Harbinger Group Inc.
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DEF 14A
HRG GROUP, INC. filed this Form DEF 14A on 06/23/1995
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<PAGE>
 
                           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:
[ ]  Preliminary Proxy Statement
[ ]  Confidential, for Use of the Commission Only.  
         (As permitted by Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[ ]  Definitive Additional Materials
[ ]  Soliciting Material pursuant to (S)240.14a-11(c) or (S)240.14a-12

                              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]  $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 4a-6(j)(2)
     or Item 22(a)(z) of Schedule 14A.
[ ]  $500 per each party to the controversy pursuant to Exchange Act 
     Rule 14a-6(i)(3).
[ ]  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:

_______________________________________________________________________________

(2)  Aggregate number of securities to which transactions applies:

_______________________________________________________________________________

(3)  Per unit price or other underlying value of transaction computed pursuant
     to Exchange Act Rule 0-11:

_______________________________________________________________________________

(4)  Proposed maximum aggregate value of transaction:

_______________________________________________________________________________

(5)  Total fee paid:

_______________________________________________________________________________

[ ]  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:

_______________________________________________________________________________

(2)  Form, Schedule or Registration Statement no.:

_______________________________________________________________________________

<PAGE>
 
(3)  Filing Party:

_______________________________________________________________________________

(4)  Date Filed:

_______________________________________________________________________________

<PAGE>
 
                         [LOGO OF ZAPATA CORPORATION]



                                June 26, 1995



To Our Stockholders:

You are cordially invited to attend the 1995 Annual Meeting of Stockholders to
be held on July 27, 1995, at 12:00 noon, New York time, at the offices of
Bloomberg Financial Markets Commodity News, 499 Park Avenue, New York, New York
10022.

At the 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 1994
annual report to stockholders has been or is being furnished to stockholders.

Whether or not you plan to attend the meeting, we ask that you indicate the
manner in which you wish your shares to be voted and sign and return your proxy
as promptly as possible in the enclosed envelope so that your vote may be
recorded.  You may vote your shares in person if you attend the meeting, even if
you send in your proxy.

I appreciate your continued interest in the Company.

Sincerely yours,

/s/ Avram A. Glazer

Avram A. Glazer
President and Chief Executive Officer

<PAGE>
 
                              TABLE OF CONTENTS


                                                                       PAGE


Notice of Annual Meeting of Stockholders

Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1
     Voting Securities  . . . . . . . . . . . . . . . . . . . . . . . .    1
     Certain Beneficial Owners  . . . . . . . . . . . . . . . . . . . .    2
     Election of Directors. . . . . . . . . . . . . . . . . . . . . . .    3
     Nominees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
     Continuing Directors . . . . . . . . . . . . . . . . . . . . . . .    3
     Board of Directors and Committees of the Board . . . . . . . . . .    4
     Security Ownership of Management . . . . . . . . . . . . . . . . .    6
     Executive Compensation . . . . . . . . . . . . . . . . . . . . . .    7

     Compliance with Section 16(a) of the Exchange Act  . . . . . . . .   10
     Certain Relationships and Related Transactions . . . . . . . . . .   10
     Report of the Compensation Committee . . . . . . . . . . . . . . .   11
     Compensation Committee Interlocks and Insider Participation  . . .   12
     Stockholder Return Performance Graphs  . . . . . . . . . . . . . .   14
     Ratification of the Appointment of Independent Accountants . . . .   15
     Stockholder Proposal on Cumulative Voting  . . . . . . . . . . . .   15
     Other Matters  . . . . . . . . . . . . . . . . . . . . . . . . . .   17
     Stockholder Proposals for 1996 Annual Meeting of Stockholders. . .   17

<PAGE>
 
 
                             ZAPATA CORPORATION

                   NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                          TO BE HELD ON JULY 27, 1995


     The Annual Meeting of the Stockholders of Zapata Corporation will be held
at the offices of Bloomberg Financial Markets Commodity News, 499 Park Avenue,
New York, New York 10022 on Thursday, July 27, 1995, at 12:00 noon, New York
time, for the purpose of considering and voting on:

     1.  Election of two directors as members of Class III of the Board of
         Directors for three-year terms.

     2.  Ratification of the appointment of Coopers & Lybrand L. L. P. as
         independent public accountants for the Company for 1995.

     3.  A stockholder proposal to request the Board of Directors to take the
         steps necessary to provide for cumulative voting of the Company's 
         Common Stock.

     4.  Such other business as may properly come before the meeting and any
         adjournment thereof.

     The Board of Directors has fixed June 20, 1995 as the record date for
determining the stockholders of the Company entitled to notice of and to vote at
the meeting and at any adjournment thereof, and only holders of the Company's
Common Stock and $2 Noncumulative Convertible Preference Stock of record at the
close of business on such date will be entitled to notice of and to vote at the
meeting or adjournment.

                         By order of the Board of Directors,

                         /s/ Joseph L. von Rosenberg III

                         Joseph L. von Rosenberg III
                         Vice President, General Counsel
                           and Corporate Secretary


Houston, Texas
J
une 26, 1995

  TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND RETURN
YOUR PROXY AS PROMPTLY AS POSSIBLE.  AN ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES, IS ENCLOSED FOR THIS PURPOSE.

<PAGE>
 
                                PROXY STATEMENT

          This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Zapata Corporation, a Delaware
corporation (hereinafter called the "Company"), to be voted at the 1995 Annual
Meeting of Stockholders to be held at the offices of Bloomberg Financial Markets
Commodity News, 499 Park Avenue, New York, New York 10022 on Thursday, July 27,
1995, at 12:00 noon, New York time, and any and all adjournments thereof.

          Solicitation of proxies by mail is expected to commence on June 26,
1995, and the cost thereof will be borne by the Company.  In addition to such
solicitation by mail, certain of the directors, officers and regular employees
of the Company may, without extra compensation, solicit proxies by telephone and
personal interview.  Arrangements will be made with brokerage houses,
custodians, nominees and other fiduciaries to send proxy materials to their
principals, and they will be reimbursed by the Company for postage and clerical
expenses. Furthermore, American Stock Transfer & Trust Co. has been retained to
assist in the solicitation of proxies for a nominal fee.

          Shares represented by properly executed proxies will be voted as
specified.  If no specifications have been given in a proxy, the shares
represented thereby will be voted FOR the election of nominees listed herein as
directors (Item 1), FOR the ratification of Coopers & Lybrand L. L. P. as
independent public accountants for 1995 (Item 2), AGAINST the stockholder
proposal to request the Board of Directors to take the steps necessary to
provide for cumulative voting of the Company's Common Stock (the "Stockholder
Proposal") (Item 3), and, in the discretion of the persons named in the proxy,
on any other business that may properly come before the 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.  The principal executive
offices of the Company are located at One Riverway, Suite 2100, Houston, Texas
77056.  The mailing address of the Company is P.O. Box 4240, Houston, Texas
77210-4240.  For a period of at least ten days prior to the Annual Meeting of
Stockholders, a complete list of stockholders entitled to vote at the meeting
will be available for inspection by stockholders of record during ordinary
business hours for proper purposes at the Company's principal executive offices.



