-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OwSfsbg9tfjxZnho9SDvjYJE6HI912tYJSnkom1hlJlwq9v9WXR6LcVM165Co0hl 8/ixq7eUzIj7ksnm1vrBQQ== /in/edgar/work/20000526/0000950130-00-003152/0000950130-00-003152.txt : 20000919 0000950130-00-003152.hdr.sgml : 20000919 ACCESSION NUMBER: 0000950130-00-003152 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20000526 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BETTER MINERALS & AGGREGATES CO CENTRAL INDEX KEY: 0001108673 STANDARD INDUSTRIAL CLASSIFICATION: [1400 ] IRS NUMBER: 550749125 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518 FILM NUMBER: 644048 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENNSYLVANIA GLASS SAND CORP CENTRAL INDEX KEY: 0000077245 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 943024593 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-01 FILM NUMBER: 644049 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: US SILICA CO CENTRAL INDEX KEY: 0001108675 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 230958670 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-02 FILM NUMBER: 644050 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BETTER MATERIALS CORP CENTRAL INDEX KEY: 0001108676 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 231542403 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-03 FILM NUMBER: 644051 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BMC TRUCKING INC CENTRAL INDEX KEY: 0001108677 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 232986246 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-04 FILM NUMBER: 644052 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BUCKS COUNTY CRUSHED STONE CO CENTRAL INDEX KEY: 0001108679 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 231468333 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-05 FILM NUMBER: 644053 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHIPPEWA FARMS CORP CENTRAL INDEX KEY: 0001108680 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 232160463 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-06 FILM NUMBER: 644054 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHORE STONE CO INC CENTRAL INDEX KEY: 0001108681 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 232243672 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-07 FILM NUMBER: 644055 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PETTINOS GEORGE F INC CENTRAL INDEX KEY: 0001108684 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 230966840 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-08 FILM NUMBER: 644056 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OTTAWA SILICA CO CENTRAL INDEX KEY: 0001108685 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 943093543 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-09 FILM NUMBER: 644057 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FULTON LAND & TIMBER CO CENTRAL INDEX KEY: 0001108686 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 231622540 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-10 FILM NUMBER: 644058 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMERCIAL STONE CO INC CENTRAL INDEX KEY: 0001108687 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 251225764 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-11 FILM NUMBER: 644059 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ELLEN JAY INC CENTRAL INDEX KEY: 0001108688 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 222033676 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-12 FILM NUMBER: 644060 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STONE MATERIALS CO LLC CENTRAL INDEX KEY: 0001108689 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 522205266 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-13 FILM NUMBER: 644061 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMERCIAL AGGREGATES TRANSPORTATION & SALES LLC CENTRAL INDEX KEY: 0001108690 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 251846125 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-32518-14 FILM NUMBER: 644062 BUSINESS ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 BUSINESS PHONE: 3042582500 MAIL ADDRESS: STREET 1: ROUTE 522 NORTH STREET 2: P O BOX 187 CITY: BERKELEY SPRINGS STATE: WV ZIP: 25411 424B3 1 RULE 424(B)(3) FILING ________________________________________________________________________________ This Prospectus Supplement is Filed Pursuant to Rule 424(b)(3) Under the Securities Act of 1933 (Registration Nos. 333-32518 and 333-32518-01 through 333-32518-14) ________________________________________________________________________________ Prospectus Supplement To Prospectus Dated May 5, 2000 ________________________________________________________________________________ Better Minerals & Aggregates Company 13% Senior Subordinated Notes due 2009 Attached is the Quarterly Report on Form 10-Q for the quarter ended March 31, 2000 ________________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2000 or [_] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period ______ 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 Identification No.) Incorporation or Organization) Route 522 North, P.O. Box 187 Berkeley Springs, West Virginia 25411 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (304) 258-2500 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 reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [_] No [X] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Class Outstanding as of April 30, 2000 --------- -------------------------------- Common Stock 100 shares
Better Minerals & Aggregates Company Form 10-Q Index Page PART I. FINANCIAL INFORMATION ---- Item 1. Financial Statements Condensed Consolidated Balance Sheets as of March 31, 2000 (unaudited) and December 31, 1999........................................................................ 1 Condensed Consolidated Statements of Operations for the three months ended March 31, 2000 and March 31, 1999 (unaudited).................................................. 3 Condensed Consolidated Statements of Stockholder's Equity for the three months ended March 31, 2000 and March 31, 1999 (unaudited)...................................... 4 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2000 and March 31, 1999 (unaudited).................................................. 5 Notes to Condensed Consolidated Financial Statements..................................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................................................ 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk...................... 15 PART II. OTHER INFORMATION Item 1. Legal Proceedings............................................................... II-1 Item 5. Other Information.............................................................. II-1 Item 6. Exhibits and Reports on Form 8-K............................................... II-1
Signatures Exhibit Index PART I. FINANCIAL INFORMATION Item 1. Financial Statements BETTER MINERALS & AGGREGATES COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) (Unaudited)
March 31, December 31, 2000 1999 ---- ---- Assets Current: Cash and cash equivalents $ 752 $ 13,573 Accounts receivable: Trade, less allowance for doubtful accounts 38,233 41,658 Other 804 1,060 Due from parent 881 834 Inventories 23,348 23,058 Prepaid expenses and other current assets 2,488 2,018 Income tax deposit -- 1,056 Deferred income taxes 8,250 8,148 --------- --------- Total current assets 74,756 91,405 Property, plant and equipment: Mining property 263,052 263,083 Land 27,939 28,086 Land improvements 4,933 5,005 Buildings 36,356 37,143 Machinery and equipment 145,837 143,082 Furniture and fixtures 1,310 1,331 Construction-in-progress 5,850 4,387 --------- --------- 485,277 482,117 Accumulated depletion, depreciation and amortization (65,738) (59,248) --------- --------- Property, plant and equipment, net 419,539 422,869 Other noncurrent: Goodwill and non compete agreements, net 17,467 19,907 Debt issuance costs 14,042 14,601 Other noncurrent assets 3,669 2,821 --------- --------- Total other noncurrent 35,178 37,329 --------- --------- Total assets $ 529,473 $ 551,603 ========= =========
1 BETTER MINERALS & AGGREGATES COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) (Unaudited)
March 31, December 31, 2000 1999 ---- ---- Liabilities Current: Book overdraft $ 4,226 $ 5,026 Accounts payable 15,048 16,845 Accrued liabilities 13,106 13,053 Payable to related party 720 898 Accrued interest 3,567 7,829 Income taxes payable 2,257 -- Current portion of long-term debt 3,442 2,039 --------- --------- Total current liabilities 42,366 45,690 Noncurrent liabilities: Long-term debt, net of current portion 281,772 285,466 Deferred income taxes 111,454 117,637 Other noncurrent liabilities 38,623 38,475 --------- --------- Total noncurrent liabilities 431,849 441,578 Commitments and contingencies Stockholder's Equity Common stock, par value $.01, authorized 5,000 shares, issued 100 shares -- -- Additional paid-in capital 81,377 81,377 Retained deficit (26,119) (17,012) Accumulated other comprehensive (loss) -- (30) --------- --------- Total stockholder's equity 55,258 64,335 --------- --------- Total liabilities and stockholder's equity $ 529,473 $ 551,603 ========= =========
The accompanying notes are an integral part of these statements. 2 BETTER MINERALS & AGGREGATES COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands) (Unaudited)
