SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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ZAPATA CORPORATION
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[LOGO OF ZAPATA CORPORATION]
April 30, 2001
To Our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of
Zapata Corporation, to be held on June 6, 2001, at 10 a.m., EST, at the
Canandaigua Inn on the Lake, 770 South Main Street, Canandaigua, New York,
14424.
At the meeting, stockholders will be asked to consider matters contained in
the enclosed Notice of Stockholders 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 Annual Report to Stockholders for the fiscal year ended
December 31, 2000 containing our consolidated financial statements, preceded or
accompanies this mailing.
Registered shareholders can vote their shares by using a toll-free
telephone number. Instructions for using this convenient service are provided on
the proxy card. You may still vote your shares by marking your votes on the
proxy/instruction card. You may also vote your shares in person if you attend
the Annual Meeting thereby canceling any proxy previously given.
We appreciate your continued interest in Zapata.
Sincerely,
AVRAM A. GLAZER
President and Chief Executive Officer
ZAPATA CORPORATION
100 MERIDIAN CENTRE, SUITE 350
ROCHESTER, NEW YORK 14618
(716) 242-2000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 6, 2001
To the Stockholders of Zapata Corporation:
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of Zapata Corporation, a Nevada corporation ("Zapata" or the
"Company"), will be held at the Canandaigua Inn on the Lake, 770 South Main
Street, Canandaigua, New York 14424, on June 6, 2001, at 10:00 a.m., EST, for
the following purposes:
1. To elect two Class III directors;
2. To ratify the appointment of PricewaterhouseCoopers, LLP as the
Company's independent public accountants; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
A copy of the Annual Report of the Company's operations during the fiscal
year ended December 31, 2000 was previously forwarded or accompanies this Proxy
Statement. A Proxy Statement and proxy/voting instruction card ("Proxy Card")
accompany this Notice. The enclosed Proxy Statement contains information
regarding the matters to be acted upon at the Annual Meeting.
The Board of Directors has set the close of business on May 1, 2001 as the
record date for the Annual Meeting. Only stockholders of record at the close of
business on the record date are entitled to notice of, and to vote at the Annual
Meeting and any adjournments thereof. The stock transfer books of the Company
will not be closed following the record date. A list of such stockholders will
be available at the place of the Annual Meeting for inspection at least ten (10)
days prior to the Annual Meeting.
Stockholders are cordially invited and encouraged to attend the Annual
Meeting in person. In the event that stockholders cannot attend the Annual
Meeting, registered stockholders can vote their shares by using a toll-free
telephone number. Instructions for using this convenient service are provided on
the Proxy Card.
By Order of the Board of Directors,
AVRAM A. GLAZER
President and Chief Executive Officer
Rochester, New York
April 30, 2001
ZAPATA CORPORATION
100 MERIDIAN CENTRE, SUITE 350
ROCHESTER, NEW YORK 14618
(716) 242-2000
PROXY STATEMENT
General
This Proxy Statement, the accompanying Notice of Annual Meeting of
Stockholders and Proxy/Voting Instructions Card (the "Proxy Card") are being
furnished to the stockholders of Zapata Corporation ("Zapata" or the "Company")
by the Board of Directors in connection with the solicitation of proxies for use
at the Annual Meeting of Stockholders to be held on June 6, 2001, at 10 a.m.,
EST, at the Canandaigua Inn on the Lake, 770 South Main Street, Canandaigua, New
York 14424, and at any adjournments thereof (the "Annual Meeting").
It is contemplated that this Proxy Statement and the accompanying form of
Proxy Card will first be mailed to Zapata stockholders on or about May 8, 2001.
The principal executive offices of the Company are located at 100 Meridian
Centre, Suite 350, Rochester, New York 14618; telephone (716) 242-2000.
As an alternative to voting by proxy or in person, registered stockholders
can simplify their voting and save the Company expense by calling 1-800-PROXIES
(or 1-800-776-9437). Telephone voting information is provided on the Proxy Card.
A Control Number, located above the stockholder's name and address on the lower
left of the Proxy Card, is designed to verify stockholders' identity and allow
them to vote their shares and confirm that their voting instructions have been
properly recorded.
If your shares are held in the name of a bank or broker, follow the voting
instructions on the form you receive. The availability of telephone voting will
depend on the voting processes of the bank or broker that holds your shares.
If you do not choose to vote by telephone, you may still return your Proxy
Card, properly signed, and the shares represented will be voted in accordance
with your directions. You can specify your choices by marking the appropriate
boxes on the Proxy Card. If your Proxy Card is signed and returned without
specifying choices, the shares will be voted as recommended by the Board of
Directors. If you do vote by telephone, it is not necessary to return your Proxy
Card.
The Company effected a one-for-ten reverse split of its outstanding shares
of common stock, par value $.01 per share (the "Common Stock"), on January 30,
2001 at 5:00 p.m. Where a number of shares of Common Stock is listed in this
Proxy Statement for a date or period prior to the effective date of the reverse
stock split, that number of shares of Common Stock has been proportionately
adjusted as if the one-for-ten reverse stock split had been in effect on that
prior date or during that prior period.
Matters To Be Considered At The Annual Meeting
At the Annual Meeting, including any adjournment(s) thereof, the
stockholders of Zapata will be asked to consider and vote upon the election of
directors and the other proposals summarized in the attached Notice of Annual
Meeting. The director nominees and each proposal are described in more detail in
this Proxy Statement.
Record Date; Outstanding Shares; Quorum
The Board of Directors of the Company has fixed the close of business on
May 1, 2001 (the "Record Date") as the date for the determination of
stockholders who are entitled to vote at the Annual Meeting and at any
adjournment(s) or postponement(s) thereof. As of April 24, 2001, the Company's
issued and outstanding capital stock consisted of 2,390,849 shares of Common
Stock, which was held by approximately 5,280 holders of record. Because this
Proxy Statement has been prepared prior to the Record Date, the Company does not
know the number of shares of Common Stock that will be outstanding and entitled
to vote on the matters described herein on the Record Date. Each share of Common
Stock is entitled to one vote in the election of directors and on each matter
submitted for stockholder approval. The Common Stock is the Company's only
outstanding class of stock as of the date of this Proxy Statement.
The date of this Proxy Statement is April 30, 2001
Quorum; Abstentions and Non-Votes; Vote Required
The presence at the meeting, in person or by proxy, of the holders of a
majority of the Company's outstanding shares of voting stock is necessary to
constitute a quorum for the transaction of business at the Annual Meeting.
