§ 19. Interlocking directorates and officers

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1914

   Pub. L. 63–323 § 8 · 38 Stat. 730

   Enacted · 15 U.S.C. § 19

   Oct. 15, 1914, ch. 323, § 8, 38 Stat. 732

   Source evidence

   Code source credit
   Oct. 15, 1914, ch. 323, § 8, 38 Stat. 732

   Enacted provision · exact public law section
   Sec. 8. That from and after two years from the date of the approval of this Act no person shall at the same time be a director or other officer or employee of more than one bank, banking association or trust company, organized or operating under the laws of the United States, either of which has deposits, capital, surplus, and undivided profits Private bankers, or officers of State banks, etc. aggregating more than $5,000,000; and no private banker or person who is a director in any bank or trust company, organized and operating under the laws of a State, having deposits, capital, surplus, and undivided profits aggregating more than $5,000,000, shall be eligible to be a director in any bank or banking association organized or Determination of eligibility. operating under the laws of the United States. The eligibility of a director, officer, or employee under the foregoing provisions shall be determined by the average amount of deposits, capital, surplus, and undivided profits as shown in the official statements of such bank, banking association, or trust company filed as provided by law during the fiscal year next preceding the date set for the annual election Temporary continuance. of directors, and when a director, officer, or employee has been elected or selected in accordance with the provisions of this Act it shall be lawful for him to continue as such for one year thereafter under said election or employment. No bank, banking association or trust company, organized or operating Large municipalities. Service as officers, etc., in United States and private banks, forbidden. under the laws of the United States, in any city or incorporated town or village of more than two hundred thousand inhabitants, as shown by the last preceding decennial census of the United States, shall have as a director or other officer or employee any private banker or any director or other officer or employee of any other bank, banking association or trust company located m the same place: Provided, That nothing in this section shall apply to mutual savings Provisos. Mutual savings banks excepted. Permitted if stock owned by stockholders of the other. banks not having a capital stock represented by shares: Provided further, That a director or other officer or employee of such bank, banking association, or trust company may be a director or other officer or employee of not more than one other bank or trust company organized under the laws of the United States or any State where the entire capital stock of one is owned by stockholders in the other: And provided further, That nothing contained in this section shall Federal reserve banks. Ante. p. 255. forbid a director of class A of a Federal reserve bank, as defined in the Federal Reserve Act, from being an officer or director or both an officer and director in one member bank. That from and after two years from the date of the approval of this Restriction on service as director in two or more competing corporations. Act no person at the same time shall be a director in any two or more corporations, any one of which has capital, surplus, and undivided profits aggregating more than $1,000,000, engaged in whole or in part m commerce, other than banks, banking associations, trust companies Not applicable to banks or carriers. Vol. 24, p. 379. and common carriers subject to the Act to regulate commerce, approved February fourth, eighteen hundred and eighty-seven, if such corporations are or shall have been theretofore, 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 provisions of any of the antitrust laws. The eligibility Determination of eligibility. of a director under the foregoing provision shall be determined by the aggregate amount of the capital, surplus, and undivided profits, exclusive of dividends declared but not paid to stockholders, at the end of the fiscal year of said corporation next preceding the election of directors, and when a director has been elected in accordance Temporary continuance. with the provisions of this Act it shall be lawful for him to continue as such for one year thereafter. When any person elected or chosen as a director or officer or selected Service allowed for one year after eligibility ceases. as an employee of any bank or other corporation subject to the provisions of this Act is eligible at the time of his election or selection to act for such bank or other corporation in such capacity his eligibility to act in such capacity shall not be affected and he shall not become or be deemed amenable to any of the provisions hereof by reason of any change in the affairs of such bank or other corporation from what-soever cause, whether specifically excepted by any of the provisions hereof or not, until the expiration of one year from the date of his election or employment.

2. 1990

   Antitrust Amendments Act of 1990

   Pub. L. 101–588 § 2 · 104 Stat. 2879

   Substituted · 15 U.S.C. § 19

   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

   Source evidence

   Code amendment note
   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.

   Enacted provision · exact public law section
   Sec. 2. Section 8 of the Clayton Act (15 U.S.C. 19) is amended to read as follows: “Sec. 8. (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 October 30 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.”.

3. 1993

   Pub. L. 103–203 § 1 · 107 Stat. 2368

   Substituted · 15 U.S.C. § 19(a)(5)

   Pub. L. 103–203 substituted “January 31” for “October 30”

   Source evidence

   Code amendment note
   Subsec. (a)(5). Pub. L. 103–203 substituted “January 31” for “October 30”.

   Enacted provision · exact public law section
   SECTION 1. TECHNICAL AMENDMENT OF THE CLAYTON ACT. Section 8(a)(5) of the Clayton Act (15 U.S.C. 19(a)(5)) is amended by striking “October 30” and inserting “January 31”.

3 of 3 references resolved to an enrolled provision