For the Three Months Ended March 31, -------------------------- 2000 1999 ---- ---- Net sales $ 49,831 $ 39,623 Cost of goods sold 37,872 28,265 Depreciation, depletion and amortization 8,456 5,737 Selling, general and administrative 6,056 4,544 -------- -------- Operating (loss) income (2,553) 1,077 Interest expense 8,860 2,958 Accretion of preferred stock warrants -- 14 Other income net, including interest income (507) (327) -------- -------- Loss before income taxes (10,906) (1,568) (Benefit) for income taxes (1,799) (235) -------- -------- Net loss $ (9,107) $ (1,333) ======== ========
The accompanying notes are an integral part of these statements. 3 BETTER MINERALS & AGGREGATES COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (Dollars in Thousands) (Unaudited)
Accumulated Other Comprehensive loss ---------------------------------- Additional Foreign Minimum Total Common Paid-In Retained Currency Pension Stockholder's Stock Capital Deficit Translation Liability Total Equity ----- ------- ------- ----------- --------- ----- ------ Balance December 31, 1998 $ -- $ 41,491 $ (18,011) $ (44) $ (40) $ (84) $ 23,396 Comprehensive income, net of income taxes: Net loss (1,333) (1,333) Foreign currency translation 27 27 27 -------- Total comprehensive loss (1,306) -------------------------------------------------------------------------------- Balance March 31, 1999 $ -- $ 41,491 $ (19,344) $ (17) $ (40) $ (57) $ 22,090 ================================================================================ Balance December 31, 1999 $ -- $ 81,377 $ (17,012) $ (30) $ -- $ (30) 64,335 Comprehensive income, net of income taxes: Net loss (9,107) (9,107) Foreign currency translation 30 30 30 -------- Total comprehensive loss (9,077) -------------------------------------------------------------------------------- Balance March 31, 2000 $ -- $ 81,377 $ (26,119) $ -- $ -- $ -- $ 55,258 ================================================================================
The accompanying notes are an integral part of these statements. 4 BETTER MINERALS & AGGREGATES COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited)
For the Three Months Ended March 31, -------------------------- 2000 1999 ---- ---- Cash flows from operating activities: Net loss $ (9,107) $ (1,333) Adjustments to reconcile net (loss) to cash flows from operations: Depreciation 5,515 3,852 Depletion 1,229 506 Non compete agreements amortization 1,381 1,306 Accretion of preferred stock warrants - 14 Debt issuance amortization 490 208 Deferred income taxes (5,881) (1,159) Disposal of property, plant and equipment (gain) loss 2 - Loss on sale of investment 83 - Other (252) 788 Changes in assets and liabilities, net of the effects from disposed company: Trade receivables 1,716 2,034 Non-trade receivables 140 (314) Receivable from parent (46) (1,905) Payable to related party (179) - Inventories (988) (607) Prepaid expenses and other current assets (517) (188) Accounts payable and accrued liabilities (1,239) (1,232) Accrued interest (4,261) 925 Income taxes 3,976 407 -------------------- Net cash (used for) provided by operating activities (7,938) 3,302 Cash flows from investing activities: Capital expenditures (4,947) (2,200) Proceeds from sale of investment 3,136 - -------------------- Net cash used for investing activities (1,811) (2,200) Cash flows from financing activities: Change in book overdraft (800) (2,284) Repayment of long-term debt (2,290) (1,270) Change in Working Capital Facility - 1,450 Principal payments on capital lease obligations (12) (12) -------------------- Net cash used for financing activities (3,102) (2,116) Effect of exchange rate on cash 30 27 -------------------- Net decrease in cash (12,821) (987) Cash and cash equivalents, beginning of period 13,573 2,222 -------------------- Cash and cash equivalents, ending of period $ 752 $ 1,235 ====================
The accompanying notes are an integral part of these statements. 5 BETTER MINERALS & AGGREGATES COMPANY AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Accounting Policies The unaudited interim condensed consolidated financial statements of Better Minerals & Aggregates Company (the "Company") have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. In the opinion of management, the statements reflect all adjustments necessary for a fair presentation of the results of the reported interim periods. The statements should be read in conjunction with the summary of significant accounting policies and notes to the audited consolidated financial statements of the Company included in the Company's Form S-4 Registration Statement (the "Registration Statement") relating to its 13% Senior Subordinated Notes due 2009 (the "Senior Subordinated Notes") filed with the Securities and Exchange Commission. Operating results are not necessarily indicative of the results to be expected for the full year or any other interim period due to the seasonal, weather- related conditions in certain aspects of the Company's business. 2. Inventories At March 31, 2000 and December 31, 1999, inventory consisted of the following: (In thousands) 2000 1999 ---- ---- Supplies (net of $77 and $32 obsolescence reserve) $11,483 $11,171 Raw materials and work in process 4,284 6,165 Finished goods 7,581 5,722 ------- ------- $23,348 $23,058 ======= ======= 3. Comprehensive Income Comprehensive income, net of tax for the three months ended March 31, 2000 and 1999 was as follows: (In thousands) 2000 1999 Net (loss) $(9,107) $(1,333) Foreign currency translation 30 27 ------- ------- Total comprehensive income $(9,077) $(1,306) ======= ======= 6 4. Segment Information The Company operates in the industrial minerals and aggregates business segments which are more fully described in the Registration Statement. Reportable segment information for the three months ended March 31, 2000 and March 31, 1999 was as follows: (In thousands) 2000 1999 ---- ---- Net sales: Aggregates $ 9,692 $ 3,574 Industrial Minerals 40,139 36,049 -------- -------- Total net sales $ 49,831 $ 39,623 ======== ======== Operating company income (loss): Aggregates $ (5,275) $ (1,017) Industrial Minerals 2,797 1,683 -------- -------- Total operating company income (loss) $ (2,478) $ 666 General corporate (expense) income (75) 411 -------- -------- Total operating income (loss) $ (2,553) $ 1,077 ======== ======== Depreciation, depletion and amortization expense: Aggregates $ 2,475 $ 700 Industrial Minerals 5,966 5,037 Corporate 15 -- -------- -------- Total depreciation, depletion, and amortization expense $ 8,456 $ 5,737 ======== ======== Capital expenditures: Aggregates $ 2,643 $ 320 Industrial Minerals 2,269 1,880 Corporate 35 -- -------- -------- Total capital expenditures $ 4,947 $ 2,200 ======== ======== Asset segment information at March 31, 2000 and December 31, 1999 was as follows: (In thousands) 2000 1999 ---- ---- Assets: Aggregates $324,713 $323,470 Industrial Minerals 211,175 201,390 Corporate 16,355 29,169 Elimination of intersegment receivables (22,770) (2,426) -------- -------- Total assets $529,473 $551,603 ======== ======== 7 5. Impact of Recent Accounting Standards In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", was issued. SFAS No. 133 requires that all derivatives be recognized as either assets or liabilities in the statement of financial position and measured at fair value. SFAS No. 133, as amended by SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133, an amendment of FASB Statement No. 133", is effective for fiscal years beginning after June 15, 2000. The Company has not yet determined the impact that adoption or subsequent application of SFAS No. 133 will have on its financial position or results of operations. 6. Sale of Canadian Subsidiary On February 29, 2000 the Company completed the sale of stock of one of its Canadian subsidiaries, George F. Pettinos (Canada) Limited, for $3.1 million. The proceeds were used to retire a portion of the Company's tranche A term loan facility and for general corporate uses. As a result of the sale, the Company recognized a pretax loss of $0.1 million, which is included in other income. 7. Income Taxes In accordance with generally accepted accounting principles, it is the Company's practice at the end of each interim reporting period to make a best estimate of the effective tax rate expected to be applicable for the full fiscal year. Estimates are revised as additional information becomes available. Tax benefits recorded on a current year-to-date basis are limited to those which are expected to be realizable during the year or recognizable as a deferred tax asset at the end of the year. In addition, in the first quarter of 2000, the sale of George F. Pettinos (Canada) Limited created a one-time $1.2 million charge to the tax provision. 8. 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. One of the Company's subsidiaries, U.S. Silica Company, is self-insured for product liability insurance as it relates to occupational disease. In addition, U.S. Silica Company 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 losses is adequate. 8 Certain product liability claims related to occupational disease are indemnified by ITT Industries, successor to a former owner of U.S. Silica Company, under an agreement whereby claims filed against U.S. Silica Company prior to September 12, 2005 alleging exposure 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 carry-forward adjustments and expires September 12, 2005. 