Abstentions and broker non-votes (which occur if a broker or other nominee does
not have discretionary authority and has not received voting instructions from
the beneficial owner with respect to the particular item) are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. If there are not sufficient shares represented in person or by
proxy at the meeting to constitute a quorum, the meeting may be adjourned or
postponed in order to permit further solicitations of proxies by the Company.
With respect to the election of two Class III directors, the two nominees
receiving the highest number of affirmative votes will be elected as Class II
directors. The affirmative vote of a majority of the shares of Common Stock
present and represented at the Annual Meeting will be necessary to ratify the
Board's appointment of PricewaterhouseCoopers, LLP as the Company's independent
public accountants. Abstentions and broker non-votes will have no effect on the
outcome of the election of directors or the approval of the independent public
accountants.
The Malcolm I. Glazer Family Limited Partnership, a Nevada limited
partnership (the "Glazer Partnership"), which, as of the date of this Proxy
Statement, held approximately 44% of the outstanding shares of Common Stock, has
notified the Company that it intends to vote all of its shares at the Annual
Meeting in favor of the election of all the nominees for directors named herein
and of all the other proposals to be presented to the stockholders for
consideration described herein.
Voting Proxies
All shares which are entitled to vote and are represented at the Annual
Meeting by properly executed proxies received prior to or at the meeting and not
revoked, will be voted as specified in the proxy. If no instructions have been
given in a proxy and authority to vote has not been withheld, the shares
represented thereby will be voted: for the election of all nominees for
directors named herein; for the ratification of the appointment of
PricewaterhouseCoopers, LLP as the Company's independent public accountants; and
in the discretion of the persons named in the proxy on any other business that
may properly come before the Annual 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. For a period of at least ten (10) days
prior to the Annual Meeting, a complete list of stockholders entitled to vote at
the meeting will be available at the place of the Annual Meeting so that
stockholders of record may inspect the list only for proper purposes.
Solicitation of Proxies; Expenses
Solicitation of proxies by mail is expected to commence on or about May 8,
2001, 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,
telecopy or personal interview. Arrangements also will be made with certain
brokerage houses, custodians, nominees and other fiduciaries for the forwarding
of solicitation materials to the beneficial owners of Common Stock held of
record by such persons, and such brokers, custodians, nominees and fiduciaries
will be reimbursed by the Company for reasonable out-of-pocket expenses incurred
by them in connection therewith.
PROPOSAL 1
ELECTION OF DIRECTORS
Pursuant to the Company's Articles of Incorporation (the "Articles") and
By-Laws, the Board of Directors has fixed the size of the Board at seven (7)
directors. The Articles provide for division of the Board into three classes
(Class I, Class II and Class III) of as nearly equal number of directors as
possible. Thus, Class I and Class III are comprised of two directors each and
Class II is comprised of three directors.
One vacancy for a Class II director currently exists on the Board of
Directors. The Board is actively searching for a new non-employee director who
qualifies as "independent" under New York Stock Exchange
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("NYSE") rules governing audit committees to fill this vacancy. The Board of
Directors intends to fill this vacancy no later than June 14, 2001, in order to
comply with NYSE rules governing audit committees.
The term of each Class of directors is three years with the term for one
Class expiring each year in rotation. As a result, each year, one Class of
directors is elected. The term of the Class III directors expires at the Annual
Meeting.
Proxies cannot be voted for a greater number of persons than the two
nominees named. If any nominee becomes unavailable for any reason, shares
represented by the proxies designated as such in the enclosed Proxy Card 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 for each
director at the Annual Meeting.
Nominees for Election as Directors
Class III Nominees -- To Serve a Three Year Term Expiring in the Year 2004
Edward S. Glazer, age 31, has served as a director since 1997. 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. Mr.
E. Glazer serves as the Executive Vice President of The Tampa Bay Buccaneers. He
is the son of Malcolm I. Glazer and the brother of Avram A. Glazer and Bryan G.
Glazer.
Robert V. Leffler, Jr., age 55, has served as a director of Zapata since
May 1995. For more than the past five years, Mr. Leffler has owned and operated
the Leffler Agency, an advertising and marketing/public relations firm based in
Baltimore, Maryland, which specializes in sports, rental real estate and
broadcast television. Mr. Leffler serves on the Audit and Compensation
Committees of the Company's Board of Directors.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES AS CLASS III
DIRECTORS.
Information Regarding Directors Who Are Not Nominees For Election at the Annual
Meeting
Class I Directors -- Three Year Term Expiring in the Year 2002
Malcolm I. Glazer, age 72, has been a director of Zapata 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 from August 1994 until March
1995. For more than the past five years, Mr. Glazer has been a self-employed
private investor whose diversified portfolio consists of investments in
television broadcasting, restaurant equipment, food services equipment, health
care, banking, real estate, stocks, government securities and corporate bonds.
He also owns the Tampa Bay Buccaneers, a National Football League franchise. Mr.
Glazer has been President and Chief Executive Officer of First Allied
Corporation since 1984. He also is a director of Omega Protein Corporation (a
marine protein firm) (NYSE: OME) and Viskase Corporation (a food packaging
firm). Malcolm I. Glazer is the father of Avram A. Glazer, Bryan G. Glazer and
Edward S. Glazer.
Bryan G. Glazer, age 36, has served as a director since May 1997. 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.
Mr. B. Glazer serves as the Executive Vice President of The Tampa Bay
Buccaneers. He also serves as a director of the Tampa Bay Performing Arts
Center. He is the son of Malcolm I. Glazer and the brother of Avram A. Glazer
and Edward S. Glazer.
Class II Directors -- Three Year Term Expiring in the Year 2003
Avram A. Glazer, age 40, has been a director of Zapata since July 1993. Mr.
Glazer has served as President and Chief Executive Officer of the Company since
March 1995. Prior to that time, Mr. Glazer was employed by, and worked on behalf
of, Malcolm I. Glazer and a number of entities owned and controlled by Malcolm
I. Glazer, including First Allied Corporation. Mr. Glazer served as Vice
President of First Allied Corporation from 1985 through 1995. He also serves as
a director, president, and chief executive officer of Zap.Com Corporation (which
until December 2000, was an internet advertising and e-commerce network company)
and as a director of Viskase
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Corporation. He is also Chairman of the Board and a director of Omega Protein
Corporation. Avram A. Glazer is the son of Malcolm I. Glazer and the brother of
Bryan G. Glazer and Edward S. Glazer.