                               VOTING SECURITIES

          Stockholders of record at the close of business on June 20, 1995 (the
"Record Date"), are entitled to vote at the meeting and at any adjournments
thereof.  On that date the issued and outstanding capital stock of the Company
consisted of 29,502,407 shares of Common Stock (the "Common Stock") and 2,627
shares of $2 Noncumulative Convertible Preference Stock (the "$2 Preference
Stock"), each of which shares is entitled to one vote.  The presence at the
meeting, in person or by proxy, of the holders of a majority of the outstanding
shares of voting stock of the Company is necessary to constitute a quorum for
the transaction of business at the Annual Meeting of Stockholders.  If there are
not sufficient shares represented in person or by proxy at the meeting to
constitute a quorum, the meeting may be postponed or adjourned in order to
permit further solicitations of proxies by the Company.  Proxies given pursuant
to this solicitation and not revoked will be voted at any postponement or
adjournment of the Annual Meeting of Stockholders in the manner set forth above.

          The two nominees receiving the greatest number of votes cast by the
holders of Common Stock and $2 Preference Stock will be elected as directors.
There will be no cumulative voting in the election of directors.  The
Stockholder Proposal and the ratification of independent public accountants
require the affirmative vote of holders of a majority of the shares of Common
S
tock and $2 Preference Stock present


<PAGE>
 
in person or represented by duly executed proxies at the Annual Meeting of
Stockholders and entitled to vote on the subject matter.

          Under Delaware law, abstentions are treated as present and entitled to
vote and thus will be counted in determining whether a quorum is present.
Abstentions will have the same effect as a vote against a matter, except as to
the election of directors, as to which they will have no effect.  A broker non-
vote (i.e., shares held by brokers or nominees as to which instructions have not
been received from the beneficial owners or persons entitled to vote and the
broker or nominee does not have discretionary power to vote on a particular
matter) is counted for purposes of determining the existence of a quorum but
will have no effect on the outcome of the vote on the Stockholder Proposal or
the ratification of independent public accountants.


                           CERTAIN BENEFICIAL OWNERS

          The following information relates to the holders of the Company's
voting securities known to the Company on June 20, 1995 to own beneficially 5%
or more of  any class of the Company's voting securities. For the purposes of
this Proxy Statement, beneficial ownership of securities is defined in
accordance with the rules of the Securities and Exchange Commission (the
"Commission") to mean generally the power to vote or dispose of securities,
regardless of any economic interest therein.


<TABLE>
<CAPTION>
 
 
                                                            Shares Owned               Percent
    Title of Class           Name and Address                Beneficially               of Class
- - ---------------------------  ---------------------------     --------------------    -------------
<S>                          <C>                             <C>                     <C>
 
Common Stock...............  The Malcolm I. Glazer Trust     10,402,050 (1)                   35.3
                             and Malcolm I. Glazer
                             1482 South Ocean Boulevard
                             Palm Beach, Florida 33480
 
                             Peter M. Holt                    2,822,617 (2)                    9.6
                             c/o Holt Company of Texas
                             S.W.W. White at Holt Avenue
                             San Antonio, Texas 78222
 
$2 Preference Stock........  Larry A. Reiten                        150                        5.7
                             Route 1, Box 297
                             Bayfield, Wisconsin 54814-9701

</TABLE>

________________
(1)  Based on information contained in a Schedule 13D, as amended as of October
     25, 1994, which was filed with the Commission by The Malcolm I. Glazer
     Trust (the "Trust") and Mr. Glazer.  The Schedule 13D states that Mr.
     Glazer contributed all of his shares of Common Stock to the Trust and that,
     as trustee and beneficiary of the Trust, Mr. Glazer is a beneficial owner
     of the shares of Common Stock held by the Trust.  The amount in the table
     also includes 6,666 shares of Common Stock, which Mr. Glazer has the right
     to acquire within 60 days through the exercise of nonqualified stock
     options.
(2)  Based on (i) information contained in a Schedule 13D, as amended as of June
     8, 1994, which was filed with the Commission by Mr. Holt and (ii)
     additional information provided to the Company by Mr. Holt. The Schedule
     13D and the additional information indicates ownership as follows:
     1,021,969 shares held by Mr. Holt, individually; 115,950 shares held by the
     Peter M. Holt Grantor Trust; 28,033 shares held by the Peter Holt H-R
     Trust; 220,478 shares held by the S Stock GST Trust for Peter M. Holt;
     60,478 shares held by the S Stock GST Trust for Benjamin D. Holt III;
     120,478 shares held by the S Stock GST Trust for Anne Holt; 207,582 shares
     held by the Holt Corporate Stock Marital Trust--1985; 200,886 shares held
     by the Holt Corporate Stock Life Trust--1985 and 840,097 shares held by
     Benjamin D. Holt, Jr.  Peter M. Holt disclaims beneficial ownership as to
     all of the shares held by the S Stock GST Trust for Benjamin D. Holt III
     and the S Stock GST Trust for Anne Holt.  The amount in the table also

                                       2

<PAGE>
 
     includes 6,666 shares of Common Stock, which Mr. Holt has the right to
     acquire within 60 days through the exercise of nonqualified stock options.

                             ELECTION OF DIRECTORS

          The Company's Restated Certificate of Incorporation, as amended,
provides for the classification of the Board of Directors into three classes
(Class I, Class II and Class III), having staggered terms of three years each.
The current term of office of directors in Class III expires at the forthcoming
Annual Meeting of Stockholders.  The terms of office of the directors in Classes
I and II will expire at the annual meetings of stockholders to be held in 1996
and 1997, respectively.  Two Class III directors will be elected at the Annual
Meeting of Stockholders to serve for three-year terms expiring at the 1998
annual meeting of stockholders.

          It is the intention of the persons designated as proxies in the
enclosed proxy card, unless the proxy is marked with contrary instructions, to
vote for the election of Messrs. Robert V. Leffler, Jr. and W. George Loar as
Class III directors to serve until the 1998 annual meeting of stockholders and
until their successors have been duly elected and qualified.  In May 1995, the
Board of Directors appointed Messrs. Leffler and Loar to fill the vacancies
created by the resignations of Messrs. Myrl S. Gelb and Luther W. Miller.  If
either of these nominees becomes unavailable for any reason, shares represented
by such proxies 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.

                                   NOMINEES

          The following sets forth certain information with respect to the
business experience of each nominee during the past five years.

          Robert V. Leffler, Jr., age 49, has served as a director since May
1995.  Mr. Leffler also has served as owner of the Leffler Agency, an
advertising and marketing/public relations firm based in Baltimore, Maryland
that specializes in sports, rental real estate, and medical areas, for more than
the past five years.

          W. George Loar, age 72, has been a director since May 1995.  Mr. Loar
has been retired for the past five years from his position as Vice President and
General Manager of KQTV, a St. Joseph, Missouri ABC-affiliated television
station.


                             CONTINUING DIRECTORS

          The following sets forth certain information with respect to all
members of the Board of Directors whose current terms will continue after the
Annual Meeting of Stockholders.  Information is provided concerning the business
experience of each continuing director during the past five years and the other
directorships held by each continuing director.  Unless otherwise indicated,
each person has had the same occupation for at least five years.

