<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
Check the appropriate box:
<Table>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for the Use of the
Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement [ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section
240.14a-11(c) or Section 240.14a-12
</Table>
ZAPATA CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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<PAGE>
[Zapata logo]
April 5, 2002
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
Zapata Corporation, to be held on May 21, 2002, at 10 a.m., EST, at the Adam's
Mark Buffalo, 120 Church St., Buffalo, New York, 14202.
At the meeting, stockholders will be asked to consider matters contained in
the enclosed Notice of Stockholders Meeting, we will report on the progress of
the Company, comment on matters of interest and respond to your questions. A
copy of the Company's Annual Report to Stockholders for the fiscal year ended
December 31, 2001 containing our consolidated financial statements preceded or
accompanies this mailing.
Registered stockholders can vote their shares by using a toll-free
telephone number. Instructions for using this convenient service are provided on
the proxy card. You may still vote your shares by marking your votes on the
proxy/instruction card. You may also vote your shares in person if you attend
the Annual Meeting thereby canceling any proxy previously given.
We appreciate your continued interest in Zapata.
Sincerely,
/s/ Avram A. Glazer
AVRAM A. GLAZER
Chairman of the Board,
President and Chief Executive Officer
<PAGE>
ZAPATA CORPORATION
100 MERIDIAN CENTRE, SUITE 350
ROCHESTER, NEW YORK 14618
(585) 242-2000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 21, 2002
To the Stockholders of Zapata Corporation:
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of Zapata Corporation, a Nevada corporation ("Zapata" or the
"Company"), will be held at the Adam's Mark Buffalo, 120 Church St., Buffalo,
New York, 14202, on May 21, 2002, at 10:00 a.m., EST, for the following
purposes:
1. To elect two Class I directors;
2. To consider and vote on a proposal to grant stock options to
non-employee directors as described in the accompanying Proxy Statement;
3. To ratify the appointment of PricewaterhouseCoopers, LLP as the
Company's independent public accountants;
4. If presented at the Annual Meeting, to consider and vote on the
stockholder proposal as described in the accompanying Proxy Statement;
5. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
A copy of the Annual Report of the Company's operations during the fiscal
year ended December 31, 2001 was previously forwarded or accompanies this Proxy
Statement. A Proxy Statement and proxy/voting instruction card ("Proxy Card")
accompany this Notice. The enclosed Proxy Statement contains information
regarding the matters to be acted upon at the Annual Meeting.
The Board of Directors has set the close of business on March 28, 2002 as
the record date for the Annual Meeting. Only stockholders of record at the close
of business on the record date are entitled to notice of, and to vote at the
Annual Meeting and any adjournments thereof. The stock transfer books of the
Company will not be closed following the record date. A list of such
stockholders will be available at the place of the Annual Meeting for inspection
at least ten (10) days prior to the Annual Meeting.
Stockholders are cordially invited and encouraged to attend the Annual
Meeting in person. In the event that stockholders cannot attend the Annual
Meeting, registered stockholders can vote their shares by using a toll-free
telephone number. Instructions for using this convenient service are provided on
the Proxy Card.
By Order of the Board of Directors,
/s/ Avram A. Glazer
AVRAM A. GLAZER
Chairman of the Board,
President and Chief Executive Officer
Rochester, New York
A
pril 5, 2002
<PAGE>
ZAPATA CORPORATION
100 MERIDIAN CENTRE, SUITE 350
ROCHESTER, NEW YORK 14618
(585) 242-2000
PROXY STATEMENT
GENERAL
This Proxy Statement, the accompanying Notice of Annual Meeting of
Stockholders and Proxy/Voting Instructions Card (the "Proxy Card") are being
furnished to the stockholders of Zapata Corporation ("Zapata" or the "Company")
by the Board of Directors in connection with the solicitation of proxies for use
at the Annual Meeting of Stockholders to be held on May 21, 2002, at 10 a.m.,
EST, at the Adam's Mark Buffalo, 120 Church St., Buffalo, New York, 14202 and at
any adjournments thereof (the "Annual Meeting").
It is contemplated that this Proxy Statement and the accompanying form of
Proxy Card will first be mailed to Zapata stockholders on or about April 12,
2002. The principal executive offices of the Company are located at 100 Meridian
Centre, Suite 350, Rochester, New York 14618; telephone (585) 242-2000.
As an alternative to voting by proxy or in person, registered stockholders
can simplify their voting and save the Company expense by calling 1-800-PROXIES
(or 1-800-776-9437). Telephone voting information is provided on the Proxy Card.
A Control Number, located above the stockholder's name and address on the lower
left of the Proxy Card, is designed to verify stockholders' identity and allow
them to vote their shares and confirm that their voting instructions have been
properly recorded.
If your shares are held in the name of a bank or broker, follow the voting
instructions on the form you receive. The availability of telephone voting will
depend on the voting processes of the bank or broker that holds your shares.
If you do not choose to vote by telephone, you may still return your Proxy
Card, properly signed, and the shares represented will be voted in accordance
with your directions. You can specify your choices by marking the appropriate
boxes on the Proxy Card. If your Proxy Card is signed and returned without
specifying choices, the shares will be voted as recommended by the Board of
Directors. If you do vote by telephone, it is not necessary to return your Proxy
Card.
The Company effected a one-for-ten reverse split of its outstanding shares
of common stock, par value $.01 per share (the "Common Stock"), on January 30,
2001 at 5:00 p.m. Where a number of shares of Common Stock is listed in this
Proxy Statement for a date or period prior to the effective date of the reverse
stock split, that number of shares of Common Stock has been proportionately
adjusted as if the one-for-ten reverse stock split had been in effect on that
prior date or during that prior period.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
At the Annual Meeting, including any adjournment(s) thereof, the
stockholders of Zapata will be asked to consider and vote upon the election of
directors and the other proposals summarized in the attached Notice of Annual
Meeting. The director nominees and each proposal are described in more detail in
this Proxy Statement.
RECORD DATE; OUTSTANDING SHARES; QUORUM
The Board of Directors of the Company has fixed the close of business on
March 28, 2002 (the "Record Date") as the date for the determination of
stockholders who are entitled to vote at the Annual Meeting and at any
adjournment(s) or postponement(s) thereof. As of the Record Date, the Company's
outstanding capital stock consisted of 2,390,849 shares of Common Stock, which
was held by approximately 4,850 holders of
THE DATE OF THIS PROXY STATEMENT IS APRIL 5, 2002
A-1
<PAGE>
record, which are entitled to vote on the matters described herein. Each share
of Common Stock is entitled to one vote in the election of directors and on each
matter submitted for stockholder approval. The Common Stock is the Company's
only outstanding class of stock as of the date of this Proxy Statement.
QUORUM; ABSTENTIONS AND NON-VOTES; VOTE REQUIRED
The presence at the meeting, in person or by proxy, of the holders of a
majority of the Company's outstanding shares of voting stock is necessary to
constitute a quorum for the transaction of business at the Annual Meeting.
Abstentions and broker non-votes (which occur if a broker or other nominee does
not have discretionary authority and has not received voting instructions from
the beneficial owner with respect to the particular item) are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. If there are not sufficient shares represented in person or by
proxy at the meeting to constitute a quorum, the meeting may be adjourned or
postponed in order to permit further solicitations of proxies by the Company.