9. Senior Subordinated Notes Subsidiary Guarantees 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 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 assets or operations other than its investments in its subsidiaries, (b) the subsidiary guarantors are each wholly owned by the Company, comprise all of the direct and indirect subsidiaries of the Company (other than inconsequential subsidiaries) 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. 10. Subsequent Events 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 $2.2 million to $2.5 million will be recorded representing the cost to replace certain benefits forfeited by the executive officer in order to join the Company, of which approximately 50% is the cost of non-cash stock grants in the Company's ultimate parent company, USS Holdings, Inc. 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following information should be read in conjunction with the accompanying unaudited consolidated financial statements and the notes thereto included in Item 1 of this quarterly report, and the audited consolidated financial statements and the notes thereto and management's discussion and analysis of financial condition and results of operations contained in our registration statement on Form S-4 relating to our senior subordinated notes filed with the Securities and Exchange Commission. Unless otherwise indicated or the context otherwise requires, all references in this quarterly report to "we," "us," "our" or similar terms refer to Better Minerals & Aggregates Company and its direct and indirect subsidiaries. Overview We mine, process and market industrial minerals, principally silica, in the eastern and midwestern United States. We also mine, process and market aggregates and produce and market asphalt in certain geographic areas in Pennsylvania and New Jersey. Our end use markets for our silica products include container glass, fiberglass, specialty glass, flat glass, fillers and extenders (primarily used in paints and coatings), 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. We operate a network of 25 production facilities in 14 states. Our industrial minerals business (substantially all the net sales of which consist of silica products) and our aggregates business accounted for 81% and 19% of our net sales, respectively, for the three months ended March 31, 2000. Since January 1998, we have completed several acquisitions of aggregates producers and silica-producing assets. Most recently, 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, and, in October 1999, we acquired Commercial Stone Co., Inc., a crushed stone and hot mixed asphalt producer in southwestern Pennsylvania, and Commercial Aggregates Transportation and Sales, L.P. (collectively, "Commercial Stone"). In February 2000, we completed the sale of one of our two Canadian subsidiaries, George F. Pettinos (Canada) Limited ("PECAL"), for $3.1 million. 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. As a result, 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. 10 Three Months Ended March 31, 2000 Compared with Three Months Ended March 31, 1999 Net Sales. Net sales increased $10.2 million, or 25.8%, to $49.8 million in the three months ended March 31, 2000 from $39.6 million in the three months ended March 31, 1999. Net sales for our industrial minerals business increased $4.1 million, or 11.4%, to $40.1 million in the three months ended March 31, 2000 from $36.0 million in the three months ended March 31, 1999. This increase was primarily due to the acquisition of the Morie Assets in April 1999, which resulted in the inclusion of $2.4 million in sales in the first quarter of 2000, partially offset by a $0.3 million reduction in sales as a result of the PECAL divestiture in February 2000. Excluding acquisitions and divestitures, net sales for our industrial minerals business increased $2.1 million, or 6.2%, to $36.0 million in the three months ended March 31, 2000 from $33.9 million in the three months ended March 31, 1999, primarily from increased silica sales to the flat glass, specialty glass, foundry and oil and gas extraction end use markets, partially offset by decreased silica and aplite sales to the glass container end use market. Net sales for our aggregates business increased $6.1 million, or 172%, to $9.7 million in the three months ended March 31, 2000 from $3.6 million in the three months ended March 31, 1999. The primary reasons for this increase are the Commercial Stone and Morie Assets acquisitions, which contributed $5.1 million to aggregates sales in the first quarter of 2000. Excluding these acquisitions, net sales for our aggregates business increased $1.0 million, or 28%, to $4.6 million in the three months ended March 31, 2000 from $3.6 million in the three months ended March 31, 1999, primarily from a $0.4 million increase in stone sales and a $0.3 million increase in asphalt sales at our eastern Pennsylvania operations. Cost of Goods Sold. Cost of goods sold increased $9.6 million, or 34.0%, to $37.9 million in the three months ended March 31, 2000 from $28.3 million in the three months ended March 31, 1999. Cost of goods sold for our industrial minerals business increased $2.3 million, or 9.1%, to $27.5 million in the three months ended March 31, 2000 from $25.2 million in the three months ended March 31, 1999. This increase was primarily due to the acquisition of the Morie Assets in April 1999, which resulted in the inclusion of $2.1 million in cost of goods sold in the first quarter of 2000, partially offset by a reduction of $0.4 million in cost of goods sold as a result of the PECAL divestiture in February 2000. Excluding the acquisitions and divestitures, cost of goods sold increased $0.6, million, or 3%, to $22.8 million in the three months ended March 31, 2000 from $22.2 million in the three months ended March 31, 1999, primarily due to increased volume, and the price of fuel, partially offset by a reduction in repairs and maintenance. Cost of goods sold for our aggregates business increased $7.1 million, or 237%, to $10.1 million in the three months ended March 31, 2000 from $3.0 million in the three 11 months ended March 31, 1999. This increase was primarily due to the acquisitions of Commercial Stone and the Morie Assets, which resulted in the inclusion of $6.1 million in cost of goods sold in the first quarter of 2000. Excluding these acquisitions, cost of goods sold increased $1.0 million, or 33%, to $4.0 million in the three months ended March 31, 2000 from $3.0 million in the three months ended March 31, 1999, primarily due to increased volume, the cost of fuel and asphalt cement and increased repairs and maintenance. Depreciation, Depletion and Amortization. Depreciation, depletion and amortization increased $2.8 million, or 49%, to $8.5 million in the three months ended March 31, 2000 from $5.7 million in the three months ended March 31, 1999. This increase was primarily due to the acquisitions of Commercial Stone and the Morie Assets in 1999. Selling, General and Administrative. Selling, general and administrative expenses increased $1.6 million, or 36%, to $6.1 million in the three months ended March 31, 2000 from $4.5 million in the three months ended March 31, 1999. This increase was primarily due to the acquisition of Commercial Stone in October 1999, which resulted in the inclusion of $0.8 million in expenses in the first quarter of 2000, and an increase of $0.3 million in expenses as a result of the PECAL divestiture in February 2000. Excluding acquisitions and divestitures, selling, general and administrative expenses increased $0.5 million, or 12%, to $4.7 million in the three months ended March 31, 2000 from $4.2 million in the three months ended March 31, 1999 due to normal inflationary increases and certain non-recurring credits associated with our acquisition program that were realized in 1999 but not in 2000. Operating Loss. Operating loss was $3.6 million in the three months ended March 31, 2000 as compared to operating income of $1.1 million in the three months ended March 31, 1999. Operating income for our industrial minerals business increased $1.1 million, or 65%, to $2.8 million in the three months ended March 31, 2000 from $1.7 million in the three months ended March 31, 1999 primarily due to the factors noted earlier. Operating loss for our aggregates business increased $4.3 million to $5.3 million in the three months ended March 31, 2000 from an operating loss of $1.0 million in the three months ended March 31, 1999 as a result of the acquisitions noted earlier. Due to the seasonality of our aggregates business, operating losses incurred in the first quarter of 2000 may not be indicative of operating results for the full year. Corporate expenses not allocated to business segments increased $0.5 million to $0.1 million in the three months ended March 31, 2000. Interest (Income) Expense. Interest expense increased $5.8 million, or 193%, to $8.8 million in the three months ended March 31, 2000 from $3.0 million in the three months ended March 31, 1999 due primarily to increased borrowings related to 12 acquisitions and increased interest rates. (Benefit) for Income Taxes. The benefit for income taxes for the three months ended March 31, 2000 has been limited to the tax benefits expected to be realizable for the