Warren H. Gfeller, age 48, has served as a director since May 1997. For the
past five years, he has operated Clayton/Hamilton Equities, L.L.C., Stranger
Valley Company, L.L.C. and Tatgc Chemical and Manufacturing, Inc. Mr. Gfeller
also serves as a director of Gardner Bancshares, Inc. and Kansas Wildscape
Foundation. Mr. Gfeller serves on the Audit and Compensation Committees of the
Company's Board of Directors.
Board of Directors and Committees of the Board
The Board of Directors has as two standing committees, the Audit Committee
and the Compensation Committee. The Board of Directors does not have a
nominating committee or a committee performing the function of a nominating
committee.
During Fiscal 2000 the Board of Directors held two meetings and acted by
unanimous written consent 13 times. In addition the Audit Committee held six
meetings and the Compensation Committee held two meetings. During Fiscal 2000
each director of the Company attended at least (75%) of the aggregate number of
meetings of the Board of Directors and committees on which each of them sit
(except that Malcolm Glazer and Bryan Glazer attended only one of two Board of
Directors' meetings and Edward Glazer attended no Board of Directors' meetings).
The Audit Committee currently is composed of Mr. Warren Gfeller (Chairman)
and Mr. Robert V. Leffler, Jr. The Committee members are "independent," as such
term is defined by NYSE rules governing audit committees. The Board of Directors
is actively searching for a person to appoint to the Board who will qualify as
"independent" for the NYSE rules governing audit committees, and who will also
be elected to the Audit Committee. 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; confirms and assures the
outside accountant's independence; makes recommendations to the Board of
Directors as to the engagement of independent accountants; and approves the fees
and other compensation to be paid to the independent accountants. This Committee
met six times during the last fiscal year. A copy of the Audit Committee's
written charter is attached hereto as Appendix A.
The Compensation Committee currently is composed of Mr. Robert W. Leffler,
Jr. (Chairman) and Mr. Warren H. Gfeller. The functions performed by the
Compensation Committee include reviewing the Company's executive salary and
bonus structure; reviewing the Company's stock option plans; recommending
directors' fees; setting bonus goals; and approving salary and bonus awards to
key executives.
Directors' Compensation
During Fiscal 2000, directors who were not employees of the Company were
paid an annual retainer of $20,000 (on a quarterly basis), plus $1,000 for each
committee of the Board of Directors on which a director served. Those directors
who also are employees of the Company do not receive any additional compensation
for their services as directors.
Pursuant to the Company's Amended and Restated Special Incentive Plan,
following initial appointment or election to the Board of Directors, each
non-employee director of the Company automatically receives a grant of options
to purchase 2,000 shares of 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.
Executive Officers
The following sets forth certain information with respect to the Executive
Officers of the Company, as of the date of this Proxy Statement. All officers of
the Company serve at the pleasure of the Company's Board of Directors until
their successors are elected and qualified.
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Name Age Position
- ---- --- --------
Malcolm I. Glazer .. 72 Chairman of the Board
Avram A. Glazer .... 40 President and Chief Executive Officer
Leonard DiSalvo .... 42 Vice President -- Finance and Chief Financial Officer
Gordon E. Forth .... 39 Secretary
Leonard DiSalvo, age 42, joined Zapata in September 1998 and currently
serves as its Vice President -- Finance and Chief Financial Officer. Mr. DiSalvo
also currently serves as Vice President -- Finance and Chief Financial Officer
of Zap.Com Corporation, a position he has held since April, 1999. Mr. DiSalvo
has 20 years of experience in the areas of finance and accounting. Mr. DiSalvo
served as a finance manager for Constellation Brands, Inc. a national
manufacturer and distributor of wine, spirits and beer, since 1996. Prior to
that position, Mr. DiSalvo held various management positions in the areas of
finance and accounting in the Contact Lens Division of Bausch & Lomb
Incorporated. Mr. DiSalvo is a Certified Public Accountant.
Gordon E. Forth, age 39, has served as Zapata's Secretary since December
1998. Mr. Forth also serves as Secretary of Zap.Com Corporation, a position he
has held since April 1999. Mr. Forth serves as director of Hahn Automotive
Warehouse, Inc. (Nasdaq SmallCap: HAHN) (a distributor of automotive replacement
parts). Mr. Forth is a partner of Woods Oviatt Gilman LLP, a Rochester, New York
based law firm. Mr. Forth has practiced law at the Woods, Oviatt firm since
1987. Mr. Forth received his B.A. from Hope College and his law degree and
M.B.A. from Vanderbilt University.
See Proposal 1 -- Election of Directors above for information concerning
the Company's other executive officers.
EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation with
respect to Fiscal 2000, Fiscal 1999 and Fiscal 1998 for services in all
capacities rendered to the Company and its subsidiaries by the Company's Chief
Executive Officer and the other most highly compensated executive officers of
the Company with annual compensation in excess of $100,000 who were serving as
executive officers on December 31, 2000 (the "Named Officers"). Due to the
Company's change during 1998 to a December 31 fiscal year end from September 30,
the table also includes amounts for the three month transition period ended
December 31, 1998, which period is referred to as "1998T."
Long-Term
Compensation
Annual Compensation Awards
------------------- ------
Securities
Fiscal Underlying All Other
Name and Principal Position Year Salary($) Bonus($) Options/SARs(#) Compensation
- --------------------------- ------ --------- --------- --------------- ------------
Malcolm I. Glazer, ...................... 2000 $500,000 $975,000 -- --
Chairman of the Board 1999 500,000 975,000 -- --
1998T 125,000 -- -- --
1998 500,000 975,000 -- --
Avram A. Glazer, ........................ 2000 $300,000(1) $300,000 -- --
President and Chief Executive 1999 300,000(1)(2) 300,000 -- --
Officer 1998T 75,000 -- -- --
1998 300,000 300,000 -- --
Leonard DiSalvo, ........................ 2000 $116,427(3) $ 17,464 -- $4,657(4)
Vice President -- Finance and Chief 1999 96,547(3) -- 1,500 3,866(4)
Financial Officer 1998T 23,125 -- -- --
1998 3,854 -- -- --
Darcie Glazer, ......................... 2000 $ 95,000 $ 95,000 -- --
Investment Analyst 1999 95,000 -- -- --
1998T 23,750 -- -- --
1998 95,000 -- -- --
-5-
- ----------
(1) Mr. A. Glazer serves as President and Chief Executive Officer of both
Zapata and Zap.Com, which became a public company in November 1999 as a
result of Zapata's distribution of 477,742 shares of Zap.Com common stock
to Zapata stockholders. During the first four months of Fiscal 2000, Zapata
allocated approximately 65% of Mr. A. Glazer's annual salary to Zap.Com. No
amount of Mr. A. Glazer's bonus for Fiscal 2000 was allocated to Zap.Com.
