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U.S. Code as of:
01/19/04
Section 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.
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