With respect to the election of two Class I directors, the two nominees
receiving the highest number of affirmative votes will be elected as Class I
directors. The affirmative vote of a majority of the shares of Common Stock
present and represented at the Annual Meeting and entitled to vote on a proposal
will be necessary to approve the proposal to grant stock options to non-employee
directors, to ratify the appointment of PricewaterhouseCoopers, LLP as the
Company's independent public accountants, and to approve the stockholder
proposal if presented. Abstentions and broker non-votes will have no effect on
the outcome of the election of directors, the approval of the options, the
approval of the independent public accountants, or the approval of the
stockholder proposal.
The Malcolm I. Glazer Family Limited Partnership, a Nevada limited
partnership (the "Glazer Partnership"), which, as of the date of this Proxy
Statement, held approximately 47% of the outstanding shares of Common Stock, has
notified the Company that it intends to vote all of its shares at the Annual
Meeting in favor of the election of nominees for directors named herein, for the
proposal to grant stock options to non-employee directors, for the ratification
of the appointment of PricewaterhouseCoopers LLP and against the stockholder
proposal.
VOTING PROXIES
All shares which are entitled to vote and are represented at the Annual
Meeting by properly executed proxies received prior to or at the meeting and not
revoked, will be voted as specified in the proxy. If no instructions have been
given in a proxy and authority to vote has not been withheld, the shares
represented thereby will be voted: for the election of both nominees for
directors named herein; for the proposal to grant stock options to non-employee
directors; for the ratification of the appointment of PricewaterhouseCoopers,
LLP as the Company's independent public accountants; if presented, against the
stockholder proposal; and in the discretion of the persons named in the proxy on
any other business that may properly come before the Annual Meeting.
Proxies may be revoked at any time prior to the exercise thereof by filing
with the Corporate Secretary, at the Company's principal executive offices, a
written revocation or a duly executed proxy bearing a later date or by appearing
at the meeting and voting in person. For a period of at least ten (10) days
prior to the Annual Meeting, a complete list of stockholders entitled to vote at
the meeting will be available at the place of the Annual Meeting so that
stockholders of record may inspect the list only for proper purposes.
EXPENSES OF SOLICITATION
The Company pays the cost of preparing, assembling and mailing this
proxy-soliciting material, and all costs of solicitation, including certain
expenses of brokers and nominees who mail proxy material to their customers or
principals.
A-2
<PAGE>
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Each of the Company's six non-employee directors, two of whom are nominees
for election as Class I directors, have an interest in Proposal 2 -- Approval of
Option Grants to Non-Employee Directors. If this proposal is approved by
stockholders, each non-employee director will receive stock options to purchase
1,000 shares of the Company's common stock at $26.60 per share, and upon the
terms discussed below under Proposal 2.
PROPOSAL 1
ELECTION OF DIRECTORS
Pursuant to the Company's Articles of Incorporation (the "Articles") and
By-Laws, the Board of Directors has fixed the size of the Board at seven (7)
directors. The Articles provide for division of the Board into three classes
(Class I, Class II and Class III) of as nearly equal number of directors as
possible. Thus, Class I and Class III are comprised of two directors each and
Class II is comprised of three directors.
The term of each Class of directors is three years with the term for one
Class expiring each year in rotation. As a result, each year, one Class of
directors is elected. The term of the Class I directors expires at the Annual
Meeting.
Proxies cannot be voted for a greater number of persons than the two
nominees named. If any nominee becomes unavailable for any reason, shares
represented by the proxies designated as such in the enclosed Proxy Card will be
voted for such person or persons, if any, as may be designated by the Board of
Directors. At present, it is not anticipated that any nominee will be unable to
serve. Directors will be elected by a plurality of the votes cast for each
director at the Annual Meeting.
NOMINEES FOR ELECTION AS DIRECTORS
Class I Directors -- Three Year Term Expiring in the Year 2005
Darcie S. Glazer, age 34, was appointed as a director of Zapata effective
March 1, 2002. For more than the past five years, she has been employed by, and
has worked on behalf of, Malcolm I. Glazer and a number of entities owned and
controlled by Malcolm I. Glazer, including First Allied Corporation. Ms. Glazer
serves as the Executive Vice President of First Allied Corporation. Ms. Glazer
served as an investment analyst for Zapata from 1996 to February 2001. She is
the daughter of Malcolm I. Glazer and the sister of Avram A. Glazer, Bryan G.
Glazer, and Edward S. Glazer.
Bryan G. Glazer, age 37, has served as a director since May 1997. For more
than the past five years, he has been employed by, and has worked on behalf of,
Malcolm I. Glazer and a number of entities owned and controlled by Malcolm I.
Glazer, including The Tampa Bay Buccaneers, a National Football League
franchise. Mr. B. Glazer serves as the Executive Vice President of The Tampa Bay
Buccaneers. He also serves as a director of the Tampa Bay Performing Arts
Center. He is the son of Malcolm I. Glazer and the brother of Avram A. Glazer,
Edward S. Glazer and Darcie S. Glazer.
THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES AS CLASS I
DIRECTORS.
INFORMATION REGARDING DIRECTORS WHO ARE NOT NOMINEES FOR ELECTION AT THE ANNUAL
MEETING
Class II Directors -- Three Year Term Expiring in the Year 2003
Avram A. Glazer, age 41, has been a director of Zapata since July 1993. Mr.
Glazer has served as President and Chief Executive Officer of the Company since
March 1995, and has also served as Chairman of the Board effective March 1,
2002. Prior to that time, Mr. Glazer was employed by, and worked on behalf of,
Malcolm I. Glazer and a number of entities owned and controlled by Malcolm I.
Glazer, including First Allied Corporation. Mr. Glazer served as Vice President
of First Allied Corporation from 1985 through 1995. He serves as a director,
president, and chief executive officer of Zap.Com Corporation, a subsidiary of
the
A-3
<PAGE>
Company (which until December 2000 was an internet advertising and e-commerce
network company). He is also Chairman of the Board and a director of Omega
Protein Corporation. Avram A. Glazer is the son of Malcolm I. Glazer and the
brother of Bryan G. Glazer, Edward S. Glazer and Darcie S. Glazer.
Warren H. Gfeller, age 49, has served as a director since May 1997. For
more than the past five years, he has operated Clayton/Hamilton Equities,
L.L.C., Stranger Valley Company, L.L.C. and Tatgc Chemical and Manufacturing,
Inc. Mr. Gfeller also serves as a director and as chairman of the audit
committee of Inergy, LP, and as a director of Gardner Bancshares, Inc. and
Kansas Wildscape Foundation. Mr. Gfeller serves on the Audit and Compensation
Committees of the Company's Board of Directors.
John R. Halldow, age 35, has served as a director since June 11, 2001. Mr.
Halldow is currently employed as the Director of Government Relations for Erdman
Anthony, an engineering firm, in its Rochester, New York office, a position he
has held since January 1999. Prior to that time, from 1992 through December
1998, Mr. Halldow served as the Eastern Regional Manager in the Office of U.S.