On April 30, 2000 Zapata waived its rights under a services agreement with
Zap.Com to be reimbursed these expenses for a period of one year. Zapata
allocated 69% of Mr. A. Glazer's annual salary to Zap.Com. No amount of Mr.
A. Glazer's Fiscal 1999 bonus was allocated to Zap.Com.
(2) In January 1998, Mr. A. Glazer was elected Chairman of the Board of
Directors of the Company's then wholly-owned subsidiary, Omega Protein. In
connection with his election Mr. A. Glazer received options to purchase
568,200 shares of Omega Protein's common stock at an exercise price equal
to such shares' fair market value on that date (i.e., $12.75 per share). In
April 1998, Omega Protein Corporation conducted its initial public
offering. On December 29, 2000, Omega Protein had a closing price of $1.50
per share on the NYSE. In November 1999, Mr. A. Glazer was granted 365,000
non-qualified options to purchase Zap.Com stock under Zap.Com's 1999
Long-Term Incentive Plan. The Zap.Com options have an exercise price of
$2.00 per share and generally vest over three years from the date of grant.
On December 29, 2000 Zap.Com had a closing price of $0.375 on the NASD OTC
Bulletin Board.
(3) Mr. DiSalvo serves as Vice President -- Finance and Chief Financial Officer
of both Zapata and Zap.Com. During the first four months of Fiscal 2000,
Zapata allocated 50% of Mr. DiSalvo's salary to Zap.Com. No amount of Mr.
DiSalvo's Zapata bonus for Fiscal 2000 was allocated to Zap.Com. Zapata
allocated $9,387 of Mr. DiSalvo's Fiscal 1999 salary to Zap.Com. Mr.
DiSalvo was granted 100,000 non-qualified options to purchase Zap.Com stock
under Zap.Com's 1999 Long-Term Incentive Plan. The Zap.Com options have an
exercise price of $2.00 per share and generally vest over three years from
the date of grant.
(4) Amounts presented represent the Company's matching contribution to Mr.
DiSalvo's account under the Zapata Profit Sharing Plan for 2000 and 1999.
While the Company's officers receive benefits in the form of certain
perquisites, none of the Named Officers received perquisites which exceeded in
value the lesser of $50,000 or 10% of such officer's salary and bonus for any of
the Fiscal Years shown in the Summary Compensation Table.
During Fiscal 2000, the Company did not grant or award any stock options,
stock appreciation rights or stock awards or cash awards to any of the Named
Officers.
The following table provides information concerning options held by the
Named Officers as of end of Fiscal 2000.
Aggregated Option Exercises and Fiscal Year-End Option Values
Number of
Securities Underlying Value of Unexercised
Shares Unexercised Options In-the-Money Options
Acquired Value At Fiscal Year-End At Fiscal Year-End ($)
Name on Exercise Realized Exercisable/Unexercisable Exercisable/Unexercisable(1)
- ---- ----------- -------- ------------------------- ----------------------------
Malcolm I. Glazer -- -- 34,500/0 $0/$0
Avram A. Glazer -- -- 15,459/0 0/0
Leonard DiSalvo -- -- 1,000/500 0/0
Darcie Glazer -- -- 13,459/0 0/0
(1) Based on the closing price on the NYSE for Zapata's Common Stock on
December 31, 2000, none of the named officers' options were "in-the-money"
as of that date.
Certain Employee Benefits
The Company's executive officers participate or have participated in
certain stock option and incentive plans, retirement and profit sharing plans
sponsored by Zapata, some of which are intended to qualify for tax-favored
treatment under the Internal Revenue Code, as amended (the "Code"). These plans
include the 1990 Stock Option Plan, the 1996 Long-Term Incentive Plan, the
Zapata Pension Plan, the Zapata Supplemental Pension Benefit Plan and the Zapata
Profit Sharing Plan.
The Zapata Pension Plan is a non-contributing qualified defined benefit
pension plan covering full-time domestic employees. Retirement benefits under
the Pension Plan are based on an employee's length of employment, average
monthly compensation and social security covered compensation. Compensation for
this purpose includes salary and other compensation paid by the Company and
reportable on Form W-2, but excludes fringe benefits (cash
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and non-cash), including compensation related to stock option plans which is
reported in the Summary Compensation Table in this Proxy Statement. The Code
limits the amount of compensation that may be considered and the annual benefits
which may be payable from the Pension Plan. Effective October 1, 1989, Pension
Plan participants are 100% vested in accrued benefits after five years of
service. 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) would not earn additional benefits under the
plan after that date. In addition, the Company terminated its Supplemental
Pension Plan covering certain executive officers, except with respect to
benefits already accrued.
The following table shows the estimated annual benefit payable to employees
on retirement under the Pension Plan to employees in the specified compensation
and years of service classification. The retirement benefits shown are based
upon an employee retiring at age 65 in 2000 who elect to receive benefits in the
form of a single life annuity (although a participant can select other methods
of calculating benefits). The amounts shown are based on current average social
security wage base amounts and are not subject to any deduction for social
security or other offset amounts.
Pension Plan Benefits Table
Remuneration (1) Years of Service
----------------------------------------------------------
15 20 25 30 35
---------- ---------- ---------- --------- ----------
$125,000 ......... $30,032 $40,043 $50,054 $60,065 $70,075
150,000 ......... 36,407 48,543 60,679 72,815 84,950
175,000 ......... 41,507(*) 55,343(*) 69,179(*) 83,015(*) 96,850(*)
200,000 ......... 41,507(*) 55,343(*) 69,179(*) 83,015(*) 96,850(*)
225,000 ......... 41,507(*) 55,343(*) 69,179(*) 83,015(*) 96,850(*)
250,000 ......... 41,507(*) 55,343(*) 69,179(*) 83,015(*) 96,850(*)
300,000 ......... 41,507(*) 55,343(*) 69,179(*) 83,015(*) 96,850(*)
400,000 ......... 41,507(*) 55,343(*) 69,179(*) 83,015(*) 96,850(*)
450,000 ......... 41,507(*) 55,343(*) 69,179(*) 83,015(*) 96,850(*)
500,000 ......... 41,507(*) 55,343(*) 69,179(*) 83,015(*) 96,850(*)
- ----------
(1) Internal Revenue Code limits covered compensation to $160,000.
