<PAGE>
 
  Lamar C. McIntyre has served as Vice President, Chief Financial Officer and
Treasurer since October 1994. He served as Vice President, Tax from October
1990 through November 1991, and Vice President, Tax and Treasurer from December
1991 through September 1994.
 
  Joseph L. von Rosenberg III has served as Executive Vice President since
November 1995. He has served as General Counsel since August 1994 and Corporate
Secretary since June 1993. From August 1994 through November 1995, Mr. von
Rosenberg also held the position of Vice President of the Company. Prior to
joining Zapata in June 1993, he served as General Counsel and Corporate
Secretary of both The Permian Corporation and Simmons Corporation.
 
PROPERTIES
 
  In addition to the properties discussed above with respect to each business
segment, the Company leases office space in Houston, Texas for its executive
offices pursuant to a lease which will expire in 2000. The Company believes its
facilities are adequate and suitable for its current level of operations. The
Company maintains customary compensation, liability, property and marine
insurance for all of its operations.
 

ITEM 3. LEGAL PROCEEDINGS
 
  On August 11, 1995, a purported derivative lawsuit was filed in a case styled
Harwin v. Glazer, et al., in the Court of Chancery of the State of Delaware in
and for New Castle County. The complaint names the Company and each of its
directors as defendants and generally alleges that the Company's directors
engaged in conduct constituting breach of fiduciary duty and waste of the
Company's assets in connection with the Company's investment in Envirodyne (for
information on the Company's investment in Envirodyne, see "Envirodyne
Ownership Interest" above). The complaint alleges, among other things, that the
purchase of the Envirodyne common stock from Malcolm Glazer's affiliate was a
wrongful expenditure of the Company's funds and was designed to permit Malcolm
Glazer to obtain substantial personal financial advantages to the detriment of
the Company. The complaint seeks relief including, among other things,
rescission of the Company's purchase of the shares of Envirodyne common stock
from the trust controlled by Malcolm Glazer, voiding of the election of Robert
V. Leffler, Jr. and W. George Loar (both of whom were elected at the Company's
Annual Meeting of Stockholders held on July 27, 1995) and an award of
unspecified compensatory damages and expenses, including attorneys' fees. The
complaint alleges, among other things, that Messrs. Leffler and Loar (both of
whom served on the special committee of the Company's Board of Directors that
approved the investment in Envirodyne) lack independence from Malcolm Glazer
because, in the case of Mr. Loar, he was employed by a corporation indirectly
controlled by Malcolm Glazer until Mr. Loar's retirement (which occurred more
than five years ago), and in the case of Mr. Leffler, that he has served as a
paid consultant to Malcolm Glazer. The Company believes that the complaint and
allegations contained therein are without merit and intends to defend the case
vigorously.
 
  On November 16, 1995, a petition was filed in the 148th Judicial District
Court of Nueces County, Texas by Peter M. Holt, a former director of the
Company, 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 the Company's intent to follow a long-term development strategy
focusing its efforts on the natural gas services business. The petition did not
allege a breach of any provision of the purchase agreement pursuant to which
the Company acquired Energy Industries from the Holt Affiliates, but alleged
that various representatives of Zapata and Malcolm Glazer made representations
to Mr. Holt regarding Zapata's intention to continue in the natural gas
services industry. 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
 
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