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
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
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.
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
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.