SCHEDULE 14A INFORMATION
 
  Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
                                      1934
 
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
 
Check the appropriate box:
 
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
    6(e)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
 
                               ZAPATA CORPORATION
                (Name of Registrant as Specified In Its Charter)
 
   (Name of Persons(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (check the appropriate box):
 
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
    Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
    6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
 
  1) Title of each class of securities to which transaction applies:
 
  2) Aggregate number of securities to which transaction applies:
 
  3) Per unit price or other underlying value of transaction computed
     pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
     filing is calculated and state how it was determined):
 
  4) Proposed maximum aggregate value of transaction:
 
  5) Total fee paid:
 
[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
    0-11(a)(2) and identify the filing for which the offsetting fee was paid
    previously. Identify the previous filing by registration statement number,
    or the Form or Schedule and the date of its filing.
 
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                   [LOGO OF ZAPATA CORPORATION APPEARS HERE]
 
                       SUPPLEMENT DATED NOVEMBER 30, 1995
                   TO PROXY STATEMENT DATED NOVEMBER 13, 1995
 
  GENERAL. The following information supplements the Proxy Statement dated
November 13, 1995 (the "Proxy Statement") of Zapata Corporation, a Delaware
corporation (the "Company"), relating to the meeting of the stockholders of the
Company scheduled to be held on December 15, 1995 at 10:00 a.m., local time, at
the Omni Hotel, 4 Riverway, Houston, Texas 77056. Certain terms that are not
defined in this Supplement are used as defined in the Proxy Statement. This
Supplement and the enclosed form of proxy are first being mailed to
stockholders of the Company on or about November 30, 1995.
 
  RECEIPT OF LETTER FROM FORMER DIRECTOR OF THE COMPANY. On November 17, 1995,
the Company received a letter dated November 16, 1995 (the "Resignation
Letter") from Peter M. Holt, a director of the Company, containing Mr. Holt's
resignation from the Board of Directors of the Company and from all of his
management and board positions with affiliates of the Company. The Resignation
Letter stated that Mr. Holt was resigning because of a disagreement with the
Company on matters relating to the Company's operations, policies and
practices. Mr. Holt requested that his resignation, his disagreement with the
Company and the Resignation Letter be disclosed in a Current Report on Form 8-K
to be filed with the Securities and Exchange Commission ("SEC") and the New
York Stock Exchange ("NYSE"). The Company made such filing with the SEC on
November 21, 1995 and with the NYSE on November 22, 1995.
 
  The Resignation Letter describes Mr. Holt's disagreement with the Company as
a disagreement regarding (i) the characterization of certain matters in the
Proxy Statement and (ii) the Company's implementation of a new strategic plan
involving repositioning the Company in the food packaging, food and food
service equipment and supply (collectively, "food services") business and
exiting the energy business.
 
  With regard to the Proxy Statement, the Resignation Letter asserts that there
are certain statements contained in the Proxy Statement that need to be
corrected in order for the disclosures therein to not be misleading.
Specifically, the Resignation Letter asserts that (i) Zapata's new strategic
plan to enter the food services business was not adopted by the Company's Board
of Directors until September 20, 1995, at the earliest, and yet the Proxy
Statement states that the strategy has been in development since late 1994 and
early 1995; (ii) Zapata has already identified its acquisition candidates for
expansion into the food services industry to be funded with the proceeds from
the sale of Energy Industries and that the failure to so state in the proxy
materials is misleading; and (iii) Zapata has failed to advise its stockholders
of what is meant by the words "new strategy" and "acquisitions in the food
service industry" in that, to the knowledge of Mr. Holt, the only acquisitions
that have been seriously considered by the Company in furtherance of its new
strategy, utilizing the proceeds to be received by the Company in the Energy
Industries transaction, are acquisitions from Malcolm I. Glazer, the Chairman
of the Board of Zapata, and his affiliates. With respect to the last assertion,
the Resignation Letter refers to the formation of a special committee of
certain disinterested members of the Company's Board of Directors (the "Special
Committee") on September 20, 1995 for the purpose of considering the possible
investments in Houlihan's Restaurant Group, Inc. ("Houlihan's") and Specialty
Equipment Companies, Inc. ("Speciality"). Malcolm Glazer or his affiliates
beneficially own substantial interests in those companies.
 
