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                               ZAPATA CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
a weighted average price of $46.97 per share were outstanding for the year
ending December 31, 2001, but were not included in the computation of diluted
EPS since the exercise price of the options was greater than the average market
price of the common shares for the period. Options to purchase 122,351 and
123,417 common shares at a weighted average price of 46.72 and 47.05 were
outstanding for the year ended December 31, 2000 and 1999, respectively, and
were not included in the diluted EPS calculation as the effect would be
antidilutive due to the net loss.
 
NOTE 12.  PREFERRED, PREFERENCE AND COMMON STOCK
 
  PREFERRED STOCK
 
     At December 31, 2001 and 2000, Zapata had authorized 200,000 shares of
preferred stock issuable in one or more series.
 
  PREFERENCE STOCK
 
     The Company has authorized 1,800,000 shares of preference stock issuable in
one or more series.
 
  COMMON STOCK
 
     At December 31, 2001 and 2000, Zapata had authorized 16,500,000 shares of
common stock, of which 3,069,859 and 3,066,718 shares were issued and 2,390,849
and 2,388,708 shares were outstanding, respectively.
 
     On January 30, 2001, the Company effected a one-for-ten reverse split of
its outstanding shares of common stock resulting in there then being
approximately 2.4 million common shares outstanding. In addition, the Company's
authorized shares were reduced to approximately 16.5 million common shares,
200,000 preferred shares and 1.8 million preference shares. The preferred stock
and preference shares are undesignated "blank check" shares. All share and per
share amounts have been retroactively restated for the reverse split.
 
     On April 13, 1999, the Company's stockholders approved the re-incorporation
of the Company as a Nevada corporation and a related Agreement and Plan of
Merger. On April 30, 1999, the Company effected the merger by merging into a
wholly-owned Nevada subsidiary. In connection with the re-incorporation, the par
value of the Company's common stock was changed from $.25 per share to $.01 per
share. The change in the par value was effectuated by a reclassification between
the common stock, at par value and capital in excess of par, respectively, on
the balance sheet.
 
     On July 6, 1998, Zapata's Board of Directors approved a stock repurchase
program whereby Zapata may repurchase up to 500,000 additional shares of its own
outstanding common stock from time to time. No time limit has been placed on the
duration of the program and no minimum number or value of shares to be
repurchased has been fixed. Subject to applicable securities laws, shares may be
repurchased from time to time in the open market or private transactions.
Purchases are subject to availability of shares at prices deemed appropriate by
the Zapata's management and other corporate considerations. Repurchased shares
will be held as treasury shares available for general corporate purposes. To
date, Zapata has not made any repurchases under this program. Zapata reserves
the right to discontinue the repurchase program at any time.
 
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