THE TIME INC. BATTLE : Former Director of Time Still Hits Warner Merger : Plain-Talking Arthur Temple Believes TV Corrupts America

NEW YORK —  Some corporate directors do as they’re told by executives of their companies. Some directors disagree with management on some issues.

And some are like Arthur Temple.

One of the most independent thinkers ever to come out of tiny Diboll, Tex., Temple is a major Time Inc. shareholder who in April stepped down after six years on Time’s board. But he didn’t leave before speaking his mind in a way that may not have ingratiated him with the management that now faces the takeover fight of its life.

Court papers from Time’s legal battle with Paramount Communications show that the bluff, 69-year-old lumberman thought contracts proposed earlier this year for Time Chairman J. Richard Munro and President Nicholas J. Nicholas Jr. were just too generous.

He initially opposed Time’s merger with Warner Communications and even now thinks that Time’s board made a mistake by deciding that it wouldn’t let shareholders vote on whether they wanted the combination. Temple believes that television and movies are corrupting America, and he wanted to liquidate Time’s coveted Home Box Office and cable-TV properties--the company’s largest money makers.

“I think the violence, the gratuitous vulgarity, the sex, the perhaps unwitting promotion of values to which we don’t subscribe are not consistent with my business ethics,” Temple said in a deposition that was released this week. “Those things are having a very serious detrimental effect on this country.”

“He’s not a shrinking violet,” says Louis Slovinsky, a Time spokesman.

Temple, who gave up his board seat citing those concerns, became a force at Time in 1972, when the big magazine publishing house bought Temple-Inland Inc., the huge forest products company that Temple and his family owned. The stock-swap deal gave Temple and his family about 15% of Time’s shares, making them the company’s No. 1 shareholders, with more stock than even the founding Luce family.

Although Time spun off Temple-Inland in 1983, Temple and a family foundation still controlled 1.74 million shares, or about 3% of Time stock, as of April, 1988, the last time the family holdings were disclosed in a Time proxy statement.

He didn’t respond to requests for comment on Wednesday.

Temple spoke his mind from the time he joined Time. To the dismay of Time Inc.’s New York staff, he told a reporter in 1975 that there was no reason that parts of the company couldn’t be moved to the heartland. Time soon felt compelled to announce that there were no plans to move operations to Texas or anywhere else.

A burly, 6-foot-tall outdoorsman, Temple is a far cry in style from some other Time board members, who include John R. Opel, the former IBM Corp. chairman; David T. Kearns, Xerox chairman; and Edward S. Finkelstein, chairman of R. H. Macy & Co.

Temple, who suffered a heart attack last summer, spins homilies, loves to hunt in Diboll’s Boggy Slough and chomps cigars that he can no longer light because of his health. He came to his final board meetings at Time with an alarm clock, set to remind him when to take his medicine.

‘Texas to the Core’

He has been known to wear his hat, a snap-brim fedora, inside the office at Temple-Inland, where he is still chairman.

“He’s Texas to the core, but don’t let the down-home talk mislead you; this is a shrewd man,” said one Time acquaintance. Temple, who spent one year at the University of Texas at Austin, greatly expanded the business his father left him.

In the pleadings in the case, Temple speaks his mind again and again.

Time’s own court papers note that Temple took issue with the proposed pay for Munro and Nicholas, quoting a director as saying that “he often believed people earned ‘excessive’ salaries, and finds it ‘personally offensive.’ ” Paramount’s brief quoted Temple as telling another director that Munro and Nicholas were “fleecing their nests,” and challenging the company’s plans for a compensation contract with Munro that was to continue after his retirement from the company.

Others on the board noted that Temple hadn’t been shy about urging that Time should get rid of the video operations that have become its fastest-growing segment. Gerald M. Levin, Time’s vice chairman and a board member, notes in the papers that Temple seemed to have a “constitutional aversion” to cable, which he saw as “corrupting to the young people of America.”

From the time he joined the company, Temple had been fascinated with Time’s magazine journalism, and the cachet it brought. He approves of Cable News Network, in which Time now holds a stake.

“But he never liked HBO because of the R-rated movies,” explained an acquaintance. “And he never liked cable systems, because that’s what delivered adult movies.”

Voiced Concerns

For those reasons, Temple didn’t take right away to the idea of the merger with Warner, which owns the Warner Bros. movie studio, the Lorimar television production firm and other entertainment operations.

When he voiced concerns about the price that Time was getting in its merger as well as the executive pay, Munro conferred with director Michael Dingman, chairman of Henley Group, about how to “neutralize” Temple, Paramount’s brief says. Munro made a special trip to Diboll, in the piney woods of East Texas.

Afterwards, Munro wrote in a secret memo: “I’m afraid we didn’t make the sale, but he’s wavering and I think we have a slightly better than 50% shot at getting his support.”

Temple did finally vote for the deal, citing the high earnings potential offered by Warner. But when he resigned from the board, he noted again that Hollywood “was not a type business I can be proud of.”

According to Paramount’s brief, Temple also disagreed with Munro and Nicholas about their fears that Time was at risk as a takeover target.

Munro and Nicholas “frequently would say I think we’re a target,” he is quoted as saying. “I said I think that’s vanity speaking--I don’t think anybody’s got you in their sights.”

And Temple squared off against management on one of the most controversial issues, their decision not to conduct a shareholder vote on Time’s proposed $14-billion takeover of Warner. “Any major move of that significance . . . I felt, should be done with a shareholder vote,” Paramount’s brief quoted him as saying.