Representative Bill Paxon, in Victor, New York. Mr. Halldow serves on the Audit
Committee of the Company's Board of Directors.
Class III Nominees -- To Serve a Three Year Term Expiring in the Year 2004
Edward S. Glazer, age 32, has served as a director since 1997. For more
than the past five years, he has been employed by, and has worked on behalf of,
Malcolm I. Glazer and a number of entities owned and controlled by Malcolm I.
Glazer. Mr. E. Glazer serves as the Executive Vice President of The Tampa Bay
Buccaneers. He is the son of Malcolm I. Glazer and the brother of Avram A.
Glazer, Bryan G. Glazer and Darci S. Glazer.
Robert V. Leffler, Jr., age 56, has served as a director of Zapata since
May 1995. For more than the past five years, Mr. Leffler has owned and operated
the Leffler Agency, an advertising and marketing/public relations firm based in
Baltimore, Maryland and Tampa, Florida, which specializes in sports, rental real
estate and broadcast television. Mr. Leffler serves on the Audit and
Compensation Committees of the Company's Board of Directors.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors has as two standing committees, the Audit Committee
and the Compensation Committee. The Board of Directors does not have a
nominating committee or a committee performing the function of a nominating
committee.
During 2001 the Board of Directors held two meetings and acted by unanimous
written consent three times. In addition the Audit Committee held five meetings
and the Compensation Committee held one meeting and acted by unanimous written
consent once. During 2001 each director of the Company attended at least (75%)
of the aggregate number of meetings of the Board of Directors and committees on
which each of them sit (except that Malcolm Glazer attended only one of two
Board of Directors' meetings).
The Audit Committee currently is composed of Mr. Warren Gfeller (Chairman),
Mr. Robert V. Leffler, Jr. and Mr. John R. Halldow. The Committee members are
"independent," as such term is defined by NYSE rules governing audit committees.
The Audit Committee meets with the Company's independent accountants to review
the Company's accounting policies, internal controls and other accounting and
auditing matters; confirms and assures the outside accountant's independence;
makes recommendations to the Board of Directors as to the engagement of
independent accountants; and approves the fees and other compensation to be paid
to the independent accountants. This Committee met five times during the last
fiscal year. The Board of Directors has adopted a written charter for the Audit
Committee.
The Compensation Committee currently is composed of Mr. Robert V. Leffler,
Jr. (Chairman) and Mr. Warren H. Gfeller. The functions performed by the
Compensation Committee include reviewing the Company's executive salary and
bonus structure; reviewing the Company's stock option plans; recommending
directors' fees; setting bonus goals; and approving salary and bonus awards to
key executives.
A-4
<PAGE>
DIRECTORS' COMPENSATION
During 2001, directors who were not employees of the Company were paid an
annual retainer of $27,500 (on a quarterly basis), plus $1,000 for each
committee of the Board of Directors on which a director served. Those directors
who also are employees of the Company do not receive any additional compensation
for their services as directors. In addition, non-employee directors were
granted stock options on March 1, 2002, subject to stockholder approval. See
P
roposal 2 -- Approval of Option Grants to Non-Employee Directors.
EXECUTIVE OFFICERS
The following sets forth certain information with respect to the Executive
Officers of the Company, as of the date of this Proxy Statement. All officers of
the Company serve at the pleasure of the Company's Board of Directors until
their successors are elected and qualified.
<Table>
<Caption>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Avram A. Glazer........................... 41 Chairman of the Board, President and Chief
Executive Officer
Leonard DiSalvo........................... 43 Vice President -- Finance and Chief Financial
Officer
Gordon E. Forth........................... 40 Secretary
</Table>
Leonard DiSalvo, age 43, joined Zapata in September 1998 and currently
serves as its Vice President -- Finance and Chief Financial Officer. Mr. DiSalvo
also currently serves as Vice President -- Finance and Chief Financial Officer
of Zap.Com Corporation, a position he has held since April 1999. Mr. DiSalvo has
20 years of experience in the areas of finance and accounting. Mr. DiSalvo
served as a finance manager for Constellation Brands, Inc. a national
manufacturer and distributor of wine, spirits and beer, since 1996. Prior to
that position, Mr. DiSalvo held various management positions in the areas of
finance and accounting in the Contact Lens Division of Bausch & Lomb
Incorporated. Mr. DiSalvo is a Certified Public Accountant.
Gordon E. Forth, age 40, has served as Zapata's Secretary since December
1998. Mr. Forth also serves as Secretary of Zap.Com Corporation, a position he
has held since April 1999. Mr. Forth served as director of Hahn Automotive
Warehouse, Inc. (a distributor of automotive replacement parts) from 1992 to
1997 and from 2000 to 2001. Mr. Forth is a partner of Woods Oviatt Gilman LLP, a
Rochester, New York based law firm. Mr. Forth has practiced law at the Woods,
Oviatt firm since 1987. Mr. Forth received his B.A. from Hope College and his
law degree and M.B.A. from Vanderbilt University.
See Proposal 1 -- Election of Directors above for information concerning
the Company's other executive officers.
A-5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation with
respect to 2001, 2000 and 1999 for services in all capacities rendered to the
Company and its subsidiaries by the Company's Chief Executive Officer and the
other most highly compensated executive officers of the Company with annual
compensation in excess of $100,000 who were serving as executive officers on
December 31, 2001 (the "Named Officers").
<Table>
<Caption>
LONG-TERM
COMPENSATION
AWARDS
---------------
ANNUAL COMPENSATION SECURITIES
FISCAL ------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS/SARS(#) COMPENSATION
--------------------------- ------ --------- --------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Malcolm I. Glazer, ............... 2001 $500,000 $975,000 -- --
Former Chairman of the Board(1) 2000 500,000 975,000 -- --
1999 500,000 975,000 -- --
Avram A. Glazer, ................. 2001 $300,000(2) $200,000 -- --
Chairman of the Board, President 2000 300,000(2) 300,000 -- --
and Chief Executive Officer 1999 300,000(2)(3) 300,000 -- --
Leonard DiSalvo, ................. 2001 $137,025(4) $ 25,000 12,500 $3,154(5)
Vice President -- Finance and 2000 116,427(4) 17,464 -- 4,657(5)
Chief Financial Officer 1999 96,547(4) -- 1,500 3,866(5)
</Table>
---------------
(1) Effective March 1, 2002, Mr. M. Glazer resigned his position as Chairman of
the Board.
(2) Mr. A. Glazer was elected Chairman of the Board of Zapata on March 1, 2002.
He also serves as President and Chief Executive Officer of both Zapata and
Zap.Com, Zapata's 98% owned subsidiary. During the first four months of
Fiscal 2000, Zapata allocated approximately 65% of Mr. A. Glazer's annual
salary to Zap.Com under a services agreement between the two companies.
Since May 1, 2000 Zapata has waived its rights under the services agreement
to be reimbursed those expenses. No amount of Mr. A. Glazer's 2000 bonus was
allocated to Zap.Com. Zapata allocated 69% of Mr. A. Glazer's 1999 salary to
Zap.Com. No amount of Mr. A. Glazer's 1999 bonus was allocated to Zap.Com.