Class I Directors - Term Expiring 1996

          Malcolm I. Glazer, age 66, has been a director since July 1993.  Mr.
Glazer has served as Chairman of the Board of Directors since July 1994, and
served as President and Chief Executive Officer of the Company from August 1994
until March 1995.  Mr. Glazer has been a self-employed, private investor whose
diversified portfolio consists of investments in television broadcasting,
restaurants, restaurant equipment, food services equipment, health care,
banking, real estate, stocks, government securities and corporate bonds, for
more than the past five years.  He is a director and Chairman of the Board of
The Houlihan's Restaurant

                                       3

<PAGE>
 
Group, Inc., and also is a director of Specialty Equipment Companies, Inc. and
Envirodyne Industries, Inc. Malcolm I. Glazer is the father of Avram A. Glazer.

          Ronald C. Lassiter, age 62, has been a director since 1974.  Mr.
Lassiter served as Acting Chief Operating Officer of the company from December
1994 to March 1995.  He served as Chairman of the Board of Directors of the
Company from December 1985 to July 1994, and Chief Executive Officer from
January 1983 to July 1994.  From July 1994 until December 1994, he was Chairman
and Chief Executive Officer of Zapata Protein, Inc.  In December 1994, Mr.
Lassiter withdrew from an active management role with Zapata Protein, Inc. as a
result of his participation in a group seeking to acquire that subsidiary.  That
proposed acquisition was not consummated, and Mr. Lassiter has resumed his
active management role as Chairman and Chief Executive Officer of Zapata
Protein, Inc. pursuant to the consulting agreement described under "Employment
Agreements and Other Incentive Plan."  He has served in various positions with
the Company since 1970, and he served as a director of Zapata Gulf Marine
Corporation from November 1984 to January 1992.  In addition, Mr. Lassiter
serves as a director of Daniel Industries, Inc.

Class II Directors - Term Expiring 1997

          Avram A. Glazer, age 34, has been a director since July 1993.  Mr.
Glazer has served as President and Chief Executive Officer of the Company since
March 1995. For 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 Florida Management Office, TV Management Office,
Farmington Mobile Home Park, Inc., Century Development Corporation d/b/a KGNS
Laredo, and Canandaigua Mobile Park. Mr. Glazer's principal responsibilities
include identifying, implementing, monitoring and disposing of Malcolm I.
Glazer's investment interests.  He also serves as a director of The Houlihan's
Restaurant Group, Inc., and is a director of Speciality Equipment Companies,
Inc. and Envirodyne Industries, Inc.  Avram A. Glazer is the son of Malcolm I.
Glazer.

          Peter M. Holt, age 46, has been a director since November 1993.  Since
July 1984, Mr. Holt has served as the Chief Executive Officer of Energy
Industries, Inc., which was acquired by the Company in November 1993.  Mr. Holt
is also the Chief Executive Officer of certain other companies, including
Caterpillar equipment dealerships and companies engaged in used machinery sales,
aircraft sales and real estate investments, a position he has held with each
such entity for more than the past five years.  In addition, Mr. Holt is a
director of Texas Commerce Bank-San Antonio, and Chairman of the Board of DUECO,
a used equipment cooperative.


                BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

          During fiscal 1994, the Board of Directors held seven (7) meetings.
The Board of Directors has established an Audit Committee, Compensation
Committee,  Nominating Committee and an Executive Committee to oversee specific
matters affecting the Company.

          The Audit Committee is currently composed of Messrs. W. George Loar
(Chairman) and Robert Leffler, Jr.  The Audit Committee held two (2) meetings in
fiscal 1994.  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; makes recommendations to the Board as to
the engagement of independent accountants; and reviews the letter of engagement
and statement of fees relating to the scope of the annual audit and special
audit work which may be recommended or required by the independent accountants.

          The Compensation Committee, currently composed of Messrs. Avram Glazer
(Chairman), Robert Leffler, Jr. and R. C. Lassiter, held one (1) meeting during
fiscal 1994.  The functions performed by the Compensation Committee include:
reviewing the Company's executive salary and bonus structure; reviewing

                                       4

<PAGE>
 
Zapata's stock option plans (and making grants thereunder); recommending
directors' fees; setting bonus goals; and approving salary and bonus awards to
key executives.

          The Nominating Committee, currently composed of Messrs. W. George Loar
(Chairman), Malcolm Glazer and Peter Holt, held one (1) meeting during fiscal
1994.  The functions performed by the Nominating Committee include: proposing
candidates to fill vacancies on the Board of Directors, reviewing the structure
and composition of the Board, and considering qualifications requisite for
continuing Board service.  The Nominating Committee will consider candidates
recommended by a stockholder of the Company.  Any such recommendation should be
provided to the Corporate Secretary of the Company.

          The Executive Committee, currently composed of Messrs. Avram Glazer
(Chairman), Malcolm Glazer, R. C. Lassiter and W. George Loar, held five (5)
meetings in fiscal 1994.  The Executive Committee reviews and develops
strategies and policies of the Company and recommends changes thereto.

          During the fiscal year ended September 30, 1994 each director attended
at least 75% of the aggregate number of meetings of the Company's Board of
Directors and respective committees on which he served.


Compensation of Directors

          During the year ended September 30, 1994, those members of Zapata's
Board of Directors who were not employees of the Company were paid an annual
retainer of $20,000, plus $3,000 for serving as chairman of any committee, plus
$700 for each Board or committee meeting attended.  Effective October 1, 1994,
the per-meeting fee was changed to an annual fee of $1,000 for each committee of
the Board on which a Board member serves and the additional fee for serving as
chairman of a committee was eliminated.  Effective April 1, 1995, the Company
changed the payment schedule of directors' fees from an annual payment to a
quarterly payment.  Those directors who also are Zapata employees do not receive
any additional compensation for their services as directors.

          Pursuant to the Company's Amended and Restated Special Incentive Plan,
each non-employee director of the Company automatically receives, following
initial appointment or election to the Board of Directors, a grant of options to
purchase 20,000 shares of the Company's Common Stock at the fair market value on
the date of the grant.  Each such option is exercisable in three equal annual
installments after the date of the grant.

          On August 27, 1981, the Company and B. John Mackin, a former director
of the Company who resigned in February 1994, entered into a Consulting and
Retirement Agreement pursuant to which Mr. Mackin, who was then serving as
Chairman of the Board and Chief Executive Officer of the Company, agreed to
continue serving as Chairman of the Board and Chief Executive Officer of the
Company until his normal retirement date, and to serve as a consultant to the
Company following his retirement.  The agreement provides for annual retirement
income of $225,000 for the remainder of Mr. Mackin's life and thereafter
$112,500 annually to his wife should she survive him.  Mr. Mackin retired as an
employee of the Company on December 31, 1985, and receives amounts provided for
under the agreement.  The agreement was deemed appropriate by the Board of
Directors since, by serving the Company in the stated capacities, Mr. Mackin
forfeited retirement benefits comparable to those provided for under such
agreement and which otherwise would have accrued to him in respect of his
previous employment, and he was not eligible to participate in the Company's
pension plan.

