Simmons Issues a New Warning to Lockheed

Texas investor Harold C. Simmons Tuesday issued a new ultimatum to Lockheed Corp., declaring that he would launch a second proxy fight for control of the company unless management allows its shareholders to decide whether Simmons’ camp should be alloted three seats on Lockheed’s board.

Under the latest proposal, shareholders would be asked at Lockheed’s annual meeting April 2 to indicate whether Simmons should be allowed to place three of his representatives on the board, expanding it from 15 to 18 members.

If Lockheed management agrees in advance of the meeting to make the proposition binding--giving shareholders final say on the issue--Simmons said he will not challenge the current directors by nominating a full slate of board candidates.

But if the company makes the vote advisory only, Simmons said he would conduct another full-scale proxy fight, seeking his slate’s election at the April meeting.

Lockheed said Tuesday that it would consider the proposal, but had no immediate response.

An agreement would end a 12-month struggle between Lockheed and Simmons, who controls NL Industries, a Houston-based chemical company that owns 19.8% of the Calabasas-based aerospace firm. Seeking to enhance the value of his Lockheed stock, Simmons has clashed repeatedly with Lockheed management over corporate strategy.

The new offer was contained in a letter from NL Industries President J. Landis Martin to Lockheed Chairman Daniel M. Tellep.

Martin, in an interview, said Lockheed must agree to the deal by Thursday if Simmons and NL are to avoid a proxy challenge. If Lockheed agrees--and shareholders decide to give NL Industries the representation--Simmons, Martin and retired Air Force Gen. Earl O’Loughlin would assume the three new board seats, Martin said.

If Lockheed rejects the offer, NL again will be trying to convince owners of 51% of Lockheed’s stock to replace the firm’s board with a slate of NL-backed directors.