(3) In November 1999, Mr. A. Glazer was granted 365,000 non-qualified options to
purchase Zap.Com stock under Zap.Com's 1999 Long-Term Incentive Plan. The
Zap.Com options have an exercise price of $2.00 per share and generally vest
over three years from the date of grant. On December 31, 2001 Zap.Com had a
closing price of $0.19 on the NASD OTC Bulletin Board.
(4) Mr. DiSalvo serves as Vice President -- Finance and Chief Financial Officer
of both Zapata and Zap.Com. During the first four months of 2000, Zapata
allocated 50% of Mr. DiSalvo's salary to Zap.Com under a services agreement
between the two companies. Since May 1, 2000 Zapata has waived its rights
under this services agreement to be reimbursed these expenses. No amount of
Mr. DiSalvo's Zapata 2000 bonus was allocated to Zap.Com. Zapata allocated
$9,387 of Mr. DiSalvo's 1999 salary to Zap.Com. Mr. DiSalvo was granted
100,000 non-qualified options to purchase Zap.Com stock under Zap.Com's 1999
Long-Term Incentive Plan. The Zap.Com options have an exercise price of
$2.00 per share and generally vest over three years from the date of grant.
(5) Amounts presented represent the Company's matching contribution to Mr.
DiSalvo's account under the Zapata Profit Sharing Plan for 2001, 2000 and
1999.
While the Company's officers receive benefits in the form of certain
perquisites, none of the Named Officers received perquisites which exceeded in
value the lesser of $50,000 or 10% of such officer's total annual salary and
bonus for any of the Fiscal Years shown in the Summary Compensation Table.
During 2000 and 1999, the Company did not grant or award any stock options,
stock appreciation rights or stock awards or cash awards to any of the Named
Officers. The following table provides information
A-6
<PAGE>
concerning the grant of stock options for the Company's common stock made to the
Named Officers during 2001:
OPTION GRANTS IN FISCAL 2001
<Table>
<Caption>
POTENTIALLY REALIZABLE
VALUE AT ASSUMED ANNUAL
NUMBER OF PERCENT OF RATE OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM(2)
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION ------------------------
NAME GRANTED(1) FISCAL YEAR ($/SHARE) DATE 5% 10%
---- ---------- ------------- -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Leonard DiSalvo...... 12,500 62.3% $22.20 11/30/2011 $174,518 $442,264
</Table>
---------------
(1) Stock options are awarded at the fair market value of common stock at the
date of grant. All options are exercisable in cumulative one-third
installments vesting annually beginning on the first anniversary of the date
of grant.
(2) The amounts shown as potentially realizable values are based on arbitrarily
assumed rates of stock price appreciations of 5% and 10% over the full term
of the options (10 years), as required by applicable regulations and are
provided for illustrative purposes only and do not reflect the Company's
estimate or projection of future common stock prices.
The following table provides information concerning options held by the
Named Officers as of end of 2001:
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
<Table>
<Caption>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED VALUE AT FISCAL YEAR-END AT FISCAL YEAR-END($)
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
---- ----------- -------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
Malcolm I. Glazer............ -- -- 34,500/0 $0/$0
Avram A. Glazer.............. -- -- 15,459/0 0/0
Leonard DiSalvo.............. -- -- 1,500/12,500 0/85,000
</Table>
---------------
(1) On December 31, 2001, the closing price per share of the Company's common
stock on the NYSE was $29.00.
CERTAIN EMPLOYEE BENEFITS
Zapata's executive officers participate or have participated in certain
stock option and incentive plans, retirement and profit sharing/401(k) plans
sponsored by Zapata, some of which are intended to qualify for tax-favored
treatment under the Internal Revenue Code, as amended (the "Code"). These plans
include Zapata's Amended and Restated Special Incentive Plan (the "1987 Plan"),
the 1990 Stock Option Plan, the Amended and Restated 1996 Long-Term Incentive
Plan, the Zapata Pension Plan ("Pension Plan"), the Zapata Supplemental Pension
Benefit Plan and the Zapata Corporation 401(k) Plan.
Zapata's Amended and Restated Special Incentive Plan (the "1987 Plan")
provides for the granting of stock options and the awarding of restricted stock.
Under the 1987 Plan, options may be granted at prices equivalent to the market
value of the common stock at the date of grant. Options become exercisable on
dates as determined by the Zapata Board of Director's Compensation Committee,
provided that the earliest such date cannot occur before six months after the
date of grant. Unexercised options will expire on varying dates, up to a maximum
of ten years from the date of grant. The awards of restricted stock have a
restriction period of not less than six months and not more than five years. The
1987 Plan provided for the issuance of up to 60,000 shares of the common stock.
During 1992, the stockholders approved an amendment to the 1987 Plan that
provides for the automatic grant of a nonqualified stock option to directors of
Zapata who are not
A-7
<PAGE>
employees of Zapata or any subsidiary of Zapata. At December 31, 2001, stock
options covering a total of 3,333 stock options had been exercised. No shares of
common stock are available for future stock options or other awards under the
Plan. As of December 31, 2001, there were 10,667 shares outstanding under the
1987 plan.
The 1990 Stock Option Plan (the "1990 Plan") was approved by the
stockholders on December 6, 1990. The 1990 Plan provides for the granting of
nonqualified stock options to key employees of the Company. Under the 1990 Plan,
options may be granted by the Committee at prices equivalent to the market value
of the common stock on the date of grant. Options become exercisable in one or
more installments on such dates as the Committee may determine, provided that
such date cannot occur prior to the expiration of one year of continued
employment with the Company following the date of grant. Unexercised options
will expire on varying dates up to a maximum of ten years from the date of
grant. The 1990 Plan provides for the issuance of options to purchase up to
100,000 shares of common stock. At December 31, 2001, a total of 96,734 stock
options had been exercised and a total of 3,267 shares of common stock were
reserved for stock options outstanding under the 1990 Plan. As of December 31,
2001, no shares were outstanding under the 1990 plan and no shares were
available for future stock options or other awards under the Plan.
The 1996 Long-Term Incentive Plan (the "1996 Plan") was approved by the
stockholders on December 5, 1996. The 1996 Plan provides for the granting of
nonqualified stock options to key employees of the Company. Under the 1996 Plan,
options may be granted by the Committee at prices equivalent to the market value
of the common stock on the date of grant. Options become exercisable in one or
more installments on such dates as the Committee may determine. Unexercised
options will expire on varying dates up to a maximum of ten years from the date
of grant. The 1996 Plan provides for the issuance of options to purchase up to
500,000 shares of common stock. During 1999, the stockholders approved an
amendment to the 1996 Plan which increased the number of shares available for
options granted under the plan to 1,000,000 shares. Accordingly, the 1996 Plan
became the Zapata Amended and Restated 1996 Long-Term Incentive Plan (the
"Amended 1996 Plan"). At December 31, 2001, stock options covering a total of
104,100 shares had been exercised and a total of 764,666 shares of common stock
are available for future stock options or other awards under the Plan. As of
December 31, 2001 there were 131,234 shares outstanding under the 1996 plan.