          In November 1993, Peter M. Holt and the Company entered into a three-
year Consulting Agreement pursuant to which the Company will pay Mr. Holt an
annual consulting fee of $200,000 for the first year, $150,000 for the second
year and $130,000 for the third year.  Pursuant to the Consulting Agreement,
during the first eighteen months of its term, Mr. Holt served in the capacity of
Chairman and Chief Executive Officer of the divisions or subsidiaries of the
Company engaged in the natural gas compression business, and had the title of
Chairman and Chief Executive Officer.  The Consulting Agreement provides that

                                       5

<PAGE>
 
commencing in May 1995 and for the balance of the remaining 18 months of the
term of the Consulting Agreement, Mr. Holt is to serve as Chairman of such
divisions and subsidiaries.  Mr. Holt also is the Chief Executive Officer of
such divisions and subsidiaries.

 
                      SECURITY OWNERSHIP OF MANAGEMENT

          Set forth below is certain information with respect to beneficial
ownership of the Company's Common Stock as of June 20, 1995 by each director,
nominee director, persons named in the Summary Compensation Table under
"Executive Compensation" below and by the directors and executive officers of
the Company as a group.



<TABLE>
<CAPTION>
 
 
 
                                                         Shares Owned      Percent
Title of Class            Name                           Beneficially(1)    of Class
- - --------------         ----------                        ---------------    --------
<S>                    <C>                               <C>                <C>
 
Common Stock           Avram A. Glazer                        6,666           *
                       Malcolm I. Glazer                 10,402,050 (2)      35.3
                       Peter M. Holt                      2,822,617 (3)       9
                       R. C. Lassiter                        98,477           *
                       Robert V. Leffler, Jr.                     0           *
                       W. George Loar                             0           *
                       Robert W. Jackson                    350,436 (4)       *
                       Joseph B. Mokry                            0           *
                       Kristian Siem                        889,224 (5)       3.0
                       Directors and executive officers
                         as a group (11 persons)         14,724,168          49.9
 
</TABLE>


________________
*    Less than 1%
(1)  Except as otherwise noted, individuals listed in the table have sole voting
     and investment power with respect to the indicated shares.  Investment
     power with respect to certain shares held by certain officers of the
     Company under the Profit Sharing Plan is limited; such shares amount to
     less than 1% of the total number of shares of Common Stock held by all
     officers and directors as a group.  Included in the amounts indicated are
     shares which are subject to options exercisable within 60 days of December
     28, 1994.  The number of such shares are 6,666 for each of Messrs. A.
     Glazer, M. Glazer, and Holt; and 173,331 shares for the directors and
     executive officers as a group.
(2)  10,395,384 shares are owned by the Malcolm I. Glazer Trust.
(3)  Includes 1,021,969 shares held by Mr. Holt, individually; 115,950 shares
     held by the Peter M. Holt Grantor Trust; 28,033 shares held by the Peter
     Holt H-R Trust; 220,478 shares held by the S Stock GST Trust for Peter M.
     Holt; 60,478 shares held by the S Stock GST Trust for Benjamin D. Holt III;
     120,478 shares held by the S Stock GST Trust for Anne Holt; 207,582 shares
     held by the Holt Corporate Stock Marital Trust--1985; 200,886 shares held
     by the Holt Corporate Stock Life Trust--1985 and 840,097 shares held by
     Benjamin D. Holt, Jr.  Peter M. Holt disclaims beneficial ownership as to
     all of the shares held by the S Stock GST Trust for Benjamin D. Holt III
     and the S Stock GST Trust for Anne Holt.
(4)  All such shares are owned by the Robert W. Jackson Trust.
(5)  All such shares are owned by Norex America, Inc.

                                       6

<PAGE>
 

                            EXECUTIVE COMPENSATION

          The following tables set forth information regarding annual, long-term
and other compensation with respect to the fiscal years ended September 30,
1994, 1993 and 1992 for services in all capacities rendered to the Company by
those persons who served as the Company's Chief Executive Officer during the
fiscal year ended September 30, 1994 and the other four most highly compensated
executive officers of the Company other than the Chief Executive Officer who was
serving as an executive officer on September 30, 1994 (the "Named Officers").
The format and information presented are as prescribed in the rules of the
Commission.

                          Summary Compensation Table


<TABLE>
<CAPTION>
 
                                                             Long-Term
                                   Annual Compensation      Compensation
                                --------------------------  ------------   -------------
                                                                LTIP          All Other
Name & Principal Position       Year  Salary($)    Bonus($)   Payouts($)     Comp.($)(4)
- - ----------------------------------------------------------------------------------------
<S>                             <C>    <C>          <C>        <C>           <C>
Malcolm I. Glazer,              1994    29,800 (1)       --           --            --
Chairman and Chief
Executive Officer (1)
 
Ronald C. Lassiter,             1994   361,779 (2)       --           --            --
Chairman and Chief              1993   358,600 (2)  175,000           --         2,100
Executive Officer of            1992   358,600      125,510    2,006,519 (3)     1,200
Zapata Protein, Inc. (2)
 
Robert W. Jackson,              1994   200,000           --           --            --
President and Chief             1993   200,000           --           --            --
Executive Officer of
Cimarron (5)
 
Marvin J. Migura,               1994   165,600           --           --         3,600
Senior Vice President and       1993   165,600       70,000           --         3,000
Chief Financial Officer (6)     1992   162,970       57,960           --         1,400
 
Joseph B. Mokry,                1994   172,260      100,080           --         8,512
President and Chief
Operating Officer of
Energy Industries, Inc.
 
Kristian Siem, Chief            1994    92,348           --           --            --
Operating Officer (7)
 
</TABLE>


_________________
(1)  In August 1994, Mr. Glazer was elected as Chairman, President and Chief
     Executive Officer. Mr. Glazer served as President and Chief Executive
     Officer until March 1995.  He received no compensation during such period
     for acting in these capacities other than the Director and board committee
     fees, which are included in the "Salary" column.  Mr. Glazer continues to
     serve as Chairman of the Company.

                                       7

<PAGE>
 
(2)  Mr. Lassiter served as Chief Executive Officer during fiscal 1992 and 1993
     and until July 1994. From July 1994 until December 1994, he was Chairman
     and Chief Executive Officer of Zapata Protein, Inc.  In December 1994, Mr.
     Lassiter withdrew from an active management role with Zapata Protein, Inc.
     as a result of his participation in a group seeking to acquire that
     subsidiary. That proposed acquisition was not consummated, and Mr. Lassiter
     has resumed his active management role with Zapata Protein, Inc. From
     December 1994 to March 1995, he served as Acting Chief Operating Officer of
     Zapata Corporation.  Amounts in the "Salary" column include amounts paid to
     Mr. Lassiter under the consulting agreement described below in "Employment
     Agreements and Other Incentive Plans."

(3)  In connection with the merger of Zapata Gulf Marine Corporation with a
     subsidiary of Tidewater, Inc. in January 1992, Mr. Lassiter received such
     payment under the Equity Incentive Plan established by Zapata Gulf Marine
     Corporation in 1989.  There are no further amounts payable under such plan.
(4)  The amounts indicated represent the Company's contributions to its Profit-
     Sharing Plan.
(5)  Mr. Jackson became an executive officer of the Company in November 1992.
(6)  Mr. Migura resigned as an executive officer of the Company effective as of
     October 28, 1994.
(7)  Mr. Siem was Chief Executive Officer during July and August 1994 and Chief
     Operating Officer from August 1994 until December 1994.  The amount shown
     in the "Salary" column for Mr. Siem includes Director and board committee
     fees and amounts paid under a consulting agreement with the Company
     providing for his services as Chief Operating Officer.  For additional
     information concerning compensation payable to Kristian Siem, see
     "Employment Agreements and Other Incentive Plans" in this Proxy Statement.