Due to the January 1995 amendment to the Zapata Pension Plan, none of the
Company's Named Officers participate in or are entitled to benefits under the
Plan.
The Zapata Profit Sharing Plan is qualified under Sections 401(a) and
401(k) of the Code. Effective October 1, 1994, the assets of the Zapata Haynie
Corporation Profit-Sharing/Savings Plan (the "Zapata Haynie Plan") were merged
with and into the assets of the Zapata Profit Sharing Plan and the Zapata Profit
Sharing Plan was renamed from the Zapata Corporation Profit Sharing Plan (the
"Profit Sharing Plan"). The Profit Sharing Plan and the Zapata Haynie Plan each
have their own benefit rights provisions. All assets of the Profit Sharing Plan
and the Zapata Haynie Plan are available to pay benefits to all participants and
beneficiaries of the merged Profit Sharing Plan. Under the Profit Sharing Plan,
all employees of the Company who are 21 years or older, including its executive
officers, are eligible to participate after six months of employment.
Contributions may consist of employee contributions and employer matching
contributions. Effective October 1, 1996, the Plan was amended to state that
participants become vested in both employee and employer contributions upon
entering the Profit Sharing Plan. The Profit Sharing Plan provides that
participating employees have the right to elect their contributions to the
Profit Sharing Plan be made from reductions from compensation owed to them by
the Company. In addition, the Company, at its discretion, can make contributions
to the Profit Sharing Plan of a percentage of a participant's annual
compensation.
-7-
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (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 Securities and Exchange Commission (the "Commission") and the NYSE
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. Based upon a review of
the copies of such forms furnished to the Company and written representations
that no other reports were required, the Company believes that during Fiscal
2000 all reports required by Section 16(a) to be filed by its directors and
officers were filed on a timely basis, except that: Avram A. Glazer, Bryan G.
Glazer and Edward S. Glazer failed to timely file Form 4s reporting the
acquisition and disposal of options to purchase Common Stock of the Company.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is responsible for the
approval and administration of compensation programs for the Company's executive
officers.
The Compensation Committee endeavors to ensure that the compensation
programs for the Company's 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 interests of the
Company and its stockholders. The Compensation Committee seeks to align total
compensation for the Company's 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 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,
stock appreciation rights, stock awards and cash awards. The Compensation
Committee takes into consideration the recommendations of management in awarding
compensation and setting compensation levels. The following is a report of the
Compensation Committee with respect to compensation policies and determinations
relating to Fiscal 2000.
Base Salary
The Compensation Committee's policy with respect to Fiscal 2000 base
salaries for executive officers was generally to keep them at appropriate levels
in light of a compensation survey in which the Company participated in 2000. The
2000 compensation survey was conducted for purposes of determining general
competitive compensation levels. The Compensation Committee did not specifically
evaluate variations in performance between the Company and other companies
included in the survey in connection with the determination of base salary
levels. The companies included in the survey are not the same as those included
in the Dow Jones Industrial Diversified Index referred to under "Stockholder
Return Performance Graph."
The determination of the base salaries for all the executive officers
during Fiscal 2000 was based on the Compensation Committee's subjective
evaluation and did not involve application of objective measures of performance.
Annual Incentive Bonus
Bonuses were paid to executive officers for Fiscal 2000 based on the
subjective evaluation of the performance of the Company and each executive.
Long-Term Incentive Awards
The Compensation Committee believes that to achieve the Company's long-term
growth objectives and to align management and its stockholders' interest, it is
in the Company's best interest from time to time to grant equity and equity-like
incentives to key members of its management staff. The Company's 1996 Long-Term
Incentive Plan and Amended and Restated Special Incentive Plan are administered
by the Compensation Committee, which has the full power and authority to
designate employee participants and determine the terms and provisions of the
agreements evidencing awards. The price of each award made is based on the fair
market value of a share of Common Stock on the date of the award.
-8-
The Compensation Committee made no awards under its plans to executive
officers during Fiscal 2000.
Compensation of Chairman of the Board and Chief Executive Officer
The compensation policies described above apply to the compensation of the
Chairman of the Board and President and Chief Executive Officer. The
Compensation Committee is directly responsible for determining the salary level,
annual bonuses and all awards and grants to the Chairman of the Board and the
Chief Executive Officer. The Compensation Committee also gives consideration to
its assessment of past performance and its expectations of future contributions.
In the Compensation Committee's opinion, the salaries and bonuses of Mr. M.
Glazer and Mr. A. Glazer reflect their positions, duties, responsibilities with,
and contributions to the Company.
Section 162(m)
The Compensation Committee has considered the potential impact of Section
162(m) of the Code adopted under the Federal Revenue Reconciliation Act of 1993.
The Section disallows a tax deduction for any publicly-held corporation for
individual compensation exceeding $1 million in any taxable year for any of the
named executive officers, other than compensation that is performance-based. At
present, the Committee has not adopted an overall policy with respect to Section
162(m) because only an immaterial portion of the cash compensation of the
Chairman of the Board is above the $1 million threshold and the Company believes
that any options granted under the 1996 Long-Term Incentive Plan will meet the
requirement of being performance-based under the transition provisions provided
in the regulations under the Section. Therefore, the Committee currently expects
Code Section 162(m) to have no material effect on the Company.
Robert V. Leffler, Jr., Chairman
Warren H. Gfeller
Compensation Committee Interlocks and Insider Participation
During Fiscal 2000, Mr. Robert V. Leffler, Jr. and Mr. Warren H. Gfeller
served on the Company's Compensation Committee.
REPORT OF THE AUDIT COMMITTEE
The Company's management has the primary responsibility for the financial
statements and the reporting process including the systems of internal controls.
The primary purpose of the Audit Committee of the Company's Board of Directors
is to assist the Board of Directors in fulfilling its responsibility to oversee
management's conduct of the Company's financial reporting process, including by
overviewing the financial reports and other financial information provided by
the Company to any governmental or regulatory body, the public or other users
thereof, the Company's systems of internal accounting and financial controls,
and the annual independent audit of the Company's financial statements.
The Audit Committee met six times during Fiscal 2000. Representatives from
the Company's independent auditors, PricewaterhouseCoopers, LLC ("PwC") were
present at each of the Committee's six meetings.