The Zapata Pension Plan is a non-contributory qualified defined benefit
pension plan which is intended to qualify under Internal Revenue Code
sec.401(a). All employees of Zapata are eligible. Highly compensated employees
(generally, employees who own more than 5% of the stock of Zapata and employees
earning in excess of $85,000) are eligible effective January 1, 2002. An
employee becomes a participant upon completion of one-year of service (1000
hours in a computation period) or attainment of age 21, whichever is later.
Retirement benefits under the Pension Plan are based on an employee's length of
employment, average monthly compensation and social security covered
compensation. Compensation for this purpose includes salary and other
compensation paid by Zapata and reportable on Form W-2, but excludes fringe
benefits (cash and non-cash), including compensation related to stock option
plans which is reported in the Summary Compensation Table in this Proxy
Statement. The Code limits the amount of compensation that may be considered
($170,000 for 2001) and the annual benefits which may be payable from the
Pension Plan. Pension Plan participants are 100% vested in accrued benefits
after five years of vesting service.
The following table shows the estimated annual benefit payable to employees
on retirement under the Pension Plan to employees in the specified compensation
and years of service classification. The retirement benefits shown are based
upon an employee retiring at age 65 in 2001 who elect to receive benefits in the
form of a single life annuity (although a participant can select other methods
of calculating benefits). The amounts
A-8
<PAGE>
shown are based on current average social security wage base amounts and are not
subject to any deduction for social security or other offset amounts.
PENSION PLAN BENEFITS TABLE
<Table>
<Caption>
YEARS OF SERVICE
-----------------------------------------------
REMUNERATION (*) 15 20 25 30 35
---------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$125,000....................................... $29,921 $39,895 $49,869 $59,843 $69,817
150,000....................................... 36,296 48,395 60,494 72,593 84,692
175,000....................................... 41,396* 55,195* 69,994* 82,793* 96,592*
200,000....................................... 41,396* 55,195* 69,994* 82,793* 96,592*
225,000....................................... 41,396* 55,195* 69,994* 82,793* 96,592*
250,000....................................... 41,396* 55,195* 69,994* 82,793* 96,592*
300,000....................................... 41,396* 55,195* 69,994* 82,793* 96,592*
400,000....................................... 41,396* 55,195* 69,994* 82,793* 96,592*
450,000....................................... 41,396* 55,195* 69,994* 82,793* 96,592*
500,000....................................... 41,396* 55,195* 69,994* 82,793* 96,592*
</Table>
---------------
(*) Internal Revenue Code limits covered compensation to $170,000 for 2001.
As a result of the January 2002 amendment to the Pension Plan, Zapata's
Named Officers are now eligible to participate under the Pension Plan.
The Zapata Supplemental Pension Plan was adopted effective April 1, 1992.
This plan provides supplemental retirement payments to certain former senior
executives of Zapata. The amounts of such payments equal the difference between
the amounts received under the applicable pension plan and the amounts that
would otherwise be received if pension plan payments were not reduced as the
result of the limitations upon compensation and benefits imposed by federal law.
Effective December 1994, the supplemental pension plan was frozen, except with
respect to benefits already accrued.
The Zapata 401(k) Plan is qualified under Sections 401(a) and 401(k) of the
Code. Under the Plan, 3 types of contributions are authorized: (1) employee
pre-tax, salary reduction contributions ("elective deferrals"); (2) matching
employer contributions for participants who make elective deferrals to the Plan;
and (3) discretionary employer contributions, based on cash flow, profitability
and other financial circumstances as Zapata determines to be relevant. The
matching contribution formula is 100% on elective deferrals up to 3% of
compensation for the year and 50% of all deferral contributions of more than 3%;
elective deferrals exceeding 5% of compensation for the year are not matched.
All employees are eligible for participation in the elective deferral and
matching contribution features of the plan upon attainment of age 21 or
completion of 3 months of service, whichever is later. For the purposes of
employer discretionary contributions, an employee enters the plan after
completing 1 year of service or attaining age 21, whichever is later. Matching
contributions are fully vested while discretionary employer contributions, if
any, vest 20% for each year of vesting service.
S
ECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, and persons who own
more than 10% of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission (the "Commission") and the NYSE
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Directors, officers and greater than
10% stockholders are required by the Commission's regulations to furnish the
Company with copies of all Section 16(a) forms they file. Based upon a review of
the copies of such forms furnished to the Company and written representations
that no other reports were required, the Company believes that during 2001 all
reports required by Section 16(a) to be filed by its directors and officers were
filed on a timely basis; except that: Bryan G. Glazer and Leonard DiSalvo failed
to timely report on Form 5 the acquisition of options to purchase the Company's
common stock; and John R. Halldow failed to timely report on Form 3 his status
as a reporting person under Section 16.
A-9
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is responsible for the
approval and administration of compensation programs for the Company's executive
officers.
The Compensation Committee endeavors to ensure that the compensation
programs for the Company's executive officers are effective in attracting and
retaining key executives responsible for the success of the Company and are
administered in an appropriate fashion in the long-term best interests of the
Company and its stockholders. The Compensation Committee seeks to align total
compensation for the Company's executive officers with the performance of the
Company and the individual performance of each executive officer in assisting
the Company in accomplishing its goals. The Company's compensation program
consists of (1) an annual component, which includes base salary and an annual
incentive bonus, and (2) a long-term component consisting of stock options,
stock appreciation rights, stock awards and cash awards. The Compensation
Committee takes into consideration the recommendations of management in awarding
compensation and setting compensation levels. The following is a report of the
Compensation Committee with respect to compensation policies and determinations
relating to 2001.
BASE SALARY
The Compensation Committee's policy with respect to 2001 base salaries for
executive officers was generally to keep them at appropriate levels in light of
a compensation survey in which the Company participated in 2000. The 2000
compensation survey was conducted for purposes of determining general
competitive compensation levels, and variations in performance between the
Company and companies included in the survey were not specifically evaluated.
The companies included in the survey are not the same as those included in the
Dow Jones Industrial Diversified Index referred to under "Stockholder Return
Performance Graph."
The determination of the base salaries for all the executive officers
during 2001 was based on the Compensation Committee's subjective evaluation and
did not involve application of objective measures of performance.
ANNUAL INCENTIVE BONUS
Bonuses were paid to executive officers for 2001 based on the subjective
evaluation of the performance of the Company and each executive.
COMPENSATION OF CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
The compensation policies described above apply to the compensation of the
Chairman of the Board and President and Chief Executive Officer. The
Compensation Committee is directly responsible for determining the salary level,
annual bonuses and all awards and grants to the Chairman of the Board and the
Chief Executive Officer. The Compensation Committee also gives consideration to
its assessment of past performance and its expectations of future contributions.
In the Compensation Committee's opinion, the salaries and bonuses of Mr. M.
Glazer and Mr. A. Glazer reflect their positions, duties, responsibilities with,
and contributions to the Company.
SECTION 162(m)
The Compensation Committee has considered the potential impact of Section
162(m) of the Code adopted under the Federal Revenue Reconciliation Act of 1993.