          While the officers of the Company receive benefits in the form of
certain perquisites, none of the Named Officers receives perquisites which
exceed in value the lesser of $50,000 or 10% of such officer's salary and bonus.



                   Aggregated Fiscal Year-End Option Values


<TABLE>
<CAPTION>
 
                          Number of Securities           Value of Unexercised
                         Underlying Unexercised        In-the-Money Options at
                      Options at Fiscal Year-End(#)       Fiscal Year-End($)
- - -------------------   -----------------------------   -------------------------
Name                    Exercisable/Unexercisable     Exercisable/Unexercisable
- - -------------------   -----------------------------   -------------------------
<S>                   <C>                             <C>
Malcolm I. Glazer             6,666 / 13,334                   0 / 0
- - -------------------   -----------------------------    ------------------------
Ronald C. Lassiter              244,000 / 0                 335,000 / 0
- - -------------------   -----------------------------    ------------------------
Robert W. Jackson                  0 / 0                       0 / 0
- - -------------------   -----------------------------    ------------------------
Marvin J. Migura                140,000 / 0                 192,500 / 0
- - -------------------   -----------------------------    ------------------------
Joseph B. Mokry                    0 / 0                       0 / 0
- - -------------------   -----------------------------    ------------------------
Kristian Siem                 6,666 / 13,334                   0 / 0
- - -------------------   -----------------------------    ------------------------
</TABLE>


                                       8

<PAGE>
 
          The options included in the foregoing table were granted in 1990 under
the Company's 1990 Stock Option Plan, except in the case of Messrs. Glazer and
Siem, whose options were granted in 1993 under the Company's Amended and
Restated Special Incentive Plan with respect to their service as non-employee
directors.  The options were granted at Market Value on the date of grant and
are exercisable in cumulative one-third installments commencing one year from
the date of grant, with full vesting occurring on the third anniversary of the
grant date.  On September 30, 1994, the closing price of Common Stock on the
NYSE was $4.50 per share.  No options were granted to, or exercised by, the
Named Officers in fiscal 1994.


                           Pension Plan Information

          Effective January 15, 1995, the Company amended its Pension Plan to
provide that highly-compensated employees (those having covered annual
compensation in excess of $66,000) will not earn additional benefits under the
plan after that date.  In addition, the Company terminated its Supplemental
Pension Plan except with respect to benefits already accrued.  Messrs. Glazer,
Jackson and Mokry are not participants in the Pension Plan or the Supplemental
Pension Plan.  Mr. Lassiter retired for purposes of the Pension Plan effective
August 1, 1994 and receives annual benefits of $87,860 under the Pension Plan
and $101,512 under the Supplemental Pension Plan.  Mr. Migura's estimated annual
benefit is $62,412 (assuming payments commence at age 65 on a single life
annuity basis).

Employment Agreements and Other Incentive Plans

          Effective as of March 15, 1991, Zapata entered into employment
agreements with, among others, Messrs. Lassiter and Migura.  As a result of the
termination of Mr. Migura's employment in October 1994, he will receive payments
for three years equivalent to his base salary in effect at the time of
termination ($165,600 annually).  The agreements also provided for continuation
of salary for a three-year period following termination of employment under
certain circumstances occurring within two years after a change of control.  A
"change of control" for purposes of this provision occurred in July 1992.  As a
result of the change in Mr. Lassiter's responsibilities in July 1994, Mr.
Lassiter terminated his employment under this provision of his contract.
Subsequently, Mr. Lassiter entered into a consulting agreement with the Company
under which he agreed to serve as Chairman and Chief Executive Officer of Zapata
Protein, Inc. for the same aggregate compensation he would have been entitled to
receive under the termination provisions of the employment agreement, with the
payment schedule deferred over a more extended period of time so long as Mr.
Lassiter continues to serve under the consulting agreement.  The payments to Mr.
Lassiter under these provisions are included in the "Salary" column of the
Summary Compensation Table.

          The employment agreements of Messrs. Lassiter and Migura provide that
all payments to be made thereunder shall be reduced as necessary such that the
present value of all parachute payments, as defined under federal tax laws, will
be one dollar less than three times the executive's base amount of salary, so as
to avoid the excise taxes on the executive or the disallowance of a tax
deduction by Zapata.

          Effective as of August 17, 1994, Zapata entered into a consulting
agreement with Mr. Siem under which he agreed to provide certain consulting
services to the Company and serve as its Chief Operating Officer in exchange for
a quarterly fee of $75,000.  Mr. Siem ceased to serve as the Company's Chief
Operating Officer on December 15, 1994.  His consulting agreement was terminated
pursuant to the terms and conditions of a settlement agreement entered into on
March 7, 1995 under which the Company paid Mr. Siem $300,000 in exchange for his
agreement to waive and release all claims under the consulting agreement.  See
"Compensation Committee Interlocks and Insider Participation" for related
information concerning payments by the Company to entities with which Mr. Siem
is affiliated to repurchase shares of the Company's common stock and repay
outstanding debt held by such entities, and information concerning Mr. Siem's
resignation from the Company's Board of Directors.

                                       9

<PAGE>
 
          Effective as of September 30, 1992 Cimarron entered into an employment
agreement with Robert W. Jackson (the "Jackson Agreement").  The Jackson
Agreement provides for Mr. Jackson's continuing employment as President, Chief
Executive Officer and Director of Cimarron for a period of five years. However,
if Mr. Jackson's employment is terminated for cause, his salary will cease as of
such date.  If Mr. Jackson's employment is terminated by death or total or
permanent disability, his salary will cease as of the end of the month in which
such event occurs.  If Mr. Jackson's employment is terminated without cause,
Cimarron will be obligated to pay the salary then being paid for the remainder
of the term of the Jackson Agreement.  In the event that Mr. Jackson voluntarily
resigns for "good reason," Cimarron is obligated to continue to pay the salary
then being paid for the remainder of the term of the Jackson Agreement.  "Good
reason" is defined as (i) the assignment to Mr. Jackson of any duties materially
inconsistent with his position, a substantial change in his reporting
responsibilities or the failure to re-elect him as President, Chief Executive
Officer or Director of Cimarron; (ii) a reduction in Mr. Jackson's base salary
or benefits; (iii) the transfer of Mr. Jackson; or (iv) a material breach by
Cimarron of the Jackson Agreement.  If Mr. Jackson voluntarily resigns without
good reason, his salary will cease as of the date of resignation.



 
              COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

          Section 16(a) of 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 Commission and the New York
Stock Exchange 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.


          To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended September 30, 1994 all
reports required by Section 16(a) to be filed by its directors, officers and
greater than 10% beneficial owners were filed on a timely basis.



 
               CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          The Company allowed Jack T. Trotter, a director of the Company until
November 1994, the use of a corporate aircraft under an arrangement which
provided the Company with full recovery of the expenses associated with such
use, including all direct and indirect costs.  For fiscal 1994, Mr. Trotter paid
the Company a total of  $317,000 for the use of the corporate aircraft.


