at its May 30, 1995 meeting (in which, as noted above, Mr. Holt participated).
Consideration of potential business combination transactions with these
companies is at a preliminary stage. Although the Company believes that
identification of either of these two potential acquisition candidates was not
required and could be considered premature, and that the disclosures regarding
the use of proceeds in the Proxy Statement were and are accurate, in view of Mr.
Holt's letter, the Company is supplementing the Proxy Statement in order to
avoid controversy over certain of the matters raised by Mr. Holt.
Other than the dissemination of a supplement to the Proxy Statement
materials referred to above, the Board of Directors does not intend to implement
Mr. Holt's other requests in the Resignation Letter. In connection with Mr.
Holt's request for "independent scrutiny" of any acquisition from Malcolm Glazer
or affiliates, the Company notes that the Envirodyne transaction was, as
described in the Proxy Statement, undertaken only after approval by a special
committee of outside directors, which had the assistance of independent
financial and legal advisers, and that any future acquisitions from Malcolm
Glazer or his affiliates would be undertaken only after completion of, and
subject to, a review by a similar special committee.
The following additional information regarding
Mr. Holt's relationship with the Company may be relevant:
. Beginning no later than June 1995, Mr. Holt and his representatives have on
several occasions requested that the Company repurchase all of the shares of the
Company's common stock owned by Mr. Holt and his affiliates in a private
transaction at a premium over the public trading price.
. Together with the Resignation Letter, the Company received a copy of a
petition filed in the 148th Judicial District Court of Nueces County, Texas by
Mr. Holt and certain of his affiliates who sold their interests in Energy
Industries to the Company in November 1993 (collectively, with Mr. Holt, the
"Holt Affiliates"). The petition lists the Company, Malcolm Glazer and Avram
Glazer as defendants and alleges several causes of action based on alleged
misrepresentations on the part of the Company and the other defendants
concerning Zapata's intent to follow a long-term development strategy focusing
its efforts on the natural gas services business. Among the remedies sought by
the petition are the following requests: (i) the Company's repurchase of the
approximately 2.8 million shares of Zapata common stock owned by the Holt
Affiliates for $15.6 million, an amount that represents a premium of
approximately $4.7 million, or more than 40%, greater than the value of such
number of shares based on the closing price of Zapata's common stock on November
16, 1995; (ii) the disgorgement to the Holt Affiliates of Zapata's profit to be
made on its sale of Energy Industries; or (iii) money damages based on the
alleged lower value of Zapata's common stock had the alleged misrepresentation
not been made. The petition, which had been filed on