  The Company believes Mr. Holt's description of his disagreement with Zapata
contained in the Resignation Letter is both inaccurate and incomplete. Mr.
Holt's letter asserts that the Company's new

 
strategy of departing the energy industry and entering the food services
industry was not presented to the Board of Directors for a vote until the
special meeting of the Company's Board of Directors held on September 20, 1995.
The Company notes, however, that at a meeting of the Board of Directors held on
May 5, 1995, the Board of Directors, with Mr. Holt participating, approved the
engagement of Schroder Wertheim & Co. Incorporated ("Schroder Wertheim"), an
investment banking firm, as the Company's financial advisor in connection with
the sale of the Company's primary energy-related assets, Energy Industries and
Cimarron Gas Holding Company, and the authorization of appropriate officers of
the Company to negotiate terms and conditions of the sale of these businesses
with viable bidders. At the same May 5, 1995 meeting, Mr. Holt participated in
a discussion by the directors of the possibility that the Company might
purchase stock of Envirodyne Industries, Inc. ("Envirodyne") (including the
stock of Envirodyne held by an affiliate of Malcolm Glazer), and at a meeting
of the Board of Directors held on May 30, 1995, the Board of Directors, with
Mr. Holt participating, decided to form a special committee of the Board of
Directors to consider the acquisition of common stock of Envirodyne from the
Malcolm I. Glazer Trust. At the May 30, 1995 meeting of the Board of Directors,
Avram A. Glazer (the Company's President and Chief Executive Officer) made a
presentation to the Board of a plan to reposition the Company into the food
services industry, including references to potential acquisition candidates.
Mr. Holt participated in this discussion, from which there emerged a consensus
among the Board members to pursue the redirection of the Company's business
into the food services industry, and Mr. Holt voiced no objection to the
proposed redirection. The new direction of the Company was also discussed at
length at the Company's Annual Meeting of Stockholders held on July 27, 1995,
at which Mr. Holt was present. Mr. Holt did not attend the September 20, 1995
meeting at which the final form of the asset purchase agreement for the sale of
Energy Industries was presented for approval by the Board.
 
  In addition, the Company also notes that Mr. Holt and another party submitted
a non-binding indication of interest to acquire Energy Industries that was sent
on June 8, 1995 to the Company's financial advisor, Schroder Wertheim. That
proposal was not pursued by the Company because it would have involved terms
substantially less favorable to the Company and its stockholders than the
Weatherford Enterra proposal. A portion of the offered consideration for such
proposal in which Mr. Holt participated was the common stock of the Company
owned by Mr. Holt and his affiliates, which the proposal would have valued at a
premium over the market price of the common stock.
 
  To the knowledge of the Company, Mr. Holt has not, prior to receipt of the
Resignation Letter, informed any member of the Board of Directors or executive
officer of the Company that he objected to the Company's proposed exit from the
energy business and redirection of its business into the food services
industry. The Company believes that Mr. Holt's suggestions of inaccuracies in
the Proxy Statement regarding the timing of specific board action to approve
various matters related to the proposed repositioning are, at most, technical
objections, and that the disclosure in the Proxy Statement in this regard is
correct in all material respects. In response to Mr. Holt's letter, however,
the Company is supplementing the Proxy Statement with this Supplement in order
to avoid controversy over certain of the matters raised by Mr. Holt.
 
  The Company also disagrees with Mr. Holt's assertion that the statements
contained in the Proxy Statement regarding the used of proceeds of the Energy
Industries Sale are misleading. The statements in the Proxy Statement regarding
the use of proceeds are (i) that the Company intends to use the net proceeds of
the Energy Industries sale for general corporate purposes, which may include
repayment of debt, and for future acquisitions which are expected to be in the
food services industry and (ii) that the Company does not have any current
plans or proposals to use the proceeds of the Energy Industries Sale for
specific acquisitions or joint ventures. The Company continues to believe that
these statements are accurate. In this connection, Mr. Holt's letter refers to
an agenda item for the September 20, 1995 meeting of the Company's Board of
Directors (which, as noted above, Mr. Holt failed to attend) referring to the
creation of a special committee for the purpose of investigating the legal and
financial considerations of one or more merger or acquisition transactions
involving the Company and Houlihan's and Specialty. Malcolm Glazer and members
of his family beneficially own approximately 73% and 45% of the outstanding
common stock of Houlihan's and
 
                                       2

 
Specialty, respectively, and Malcolm Glazer, Avram Glazer and other members of
their family serve as directors of both of those companies. The Special
Committee was charged with recommending to the Board of Directors what further
steps should be taken by the Company in connection with its consideration of
any such transactions. To date, the Special Committee has not issued any
recommendations with respect to its consideration of possible transactions
involving either Houlihan's or Specialty. The Company has considered these two
companies, along with other companies (for which a special committee was not
deemed necessary because of the fact that no interested director transaction
was involved), as potential acquisition candidates in the food services
industry. Houlihan's and Specialty were included as potential merger targets in
the presentation made by Avram Glazer to the Company's Board of Directors 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 with this
Supplement in order to avoid controversy over certain of the matters raised by
Mr. Holt.
 