          On February 14, 1995, the Company entered into a stock purchase
agreement for the sale of Zapata Protein, Inc. with ZP Acquisition Corp. ("ZP").
R. C. Lassiter held an ownership interest in ZP, which committed to buy all of
the issued and outstanding shares of Zapata Protein for $56 million.  ZP and its
guarantors failed to close the transaction and perform their obligations under
the purchase agreement and related guaranty agreement.  The Company has filed a
lawsuit in the District Court of Harris County, Texas, number 95-26579, styled
Zapata Corporation v. ZP Acquisition Corp., et al, seeking to recover all
                                            -----
damages arising from the aforementioned failure to close the Zapata Protein
transaction.

                                       10

<PAGE>
 
          For information concerning certain related transactions and
relationships of Peter M. Holt and Kristian Siem with the Company, and certain
proposed transactions between the Company and Malcolm Glazer, see "Compensation
Committee Interlocks and Insider Participation" in this Proxy Statement.


 
                    REPORT OF THE COMPENSATION COMMITTEE

          The Compensation Committee (the "Committee") is responsible for the
approval and administration of compensation programs for the Company's executive
officers.  The Committee endeavors to ensure that the compensation programs for
its 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 interest of the Company and its
stockholders.  The Committee seeks to align total compensation for its 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 present 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.


Base Salary

          The Committee's policy with respect to 1994 base salaries for
executive officers was generally to keep them at the same levels as had been in
effect for 1993.  This decision was based on the Committee's subjective
determination, based on recommendations from the Chief Executive Officer, that
the base salary rates were at an appropriate level in light of compensation
surveys in which the Company participated and the expectation that executive
compensation policies would be reviewed on a comprehensive basis at a later
date.  The Committee did not consider a salary increase for Mr. Lassiter because
his salary is governed by a negotiated consulting agreement.  When Kristian Siem
became Chief Executive Officer in July 1994 following Mr. Lassiter's
resignation, his salary was fixed at an annual rate of $300,000 pursuant to a
negotiated consulting agreement.  In August 1994, Malcolm Glazer was elected
Chairman, President and Chief Executive Officer.  He received no compensation
for acting in these capacities other than Director and board committee fees.


Annual Incentive Bonus

          The 1994 bonus amounts for the executive officers were awarded by the
Committee based on the recommendations of the Chief Operating Officer, which in
turn were based on a subjective assessment of their performance in helping the
Company achieve the goals set forth in the Company's strategic plan, to the
extent applicable to each executive officer's area of responsibility.  The
Committee did not utilize any formulas based on stock prices or other
quantitative measures of corporate performance in determining the 1994 bonus
amounts.  Neither Malcolm Glazer, Kristian Siem nor R. C. Lassiter received a
bonus for 1994.



Stock Options

          The Company believes that to achieve its long-term growth objectives
and to align management and its stockholders' interests, it is in the Company's
best interest from time to time to grant stock options to key members of its
management staff.  The Company's 1990 Stock Option Plan is administered by the
Committee, which has the full power  and  authority to  designate  participants
and   determine   the   terms  and  provisions  of  the  option agreements.  The
price of each option granted is the fair market value of a share of the
Company's Common Stock on the date the option is granted.  No options were
granted under

                                       11

<PAGE>
 
the 1990 Stock Option Plan during 1994.  The Committee believes that options
should be granted only once every several years so that option grants do not
become considered a part of normal annual compensation.

THE COMPENSATION COMMITTEE
Avram A. Glazer (Chairman)
Robert V. Leffler, Jr.
R. C. Lassiter (nonvoting)



          COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

          Members of the Compensation Committee of the Board of Directors during
the year ended September 30, 1994 included Peter M. Holt, Malcolm I. Glazer,
Kristian Siem and Daniel P. Whitty, and until his resignation in February 1994,
B. John Mackin.  Mr. A. Glazer became a member of the Committee in August 1994.
Daniel P. Whitty resigned from the Board of Directors in November 1994.  Myrl S.
Gelb became a member of the Board of Directors and the Compensation Committee in
December 1994.  He resigned as a director in May 1995 and was replaced as a
member of the committee by Robert V. Leffler, Jr.


          Peter M. Holt is a director of the Company and is the beneficial owner
of 9.6% of the Company's Common Stock.  In November 1993, the Company purchased
the natural gas compression business of Energy Industries for an aggregate of
$67,227,631 in cash and 2,700,000 shares of the Company's Common Stock.  At the
time of the  acquisition, Mr. Holt was Chief Executive Officer of Energy
Industries, as well as its majority shareholder.  As part of the acquisition of
Energy Industries, the Company entered into a noncompetition agreement with Mr.
Holt.  In exchange for Mr. Holt's covenant not to compete with the Company's
natural gas compression business for a three-year period after the closing date
in the states of Arkansas, Louisiana, Kansas, New Mexico, Oklahoma and Texas,
the Company paid Mr. Holt $3,886,514. Also, in connection with the acquisition
of Energy Industries, the Company entered into a three-year Consulting Agreement
with Mr. Holt.  See "Board of Directors and Committees of the Board -
Compensation of Directors" in this Proxy Statement.


          Energy Industries, now a wholly-owned subsidiary of the Company,
purchases parts used in manufacturing and servicing compressors and for resale
to its customers from an affiliate of Mr. Holt. Energy Industries paid
approximately $7.3 million to this affiliate of Mr. Holt in fiscal 1994.  The
Company believes that such payments are comparable to those that would have been
made to other nonaffiliated entities.


          Mr. Holt also uses an aircraft of another affiliated company of his
for travel in connection with his duties at Energy Industries.  Energy
Industries pays Mr. Holt's affiliate for this usage, the amount of which was
$16,085 for the fiscal year ended September 30, 1994.  The Company believes that
such payments are comparable to those that would be made to other nonaffiliated
firms for comparable services.


          Mr. Siem served as a director of the Company from 1993 until his
resignation in April 1995. Mr. Siem is also the Chairman and Chief Executive
Officer of Norex America, Inc.  On May 17, 1993, Zapata completed certain
financial transactions with Norex Drilling Ltd. ("Norex Drilling"), a wholly-
owned subsidiary of Norex America, Inc. ("Norex America" and collectively with
Norex Drilling and other affiliates, "Norex"), through which Zapata raised
$111.4 million from the issuance of debt and equity pursuant to a Second Amended
and Restated Master Restructuring Agreement dated as of April 16, 1993,