year, which resulted in an effective tax rate of approximately 27%. This benefit has been reduced by taxes required on the sale of PECAL that occurred during the first quarter of 2000. The benefit for income taxes for the three months ended March 31, 1999 was based on an estimated annual effective tax rate of 15%. Net Loss. Net loss increased $7.8 million to $9.1 million in the three months ended March 31, 2000 from $1.3 million in the three months ended March 31, 1999 primarily as a result of the factors noted earlier. Liquidity and Capital Resources Our principal liquidity requirements have historically been to service our debt and meet our working capital, capital expenditures and mine development expenditure needs and to finance acquisitions. We have historically met our liquidity and capital investment needs with internally generated funds while acquisitions have required borrowings and equity investments. Our total long term debt as of March 31, 2000 was $285.2 million. Net cash used in operating activities was $7.9 million for the three months ended March 31, 2000 compared to $3.3 million of net cash provided by operating activities for the three months ended March 31, 1999. Cash used in operating activities increased $11.2 million in the first quarter of 2000 due primarily to reduced earnings as a result of the seasonal nature of our aggregates acquisitions and increased interest expense. Cash interest paid in the three months ended March 31, 2000 was $12.5 million, an increase of $10.7 million from the $1.8 million paid in the three months ended March 31, 1999, primarily as a result of increased borrowings in 1999. Net cash used for investing activities decreased $0.4 million to $1.8 million for the period ended March 31, 2000 from $2.2 million for the period ended March 31, 1999. This decrease primarily resulted from the $3.1 million received from the PECAL sale in February 2000 partially offset by a $2.7 million increase in capital expenditures. Cash flow used for financing activities was $3.1 million for the three months ended March 31, 2000 and $2.1 million for the three months ended March 31, 1999. There was a $2.3 million reduction in long term debt in the three months ended March 31, 2000 and a $1.3 million reduction in long term debt in the same period in 1999. Interest payments on our 13% senior subordinated notes due 2009 ($150 million outstanding as of March 31, 2000), senior debt service under our senior secured credit facilities, 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. 13 Under our senior secured credit facilities, as of March 31, 2000, we had $39.1 million outstanding under the tranche A term loan facility and $94.8 million outstanding under the tranche B term loan facility. In addition, these credit facilities provide us with a $50 million revolving credit facility and a $40 million acquisition term loan facility, each of which were undrawn as of March 31, 2000. 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 facilities is secured by substantially all of our assets, including our real and personal property, inventory, accounts receivable and other intangibles. For description of the senior secured credit facilities and the indenture under which our senior subordinated notes have been issued, including certain restrictions that these agreements impose upon us, please see our registration statement on Form S-4 relating to our senior subordinated notes filed with Securities and Exchange Commission. Capital expenditures totaled $4.9 million in the three months ended March 31, 2000 compared with $2.2 million in the three months ended March 31, 1999. Excluding possible acquisitions, our expected capital expenditure requirements for the remainder of 2000 and 2001 are $23.8 million and $21.7 million, respectively. 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 our future performance, which is subject to general economic, financial and other factors, some of which are beyond our control. We believe that based on current levels of operations and anticipated growth, cash flow from operations, together with borrowings under the revolving credit facility and, if available, the acquisition term loan facility, will be adequate for the foreseeable future to make required payments of principal and interest on our debt, fund working capital, mine development and capital expenditure requirements and pursue acquisitions. 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 and the acquisition term loan facility in an amount sufficient to enable us to service our debt or to fund our other liquidity needs. Other Matters On April 10, 2000, we entered into an employment agreement with Mr. Roy D. Reeves to manage our aggregates business segment. In the second quarter of 2000, a one-time charge of approximately $2.2 million to $2.5 million will be recorded representing the cost to replace certain benefits forfeited by him in order to join us, of which approximately 50% is the cost of non-cash stock grants in our ultimate parent company, USS Holdings, Inc. Forward-Looking Statements This quarterly report, including this management's discussion and analysis of financial condition and results of operations section, includes "forward- looking statements." 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 believe that the following factors, among others, could affect our future performance and cause actual results to differ materially from those expressed or implied 14 by these forward-looking statements: (1) general and regional economic conditions, including the economy in the states in which we have production facilities and in which we sell our products; (2) demand for residential and commercial construction; (3) demand for automobiles and other vehicles; (4) levels of government spending on road and other infrastructure construction; (5) the competitive nature of the industrial minerals and aggregates industries; (6) operating risks typical of the industrial minerals and aggregates industries, including the price and availability of oil; (7) difficulties in, and unanticipated expense of, assimilating newly-acquired businesses; (8) fluctuations in prices for, and availability of, transportation and power; (9) unfavorable weather conditions; (10) regulatory compliance, including compliance with environmental and silica exposure regulations, by us and our customers; (11) litigation affecting us and our customers; (12) changes in the demand for our products due to the availability of substitutes for products of our customers; and (13) labor unrest. Item 3. Quantitative and Qualitative Disclosures About Market Risk Information regarding the Company's financial instruments that are sensitive to changes in interest rates is contained in our registration statement on Form S-4 relating to our senior subordinated notes filed with the Securities and Exchange Commission. This information has not changed materially in the interim period since December 31, 1999. 15 PART II. OTHER INFORMATION Item 1. Legal Proceedings We are a defendant in various lawsuits related to our businesses. These matters include lawsuits relating to the exposure of persons to crystalline silica as discussed in detail in our registration statement on Form S-4 relating to our senior subordinated notes filed with the Securities and Exchange Commission. Although we do not believe that these lawsuits are likely to have a material adverse effect upon our business, we cannot predict what the full effect of these or other lawsuits will be. We currently believe, however, that these claims and proceedings in the aggregate are unlikely to have a material adverse effect on us. On May 15, 2000, the National Toxicology Program, part of the United States 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." Item 5. Other Information Effective April 1, 2000 Mr. Roy D. Reeves joined us as President and Chief Operating Officer of Stone Materials Company, LLC, one of our subsidiaries. In that capacity Mr. Reeves will be responsible for all of the operations of our aggregates business segment. At the time of his employment, Mr. Reeves received 25,000 shares of Class A Common Stock (4.5% of the class as of April 30, 2000) and 25,000 shares of Class C Common Stock (5.8% of the class as of April 30, 2000) in our ultimate parent company, USS Holdings, Inc. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit No. - ---------- 10.1 Employment Agreement between Better Materials Corporation and Craig Cinalli dated December 14, 1998. 10.2 Employment Agreement between Better Materials Corporation and Brian Hessenthaler dated December 14, 1998. 27 Financial Data Schedule (b) Reports on Form 8-K None. II-1 Pursuant to the requirements 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. May 25, 2000 Better Minerals & Aggregates Company By: /s/ Gary E. Bockrath ------------------------------- Name: Gary E. Bockrath Title: Vice President and Chief Financial Officer II-2 EXHIBIT INDEX Exhibit No. - ----------- 10.1 Employment Agreement between Better Materials Corporation and Craig Cinalli dated December 14, 1998. 10.2 Employment Agreement between Better Materials Corporation and Brian Hessenthaler dated December 14, 1998. 