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Board of Directors
Zapata Corporation
November 16, 1995
Page 3
2. In light of the foregoing discussion, I believe the portions of the Proxy
Statement which describe the factors that were considered by the Board in
reaching their decision to "begin the exit of the energy business" and to enter
the food service business are misleading. "In late 1994," there was no Board
action taken to develop a plan to exit the energy services business and enter
the food service business and, to my knowledge, the only Board action taken in
this regard was during the aforementioned meeting on September 20, 1995, well
after the exit had begun. The entry into food services, based upon the
information that has been made available to me, was predicated not upon the
identification of a more attractive industry segment than energy services, but
upon the make-up of Mr. Glazer's investment portfolio, apparently the only
source of candidates which are regarded, by those responsible for the new
strategy, as suitable for acquisition by Zapata.
For the foregoing reasons, I ask the Board to:
1. Resolve to conduct no further negotiations for the acquisition of
investments from Malcolm I. Glazer and his affiliates except upon the
condition that any such acquisition will be subjected to independent
scrutiny and the closing of the acquisition will be conditioned upon
shareholder approval;
2. Obtain the advice of independent counsel regarding the enforceability of
Zapata's obligation regarding the acquisition of the Envirodyne
investment, with a view towards rescission; and
3. Cause to be filed with the SEC proxy materials accurately reflecting the
matters discussed in this letter as well as the actions indicated in 1
and 2, above, and schedule and provide notice of a shareholder meeting to
approve the sale of Energy Industries to Enterra.
Nothing can be gained by delay. I see no reason why the foregoing described
acts cannot be accomplished promptly, so as not to unduly delay the
aforementioned shareholder meeting and vote upon the sale of Energy Industries
to Enterra.
Finally, I have become concerned with the practice of calling special meetings
of the Board on short notice to address matters of great importance to Zapata's
shareholders and without providing the directors sufficient information in
advance of the meeting to permit an informed vote. There are of course matters
which arise and which require a rapid response by the Board, but I have not been
able to discern any circumstances so compelling that the Board meetings which
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