                                       12

<PAGE>
 
as amended (as so amended, the "Norex Agreement").  Under the terms of the Norex
Agreement, Zapata issued $50.0 million of senior secured notes and $32.6 million
of senior convertible notes to Norex.  In addition, Norex purchased 3 million
shares of Common Stock for $11.25 million and 17.5 million shares of $1
Preference Stock for $17.5 million.  The $1 Preference Stock was to pay
dividends at an annual rate of 8.5% and was exchangeable into 673,077 shares of
Zapata's Tidewater common stock at the option of Norex. In August 1993, Norex
exchanged all of its $1 Preference Stock for $17.5 million aggregate principal
amount of 8.5% unsecured exchangeable notes, maturing May 16, 1996.  The 8.5%
unsecured notes were exchangeable into the 673,077 shares of Tidewater common
stock for which the $1 Preference Stock had previously been exchangeable.  In
March 1995 the Company entered into an agreement with Norex under which the
Company was permitted to sell the shares of Tidewater, Inc. common stock and
apply the net proceeds toward repayment of the 8.5% unsecured notes.  All of
such shares were sold in March 1995 for $12.7 million and the proceeds applied
to reduce the outstanding principal amount of the 8.5% unsecured notes from
$17.5 million to $4.8 million in April 1995.  On April 10, 1995 Zapata
repurchased from Norex 2,250,000 shares of the Company's Common Stock for an
aggregate purchase price of $9,000,000.  Pursuant to a conditional resignation
letter dated March 7, 1995, Mr. Siem's resignation from the Company's Board of
Directors became effective when the repurchase of the 2,250,000 shares of the
Company's Common Stock from Norex, the receipt by Norex of the proceeds of the
sale of the Tidewater, Inc. common stock and the payment to Mr. Siem of certain
unpaid directors' fees and reimbursed expenses had all been completed.  As a
result, Mr. Siem's resignation from the Board of Directors became effective on
April 10, 1995.


          In December 1993, $73.7 million of the proceeds from the sale of 3.75
million shares of Zapata's Tidewater common stock were used to prepay $68.5
million of the Company's 13% senior indebtedness to Norex, along with accrued
interest, and to pay a $3.5 million prepayment premium.  Also, Zapata wrote off
$3.3 million of previously deferred expenses related to the origination of such
indebtedness.  In September 1994, Zapata repaid the remaining balance of its 13%
senior convertible indebtedness to Norex and a required prepayment penalty of
$655,000.


          The Company also entered into an administrative services arrangement
with Norex Drilling effective June 1, 1993, pursuant to which it provided office
space and certain administrative services to Norex Drilling.  Norex Drilling
reimbursed the Company on a quarterly basis for the full cost of providing such
services as and when incurred, plus an administrative fee of 2.5%.  In fiscal
1994, the Company billed Norex Drilling $104,000 under this arrangement, which
was terminated in December 1994.


          On June 16, 1995, the Company and Malcolm Glazer entered into a non-
binding letter of intent under which the Company would acquire 4,189,298 shares,
or 31% of the outstanding common stock of Envirodyne Industries, Inc.
("Envirodyne") in a private transaction in exchange for an unsecured,
subordinated promissory note to be issued by the Company.  The note will bear
interest payable quarterly at a rate equal to the reference rate of Chemical
Bank.  Earlier, a special committee of disinterested directors was established
by the Company's Board of Directors to evaluate this possible acquisition and
the evaluation presently is underway.  The acquisition of the shares is subject
to, among other things, the completion of the Committee's evaluation process;
receipt by the Committee of a fairness opinion from Wertheim Schroder & Co.
Incorporated, an investment banking firm that was retained by the Committee to
review the proposed acquisition; negotiation and execution of a definitive
purchase agreement and expiration of the waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976.  The purchase price will be
determined with reference to the 30-day average sales price of Envirodyne's
common stock.

          For information on Mr. Mackin's consulting and retirement Agreement
with the Company, see "Compensation of Directors" above.

                                       13

<PAGE>
 
                     STOCKHOLDER RETURN PERFORMANCE GRAPH



          The following graph compares the yearly percentage change in the
Company's cumulative total return on its Common Stock over the preceding five-
year period with the cumulative total return of the Standard & Poor's 500 Stock
Index ("S&P 500 Index") and with two peer groups of publicly traded companies
over the same period.  The first peer group (the "1993 Peer Group") is the peer
group used by the Company in the presentation of the performance graph included
in the proxy soliciting material for its 1993 and 1994 annual meetings and
consists of the following companies:  Edisto Resources Corporation, Energy
Service Company, Inc., Global Marine Inc., Marine Drilling Companies, Inc.,
Mesa, Inc., Reading & Bates Corporation, and Western Company of North America.
The second peer group (the "1994 Peer Group") is a new group of peer issuers
selected by the Company in order to provide a better comparison to companies in
the natural gas services sector of the energy industry, in which the Company's
current operations are concentrated.  (The 1993 Peer Group includes several
companies in the offshore drilling industry in which the Company no longer
operates.)  The 1994 Peer Group consists of Tidewater, Inc., Enterra Corp.,
Production Operators Corp., Western Gas Resources, Inc., Aquila Gas Pipeline
Corporation, Tejas Gas Corporation, KN Energy, Inc., and USX-Delhi Group.  In
accordance with Commission rules, the 1993 Peer Group is presented along with
the 1994 Peer Group in the year of transition.

                             [GRAPH APPEARS HERE]

               COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
                AMONG ZAPATA CORPORATION, THE S & P 500 INDEX,
                  THE 1994 PEER GROUP AND THE 1993 PEER GROUP


<TABLE> 
<CAPTION> 
Measurement Period      ZAPATA          1994           1993
(Fiscal Year Covered)   CORPORATION     PEER GROUP     PEER GROUP    S & P 500
- - --------------------    -----------     ----------     ----------    ---------
<S>                     <C>             <C>            <C>           <C> 
Measurement Pt-
09/30/89
FYE 09/30/89            $100            $100           $100          $100
FYE 09/30/90            $ 48            $146           $128          $ 91
FYE 09/30/91            $ 31            $143           $ 59          $119
FYE 09/30/92            $ 38            $188           $ 41          $132
FYE 09/30/93            $ 38            $269           $ 61          $149
FYE 09/30/94            $ 35            $212           $ 52          $155  
</TABLE>
 
* $100 INVESTED ON 09/30/89 IN STOCK OR INDEX-
  INCLUDING REINVESTMENT OF DIVIDENDS.
  FISCAL YEAR ENDING SEPTEMBER 30.

                                       14

<PAGE>
 
          RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS

          Subject to stockholder ratification, the Board of Directors has
appointed Coopers & Lybrand L.L.P. to serve as the Company's independent public
accountants for the fiscal year ending September 30, 1995. Representatives of
Coopers & Lybrand L.L.P. are expected to be present at the meeting and will have
the opportunity to make a statement if they desire to do so and to respond to
appropriate questions.

Vote Required

          The affirmative vote of a majority of the total number of shares of
Common Stock and $2 Preference Stock present in person or represented by proxy
at the meeting is required to approve the ratification of Coopers & Lybrand
L.L.P. as the Company's independent public accountants.

          The Board of Directors recommends a vote FOR ratification of the
selection of Coopers & Lybrand L.L.P. as the Company's independent public
accountants for the fiscal year ending September 30, 1995.