  LITIGATION INSTITUTED BY HOLT AFFILIATES. 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 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 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 Company's 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.
 
  RECOMMENDATION OF THE COMPANY'S BOARD OF DIRECTORS. A meeting of the
Company's Board of Directors was held on November 21, 1995 to discuss the
Resignation Letter and the litigation instituted by the Holt Affiliates. At
such meeting, the Resignation Letter, the litigation and related matters were
discussed and the Board reaffirmed its recommendation that the stockholders
approve the Energy Industries Sale transaction. The Board authorized the
appropriate officers of the Company to file the Current Report on Form 8-K
referred to above with the SEC and the New York Stock Exchange. The Board also
authorized the mailing of this Supplement to stockholders of the Company. THE
BOARD OF DIRECTORS CONTINUES TO RECOMMEND THAT THE STOCKHOLDERS VOTE FOR THE
ENERGY INDUSTRIES SALE PROPOSAL.
 
  NEW PROXY CARD. The Company has enclosed herewith a new proxy card for the
Special Meeting pursuant to which, a stockholder may, if he or she desires,
revoke any previous proxy given in connection with the Special Meeting. A
stockholder who wishes to revoke a proxy can do so by executing a later-dated
proxy relating to the same shares and delivering it in the enclosed envelope,
or to the Secretary of the Company, in each case, prior to the vote at the
Special Meeting, by giving written notice of revocation to the Secretary prior
to the vote at the Special Meeting or by appearing in person at the Special
Meeting and voting in person the shares to which the proxy relates. Any written
notice revoking a proxy should be sent to the Company, Attention: Joseph L. von
Rosenberg III, Corporate Secretary. The Company's executive offices are located
at 1717 S. James Place, Suite 550, Houston, Texas 77056.
 
                                       3

 
  CHANGES TO THE PROXY STATEMENT. The sections set forth below replace the
sections of the Proxy Statement captioned: "Background of the Energy Industries
Sale Proposal--General" (pages 3-4 of the Proxy Statement) and "Recommendation
of the Company's Board of Directors" (pages 9-10 of the Proxy Statement).
 
BACKGROUND OF THE ENERGY INDUSTRIES SALE PROPOSAL
 
  General. The Company is a Delaware corporation which was organized in 1954
and which historically has operated within the energy industry. The Company was
previously engaged in the operation of offshore drilling rigs, marine service
and supply vessels and oil and gas operations. All of these operations have
been divested in the last few years, with the exception of the Company's
remaining interest in a Bolivian oil and gas operation.
 
  In fiscal 1993, the Company began to narrow the focus of its operations to
the natural gas services market. In connection with that strategy, the Company
acquired Cimarron Gas Holding Company ("Cimarron") in November 1992. Cimarron
is engaged in the business of gathering and processing natural gas and its
constituent products, as well as marketing and trading natural gas liquids. In
September 1993, Cimarron purchased additional gathering and processing assets
and expanded its operations through the acquisition of Stellar Energy
Corporation and three affiliated companies. In November 1993, the Company
acquired the natural gas compression business of Energy Industries. Energy
Industries is engaged in the business of renting, fabricating, selling,
installing and servicing natural gas compressor packages. Energy Industries
operates one of the ten largest rental fleets of natural gas compressor
packages in the United States. See "--Business of Energy Industries."
 
  In late 1994 and early 1995, members of senior management of the Company
began to develop a strategic plan for the Company which involves repositioning
the Company in the food packaging, food and food service equipment and supply
(collectively, "food services") businesses and exiting the energy business in
which the Company has historically operated. The strategic plan that was
developed called for the divestiture of the Company's remaining energy
operations, consisting primarily of Energy Industries, Cimarron and the
Company's remaining domestic oil and gas assets, and the acquisition of, or
joint ventures with, selected companies in the food services industry. In
connection with the development of such strategic plan, certain members of
senior management and certain members of the Board of Directors reviewed
various publicly available materials regarding the food services industry,
including information on overall market size, susceptibility of the industry to
consolidation, general revenue and earnings history and trends and other
relevant information. As a result of such evaluations and informal exchanges of
information, a consensus developed among such senior management and Board
members that the food services industry might provide better opportunities to
increase the earnings and revenues of the Company as compared to the businesses
in which the Company had historically operated. The Company publicly announced
its decision to exit the energy business in April 1995. Members of senior
management and Board members continued to evaluate information of the food
services industry and, at a meeting held in May 1995, there emerged a consensus
among the members of the Board of Directors to pursue the redirection of the
Company's business into the food services industry.
 