27 Financial Data Schedule II-3 EX-10.1 2 EMPLOYMENT AGREEMENT Exhibit 10.1 Execution Copy -------------- EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (hereinafter "this Agreement") is made this 14th day of December, 1998, between Better Materials Corporation, a Pennsylvania corporation, (hereinafter "the Company") and Craig Cinalli (hereinafter "the Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Company is an indirect wholly owned subsidiary of USS Holdings, Inc. ("USSH"); WHEREAS, the Company desires to employ the Executive; WHEREAS, during the course of the Executive's employment, the Executive may be required to perform certain duties on behalf of a company controlling, controlled by or under common control with the Company (such companies hereinafter collectively called "Affiliates") and to accept such offices in any Affiliates as the Company may require; and WHEREAS, the Executive desires to be so employed by the Company, on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements herein set forth, the Company and the Executive hereby agree as follows: 1. Employment. The Company hereby agrees to employ the Executive, ---------- and the Executive hereby agrees to serve as a senior executive of the Company. The Executive agrees to perform such services customary to such office as shall from time to time be assigned to him by the Company's Board of Directors or the President of USSH. The Executive further agrees to use his best efforts to promote the interests of the Company and to devote his full business time and energies to the business and affairs of the Company. The Executive may be required in pursuance of his duties hereunder to perform services for an Affiliate and to accept such offices in any Affiliates as the Company may require. The Executive shall not be required to have his primary place of employment more than 25 miles from his current place of employment. 2. Term of Employment. The employment hereunder shall be for a term ------------------ of two years commencing on the Closing Date (as such term is defined in the Agreement and Plan of Merger among the Company, BMC Acquisition Company and U.S. Silica Company dated October 30, 1998) and ending on the second anniversary thereof (the "Expiration Date"), unless terminated earlier pursuant to Paragraph 4 of this Agreement (the "Term of Employment"). 3. Compensation and Other Related Matters. -------------------------------------- (a) Salary. As compensation for services rendered hereunder, ------ the Executive shall receive a minimum Annual Salary of One Hundred Seventy Five Thousand dollars ($175,000), which salary shall be paid in accordance with the Company's then prevailing payroll practices. (b) Signing Bonus. As an inducement to the Executive to enter ------------- into this Agreement, as of the effectiveness hereof the Executive shall receive One Hundred Sixty Five Thousand dollars ($165,000). (c) Bonus. During the term of this Agreement, and in the ----- Company's sole discretion, the Executive shall be eligible to receive an annual bonus which is approved by the Board of Directors of USSH to be calculated in accordance with USSH'a bonus program for its senior executives as it is developed from time to time with performance targets to be established from year to year. (d) Other Benefits. The fringe benefits, perquisites and other -------------- benefits of employment to be provided to the Executive shall be equivalent to such benefits and 2 perquisites as are provided to other senior executives of USSH as amended from time to time. The Company acknowledges and agrees that the Executive shall be entitled to keep the automobile currently being used by the Executive, and the Executive shall be entitled to live at the residence at Chippewa Farms owned by the Company rent free during the term of this Agreement. (e) Restricted Stock. The Company shall, in its sole discretion, ---------------- make available for purchase by the Executive shares of common stock of USSH on substantially the same terms as such stock is made available to other senior executives of USSH. In addition, in the Company's sole discretion, the Company shall grant the Executive restricted shares of stock in USSH. 4. Termination. ----------- (a) Disability. If, as a result of the incapacity of the ---------- Executive due to physical or mental illness, the Executive is unable to perform substantially and continuously the duties assigned to him hereunder, with or without a reasonable accommodation, for a period of three (3) consecutive months or for a non-consecutive period of nine (9) months during the Term of Employment, the Company may terminate his employment for "Disability" upon thirty (30) days prior written notice to the Executive. (b) Death. The Executive's employment shall terminate ----- immediately upon the death of the Executive. (c) Cause. The Company shall be entitled to terminate the ----- Executive's employment for "Cause." Termination by the Company of the employment of the Executive for "Cause" shall mean termination based upon (i) the willful failure by the Executive to follow directions communicated to him by the Company's Board of Directors or the President of USSH provided that such directions are in writing and are neither illegal, immoral or unethical; (ii) a 3 conviction of, a plea of nolo contendere regarding, a guilty plea or confession by the Executive to an act of fraud, misappropriation or embezzlement or to a felony; (iii) the Executive's habitual drunkenness or use of illegal substances; (iv) a material breach by the Executive of this Agreement with respect to the misuse or unauthorized disclosure of Confidential Information (as defined below); or (v) an act of gross neglect or gross misconduct which the Company deems to be good and sufficient cause. With respect to clauses (i) and (v) above, the Executive shall be entitled to receive written notice allowing the Executive 30 days to cure any conduct referred to in said clauses that is reasonably likely to be able to be cured. (d) Termination Without Cause by the Company. The Company may ---------------------------------------- terminate the Executive's employment under this Agreement at any time for any reason other than "Cause" upon thirty (30) days prior written notice to the Executive. 5. Compensation Upon Termination or During Disability. -------------------------------------------------- (a) Disability. During any period that the Executive fails to ---------- perform his full-time duties with the Company as a result of incapacity due to physical or mental illness (the "Disability Period"), the Executive shall continue to receive his Annual Base Salary at the rate set forth in Paragraph 3(a) of this Agreement, less any compensation payable to the Executive under the applicable disability insurance plan of the Company during such period, until this Agreement is terminated pursuant to Paragraph 4(a) hereof. Thereafter, or in the event the Executive's employment shall be terminated by reason of his death, the Executive's benefits shall be determined under the Company's insurance and other compensation programs then in effect in accordance with the terms of such programs and the Company shall have no further obligation to the Executive under this Agreement or otherwise. (b) Death. In the event of the Executive's death, the ----- Executive's beneficiary shall be entitled to receive the Executive's Annual Salary at the rate set forth in 4 Paragraph 3(a) of this Agreement until the date of his death. Thereafter, the Company shall have no further obligation to the Executive or the Executive's beneficiary under this Agreement or otherwise. (c) Cause. If the Executive's employment shall be terminated ----- by the Company for "Cause" as defined in Paragraph 4(c) of this Agreement, the Company shall continue to pay the Executive his Annual Base Salary at the rate set forth in Paragraph 3(a) of this Agreement through the date of termination of the Executive's employment. Thereafter, the Company shall have no further obligation to the Executive under this Agreement or otherwise. (d) Termination Without Cause by the Company. If (i) the Company ---------------------------------------- voluntarily terminates the Executive's employment with the Company pursuant to Paragraph 4(d) of this Agreement or (ii) the Executive and the Company fail to enter into a new agreement with respect to the employment of the Executive within ninety days after the Expiration Date and the Executive's employment with the Company is terminated either by the Company or by the Executive, the Company shall pay the Executive an amount equal to two (2) years of his Annual Salary at the rate in effect at the date of termination of the Executive's employment in same manner and at the same times as are in accordance with the practice with respect to payment of the Executive's compensation as of such date of termination; provided that, the Company may elect to pay any unpaid portion of ------------- such two (2) years Annual Salary at any time. Thereafter, the Executive acknowledges that the Company shall have no further obligation to the Executive under this Agreement or otherwise. There shall be no duty on the part of the Executive to mitigate damages, nor is the Company or any affiliate of the Company entitled to a right of set-off. 6. Confidentiality and Restrictive Covenants. ----------------------------------------- (a) The Executive acknowledges that: 5 (i) the business in which the Company is engaged is intensely competitive and that his employment by the Company will require that he have access to and knowledge