<PAGE>
 
million, or more than 40%, over the market 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 the Common Stock had the alleged misrepresentations not been made. The
Company believes that the petition and the allegations made therein are without
merit and intends to defend the case vigorously.
 
  From time to time, the Company is involved in litigation relating to claims
arising out of its operations in the normal course of its business. The Company
maintains insurance coverage against potential claims in an amount which it
believes to be adequate. In the opinion of management, uninsured losses, if
any, resulting from these matters and from the matters discussed above will not
have a material adverse effect on Zapata's results of operations, cash flows or
financial position.
 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
  The information set forth in Item 4 of Zapata's Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 1995, as amended by a Form 10-Q/A filed
on November 13, 1995, is incorporated herein by reference.
 
                                       11