  In March 1995, the Company executed an agreement to sell its marine protein
operations to an investor group. However, that agreement was terminated in
April 1995 due to the investor group's failure to obtain sufficient financing.
 
  In April 1995, the Company engaged Schroder Wertheim as its financial advisor
to assist in the potential divestiture of Energy Industries and Cimarron. In
selecting Schroder Wertheim, the Board of Directors took into account Schroder
Wertheim's expertise, reputation and familiarity with the natural gas industry.
The Board of Directors had also engaged Schroder Wertheim in connection with
the Envirodyne transaction described below. Schroder Wertheim, as a customary
part of its investment banking business, is engaged in the valuation of
businesses and their securities in connection with mergers and acquisitions,
negotiated
 
                                       4

 
underwritings, private placements and valuations for estate, corporate and
other purposes. In connection with the Energy Industries divestiture, Schroder
Wertheim initiated contacts with a significant number of prospective purchasers
which are described below under "--The Energy Industries Sale Proposal."
 
  A meeting of the Company's Board of Directors was held on May 5, 1995 to
review and discuss the status of the sale of Energy Industries and Cimarron. At
that meeting, the Board ratified the engagement of Schroder Wertheim and
authorized officers of the Company to negotiate terms and conditions of sale
with viable bidders for each of Energy Industries and Cimarron, subject to
approval by the Board of Directors. The authorized officers were the Chairman
of the Board, the President, the General Counsel and the Chief Financial
Officer of the Company. These officers were selected based on their positions
and history with the Company and their collective operational, legal and
financial expertise. Schroder Wertheim was also granted authority to negotiate
terms on behalf of the Company, and participated in negotiations in
consultation with the President, General Counsel and Chief Financial Officer of
the Company, subject to final approval by the Board of Directors.
 
  In June 1995, the Company sold a portion of its natural gas reserves in the
Gulf of Mexico. In August 1995, the Company sold its remaining domestic oil and
gas operations, including its interests in five offshore federal leases in the
Gulf of Mexico.
 
  In August 1995, the Company purchased 31% of the common stock of Envirodyne
Industries, Inc. ("Envirodyne") for $18.8 million from a trust controlled by
Malcolm I. Glazer, Chairman of the Board of the Company and, through his
beneficial ownership of a trust, a major stockholder of the Company. Mr. Glazer
is also a director of Envirodyne. Such shares represented all of Mr. Glazer's
beneficial interest in Envirodyne. The Company paid the purchase price by
issuing a subordinated promissory note in a principal amount of $18.8 million,
bearing interest at the prime rate and maturing in August 1997, subject to
prepayment at the Company's option. This transaction was approved by a special
committee composed of outside members of the Company's Board of Directors, and
Schroder Wertheim provided a fairness opinion to the Board of Directors
regarding the fairness, from a financial point of view, of the transaction. The
Company has since prepaid approximately $15.6 million of principal on the
promissory note. Envirodyne is a major supplier of food packaging products and
food service supplies and is a leading worldwide producer of cellulosic casings
used in the preparation and packaging of processed meat products. It is the
world's second largest producer of heat shrinkable plastic bags and specialty
films for packaging and preserving fresh and processed meat products, poultry
and cheeses. Envirodyne is also a leading domestic producer of disposable
plastic cutlery, drinking straws, custom dining kits and related products. In
addition, Envirodyne is a leading domestic producer of thermo-formed and
injection-molded plastic containers and horticultural trays and inserts. The
Company may continue to evaluate the acquisition of additional shares of
Envirodyne common stock or proposing a merger with, or acquisition of,
Envirodyne in the future, although the Company currently has no plans or
proposals to do so.
 
  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. 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)
lack independence from
 
                                       5

 
Malcolm Glazer because, in the case of Mr. Loar, he was employed by a
corporation indirectly controlled by Malcolm Glazer until his 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.
 
                                    * * * *
 
RECOMMENDATION OF THE COMPANY'S BOARD OF DIRECTORS
 
  THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY VOTE
"FOR" THE ENERGY INDUSTRIES SALE PROPOSAL.
 