On October 16, 2000, the Audit Committee received from PwC the written
disclosures and the letter regarding PwC's independence required by Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees.
Additionally, the Audit Committee and PwC have also discussed PwC's independence
relative to the Company.
The Audit Committee has discussed with PwC the Company's financial
management and financial structure and the matters relating to the conduct of
the audit required to be discussed by Statement on Auditing Standards 61. The
Audit Committee has also reviewed and discussed with the Company's management
the Company's audited consolidated financial statements relating to Fiscal 2000.
Based upon the review and discussions described above, the Audit Committee
recommended to the Company's Board of Directors that the Company's consolidated
financial statements for Fiscal 2000, audited by PwC be included in the
Company's 2000 Annual Report on Form 10-K filed with the Securities and Exchange
Commission on April 2, 2001.
-9-
Warren H. Gfeller, Chairman
Robert V. Leffler, Jr.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Until November 12, 1999, Zap.Com was a wholly-owned subsidiary of Zapata
Corporation. On November 12, 1999, Zapata distributed to its stockholders
477,742 shares of Zap.Com Common Stock, or 1% of Zap-Com's outstanding Common
Stock. On October 20, 1999, Zapata and Zap.Com Corporation, its then
wholly-owned subsidiary, entered into a services agreement that provided that
Zapata would provide to Zap.Com management and administrative services, as well
as the use of designated office space and facilities. The administrative
services to be provided by Zapata, through its employees, include financial
reporting, accounting, auditing, tax, office services, payroll and human
resources as well as the management consulting services. Zapata billed Zap.Com
for these services on a cost basis using methods that Zapata's management
believes were reasonable. During Fiscal 2000, these services totaled
approximately $298,000. On April 30, 2000, Zapata notified Zap.Com that it was
waiving its rights to be reimbursed by Zap.Com until April 30, 2001 (or such
longer period as may be determined by Zapata). As a result, during Fiscal 2000,
$75,000 was directly charged and/or allocated to Zap.Com for these services.
On October 20, 1999 American Internetwork Sports Company, LLC and Zap.Com
entered into a consulting agreement which required American Internetwork Sports
to provide Zap.Com during a three year term with corporate, business and
marketing advice on sports related aspects of Zap.Com's business, including
sports related content, e-commerce opportunities, strategic alliances and Web
sites who are candidates for the ZapNetwork. American Internetwork Sports is
owned and controlled by Kevin Glazer, Bryan Glazer, Joel Glazer, Darcie Glazer
and Edward Glazer, all of whom are siblings and the children of Malcolm Glazer
and siblings of Avram Glazer. Messers. Joel Glazer and Edward Glazer are also
directors of Zapata. Bryan Glazer, Joel Glazer and Edward Glazer all serve as
Executive Vice Presidents of the Tampa Bay Buccaneers, which is a member of the
National Football League.
In exchange for these services, Zap.Com and American Internetwork Sports
entered into a warrant agreement which provides for the issuance of warrants to
purchase up to 2,000,000 shares of Zap.Com common stock at an exercise price of
$2.00 per share. In December 2000, the Zap.Com Board of Directors discontinued
Zap.Com's internet business and as part of that process terminated the
consulting agreement without cause. As a result, the vesting of the warrants
accelerated and became exercisable immediately. Zap.Com is required to register
the shares covered by the warrants on a registration statement on Form S-8 upon
the demand of American Internetwork Sports and to keep the registration in
effect until all of the shares issuable under the warrants can be sold under
Rule 144 within a three month period.
Darcie Glazer, daughter of Malcolm Glazer, was employed by the Company as
an investment analyst during Fiscal 2000. She held the position since May 6,
1996. She received an annual salary of $95,000, a bonus of $95,000 and other
employee benefits.
Gordon E. Forth, who serves as corporate secretary of Zapata and Zap.Com,
is a partner at Woods Oviatt Gilman LLP which has acted as counsel to Zapata and
Zap.Com.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table indicates the number of shares of Common Stock owned
beneficially as of March 31, 2001 by (1) each person known to the Company to
beneficially own more than 5% of the outstanding shares of Common Stock (2) each
director, (3) the Named Officers and (4) all directors and Named Officers as a
group. Except to the extent indicated in the footnotes to the following table,
each of the persons or entities listed therein has sole voting and investment
power with respect to the shares which are deemed beneficially owned by such
person or entity.
-10-
Name and Address Amount of Shares
of Beneficial Owner Beneficially Owned
-----------------------
Percent
Shares of Class(1)
Malcolm I. Glazer(2)(3) ............................... 1,074,038 44.2%
State Street Research & Management Company(4) ......... 140,390 5.9%
Dimensional Fund Advisors Inc.(5) ..................... 121,770 5.1%
Avram A. Glazer(3) .................................... 15,249 *
Robert V. Leffler, Jr.(3) ............................. 667 *
Warren H. Gfeller(3) .................................. 2,000 *
Bryan G. Glazer(3) .................................... 28,459 *
Edward S. Glazer(3) ................................... 13,459 *
Leonard DiSalvo ....................................... 1,000 *
All directors and Named Officers of the Company
as a group (6 persons)(2) ........................ 1,134,872 45.9%
- ----------
* Represents beneficial ownership of less than 1.0%.
(1) Shares of Company Common Stock subject to exercisable options are deemed
outstanding for (computing the percentage of the person holding such
option) but are not deemed outstanding for computing the percentage of any
other person. The calculation for this column is based upon the number of
shares of Common Stock issued and outstanding on March 31, 2001, plus the
shares of Common Stock subject to presently exercisable options.
(2) The shares reported are held in the name of The Malcolm I. Glazer Family
Limited Partnership, in which Malcolm Glazer controls the sole general
partner. The address for Malcolm I. Glazer is 270 Commerce Drive,
Rochester, New York.
(3) Presently reported ownership includes 34,500, 15,459, 667, 2,000, 13,459,
13,459 and 1,000 shares issuable under options exercisable held by Messrs.
M. Glazer, A. Glazer, Leffler, Gfeller, B. Glazer, E. Glazer and DiSalvo,
respectively.
(4) Based solely on a Schedule 13G, dated February 10, 2001. State Street
Research and Management Company, One Financial Center, 30th Floor, Boston,
Massachusetts, is record holder of 140,390. State Street Research and
Management Company is an Investment Adviser registered under Section 203 of
the Investment Advisers Act of 1940. All of the foregoing shares are owned
by clients of State Street Research and Management Company. State Street
Research and Management Company possesses sole power to vote and dispose of
the shares.
