompanying Index to Exhibits is hereby
incorporated by reference. Each management contract or compensatory plan or
arrangement required to be filed as an exhibit is indicated by an asterisk.

(b) Reports on Form 8-K.

        We did not file any reports on Form 8-K during the last quarter of the
period covered by this Annual Report on Form 10-K.

                                       71
<PAGE>

                                  SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 27th day of
March, 2001.

                         BETTER MINERALS & AGGREGATES COMPANY


                         By: /s/ Gary E. Bockrath
                             -----------------------------------------
                             Name:  Gary E. Bockrath
                             Title: Vice President and Chief Financial Officer

                               POWER OF ATTORNEY

        Know all persons by these presents, that each person whose signature
appears below appoints Gary E. Bockrath and John A. Ulizio, jointly and
severally, as his or her true and lawful attorney-in-fact, each with full power
of substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments to this
Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact, jointly and severally, full
power and authority to do and perform each in connection therewith, as fully to
all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact, jointly and severally,
or their or his substitutes or substitute, may lawfully do or cause to be done
by virtue hereof.

Dated:  March 27, 2001

        Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated:

SIGNATURE                          TITLE                                   DATE
---------                          -----                                   ----


/s/ Roy D. Reeves                  President and Chief Executive         3/20/01
-----------------------------      Officer (Principal Executive Officer)
Roy D. Reeves



/s/ Gary E. Bockrath               Vice President and Chief Financial    3/20/01
-----------------------------      Officer (Principal Financial Officer
Gary E. Bockrath                   and Principal Accounting Officer)
                                       72
<PAGE>

/s/ D. George Harris
-----------------------------       Director                            3/26/01
D. George Harris

/s/ Anthony J. Petrocelli
-----------------------------       Director                            3/21/01
Anthony J. Petrocelli

/s/ Richard J. Donahue
-----------------------------       Director                            3/21/01
Richard J. Donahue

/s/ Arnold L. Chavkin
-----------------------------       Director                            3/21/01
Arnold L. Chavkin

/s/ Ruth Dreessen
-----------------------------       Director                            3/26/01
Ruth Dreessen

/s/ Timothy J. Walsh
-----------------------------       Director                            3/21/01
Timothy J. Walsh

/s/ Richard E. Goodell
-----------------------------       Director                            3/21/01
Richard E. Goodell

                                       73
<PAGE>

                               INDEX TO EXHIBITS

EXHIBIT
NUMBER         EXHIBIT
------         -------

3.1            Amended and Restated Certificate of Incorporation of Better
               Minerals & Aggregates Company dated as of February 9, 1996
               (incorporated by reference to Exhibit 3.1 of the Better Minerals
               & Aggregates Company Registration Statement on Form S-4,
               Registration No. 333-32518, filed on March 15, 2000).

3.1.1          Certificate of Amendment of Amended and Restated Certificate of
               Incorporation of Better Minerals & Aggregates Company dated
               September 30, 1999 (incorporated by reference to Exhibit 3.1.1 of
               the Better Minerals & Aggregates Company Registration Statement
               on Form S-4, Registration No. 333-32518, filed on March 15,
               2000).

3.2            By-laws of Better Minerals & Aggregates Company (incorporated by
               reference to Exhibit 3.2 of the Better Minerals & Aggregates
               Company Registration Statement on Form S-4, Registration No. 333-
               32518, filed on March 15, 2000).

4.1            Indenture, dated as of October 1, 1999, among Better Minerals &
               Aggregates Company, the subsidiary guarantors named therein and
               The Bank of New York, as trustee (including the forms of Better
               Minerals & Aggregates Company's 13% Senior Subordinated Notes due
               2009 attached thereto as exhibits) (incorporated by reference to
               Exhibit 4.1 of the Better Minerals & Aggregates Company
               Registration Statement on Form S-4, Registration No. 333-32518,
               filed on March 15, 2000).

4.2            Supplemental Indenture, dated as of December 1, 2000, among
               Better Minerals & Aggregates Company, BMAC Services Co., Inc. and
               the other subsidiary guarantors named therein and The Bank of New
               York, as trustee.

10.1           Stockholders Agreement, dated as of February 9, 1996, among USS
               Holdings, Inc. and the stockholders of USS Holdings, Inc.
               (incorporated by reference to Exhibit 10.1 of the Better Minerals
               & Aggregates Company Registration Statement on Form S-4,
               Registration No. 333-32518, filed on March 15, 2000).

10.1.1         Amendment No. 1 to Stockholders Agreement, dated as of October
               15, 1996, among USS Holdings, Inc. and the stockholders of USS
               Holdings, Inc. (incorporated by reference to Exhibit 10.1.1 of
               the Better Minerals & Aggregates Company Registration Statement
               on Form S-4, Registration No. 333-32518, filed on March 15,
               2000).

10.1.2         Amendment No. 2 to Stockholders Agreement, dated as of October 6,
               1998, among USS Holdings, Inc. and the stockholders of USS
               Holdings, Inc. (incorporated by reference to Exhibit 10.1.2 of
               the Better Minerals & Aggregates Company

                                      E-1
<PAGE>

               Registration Statement on Form S-4, Registration No. 333-32518,
               filed on March 15, 2000).

10.2           Amended and Restated Management Services Agreement, dated October
               1, 1998, among Better Minerals & Aggregates Company, USS
               Holdings, Inc., BMAC Holdings, Inc. and D. George Harris &
               Associates, LLC (incorporated by reference to Exhibit 10.2 of the
               Better Minerals & Aggregates Company Registration Statement on
               Form S-4, Registration No. 333-32518, filed on March 15, 2000).