  As discussed previously under "-- Background of the Energy Industries Sale
Proposal", the Board of Directors determined that the Energy Industries Sale
Proposal was expedient and fair to, and in the best interests of, the Company
and its stockholders. In making this determination, the following factors were
considered and evaluated:
 
    (i) The Board's consideration that the focus of the Company's business
  strategy had shifted from the energy business toward the food processing
  business. The Board therefore elected to begin the exit of the energy
  business through the sale of Energy Industries and the other energy related
  operations discussed under "Background of the Energy Industries Sale
  Proposal";
 
    (ii) The Board's review of presentations from, and discussions of the
  terms and conditions of the Energy Industries Sale Proposal with, senior
  executive officers of the Company and Energy Industries;
 
    (iii) The Board's consideration of, among other things, information with
  respect to the financial condition, results of operations and business of
  the Company and Energy Industries, on both a historical and a prospective
  basis;
 
    (iv) The fact that five other offers to purchase Energy Industries were
  received by the Company and that those offers were inferior to the
  Weatherford Enterra offer with respect to price and other material terms;
  and
 
    (v) The Board's consideration of Schroder Wertheim's oral opinion, which
  was to be subsequently confirmed in writing, as to the fairness to the
  Company from a financial point of view, of the consideration to be received
  by the Company pursuant to the Weatherford Enterra offer. In connection
  with its evaluation of this factor, the Board was aware of the fact that
  Schroder Wertheim did not assume any responsibility for independently
  verifying the information that it reviewed in connection with the rendering
  of its opinion and that Schroder Wertheim assumed the accuracy and
  completeness of all information made available or obtained by it. However,
  the Board believed that reliance by Schroder Wertheim was reasonable and
  was consistent with the Company's management's understanding of such
  information which related to the Company and Energy Industries, based on
  management's historical familiarity and day-to-day utilization of such
  information.
 
  The Board did not assign relative weights to the factors discussed above.
 
  In light of the Company's overall strategic plan of exiting the energy
services business, the Board did not consider other alternatives to the sale of
Energy Industries, such as its continuing operation, growth of Energy
Industries through potential acquisitions, or strategic alliances or joint
ventures of Energy Industries with other third parties.
 
  The Energy Industries Sale is a major step in the Company's transition from
an energy company to a food services company. The Company intends to use the
net proceeds from the Energy Industries Sale for general corporate purposes,
which may include repayment of debt, and for future acquisitions or joint
ventures that are expected to be in the food services industry. While the
Company is actively seeking
 
                                       6

 
acquisition and joint venture opportunities, there can be no assurances that
the Company will succeed in consummating any such opportunities or that
acquisitions or joint ventures, if consummated, will be successful. The Company
does not have any current plans or proposals to use the proceeds of the Energy
Industries Sale for specific acquisitions or joint ventures. The Board of
Directors has established the Special Committee for the purpose of
investigating the legal and financial considerations of one or more merger or
acquisition transactions involving the Company and Houlihan's Restaurant Group,
Inc. ("Houlihan's") and Specialty Equipment Companies, Inc. ("Speciality").
Malcolm Glazer and members of his family beneficially own approximately 73% and
45% of the outstanding common stock of Houlihan's and Specialty, respectively,
and Malcolm Glazer, Avram Glazer and other members of their family serve as
directors of both of those companies. The Special Committee was charged with
recommending to the Board of Directors what further steps should be taken by
the Company in connection with the above considerations. To date, the Special
Committee has not issued any recommendations with respect to its consideration
of possible transactions involving either Houlihan's or Specialty. The Company
has considered these two companies, along with other companies (for which a
special committee was not deemed necessary because of the fact that no
interested director transaction was involved), as potential acquisition
candidates in the food services industry. Houlihan's and Specialty were
included as potential merger targets in the presentation made by Avram Glazer
to the Company's Board of Directors at its May 30, 1995 meeting. Consideration
of potential business combination transactions with these companies is at a
preliminary stage.
 
  Other than the seeking of proposed acquisitions and joint ventures as
described above and the Company's consideration of possible future transactions
involving Envirodyne as described under "Background of the Energy Industries
Sale Proposal--General", the Company currently has no plans or developments to
advance its internal or external expansion in the food services industry. In
addition, while the Company currently intends to focus on the food services
industry, the Company may effect acquisitions in other industries if the Board
determines that it is in the interests of the Company and stockholders to do
so. While the Board of Directors believes that the consummation of the Energy
Industry Sales Proposal is expedient and fair to, and in the best interests of,
the Company and its stockholders, there can be no assurance that the Energy
Industries Sale, or the Company's entry into the food services business, will
result in an improvement in the Company's results of operations or financial
condition.
 
                                       7