(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) Not withstanding 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.
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(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 January 31 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.
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(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.
[15 USC 19. As amended
by acts of May 15, 1916 (39 Stat. 121); May 26, 1920 (41 Stat. 626);
March 9, 1928 (45 Stat. 253); March 2, 1929 (45 Stat. 1536); Aug.
23, 1935 (49 Stat. 717), which completely revised this section; Nov.
16, 1990 (104 Stat. 2879); and Dec. 17, 1993 (107 Stat. 2368).]