The Section disallows a tax deduction for any publicly-held corporation for
individual compensation exceeding $1 million in any taxable year for any of the
named executive officers, other than compensation that is performance-based. At
present, the Committee has not adopted an overall policy with respect to Section
162(m) because only an immaterial portion of the cash compensation of the
Chairman of the Board is above the $1 million threshold and the Company believes
that any options granted under the 1996 Long-Term Incentive Plan will meet the
requirement of being
A-10
<PAGE>
performance-based under the transition provisions provided in the regulations
under the Section. Therefore, the Committee currently expects Code Section
162(m) to have no material effect on the Company.
Robert V. Leffler, Jr., Chairman
Warren H. Gfeller
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During Fiscal 2001, Mr. Robert V. Leffler, Jr. and Mr. Warren H. Gfeller
served on the Company's Compensation Committee.
REPORT OF THE AUDIT COMMITTEE
The Company's management has the primary responsibility for the financial
statements and the reporting process including the systems of internal controls.
The primary purpose of the Audit Committee of the Company's Board of Directors
is to assist the Board of Directors in fulfilling its responsibility to oversee
management's conduct of the Company's financial reporting process, including by
overviewing the financial reports and other financial information provided by
the Company to any governmental or regulatory body, the public or other users
thereof, the Company's systems of internal accounting and financial controls,
and the annual independent audit of the Company's financial statements.
The Audit Committee met five times during 2001. Representatives from the
Company's independent auditors, PricewaterhouseCoopers, LLC ("PwC") were present
at each of the Committee's five meetings.
On November 8, 2001, the Audit Committee received from PwC the written
disclosures and the letter regarding PwC's independence required by Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees.
Additionally, the Audit Committee and PwC have also discussed PwC's independence
relative to the Company.
The Audit Committee has discussed with PwC the Company's financial
management and financial structure and the matters relating to the conduct of
the audit required to be discussed by Statement on Auditing Standards 61. The
Audit Committee has also reviewed and discussed with the Company's management
the Company's audited consolidated financial statements relating to 2001.
Based upon the review and discussions described above, the Audit Committee
recommended to the Company's Board of Directors that the Company's consolidated
financial statements for 2001, audited by PwC be included in the Company's 2001
Annual Report on Form 10-K filed with the Securities and Exchange Commission on
March 28, 2002.
Warren H. Gfeller, Chairman
John R. Halldow
Robert V. Leffler, Jr.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is presently discussing proposed terms for the consulting
arrangement with its former Chairman Malcolm Glazer. Mr. Glazer resigned as
Chairman and as a director effective March 1, 2002. Mr. Glazer beneficially owns
approximately 47% of the Company's outstanding common stock through the Malcolm
I. Glazer Family Limited Partnership. No specific terms have been agreed upon by
the parties as to the duties or amount of compensation under the consulting
arrangement.
Gordon E. Forth, who serves as corporate secretary of Zapata and Zap.Com,
is a partner at Woods Oviatt Gilman LLP which has acted as counsel to Zapata and
Zap.Com.
A-11
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table indicates the number of shares of Common Stock owned
beneficially as of March 28, 2002 by (1) each person known to the Company to
beneficially own more than 5% of the outstanding shares of Common Stock (2) each
director, (3) the Named Officers and (4) all directors and Named Officers as a
group. Except to the extent indicated in the footnotes to the following table,
each of the persons or entities listed therein has sole voting and investment
power with respect to the shares which are deemed beneficially owned by such
person or entity.
<Table>
<Caption>
AMOUNT OF SHARES
BENEFICIALLY OWNED
-----------------------
NAME AND ADDRESS PERCENT
OF BENEFICIAL OWNER SHARES OF CLASS(1)
------------------- --------- -----------
<S> <C> <C>
Malcolm I. Glazer(2)(3)..................................... 1,146,438 47.3%
Fidelity Management & Research Company(4)................... 173,800 7.3%
Dimensional Fund Advisors Inc(5)............................ 125,230 5.2%
Avram A. Glazer(3).......................................... 19,159 *
Robert V. Leffler, Jr.(3)................................... 667 *
Warren H. Gfeller(3)........................................ 2,000 *
Bryan G. Glazer(3).......................................... 14,959 *
Edward S. Glazer(3)......................................... 13,459 *
Darcie S. Glazer(3)......................................... 13,459 *
Leonard DiSalvo............................................. 1,500 *
All directors and Named Officers of the Company as a group
(7 persons)(2)............................................ 1,211,641 49.0%
</Table>
---------------
* Represents beneficial ownership of less than 1.0%.
(1) The calculation for this column is based upon the number of shares of Common
Stock issued and outstanding on March 28, 2002, plus the number of shares of
Common Stock deemed outstanding pursuant to SEC Rule 13d-3(d)(1). Shares of
Company Common Stock subject to options exercisable within 60 days of
January 15, 2002 are deemed outstanding for purposes of computing the
percentage of the person holding such option but are not deemed outstanding
for computing the percentage of any other person.
(2) 1,111,938 of the shares reported are held in the name of The Malcolm I.
Glazer Family Limited Partnership, 270 Commerce Drive, Rochester, New York
14623, in which Malcolm Glazer controls the sole general partner.
(3) Presently reported ownership includes 34,500, 15,459, 667, 2,000, 13,459,
13,459, 13,459 and 1,500 shares issuable under options exercisable within 60
days of January 15, 2002 held by Messrs. M. Glazer, A. Glazer, Leffler,
Gfeller, B. Glazer, E. Glazer, D. Glazer and DiSalvo, respectively.
(4) Based solely on a Schedule 13G, dated February 14, 2002, Fidelity Management
& Research Company ("Fidelity"), 82 Devonshire Street, Boston, Massachusetts
02109, is the beneficial owner of 173,800 shares. Fidelity is an investment
adviser registered under Section 203 of the Investment Advisers Act of 1940
and acts as investment advisor to various investment companies acting under
Section 8 of the Investment Company Act of 1940. FMR Corp., Edward C.
Johnson 3d, through their control of Fidelity and the funds, each has sole
power to dispose of these shares. Neither has sole power to vote or direct
the voting of the shares.
(5) Based solely on a Schedule 13G, dated January 30, 2002, Dimensional Fund
Advisors 1299 Ocean Avenue, 11th Floor, Santa Monica, California, is record
holder of 125,230 shares. Dimensional Fund Advisors is an investment adviser
registered under Section 203 of the Investment Advisers Act of 1940,
furnishes investment advice to four investment companies registered under
the Investment Company Act of 1940, and serves as investment manager to
certain other commingled group trusts and separate accounts. In its role as
investment adviser or manager, Dimensional possesses voting and/or
investment power over the shares owned.
A-12
<PAGE>
STOCKHOLDER RETURN PERFORMANCE GRAPH
The Commission requires a five-year comparison of the cumulative total
return of the Company's Common Stock with that of (1) a broad equity market
index and (2) a published industry or line-of-business index, or index of peer
companies with similar market capitalization. Pursuant to the Commission's
rules, the graph presented below includes comparisons of the performance (on a
cumulative total return basis) of the Company's Common Stock with the S&P
SmallCap 600 Index and the Dow Jones Industrial Diversified Index. The stock
price performance shown on the graph is not necessarily indicative of future
price performance.