                   STOCKHOLDER PROPOSAL ON CUMULATIVE VOTING

          Martin Glotzer, who resides at 7061 North Kedzie Avenue #301, Chicago,
Illinois 60645, is the owner of 2,000 shares, and John J. Gilbert, who resides
at 29 East 64th Street, New York, New York 10021-7043, is the owner of 203
shares and co-trustee with Margaret R. Gilbert under the will of Caston J.
Gilbert for 40 shares, and both representing an additional family interest of
1,600 shares of the Company's Common Stock.  These stockholders  have advised
the Company that it is their intention to present the following resolution for
consideration and action by stockholders at the 1995 Annual Meeting of
Stockholders:

     "RESOLVED:  That the stockholders of Zapata Corporation, assembled in
     annual meeting in person and by proxy, hereby request the Board of
     Directors to take the steps necessary to provide for cumulative voting in
     the election of directors, which means each stockholder shall be entitled
     to as many votes as shall equal the number of shares he or she owns
     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

Ms. Gilbert and Messrs. Glotzer and Gilbert have made the following statement in
support of this proposal:

     "REASONS:  Support along the lines we suggest were shown at the last annual
     meeting, when 6.7%, __________ [left blank by proponents] owners of
     7,077,149 shares, were cast in favor of this proposal.  The vote against
     included __________ [left blank by proponents] unmarked proxies.

     "A law enacted in California provides that all state pension holding and
     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.

     "The National Bank Act provides for cumulative voting.  Unfortunately, in
     many cases companies get around it by forming holding companies without
     cumulative voting.  Banking authorities have the right to question the
     capability of directors to be on banking boards. Unfortunately, in many
     cases authorities come in after and say the director or directors were not
     qualified.  We were delighted to see that the SEC has finally taken action
     to prevent bad

                                       15

<PAGE>
 
     directors from being on the board's of public companies.

     "We think cumulative voting is the answer to find new directors for various
     committees.

     "Additionally, some recommendations have been made to carry out the Valdez
     10 points. The 11th should be to having cumulative voting and ending
     stagger systems of electing directors, in our opinion.

     "When Alaska became a state, it took away cumulative voting over our
     objections. The Valdez oil spill might have been prevented if environmental
     directors were elected through cumulative voting.  Also, the high
     derivative losses might have been prevented with cumulative voting.

     "Many successful corporations have cumulative voting.  For example,
     Pennzoil having cumulative voting defeated Texaco in that famous case.
     Another example is Ingersoll-Rand, which has cumulative voting and won two
     awards.  In FORTUNE magazine it was ranked second in its industry as
     'America's Most Admired Corporations' and the WALL STREET TRANSCRIPT noted
     'on almost any criteria used to evaluate management, Ingersoll-Rand
     excels.'  In 1994 they raised their dividend. We believe that Zapata should
     follow these examples.

     "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.

          Cumulative voting tends to produce special interest directors beholden
to the narrow interests of those who elect them, even though such interests may
be adverse to the overall welfare of the Company and the stockholders as a
whole.  A board encumbered by such conflicting factions could impede the ability
of the Company to arrive at decisions that represent the long-term interest of
all stockholders and to react timely and decisively in critical situations.  The
factionalism caused by cumulative voting could also deter independent persons of
standing and reputation from serving on the Board and reduce the sense of
cooperation and confidence which the Board presently maintains.

          Neither Delaware, the State in which the Company and most major
publicly-owned corporations are incorporated, nor the Model Business Corporation
Act, which reflects a consensus of the academic and practicing legal community,
requires cumulative voting.  This is in accord with the Board's belief that the
principle of majority rule is the appropriate one for the election of directors.

          Under the corporation law of the State of Delaware, the action
recommended in this proposal could be taken only if the Board of Directors
recommended an amendment to the Company's Restated Certificate of Incorporation
establishing cumulative voting and directed that the amendment be submitted to a
vote of the Company's stockholders.  The Company's Board of Directors has not
recommended, and does not recommend, such an amendment.  Therefore, a vote in
favor of this proposal would be only an advisory recommendation to the Board of
Directors that it take steps to initiate such an amendment.

          At certain annual meetings of stockholders of, among others, Florida
Power & Light Company, FPL Group, Inc., Rockefeller Center Properties, Inc.,
Citicorp, The Chase Manhattan Corporation and Chemical

                                       16

<PAGE>
 
Banking Corporation, Mr. Gilbert submitted similar cumulative voting proposals.
At all such meetings, the proposals were overwhelmingly rejected by the
stockholders.

Vote Required

          The affirmative vote of a majority of the total number of shares of
Common Stock and $2 Preference Stock present in person or represented by proxy
at the meeting is required to approve the Stockholder Proposal.

          The Board of Directors recommends a vote AGAINST the Stockholder
Proposal.

                                 OTHER MATTERS

          The Board of Directors knows of no other matter to be presented at the
1995 Annual Meeting of Stockholders.  If any additional matter should be
presented properly, it is intended that the enclosed proxy will be voted in
accordance with the discretion of the persons named in the proxy.

         STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING OF STOCKHOLDERS

          Proposals of stockholders intended to be presented at the 1996 annual
meeting of stockholders must be received by the Company by January 15, 1996 to
be considered for inclusion in the proxy statement and form of proxy relating to
the 1996 meeting.

                         By Order of the Board of Directors,

                         /s/ Joseph L. von Rosenberg III

                         Joseph L. von Rosenberg III
                         Vice President, General Counsel
                           and Corporate Secretary


June 26, 1995

                                       17

<PAGE>
 
                                     PROXY

                               ZAPATA CORPORATION

                                 P.O. BOX 4240
                               HOUSTON, TX 77210
          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

  The undersigned hereby appoints Avram A. Glazer, Joseph L. von Rosenberg III 
and Lamar C. McIntyre and each of them, attorneys and agents with full power of 
substitution, to vote as proxy all the shares of Common Stock and $2 
Noncumulative Convertible Preference Stock of Zapata Corporation held of record 
by the undersigned on June 20, 1995 at the 1995 Annual Meeting of Stockholders 
of Zapata Corporation to be held on July 27, 1995 and at any adjournments 
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.

  If you wish to vote in accordance with the recommendations of the Board of 
Directors, you may just sign and date on the reverse side and mail in the 
postage paid envelope provided. Specific choices may be made on the reverse 
side.

                        (SIGN AND DATE ON REVERSE SIDE)


[X] PLEASE MARK YOUR
    VOTES AS IN THIS
    EXAMPLE.
                    FOR ALL                                     Nominees:
             (except as specified     WITHHOLD AUTHORITY    Term Ending 1998:
                    below)              TO VOTE FOR            
1. Election of       [_]                    [_]           Robert V. Leffler, Jr.
   Directors.
                                                            W. George Loar  
Instructions: To withhold vote for individual(s)
write name(s) below.

- - ------------------------------------------------ 
                                                 FOR     AGAINST   ABSTAIN
2. Ratification of appointment of independent    [_]       [_]       [_]
   public accountants for 1995 

3. Stockholder proposal for cumulative voting     [_]       [_]       [_]

THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS
INDICATED, WILL BE VOTED FOR ITEM 1--ALL NOMINEES LISTED AT 
LEFT FOR ELECTION AS DIRECTORS, FOR ITEM 2, AND AGAINST
ITEM 3. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR 
ITEMS 1 AND 2, AND RECOMMENDS A VOTE AGAINST ITEM 3.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE


SIGNATURE                DATE           SIGNATURE                    DATE
         ---------------     ----------          -------------------     ------
                                               SIGNATURE IF HELD JOINTLY

NOTE: When signing as Executor, Administrator, Trustee or the like, please give 
full title.




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