(5) Based solely on a Schedule 13G, dated February 2, 2001, Dimensional Fund
Advisors 1299 Ocean Avenue, 11th Floor, Santa Monica, California, is record
holder of 121,770. Dimensional Fund Advisors is an investment adviser
registered under Section 203 of the Investment Advisers Act of 1940,
furnishers investment advice to four investment companies registered under
the Investment Company Act of 1940, and serves as investment manager to
certain other commingled group trusts and separate accounts. In its role as
investment adviser or manager, Dimensional possesses voting and/or
investment power over the shares owned.
STOCKHOLDER RETURN PERFORMANCE GRAPH
The Commission requires a five-year comparison of the cumulative total
return of the Company's Common Stock with that of (1) a broad equity market
index and (2) a published industry or line-of-business index, or index of peer
companies with similar market capitalization. Pursuant to the Commission's
rules, the graph presented below includes comparisons of the performance (on a
cumulative total return basis) of the Company's Common Stock with the S&P
SmallCap 600 Index and the Dow Jones Industrial Diversified Index.
-11-
The Stock Performance Graph shall not be deemed incorporated by reference
by any general statement incorporating by reference the Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates this
documents by reference and shall not otherwise be deemed filed.
COMPARISON OF 63 MONTHS CUMULATIVE TOTAL RETURN (1)
AMONG ZAPATA CORPORATION
THE DOW JONES INDUSTRIAL - DIVERSIFIED INDEX
AND THE S & P SMALLCAP 600 INDEX
[THE FOLLOWING WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL]
Cumulative Total Return
--------------------------------------------------------------------
9/95 9/96 9/97 9/98 12/98 12/99 12/00
Zapata Corporation 100.00 82.86 167.71 230.92 292.00 110.25 37.26
Down Jones Industrial - Diversified 100.00 115.31 157.94 133.70 157.23 176.73 197.59
S & P SmallCap 600 100.00 136.34 198.39 210.58 157.23 360.67 363.27
- ----------
(1) Assumes that the value of the investment in Company Common Stock and in
each index was $100 on September 30, 1995 and the reinvestment of all
dividends on a quarterly basis.
-12-
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, acting on the recommendation of its Audit
Committee, has selected the firm of PricewaterhouseCoopers, LLP to act as the
Company's independent public accountants and to conduct an audit, in accordance
with generally accepted auditing standards, of the Company's financial
statements for year end ending December 31, 2001.
The Board of Directors considers PricewaterhouseCoopers, LLP to be well
qualified. A representative of that firm is expected to be present at the Annual
Meeting to respond to appropriate questions and will be given an opportunity to
make a statement if he or she so desires. Neither the firm nor any of its
partners has any direct financial interest or any indirect financial interest in
the Company other than as independent auditors. This selection is being
submitted for ratification at the meeting.
The affirmative vote of the holders of a majority of the shares of Common
Stock present in person or represented by proxy at the meeting and entitled to
vote is required for such ratification. If not ratified, the selection will be
reconsidered by the Board, although the Board of Directors will not be required
to select different independent auditors for the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE BOARD'S
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS.
Auditors' Fees
Audit Fees: For professional services rendered by them for the audit of our
annual financial statements for 2000, and reviews of the financial statements
included in our Quarterly Reports on Form 10-Q for 2000, PricewaterhouseCoopers
LLP billed us fees in the aggregate amount of $82,500.
Financial Information Systems Design and Implementation Fees:
PricewaterhouseCoopers LLP billed us no fees for professional services rendered
by them for 2000 in connection with financial information systems design and
implementation.
All Other Fees: For professional services other than those described above
rendered by them for 2000, PricewaterhouseCoopers LLP billed us fees in the
aggregate amount of $122,450.
The Audit Committee has considered whether the provision of services
described above under "ALL OTHER FEES" is compatible with maintaining the
independence of PricewaterhouseCoopers LLP.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
other matter to be presented at the Annual Meeting. If any additional matter
properly comes before the meeting, it is intended that proxies in the enclosed
form will be voted on the matter in accordance with the discretion of the
persons named in the proxy.
-13-
STOCKHOLDER PROPOSALS FOR 2002 ANNUAL MEETING OF STOCKHOLDERS
Under applicable securities laws, stockholder proposals must be received by
the Company no later than 120 days prior to May 8, 2002 to be considered for
inclusion in the Company's proxy statement relating to the 2002 Annual
Stockholders Meeting. If the Company changes the date of the 2002 Annual Meeting
by more than 30 days from the date of the 2001 Annual Meeting, then stockholder
proposals must be received by the Company a reasonable time before the Company
begins to print and mail its proxy statement for the 2002 Annual Meeting.
By Order of the Board of Directors,
_____________________________________
Avram A. Glazer,
President and Chief Executive Officer
Rochester, New York
April 30, 2001
-14-
APPENDIX A
ZAPATA CORPORATION
AUDIT COMMITTEE CHARTER
The Audit Committee
The Audit Committee (the "Committee") is a Committee of the Board of Directors
(the "Board"). The members of the Committee shall be elected by the Board.
Unless a Chair is elected by the full Board, the members of the Committee may
designate a Chair by majority vote of the Committee by written consent or at a
duly held meeting at which a least a majority of the members are present.
This Charter governs the operations of the Committee. The duties and
responsibilities of a member of the Committee are in addition to those duties of
such member as a member of the Board
Purpose
The primary purpose of the Committee is to assist the Board of Directors in
fulfilling its responsibility to oversee management's conduct of the Company's
financial reporting process, including by overviewing the financial reports and
other financial information provided by the Company to any governmental or
regulatory body, the public or other users thereof, the Company's systems of
internal accounting and financial controls, and the annual independent audit of
the Company's financial statements. The Committee will also have oversight of
corporate risk management, legal compliance and business ethics matters.
In discharging its oversight role, the Committee is empowered to investigate any
matter brought to its attention with full access to all books, records,
facilities and personnel of the Company and the power to retain outside counsel,
auditors or other experts for this purpose. The Board and the Committee are in
place to represent the Company's stockholders; accordingly, the outside auditor
is ultimately accountable to the Board and the Committee.