The Stock Performance Graph shall not be deemed incorporated by reference
by any general statement incorporating by reference the Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates this
document by reference and shall not otherwise be deemed filed.
COMPARISON OF 63 MONTH CUMULATIVE TOTAL RETURN*
AMONG ZAPATA CORPORATION,
THE DOW JONES INDUSTRIAL -- DIVERSIFIED INDEX
AND THE S&P SMALLCAP 600 INDEX
<Table>
<Caption>
CUMULATIVE TOTAL RETURN
-----------------------------------------------------------------------------------------------
9/96 9/97 9/98 12/98 12/99 12/00 12/01
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Zapata Corporation 100.00 202.41 278.70 352.42 133.06 44.97 83.43
Dow Jones
Industrial-Diversified 100.00 136.97 115.95 136.35 153.26 171.35 206.28
S&P SmallCap 600 100.00 145.51 154.45 195.27 264.54 266.44 239.54
</Table>
---------------
* $100 invested on 9/30/96 in stock or index -- including reinvestment of
dividends.
A-13
<PAGE>
PROPOSAL 2
APPROVAL OF OPTION GRANTS TO NON-EMPLOYEE DIRECTORS
On March 1, 2002, the Board of Directors approved specific stock option
grants to the Company's non-employee directors subject to stockholder approval.
The New York Stock Exchange rules require that such grants of stock options be
submitted to the Company's stockholders for approval.
The Company's Amended and Restated 1987 Special Incentive Plan, which
provided for the grant of options to non-employee directors, expired in 1997.
The Company's Amended and Restated 1996 Long-Term Incentive Plan does not
provide for the grant of options to non-employees. The Board has elected not to
adopt a new plan for non-employee directors, but rather to make specific grants
to directors.
To this end, in March, 2002, the Company granted, subject to stockholder
approval, to each of Bryan G. Glazer, Edward S. Glazer, Darcie S. Glazer, Warren
H. Gfeller, Robert V. Leffler, Jr., and John R. Halldow, all of whom are members
of the Board of Directors who are not employees of the Company, 10 year non-
qualified options each to purchase 1,000 shares of the Company's common stock.
The options are exercisable in cumulative one-third installments vesting
annually beginning on the first anniversary of the date of grant. The exercise
price for these stock options is $26.60 per share, which was the closing price
of the Common Stock on the date of grant. The closing price per share of the
Company's Common Stock on the NYSE on April 2, 2002, was $25.30.
The Board of Directors considers that it is in the Company's best interest
to grant non-qualified stock options to non-employee directors in order to align
their interest with those of the Company's stockholders and to provide them with
appropriate compensation for their services.
TAX TREATMENT
The options granted are non-qualified options for tax purposes. No taxable
income is recognized by an optionee upon the grant of an option. The optionee
will, in general, recognize ordinary income, in the year in which the option is
exercised, equal to the excess of the fair market value of the purchased shares
on the exercise date over the exercise price paid for the shares, and the
optionee will be required to satisfy the tax withholding requirements applicable
to such income. Upon a subsequent sale or exchange of shares acquired pursuant
to the exercise of an option, the optionee will have taxable gain or loss
measured by the difference between the amount realized on the disposition and
the tax basis of the shares (generally, the amount paid for the shares plus the
amount treated as ordinary income at the time the option was exercised).
If the Company complies with applicable reporting requirements and with the
restrictions of Section 162(m) of the Internal Revenue Code, it generally will
be entitled to an income tax deduction equal to the amount of ordinary income
recognized by the optionee with respect to the exercised option. The deduction
will in general be allowed for the taxable year of the Company in which such
ordinary income is recognized by the optionee.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of Common
Stock present in person or represented by proxy at the meeting and entitled to
vote on this matter is required to approve Proposal 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE PROPOSAL
TO GRANT STOCK OPTIONS TO NON-EMPLOYEE DIRECTORS.
A-14
<PAGE>
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, acting on the recommendation of its Audit
Committee, has selected the firm of PricewaterhouseCoopers, LLP to act as the
Company's independent public accountants and to conduct an audit, in accordance
with generally accepted auditing standards, of the Company's financial
statements for year end ending December 31, 2002.
The Board of Directors considers PricewaterhouseCoopers, LLP to be well
qualified. A representative of that firm is expected to be present at the Annual
Meeting to respond to appropriate questions and will be given an opportunity to
make a statement if he or she so desires. Neither the firm nor any of its
partners has any direct financial interest or any indirect financial interest in
the Company other than as independent auditors. This selection is being
submitted for ratification at the meeting.
The affirmative vote of the holders of a majority of the shares of Common
Stock present in person or represented by proxy at the meeting and entitled to
vote on this matter is required for such ratification. If not ratified, the
selection will be reconsidered by the Board, although the Board of Directors
will not be required to select different independent auditors for the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
BOARD'S APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS.
AUDITORS' FEES
AUDIT FEES: For professional services rendered by them for the audit of
our annual financial statements for 2001, and reviews of the financial
statements included in our Quarterly Reports on Form 10-Q for 2001,
PricewaterhouseCoopers LLP billed us fees in the aggregate amount of $82,500.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES:
PricewaterhouseCoopers LLP billed us no fees for professional services rendered
by them for 2001 in connection with financial information systems design and
implementation.
ALL OTHER FEES: For professional services other than those described above
rendered by them for 2001, PricewaterhouseCoopers LLP billed us fees in the
amount of approximately $122,450 for tax related services.
The Audit Committee has considered whether the provision of services
described above under "All Other Fees" is compatible with maintaining the
independence of PricewaterhouseCoopers LLP.
PROPOSAL 4
STOCKHOLDER PROPOSAL FOR THE RECOMMENDATION TO LIQUIDATE COMPANY
Gates Capital Management, located at 1177 Avenue of the Americas, New York,
New York, manages the ECF Value Fund, LP. Since May 15, 2000, the ECF Value Fund
has had beneficial ownership of at least 51,960 shares of common stock of the
Zapata Corporation, which constitutes approximately 2.2% of the outstanding
shares. Gates Capital Management hereby submits the following resolution for
inclusion in the proxy statement for the 2002 Annual Meeting of Stockholders.
"RESOLVED: That the stockholders recommend to the Board of Directors that
Zapata Corporation ("Zapata") liquidate itself by distributing to stockholders
all of its cash and marketable securities."
PROPONENT'S SUPPORTING STATEMENT
"REASONS:
1. Zapata is merely a holding company with absolutely no business
operations of its own, yet it spends more than $4 million per year in
overhead expenses, more than one-half of which is to pay salaries to
members of the Glazer family.
A-15
<PAGE>
2. In a press release dated October 5, 2001, management stated that
Zapata anticipates generating a tax benefit of approximately $15 million
from capital losses resulting from the sale of certain investments. This
means that the pre-tax loss on these investments must have been on the
order of $45 million or approximately $19 per share. Clearly management's
track record in making investment decisions for the company has not been
very good and does not deserve to be continued.