of confidential information of the Company, including, but not limited to, certain/all of the Company's plans for creation, acquisition or disposition of products or publications, expansion plans, financial status and plans, products, improvements, formulas, designs or styles, method of distribution, customer lists, product development plans, rules and regulations, personnel information and trade secrets of the Company, all of which are of vital importance to the success of the Company's business (collectively, "Confidential Information"); (ii) the direct or indirect disclosure of any Confidential Information to existing or potential competitors of the Company would place the Company at a serious competitive disadvantage and would do serious damage, financial and otherwise, to the Company's business; (iii) by his training, experience and expertise, the Executive's services to the Company will be special and unique; and (iv) if the Executive leaves the Company's employ to work for a competitive business, in any capacity, it would cause the Company irreparable harm. (v) references to Company in this paragraph 6 shall include the Company and the Affiliates. (b) Covenant Against Disclosure. The Executive therefore --------------------------- covenants and agrees that all Confidential Information relating to the business products and services of the Company, any Affiliate or customer shall be and remain the sole property and confidential business information of the Company, free of any rights of the Executive. The Executive further agrees not to make any use of the confidential information except in the performance of his duties hereunder and not to disclose the information to third parties, without the prior written 6 consent of the Company. The obligations of the Executive under this Paragraph 6 shall survive any termination of this Agreement. The Executive agrees that, upon any termination of his employment with the Company, all Confidential Information in his possession, directly or indirectly, that is in written or other tangible form (together with all duplicates thereof) will forthwith be returned to the Company and will not be retained by the Executive or furnished to any third party, either by sample, facsimile, film, audio or video cassette, electronic data, verbal communication or any other means of communication. (c) Non-competition. The Executive agrees that, during the --------------- Term of Employment and for a period of three (3) years following the date of termination of the Executive's employment with the Company for any reason (including by reason of the failure of the Company and the Executive to enter into a new agreement with respect to the employment of the Executive within ninety days of the Expiration Date), the Executive will not, directly or indirectly, own, manage, operate, control or participate in the ownership, management or control of, or be connected as an officer, employee, partner, director, or otherwise with, or have any financial interest in, or aid or assist anyone else in the conduct of, any entity or business which competes with any business conducted by the Company or any of its subsidiaries or affiliates, in any area where such business is being conducted on the date the Executive's employment is terminated hereunder and as to which the Executive has material responsibilities. (d) Further Covenant. Until the date which is three (3) years ---------------- after the date of the termination of the Executive's employment hereunder for any reason, the Executive will not, directly or indirectly, take any of the following actions, and, to the extent the Executive owns, manages, operates, controls, is employed by or participates in the ownership, management, operation or control of, or is connected in any manner with, any business of the type and character engaged in and competitive with that conducted by the Company or any of the 7 Affiliates during the period of the Executive's employment, the Executive will use his best efforts to ensure that such business does not take any of the following actions: (i) persuade or attempt to persuade any client of the Company to cease doing business with the Company or any Affiliate, or to reduce the amount of business it does with the Company or any Affiliate; (ii) solicit for himself or any entity the business of a client of the Company or any Affiliate, or solicit any business which was a client of the Company or any Affiliate within six months prior to the termination of the Executive's employment; (iii) persuade or attempt to persuade any employee of the Company or any Affiliate or any individual who was its employee of the Company or any Affiliate during the two (2) years prior to the Executive's termination of employment, to leave the employ of the Company or any of its subsidiaries or affiliates. 7. Breach by Employee. Both parties recognize that the services to ------------------ be rendered under this Agreement by the Executive are special, unique and extraordinary in character, and that in the event of a breach by Employee of the terms and conditions of the Agreement to be performed by him, then the Company shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to obtain damages for any breach of this Agreement, or to enforce the specific performance thereof by the Executive. Without limiting the generality of the foregoing, the parties acknowledge that a breach by the Executive of his obligations under Paragraph 6 would cause the Company irreparable harm, that no adequate remedy at law would be available in respect thereof and that therefore the Company would be entitled to injunctive relief with respect thereto. 8. Miscellaneous. ------------- 8 (a) Successors; Binding Agreement. This Agreement and the ----------------------------- obligations of the Company hereunder and all rights of the Executive hereunder shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns, provided, however, that the duties of the Executive hereunder are personal to the Executive and may not be delegated or assigned by him. (b) Notice. All notices of termination and other communications ------ provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or mailed by United States registered mail, return receipt requested, addressed as follows: If to the Company to: Better Materials Corporation c/o U.S. Silica Company Route 522 P.O. Box 187 Berkeley Springs, WV Telephone: 304-258-2500 Telecopy: 304-258-3500 Attention: President and to: D. George Harris & Associates, Inc. 399 Park Avenue, 32nd Floor New York, New York 10022 Telephone: 212-750-3510 Telecopy: 212-207-6470 Attention: Donald G. Kilpatrick, Esq. 9 If to the Executive to: Craig S. Cinalli Better Materials Corporation P.O. Box 196 Penns Park, PA 18943 Telephone: 215-598-8360 Telecopy: 215-598-8368 and to: Steven Gershman, Esq. 528 Fayette Street Conshohocken, PN 19428 Telephone: 610-941-4055 Telecopy: 610-941-0959 or to such other address as either party may designate by notice to the other, which notice shall be deemed to have been given upon receipt. (c) Governing Law. This Agreement shall be governed by and ------------- construed in accordance with the laws of the State of Pennsylvania without regard to the conflict of law rules thereof. (d) Waivers. The waiver of either party hereto of any right ------- hereunder or of any failure to perform or breach by the other party hereto shall not be deemed a waiver of any other right hereunder or of any other failure or breach by the other party hereto, whether of the same or a similar nature or otherwise. No waiver shall be deemed to have occurred unless set forth in writing executed by or on behalf of the waiving party. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. 10 (e) Validity. The invalidity or enforceability of any provision -------- of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall otherwise remain in full force and effect. Moreover, if any one or more of the provisions contained in this Agreement is held to be excessively broad as to duration, scope or activity, such provisions shall be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law. (f) Counterparts. This Agreement may be executed in several ------------ counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. (g) Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties in respect of the subject matter contained herein, and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of either party in respect of said subject matter. (h) Headings Descriptive. The headings of the several -------------------- paragraphs of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any of this Agreement. (i) Capacity. The Executive represents and warrants that he is -------- not a party to any agreement that would prohibit him from entering into this Agreement or performing fully his obligations hereunder. 