multiplied by the number of directors to be elected, and he or she may cast
all of such votes for a single candidate, or any two or more of them as he
or she may see fit."
PROPONENT'S STATEMENT IN SUPPORT OF PROPOSAL
Messrs. Glotzer and Gilbert have made the following statement in support of this
"REASONS: A law enacted in California provides that all state pension
holding, as well as state college funds, invested in shares must be voted in
favor of cumulative voting proposals, showing increasing recognition of the
importance of this democratic means of electing directors.
"Also, the National Bank Act has provided for cumulative voting.
Unfortunately, in so many cases companies get around it by forming holding
companies without cumulative voting. Thus, with so many banking failures the
result is that tax payers have to make up the losses. Banking authorities
have the right to question the capability of directors to be on banking
boards. Unfortunately, in so many cases authorities come in after and say
the director or directors were not qualified. So there is no reason why this
could not be done for corporations under the SEC and banking authorities.
"It has increasingly been recognized that fair and equitable distribution of
voting power is best secured when all the stockholders have the right of
cumulative voting. This is the purpose of cumulative voting, in our opinion,
it protects everyone.
"Because of the normal need to find new directors and the need for directors
on the compensation committee, we think cumulative voting is the answer. In
addition, some recommendations have been made to carry out the Valdez 10
points. In our opinion, the 11th should be to have cumulative voting and to
end the stagger system of electing directors.
"Alaska took away cumulative voting, over our objections, when it became a
state. Perhaps, if the citizens had insisted on proper representation the
disastrous Valdez oil spill might have been prevented if environmental
directors were elected through cumulative voting.
"Many successful corporations have cumulative voting. For example, Pennzoil
having cumulative voting defeated Texaco in that famous case. Another
example, in spite of still having a stagger system of electing directors,
Ingersoll-Rand, which has cumulative voting, won two awards. In FORTUNE
magazine it was ranked second as 'America's Most Admired Corporations' and
the WALL STREET TRANSCRIPT noted 'on almost any criteria used to evaluate
management, Ingersoll-Rand excels.' We believe Zapata should follow this
"If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain."
COMMENT BY MANAGEMENT
The Board of Directors believes that directors should be chosen for their
capacity and willingness to represent all stockholders, and that the present
system of voting for directors provides the best assurance that the decisions of
the directors will be made in the best interest of all the stockholders, rather
than for the benefit of special interest groups.