3. Based on the June 20, 2001 financial statements and the recent sale
of the investments above, our calculations indicate that Zapata has cash of
$85 million or more than $35 per share and 14.5 million shares of Omega
Protein common stock worth about $12 per Zapata share. If this cash and the
Omega Protein common stock were distributed to stockholders, they would
receive a total value of about $47 per share. At the time of this letter,
the closing price of Zapata stock reported by the New York Stock Exchange
was about $18 per share. Thus the value of the distributions to
stockholders in a liquidation of Zapata would be equal to about 260% of the
current trading price."
BOARD OF DIRECTOR'S OPPOSING STATEMENT
The Board of Directors opposes the proposal because it believes that
liquidation of the Company is not in the best interest of the stockholders.
First, the proposal fails to recognize the potential negative effect
liquidation and distribution would have on the value of the stock of Omega
Protein Corporation held by the Company. A liquidation of the Company would
necessarily include the distribution of stock to Zapata's current record
holders, numbering over 4,800, and an even greater number of persons who have
beneficial ownership of those shares. With the potential that this stock could
immediately be sold on the market by persons or stockholders not affiliated with
Zapata, a distribution could have the effect of driving down the price of Omega
Protein. Additionally, value may be lost as a result of the loss of a control
premium that the market may attribute to Zapata holding approximately 60% of
Omega Protein's outstanding common stock.
Second, the proposal does not take into account the negative effects of the
liquidation process. Liquidation of any business is a lengthy and time-consuming
process. This could negatively affect the value of the marketable securities
held by the Company. The proposal also does not take into account the expenses
to be incurred in the liquidation process.
Finally, the Board of Directors believes that adequate capital resources,
including its available cash and cash equivalents, are necessary to accomplish
the Company's current strategies adopted by the Board of Directors. The Board's
view is that the Company should continue on its current path with the objectives
of maintaining cash reserves adequate to fund its business strategies going
forward.
Overall, the Board believes that liquidation would not have a positive
effect on long-term stockholder value and that the long-term value of the
Company to its stockholders can best be realized as a going concern and not
through liquidation.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of a majority of the shares of Common Stock present in
person or by proxy at the meeting and entitled to vote on this matter is
required for approval of this proposal if it is presented. Under Nevada law, the
action to be recommended by this proposal could be taken only if first approved
by the Board of Directors. Therefore, if approved, the proposal would not
automatically result in a liquidation, but instead would serve as a
recommendation to the Board of Directors to take the steps necessary to effect a
liquidation of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS STOCKHOLDER
PROPOSAL IF IT IS PRESENTED.
A-16
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
other matter to be presented at the Annual Meeting. If any additional matter
properly comes before the meeting, it is intended that proxies in the enclosed
form will be voted on the matter in accordance with the discretion of the
persons named in the proxy.
STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING OF STOCKHOLDERS
Under applicable securities laws, stockholder proposals must be received by
the Company no later than December 13, 2002 to be considered for inclusion in
the Company's proxy statement relating to the 2003 Annual Stockholders Meeting.
If the Company changes the date of the 2003 Annual Meeting by more than 30 days
from the date of the 2002 Annual Meeting, then stockholder proposals must be
received by the Company a reasonable time before the Company begins to print and
mail its proxy statement for the 2003 Annual Meeting. A stockholder proposal
submitted outside the process of SEC Rule 14a-8 is considered untimely if it is
not received by February 26, 2003.
By Order of the Board of Directors,
/s/ AVRAM A. GLAZER
--------------------------------------
Avram A. Glazer,
Chairman of the Board,
President and Chief Executive Officer
Rochester, New York
April 5, 2002
A-17
<PAGE>
ZAPATA CORPORATION
PROXY/VOTING INSTRUCTIONS
ZAPATA CORPORATION, 100 MERIDIAN CENTRE, SUITE 350, ROCHESTER, NEW YORK 14618
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Avram Glazer and Leonard DiSalvo, and each,
as attorney and agent with full power of substitution, to vote as proxy all the
shares of Common Stock of Zapata Corporation the undersigned would be entitled
to vote if personally present at the Annual Meeting of Stockholders of Zapata
Corporation to be held on May 21, 2002 and at any adjournment(s) thereof, in the
manner indicated on the reverse hereof and in their discretion on such other
matters as may properly come before said meeting or any adjournments thereof.
To vote by telephone, please follow the instructions on the reverse of this
card. To vote by mail, please sign and date the card on the reverse side and
return promptly by mail in the enclosed, postage pre-paid envelope.
If you wish to vote in accordance with the recommendations of the Board of
Directors, you may just sign and date below and mail in the postage paid
envelope provided. Specific choices may be made on the reverse side.
<Table>
<S> <C>
Dated ------------------------------, 2002
---------------------------------------------
Signature
---------------------------------------------
Signature if held jointly
When signing as Executor, Administrator,
Trustee or the like, please give full title.
</Table>
<PAGE>
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL
BE VOTED FOR PROPOSAL 1, 2 AND 3, AND AGAINST STOCKHOLDER PROPOSAL 4. ANY PROXY
WHICH IS EXECUTED IN SUCH A MANNER AS NOT TO WITHHOLD AUTHORITY TO VOTE FOR THE
ELECTION OF ANY DIRECTOR NOMINEE, SHALL BE DEEMED TO GRANT SUCH AUTHORITY. THE
B
OARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3, AND RECOMMENDS A
VOTE AGAINST PROPOSAL 4.
[X] Please mark your vote as in this example.
<Table>
<S> <C> <C> <C>
(1) Election of Directors FOR ALL [ ] WITHHOLD AUTHORITY EXCEPTIONS [ ]
(except as specified below) nominees listed below TO VOTE FOR [ ]
all nominees listed below
</Table>
Darcie S. Glazer Bryan G. Glazer
Instructions: To withhold vote for any individual nominee, mark the
"Exceptions" box and write that nominee's name(s) in the space provided below.
-----------------------------------------------------------------------------
(2) Proposal to grant stock options to non-employee directors
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(3) Proposal to ratify selection of PricewaterhouseCoopers LLP as independent
public accountants FOR [ ] AGAINST [ ] ABSTAIN [ ]
(4) Stockholder proposal to recommend liquidation of the Company
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(Sign and date on reverse side)
THE ZAPATA CORPORATION -- ANNUAL MEETING -- MAY 21, 2002
ZAPATA CORPORATION NOW OFFERS PHONE VOTING 24 HOURS A DAY, 7 DAYS A WEEK
ON A TOUCH-TONE PHONE, CALL TOLL-FREE 1-800-PROXIES (OR 1-800-776-9437). YOU
WILL HEAR THESE INSTRUCTIONS:
- ENTER THE CONTROL NUMBER FROM THE BOX ABOVE, JUST BELOW THE PERFORATION.
- YOU WILL THEN HAVE TWO OPTIONS:
OPTION 1: TO VOTE AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL PROPOSALS;
OR
OPTION 2: TO VOTE ON EACH PROPOSAL SEPARATELY.
- YOUR VOTE WILL BE REPEATED TO YOU AND YOU WILL BE ASKED TO CONFIRM IT.
IF YOU HAVE VOTED BY PHONE, PLEASE DO NOT RETURN THE PROXY CARD. THANK YOU FOR
VOTING