11 IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date first written above. CRAIG CINALLI BETTER MATERIALS CORPORATION _______________________________ By:__________________________ Name: Title: 12 EX-10.2 3 EMPLOYMENT AGREEMENT EXHIBIT 10.2 Execution Copy -------------- EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (hereinafter "this Agreement") is made this 14th day of December, 1998, between Better Materials Corporation, a Pennsylvania corporation, (hereinafter "the Company") and Brian Hessenthaler (hereinafter "the Executive"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Company is an indirect wholly-owned subsidiary of USS Holdings, Inc. ("USSH"); WHEREAS, the Company desires to employ the Executive; WHEREAS, during the course of the Executive's employment, the Executive may be required to perform certain duties on behalf of a company controlling, controlled by or under common control with the Company (such companies hereinafter collectively called "Affiliates") and to accept such offices in any Affiliates as the Company may require; and WHEREAS, the Executive desires to be so employed by the Company, on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements herein set forth, the Company and the Executive hereby agree as follows: 1. Employment. The Company hereby agrees to employ the Executive, ---------- and the Executive hereby agrees to serve as a senior executive of the Company. The Executive agrees to perform such services customary to such office as shall from time to time be assigned to him by the President of the Company or the Chief Financial Officer of USSH. The Executive further agrees to use his best efforts to promote the interests of the Company and to devote his full business time and energies to the business and affairs of the Company. The Executive may be required in pursuance of his duties hereunder to perform services for an Affiliate and to accept such offices in any Affiliates as the Company may require. The Executive shall not be required to have his primary place of employment more than 25 miles from his current place of employment. 2. Term of Employment. The employment hereunder shall be for a term ------------------ of two years commencing on the Closing Date (as such term is defined in the Agreement and Plan of Merger among the Company, BMC Acquisition Company and U.S. Silica Company dated October 30, 1998) and ending on the second anniversary thereof (the "Expiration Date"), unless terminated earlier pursuant to Paragraph 4 of this Agreement (the "Term of Employment"). 3. Compensation and Other Related Matters. -------------------------------------- (a) Salary. As compensation for services rendered hereunder, the ------ Executive shall receive a minimum Annual Salary of One Hundred Seventy Five Thousand dollars ($175,000), which salary shall be paid in accordance with the Company's then prevailing payroll practices. (b) Signing Bonus. As an inducement to the Executive to enter ------------- into this Agreement, as of the effectiveness hereof the Executive shall receive One Hundred Sixty Five Thousand dollars ($165,000). (c) Bonus. During the term of this Agreement, and in the ----- Company's sole discretion, the Executive shall be eligible to receive an annual bonus which is approved by the Board of Directors of USSH to be calculated in accordance with USSH'a bonus program for its senior executives as it is developed from time to time with performance targets to be established from year to year. (d) Other Benefits. The fringe benefits, perquisites and other -------------- benefits of employment to be provided to the Executive shall be equivalent to such benefits and 2 perquisites as are provided to other senior executives of USSH as amended from time to time. The Company acknowledges and agrees that the Executive shall be entitled to keep the automobile currently being used by the Executive. (e) Restricted Stock. The Company shall, in its sole discretion, ---------------- make available for purchase by the Executive shares of common stock of USSH on substantially the same terms as such stock is made available to other senior executives of USSH. In addition, in the Company's sole discretion, the Company shall grant the Executive restricted shares of stock in USSH. 4. Termination. ----------- (a) Disability. If, as a result of the incapacity of the ---------- Executive due to physical or mental illness, the Executive is unable to perform substantially and continuously the duties assigned to him hereunder, with or without a reasonable accommodation, for a period of three (3) consecutive months or for a non-consecutive period of nine (9) months during the Term of Employment, the Company may terminate his employment for "Disability" upon thirty (30) days prior written notice to the Executive. (b) Death. The Executive's employment shall terminate ----- immediately upon the death of the Executive. (c) Cause. The Company shall be entitled to terminate the ----- Executive's employment for "Cause." Termination by the Company of the employment of the Executive for "Cause" shall mean termination based upon (i) the willful failure by the Executive to follow directions communicated to him by the President of the Company or the Chief Financial Officer of USSH provided that such directions are in writing and are neither illegal, immoral or unethical; (ii) a conviction of, a plea of nolo contendere regarding, a guilty plea or confession by the Executive to an act of fraud, misappropriation or embezzlement or to a felony; (iii) the 3 Executive's habitual drunkenness or use of illegal substances; (iv) a material breach by the Executive of this Agreement with respect to the misuse or unauthorized disclosure of Confidential Information (as defined below); or (v) an act of gross neglect or gross misconduct which the Company deems to be good and sufficient cause. With respect to clauses (i) and (v) above, the Executive shall be entitled to receive written notice allowing the Executive 30 days to cure any conduct referred to in said clauses that is reasonably likely to be able to be cured. (d) Termination Without Cause by the Company. The Company may ---------------------------------------- terminate the Executive's employment under this Agreement at any time for any reason other than "Cause" upon thirty (30) days prior written notice to the Executive. 5. Compensation Upon Termination or During Disability. -------------------------------------------------- (a) Disability. During any period that the Executive fails to ---------- perform his full-time duties with the Company as a result of incapacity due to physical or mental illness (the "Disability Period"), the Executive shall continue to receive his Annual Base Salary at the rate set forth in Paragraph 3(a) of this Agreement, less any compensation payable to the Executive under the applicable disability insurance plan of the Company during such period, until this Agreement is terminated pursuant to Paragraph 4(a) hereof. Thereafter, or in the event the Executive's employment shall be terminated by reason of his death, the Executive's benefits shall be determined under the Company's insurance and other compensation programs then in effect in accordance with the terms of such programs and the Company shall have no further obligation to the Executive under this Agreement or otherwise. (b) Death. In the event of the Executive's death, the ----- Executive's beneficiary shall be entitled to receive the Executive's Annual Salary at the rate set forth in Paragraph 3(a) of this Agreement until the date of his death. Thereafter, the Company shall have 4 no further obligation to the Executive or the Executive's beneficiary under this Agreement or otherwise. (c) Cause. If the Executive's employment shall be terminated by ----- the Company for "Cause" as defined in Paragraph 4(c) of this Agreement, the Company shall continue to pay the Executive his Annual Base Salary at the rate set forth in Paragraph 3(a) of this Agreement through the date of termination of the Executive's employment. Thereafter, the Company shall have no further obligation to the Executive under this Agreement or otherwise. (d) Termination Without Cause by the Company; Expiration of ------------------------------------------------------- Agreement. If (i) the Company voluntarily terminates the Executive's employment - --------- with the Company pursuant to Paragraph 4(d) of this Agreement or (ii) the Executive and the Company fail to enter into a new agreement with respect to the employment of the Executive within ninety days after the Expiration Date and the Executive's employment with the Company is terminated either by the Company or by the Executive, then the Company shall pay the Executive an amount equal to two (2) years of his Annual Salary at the rate in effect at the date of termination of the Executive's employment in same manner and at the same times as are in accordance with the practice with respect to payment of the Executive's compensation as of such date of termination; provided that, the ------------- Company may elect to pay any unpaid portion of such two (2) years Annual Salary at any time. Thereafter, the Executive acknowledges that the Company shall have no further obligation to the Executive under this Agreement or otherwise. There shall be no duty on the part of the Executive to mitigate damages, nor is the Company or any affiliate of the Company entitled to a right of set-off. 6. Confidentiality and Restrictive Covenants. ----------------------------------------- (a) The Executive acknowledges that: 5 (i) the business in which the Company is engaged is intensely competitive and that his employment by the Company will require that he have access to and knowledge of confidential information of the Company, including, but not limited to, certain/all of the Company's plans for creation, acquisition or disposition of products or publications, expansion plans, financial status and