10.2.1         Assignment and Assumption Agreement, dated as of September 30,
               1999, among D. George Harris & Associates, Inc., D. George Harris
               & Associates, LLC, USS Holdings, Inc., USS Intermediate Holdco,
               Inc., U.S. Silica Company, BMAC Holdings, Inc. and Better
               Minerals & Aggregates Company (incorporated by reference to
               Exhibit 10.2.1 of the Better Minerals & Aggregates Company
               Registration Statement on Form S-4, Registration No. 333-32518,
               filed on March 15, 2000).

10.3           Amended and Restated Tax Sharing Agreement, dated as of October
               1, 1999, among Better Minerals & Aggregates Company, its domestic
               subsidiaries, and USS Holdings, Inc. (incorporated by reference
               to Exhibit 10.3 of the Better Minerals & Aggregates Company
               Registration Statement on Form S-4, Registration No. 333-32518,
               filed on March 15, 2000).

10.4           Credit Agreement, dated as of September 30, 1999, among Better
               Minerals & Aggregates Company, BMAC Holdings, Inc., George F.
               Pettinos (Canada) Limited, Banque Nationale de Paris, and the
               financial institutions and other institutional lenders named
               therein (incorporated by reference to Exhibit 10.4 of the Better
               Minerals & Aggregates Company Registration Statement on Form S-4,
               Registration No. 333-32518, filed on March 15, 2000).

10.4.1         Amendment and Waiver No. 1 to the Credit Agreement and Security
               Agreement, dated as of December 31, 1999, among BMAC Holdings,
               Inc., Better Minerals & Aggregates Company, George F. Pettinos
               (Canada) Limited, the banks, financial institutions and other
               institutional lenders parties to the Credit Agreement dated as of
               September 30, 1999, and Banque Nationale de Paris (incorporated
               by reference to Exhibit 10.1 of the Better Minerals & Aggregates
               Company Quarterly Report on Form 10-Q filed on August 11, 2000).

10.4.2         Amendment No. 2 to the Credit Agreement, dated as of March 15,
               2000, among BMAC Holdings, Inc., Better Minerals & Aggregates
               Company, the banks, financial institutions and other
               institutional lenders parties to the Credit Agreement dated as of
               September 30, 1999, and Banque Nationale de Paris (incorporated
               by reference to Exhibit 10.2 of the Better Minerals & Aggregates
               Company Quarterly Report on Form 10-Q filed on August 11, 2000).

10.4.3         Amendment No. 3 to the Credit Agreement, dated as of December 31,
               2000, among BMAC Holdings, Inc., Better Minerals & Aggregates
               Company, the banks, financial

                                      E-2
<PAGE>

               institutions and other institutional lenders parties to the
               Credit Agreement dated as of September 30, 1999, and Banque
               Nationale de Paris (incorporated by reference to Exhibit 10.1 of
               the Better Minerals & Aggregates Company Current Report on
               Form 8-K filed on March 5, 2001).

10.5           Security Agreement, dated September 30, 1999, among Better
               Minerals & Aggregates Company, the subsidiary guarantors named
               therein and Banque Nationale de Paris (incorporated by reference
               to Exhibit 10.5 of the Better Minerals & Aggregates Company
               Registration Statement on Form S-4, Registration No. 333-32518,
               filed on March 15, 2000).

10.6           Intellectual Property Security Agreement, dated September 30,
               1999, among Better Minerals & Aggregates Company, the subsidiary
               guarantors named therein and Banque Nationale de Paris
               (incorporated by reference to Exhibit 10.6 of the Better Minerals
               & Aggregates Company Registration Statement on Form S-4,
               Registration No. 333-32518, filed on March 15, 2000).

10.7           Parent Guarantor Security Agreement, dated September 30, 1999,
               between BMAC Holdings, Inc. and Banque Nationale de Paris
               (incorporated by reference to Exhibit 10.7 of the Better Minerals
               & Aggregates Company Registration Statement on Form S-4,
               Registration No. 333-32518, filed on March 15, 2000).

10.8           Parent Guaranty, dated September 30, 1999, between BMAC Holdings,
               Inc. and Banque Nationale de Paris (incorporated by reference to
               Exhibit 10.9 of the Better Minerals & Aggregates Company
               Registration Statement on Form S-4, Registration No. 333-32518,
               filed on March 15, 2000).

10.9           Subsidiary Guaranty, dated September 30, 1999, between each of
               the subsidiary guarantors named therein and Banque Nationale de
               Paris (incorporated by reference to Exhibit 10.10 of the Better
               Minerals & Aggregates Company Registration Statement on Form S-4,
               Registration No. 333-32518, filed on March 15, 2000).

10.10*         Employment Agreement, dated December 14, 1998, between Better
               Materials Corporation and Craig S. Cinalli (incorporated by
               reference to Exhibit 10.1 of the Better Minerals & Aggregates
               Company Quarterly Report on Form 10-Q filed on May 25, 2000).

10.11*         Amendment No. 1, dated March 15, 2001, to Employment Agreement
               dated December 14, 1998 between Better Materials Corporation and
               Craig S. Cinalli.

10.12*         Severance Agreement, dated August 15, 2000, between U.S. Silica
               Company and Richard Shearer.

10.13*         Employment Agreement, dated April 19, 2000, between Better
               Minerals & Aggregates Company and Roy Reeves.

10.14*         Employment Agreement, dated April 19, 2000, between USS Holdings,
               Inc. and Roy Reeves.

                                      E-3
<PAGE>

10.15*         Employment, Consulting and Non-Competition Agreement, dated
               December 31, 2000, between USS Holdings, BMAC Holdings, Inc.,
               U.S. Silica Company and Better Minerals & Aggregates Company and
               Richard Goodell.

12.1           Statement regarding ratio of earnings to fixed charges.

21.1           Subsidiaries of Better Minerals & Aggregates Company.

                                      E-4