Mail-Stop 4561
July 12, 2007
Via facsimile and U.S. Mail
Mr. W.B. Marsh
President and Chief Executive Officer
First Commerce Bancorp, Inc.
500 North Ellington Parkway
Lewisburg, Tennessee 37091
Re: First Commerce Bancorp, Inc.
Preliminary Proxy Statement and Schedule 13E-
3
File Nos. 0-52257 (Proxy), 005-82901 (Schedule 13E-
3)
Filed May 29, 2007
Dear Mr. Marsh:
We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why a comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filings. We look forward to
working
with you in these respects. We welcome any questions you may have
about our comments or on any other aspect of our review. Feel
free
to call us at the telephone numbers listed at the end of this
letter.
Schedule 13E-3
1. Revise each biography to disclose the office or employment
during
the last 5 years.
Shareholder Letter
2. Revise the table at the bottom of the cover page under the
"Effect" column to also disclose voting rights and dividends. For
example, for holders with 1,021 shares or more, the disclosure to
be
added might be, "voting rights unchanged, dividend rights
unchanged"
3. Revise the second full paragraph on the second page to separate
the advantages and disadvantages of the transaction.
4. Revise the paragraph preceding the bold paragraph on the last
page
of the shareholder letter to indicate that the terms are
procedurally
and substantially fair to unaffiliated security holders.
Proxy Statement
General
5. Supplementally advise the staff as to when the holding company
was
formed and the company`s exemption from registration of that
transaction.
6. We note that you are purporting to create two new classes of
securities out of what is currently a single class of common
stock,
for the purpose of taking the company private by causing each
"new"
class to be held by less than 500 shareholders of record. In your
response letter, provide your legal analysis as to why the common
stock and Class A and B stock are truly separate classes for
purposes
of determining eligibility to deregister under Section 12 of the
Securities Exchange Act of 1934. Also, please provide a formal
opinion of counsel that your common stock and your newly
authorized
Class A and B stock are separate classes of securities under state
law. Your response should also provide counsel`s legal analysis
as
to why it is opining that your common stock and the newly
authorized
Class A and B stock are in fact separate classes under state law.
In
this regard, the analysis should include a detailed discussion and
comparison of each feature of your common stock and the Class A
and B
stock and why the rights of each class support the opinion of
counsel.
7. Further, the analysis should specifically address whether or
not
the Class A and B stock is convertible into common stock upon a
change of control.
8. Please provide t the staff, the information that would be
required
by Item 1005(a) of Regulation M-A, i.e., any loan between the bank
and any one of the officers and directors with a principal amount
of
$109,290 if the officers and directors were filers.
Questions and Answers, page 1
9. Revise the second answer to disclose the requirements of
Section
404.
10. With regard to the first answer on page 2, add bullets to
disclose the effect of the changes in voting rights, dividends,
liquidation and change of control.
11. Revise the first answer on page 3 to add balance to the
discussion by addressing what will take the place of the investor
protections in the SEC rules, the NASD rules, ownership disclosure
rules, etc. In addition, revise to explain how the semi-annual and
quarterly letters will differ from annual and quarterly reports
filed
with the SEC and how the regulatory reports are different from SEC
reports. Finally, disclose what investor protection rules will
still
be applied by the remaining regulators.
12. Revise the last answer on page 3 (carried over to page 4) and
throughout the proxy to indicate the transaction is substantively
and
procedurally fair to "unaffiliated" shareholders. Also, disclose
in
this answer whether or not any of the officers and directors will
be
affected, i.e., do they hold less than 1,021 shares.
13. Revise the first question on page 7 to insert, "or through
other
transfers" after the word, "trades".
14. Revise the second answer on page 7 to briefly discuss whether
shareholders will get the same audit as under SEC rules.
15. Revise the first answer on page 9 to indicate when the "fair
value" determination by the company will occur.
16. Revise the second answer on page 10 to address the effect on
directors and officers with regard to indemnification, compliance
with Sarbanes-Oxley, compliance with SEC rules relating to
officers
and directors disclosures and actions, and, compliance with NASD
rules.
Background of the Reclassification Transaction
17. With regard to the third paragraph on page 13, provide the
staff
with all correspondence with the FDIC (both sent and received)
regarding the request for the reclassification.
18. Revise the disclosure to address whether or not there was any
discussion with, by or between the Board, the officers of the
Company, it counsel or any other parties regarding forming the
holding company to become a SEC reporting company to enable the
Company to deregister. If so, provides the date(s).
19. Revise the third full paragraph on page 14 to indicate, since
the
formation of the holding company, whether there were any security
issuances or acquisitions.
20. In the last paragraph of this section, revise to more
specifically discuss the reasons for the particular structure.
That
is, why did the board choose a method of going private that result
in
unaffiliated security holders receiving unregistered securities
with
no voting rights?
Reasons for the Reclassification Transaction, page 17
21. Please discuss the recent SEC and PCAOB actions to make Rule
3404
less expensive to comply with.
Our Position as to the Fairness of the Reclassification
Transaction,
page 19
22. Revise the second bullet on page 24 to disclose the most
recent
trading price per share.
23. Revise both the procedural and substantive fairness
determinations to specifically address the fairness of the
proposed
transaction to unaffiliated security holders. See Item 1014(a) of
Regulation M-A.
Substantive Fairness, page 20
24. In the list of negative factors, please include the lack of
information about executive compensation.
Procedural Fairness, page 23
25. In view of the distinct differences between the classes of
securities involved in the reclassification and the fact that no
officers and directors are affected, please delete the phrase in
the
third bullet on page 19, "our board would be treated the same as
the
other shareholders", and the phrase in the carryover paragraph at
the
top of page 25, "who will be treated identically to".
Effects of the reclassification Transaction on First Commerce
Effect on Trading of Common Stock, page 28
26. Revise to disclose that if a trading market begins for the
Company`s stock, it will not be available to holders of the Class
A
and B shares.
Effect on Outstanding Options, page 29
27. Revise to summarize the option rules of the SEC and NASD that
will no longer apply.
Effect on Our Directors and Executive Officers, page 30
28. Revise to summarize the effect from not having to comply with
SEC
and NASD rules relating to indemnification, disclosure of
activities
and limitations on activities.
Selected Historical Financial Information (Unaudited), page 48
29. It is inappropriate to qualify information in the proxy
statement
by reference to information not included in the proxy statement.
Please revise.
Information Incorporated by Reference, page 59
30. Since you are not S-3 eligible, you cannot incorporate by
reference. Please revise.
Closing Comments
As appropriate, please amend your filings and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendments to expedite our review. Please furnish a cover
letter
with your amendments that keys your responses to our comments and
provides any requested information. Detailed cover letters
greatly
facilitate our review. Please understand that we may have
additional
comments after reviewing your amendments and responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment and voting decision.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company and each filing person
acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.
Any questions regarding the comments may be directed to
Michael
Clampitt at (202) 551-3434 or to me at (202) 551-3698.
Sincerely,
Mark Webb
Branch Chief
Financial Services Group
CC: Via U.S. Mail and Fax:
Bob F. Thompson, Esq.
Bass, Berry & Sims PLC
315 Deaderick Street, Suite 7200
Nashville, Tennessee 37238-0002
Phone (615) 742-6200
Facsimile (615) 742-2813
Mr. W. B. Marsh
First Commerce Bancorp, Inc.
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