Simmons Tells Lockheed He Wants a Deal : Aerospace: The investor offers to drop his proxy battle if management helps him get three board seats.

Texas investor Harold C. Simmons on Wednesday informed Lockheed Corp. that he would not mount a second proxy fight for control of the company if Lockheed management agrees to help him obtain three seats on the aerospace company’s board.

Such a deal would end the yearlong struggle between Lockheed and Simmons, who controls NL Industries, a Houston-based chemical company that owns 19.8% of the Calabasas-based defense contractor.

The new offer was contained in a letter from NL Industries President J. Landis Martin to Lockheed Chairman Dan Tellep. Martin, in an interview, said NL would consider the offer to be rejected if Lockheed fails to respond today, “because we have limited time to prepare for a full-fledged proxy contest.”

Lockheed management, which defeated Simmons in a bitter and expensive proxy battle for control of the company’s board last spring, said the company would react to the offer as soon as a board meeting could be arranged.

“Simmons’ proposal will be considered by our board of directors in the context of any possible benefits to all Lockheed shareholders,” the firm said in a statement.

Although Lockheed has continued to clash with Simmons and NL over corporate strategy, it has been willing to review proposals from NL, Lockheed’s largest shareholder.

Under the terms of the new proposal, NL Industries would agree not to challenge Lockheed’s 15-member board with a rival slate of candidates if Lockheed management nominates and supports Martin, Simmons and retired Navy Admiral Elmo Zumwalt for the board, Martin’s letter said. Zumwalt was a member of rival slate NL backed in the proxy fight last spring.

“It’s a way of avoiding a time-consuming and costly proxy contest,” Martin explained in a telephone interview Wednesday. “We think it’s an equitable solution and a fair compromise.”

Martin said a new proxy fight remained an option for NL, indicating that such a challenge was very likely if Lockheed rejects the Texan’s latest offer.

NL would then again be trying to persuade owners of 51% of Lockheed’s stock to replace the firm’s board with a slate of NL-backed directors.

Lockheed on Monday announced that it would hold its annual meeting April 2. On Tuesday, however, NL asked a U.S. District Court judge in Los Angeles to delay the meeting until there has been court action on a suit between the two companies.