§ 19. — Interlocking directorates and officers.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC19]
TITLE 15--COMMERCE AND TRADE
CHAPTER 1--MONOPOLIES AND COMBINATIONS IN RESTRAINT OF TRADE
Sec. 19. Interlocking directorates and officers
(a)(1) No person shall, at the same time, serve as a director or
officer in any two corporations (other than banks, banking associations,
and trust companies) that are--
(A) engaged in whole or in part in commerce; and
(B) by virtue of their business and location of operation,
competitors, so that the elimination of competition by agreement
between them would constitute a violation of any of the antitrust
laws;
if each of the corporations has capital, surplus, and undivided profits
aggregating more than $10,000,000 as adjusted pursuant to paragraph (5)
of this subsection.
(2) Notwithstanding the provisions of paragraph (1), simultaneous
service as a director or officer in any two corporations shall not be
prohibited by this section if--
(A) the competitive sales of either corporation are less than
$1,000,000, as adjusted pursuant to paragraph (5) of this
subsection;
(B) the competitive sales of either corporation are less than 2
per centum of that corporation's total sales; or
(C) the competitive sales of each corporation are less than 4
per centum of that corporation's total sales.
For purposes of this paragraph, ``competitive sales'' means the gross
revenues for all products and services sold by one corporation in
competition with the other, determined on the basis of annual gross
revenues for such products and services in that corporation's last
completed fiscal year. For the purposes of this paragraph, ``total
sales'' means the gross revenues for all products and services sold by
one corporation over that corporation's last completed fiscal year.
(3) The eligibility of a director or officer under the provisions of
paragraph (1) shall be determined by the capital, surplus and undivided
profits, exclusive of dividends declared but not paid to stockholders,
of each corporation at the end of that corporation's last completed
fiscal year.
(4) For purposes of this section, the term ``officer'' means an
officer elected or chosen by the Board of Directors.
(5) For each fiscal year commencing after September 30, 1990, the
$10,000,000 and $1,000,000 thresholds in this subsection shall be
increased (or decreased) as of October 1 each year by an amount equal to
the percentage increase (or decrease) in the gross national product, as
determined by the Department of Commerce or its successor, for the year
then ended over the level so established for the year ending September
30, 1989. As soon as practicable, but not later than January 31 of each
year, the Federal Trade Commission shall publish the adjusted amounts
required by this paragraph.
(b) When any person elected or chosen as a director or officer of
any corporation subject to the provisions hereof is eligible at the time
of his election or selection to act for such corporation in such
capacity, his eligibility to act in such capacity shall not be affected
by any of the provisions hereof by reason of any change in the capital,
surplus and undivided profits, or affairs of such corporation from
whatever cause, until the expiration of one year from the date on which
the event causing ineligibility occurred.
(Oct. 15, 1914, ch. 323, Sec. 8, 38 Stat. 732; May 15, 1916, ch. 120, 39
Stat. 121; May 26, 1920, ch. 206, 41 Stat. 626; Mar. 9, 1928, ch. 165,
45 Stat. 253; Mar. 2, 1929, ch. 581, 45 Stat. 1536; Aug. 23, 1935, ch.
614, Sec. 329, 49 Stat. 717; Pub. L. 101-588, Sec. 2, Nov. 16, 1990, 104
Stat. 2879; Pub. L. 103-203, Sec. 1, Dec. 17, 1993, 107 Stat. 2368.)
References in Text
The antitrust laws, referred to in subsec. (a)(1)(B), are defined in
section 12 of this title.
Amendments
1993--Subsec. (a)(5). Pub. L. 103-203 substituted ``January 31'' for
``October 30''.
1990--Pub. L. 101-588 amended section generally, completely revising
it in form by substituting text divided into a subsec. (a) consisting of
five numbered paragraphs and a subsec. (b) consisting of a single
unnumbered paragraph for former provisions which had consisted of a
series of five undesignated paragraphs, and in substance by increasing
the jurisdictional threshold for application of the section to
corporations from $1,000,000 in net worth to $10,000,000 in net worth,
creating three ``de minimis'' exceptions to applications of the section
in cases of insignificant competitive overlaps, and expanding the
section to cover officers elected or chosen by the Board of Directors.
1935--Act Aug. 23, 1935, amended section generally.
1929--Act Mar. 2, 1929, amended second par.
1928--Act Mar. 9, 1928, amended second par.
Section Referred to in Other Sections
This section is referred to in sections 18a, 21, 26 of this title;
title 12 section 3205.