The Committee shall review the adequacy of this Charter on an annual basis and
report on it at the annual meeting of the board of directors. The Committee may
amend this Charter by a vote of a majority of the Committee members by written
consent or at a duly held meeting of the Committee at which at least a majority
of the Committee members are present. A copy of any amendments to restatements
of this Charter will be promptly provided to each Committee member and to the
Secretary of the Company.
The Committee shall maintain written minutes or other records of meetings and
activities. The Committee shall report its actions to the Board with such
recommendations as the Committee may deem appropriate.
Membership
The Committee shall consist of at least two directors with an increase to three
by June 2001. Thereafter the Committee shall be comprised of not less than three
directors. The Committee's composition will meet the requirements of the Audit
Committee Policy of the New York Stock Exchange and similar requirements of any
other exchange on which the Company's stock is admitted for listing.
Accordingly, all of the members will be directors:
1. Who meet the independence requirements set forth in Rule 303.01(B)(3) (or
qualify for an exemption under Rule 302(D)) of the New York Stock Exchange
Listing Standards, as applicable, and as may be modified or supplemented; and
2. Who are financially literate, as determined by the Company's Board in its
business judgment, or who become financially literate within a reasonable period
of time after appointment to the Committee. In addition, at least one member of
the Committee will have accounting or related financial management expertise, as
determined by the Board in its business judgment.
A-1
Key Responsibilities
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent auditor. Nor is it the duty of
the Audit Committee to conduct investigations, to resolve disagreements, if any,
between management and the independent auditor or to assure compliance with laws
and regulations and the Company's Code of Conduct. However, in discharging its
oversight role, the Committee is empowered to investigate any matter brought to
its attention with full access to all books, records, facilities, and personnel
of the Company and the power to retain outside counsel, or other experts for
this purpose.
The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. These functions are set forth
as a guide with the understanding that the Committee may diverge from this guide
as appropriate given the circumstances.
o The Committee shall review with management and the outside auditors the
audited financial statements to be included in the Company's Annual Report
on Form 10-K (or the Annual Report to Shareholders if distributed prior to
the filing of Form 10-K) and review and consider with the outside auditors
the matters required to be discussed by Statement of Auditing Standards
('SAS') No. 61.
o As a whole, or through the Committee chair, the Committee shall review with
the outside auditors the Company's interim financial results to be included
in the Company's quarterly reports to be filed with Securities and Exchange
Commission and the matters required to be discussed by SAS No. 61; this
review will occur prior to the Company's filing of the Form 10-Q. If
necessary, the Chairperson of the Committee may represent the entire
Committee for the review of the Form 10-Q.
o The Committee shall discuss with management and the outside auditors the
quality and adequacy of the Company's internal controls.
o Confirm and assure the independence of the outside auditor's independence.
With respect to the outside auditor's independence, the Committee shall:
o ensure that the outside auditors submit annually, a formal written
statement delineating all relationships between the auditor and the
Company consistent with Independence Standards Board Standard Number
1;
o discuss with the outside auditors any such disclosed relationships and
their impact on the objectively and independence of the outside
auditor; and
o recommend that the Board take appropriate action in response to the
outside auditor's report to satisfy itself of the auditor's
independence.
o The Committee shall recommend to the Board of Directors the selection of
the outside auditor for each fiscal year, considering independence and
effectiveness, and approve the fees and other compensation to be paid to
the independent accountant. In any event, the Committee shall, subject to
any action that may be taken by the full Board, have the ultimate authority
and responsibility to select (or nominate for shareholder approval),
evaluate and, where appropriate, replace the outside auditor.
The Committee shall perform any other activities consistent with this Charter,
the Company's Articles of Incorporation, By-laws and governing law, as the
Committee or the Board deems necessary or appropriate.
A-2
ZAPATA CORPORATION
PROXY/VOTING INSTRUCTIONS
ZAPATA CORPORATION
100 MERIDIAN CENTRE
SUITE 350
ROCHESTER, NEW YORK 14618
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Malcolm Glazer and Avram Glazer and each of
them, attorneys and agents with full power of substitution, to vote as proxy all
the shares of Common Stock of Zapata Corporation held of record by the
undersigned on May 1, 2001 at the Annual Meeting of Stockholders of Zapata
Corporation to be held on June 6, 2001 and at any adjournment(s) 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.
To vote by telephone, please follow the instructions on the reverse of this
card. To vote by mail, please sign and date the card on the reverse side and
return promptly by mail in the enclosed, postage pre-paid envelope.
If you wish to vote in accordance with the recommendations of the Board of
Directors, you may just sign and date below and mail in the postage paid
envelope provided. Specific choices may be made on the reverse side.
Dated __________________, 2001
___________________________________________
Signature
___________________________________________
Signature if held jointly
When signing as Executor,
Administrator, Trustee or the like, please give full title.
A-3
This proxy will be voted as directed, or if no direction is indicated, will be
voted FOR Proposal 1 - all nominees listed below for election as directors, and
FOR Proposal 2 - the ratification of the appointment of PricewaterhouseCoopers,
LLP. The Board of Directors recommends a vote FOR Proposals 1 and 2.
(1) Election of Directors FOR ALL WITHHOLD AUTHORITY TO VOTE FOR
Edward S. Glazer (except as specified below)
Robert V. Leffler
Instructions: To withhold vote for individual(s) write name(s) below.
(2) Proposal to ratify FOR AGAINST ABSTAIN
selection of PricewaterhouseCoopers, LLP
as independent public accountants
(Sign and date on reverse side)
THE ZAPATA CORPORATION - ANNUAL MEETING - JUNE 6, 2001
ZAPATA CORPORATION NOW OFFERS PHONE VOTING
24 HOURS A DAY, 7 DAYS A WEEK
ON A TOUCH-TONE PHONE, CALL TOLL-FREE 1-800-PROXIES (OR 1-800-776-9437). YOU
WILL HEAR THESE INSTRUCTIONS:
- -- ENTER THE CONTROL NUMBER FROM THE BOX ABOVE, JUST BELOW THE PERFORATION.
- -- YOU WILL THEN HAVE TWO OPTIONS:
OPTION 1: TO VOTE AS THE BOARD OF DIRECTORS RECOMMENDS ON BOTH PROPOSALS;
OR OPTION 2: TO VOTE ON EACH PROPOSAL SEPARATELY.
- -- YOUR VOTE WILL BE REPEATED TO YOU AND YOU WILL BE ASKED TO CONFIRM IT.
IF YOU HAVE VOTED BY PHONE, PLEASE DO NOT RETURN THE PROXY CARD.
THANK YOU FOR VOTING
A-4