plans, products, improvements, formulas, designs or styles, method of distribution, customer lists, product development plans, rules and regulations, personnel information and trade secrets of the Company, all of which are of vital importance to the success of the Company's business (collectively, "Confidential Information"); (ii) the direct or indirect disclosure of any Confidential Information to existing or potential competitors of the Company would place the Company at a serious competitive disadvantage and would do serious damage, financial and otherwise, to the Company's business; (iii) by his training, experience and expertise, the Executive's services to the Company will be special and unique; and (iv) if the Executive leaves the Company's employ to work for a competitive business, in any capacity, it would cause the Company irreparable harm. (v) references to Company in this paragraph 6 shall include the Company and the Affiliates. (b) Covenant Against Disclosure. The Executive therefore --------------------------- covenants and agrees that all Confidential Information relating to the business products and services of the Company, any Affiliate or customer shall be and remain the sole property and confidential business information of the Company, free of any rights of the Executive. The Executive further agrees not to make any use of the confidential information except in the performance of his duties hereunder and not to disclose the information to third parties, without the prior written 6 consent of the Company. The obligations of the Executive under this Paragraph 6 shall survive any termination of this Agreement. The Executive agrees that, upon any termination of his employment with the Company, all Confidential Information in his possession, directly or indirectly, that is in written or other tangible form (together with all duplicates thereof) will forthwith be returned to the Company and will not be retained by the Executive or furnished to any third party, either by sample, facsimile, film, audio or video cassette, electronic data, verbal communication or any other means of communication. (c) Non-competition. The Executive agrees that, during the Term --------------- of Employment and for a period of three (3) years following the date of termination of the Executive's employment with the Company for any reason (including by reason of the failure of the Company and the Executive to enter into a new agreement with respect to the employment of the Executive within ninety days of the Expiration Date), the Executive will not, directly or indirectly, own, manage, operate, control or participate in the ownership, management or control of, or be connected as an officer, employee, partner, director, or otherwise with, or have any financial interest in, or aid or assist anyone else in the conduct of, any entity or business which competes with any business conducted by the Company or any of its subsidiaries or affiliates, in any area where such business is being conducted on the date the Executive's employment is terminated hereunder and as to which the Executive has material responsibilities. (d) Further Covenant. Until the date which is three (3) years ---------------- after the date of the termination of the Executive's employment hereunder for any reason, the Executive will not, directly or indirectly, take any of the following actions, and, to the extent the Executive owns, manages, operates, controls, is employed by or participates in the ownership, management, operation or control of, or is connected in any manner with, any business of the type and character engaged in and competitive with that conducted by the Company or any of the 7 Affiliates during the period of the Executive's employment, the Executive will use his best efforts to ensure that such business does not take any of the following actions: (i) persuade or attempt to persuade any client of the Company to cease doing business with the Company or any Affiliate, or to reduce the amount of business it does with the Company or any Affiliate; (ii) solicit for himself or any entity the business of a client of the Company or any Affiliate, or solicit any business which was a client of the Company or any Affiliate within six months prior to the termination of the Executive's employment; (iii) persuade or attempt to persuade any employee of the Company or any Affiliate or any individual who was its employee of the Company or any Affiliate during the two (2) years prior to the Executive's termination of employment, to leave the employ of the Company or any of its subsidiaries or affiliates. 7. Breach by Employee. Both parties recognize that the services to ------------------ be rendered under this Agreement by the Executive are special, unique and extraordinary in character, and that in the event of a breach by Employee of the terms and conditions of the Agreement to be performed by him, then the Company shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, either in law or in equity, to obtain damages for any breach of this Agreement, or to enforce the specific performance thereof by the Executive. Without limiting the generality of the foregoing, the parties acknowledge that a breach by the Executive of his obligations under Paragraph 6 would cause the Company irreparable harm, that no adequate remedy at law would be available in respect thereof and that therefore the Company would be entitled to injunctive relief with respect thereto. 8. Miscellaneous. ------------- 8 (a) Successors; Binding Agreement. This Agreement and the ----------------------------- obligations of the Company hereunder and all rights of the Executive hereunder shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns, provided, however, that the duties of the Executive hereunder are personal to the Executive and may not be delegated or assigned by him. (b) Notice. All notices of termination and other communications ------ provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or mailed by United States registered mail, return receipt requested, addressed as follows: If to the Company to: Better Materials Corporation c/o U.S. Silica Company Route 522 P.O. Box 187 Berkeley Springs, WV Telephone: 304-258-2500 Telecopy: 304-258-3500 Attention: President and to: D. George Harris & Associates, Inc. 399 Park Avenue, 32nd Floor New York, New York 10022 Telephone: 212-750-3510 Telecopy: 212-207-6470 Attention: Donald G. Kilpatrick, Esq. 9 If to the Executive to: Brian Hessenthaler Better Materials Corporation P.O. Box 196 Penns Park, PA 18943 Telephone: 215-598-8361 Telecopy: 215-598-8368 and to: Steven Gershman, Esq. 528 Fayette Street Conshohocken, PN 19428 Telephone: 610-941-4055 Telecopy: 610-941-0959 or to such other address as either party may designate by notice to the other, which notice shall be deemed to have been given upon receipt. (c) Governing Law. This Agreement shall be governed by and ------------- construed in accordance with the laws of the State of Pennsylvania without regard to the conflict of law rules thereof. (d) Waivers. The waiver of either party hereto of any right ------- hereunder or of any failure to perform or breach by the other party hereto shall not be deemed a waiver of any other right hereunder or of any other failure or breach by the other party hereto, whether of the same or a similar nature or otherwise. No waiver shall be deemed to have occurred unless set forth in writing executed by or on behalf of the waiving party. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. 10 (e) Validity. The invalidity or enforceability of any provision -------- of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall otherwise remain in full force and effect. Moreover, if any one or more of the provisions contained in this Agreement is held to be excessively broad as to duration, scope or activity, such provisions shall be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law. (f) Counterparts. This Agreement may be executed in several ------------ counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. (g) Entire Agreement. This Agreement sets forth the entire ---------------- agreement and understanding of the parties in respect of the subject matter contained herein, and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of either party in respect of said subject matter. (h) Headings Descriptive. The headings of the several paragraphs -------------------- of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any of this Agreement. (i) Capacity. The Executive represents and warrants that he is -------- not a party to any agreement that would prohibit him from entering into this Agreement or performing fully his obligations hereunder. 11 IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date first written above. BRIAN HESSENTHALER BETTER MATERIALS CORPORATION _______________________________ By:__________________________ Name: Title: 12 EX-27 4 FINANCIAL DATA SCHEDULE
5 BETTER MINERALS & AGGREGATES CO 0001108673 3-MOS 3-MOS DEC-31-1999 DEC-31-2000 JAN-01-1999 JAN-01-2000 MAR-31-1999 MAR-31-2000 0 752 0 0 0 39,918 0 (1,236) 0 23,348 0 74,756 0 485,277 0 (65,738) 0 529,473 0 42,366 0 281,772 0 0 0 0 0 0 0 55,258 0 529,473 39,623 49,831 39,623 49,831 28,265 37,872 38,546 52,384 (327) (507) 0 0 2,958 8,860 (1,568) (10,906) (235) (1,799) (1,333) (9,107) 0 0 0 0 0 0 (1,333) (9,107) 0 0 0 0
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