-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, KK+PZIVqVPxuJJcSsTNmnZQHfMWMW6SRaK+rtTwKunC2gar1ctzwKsBPNERLvdNq sdSDMbdBn81QBN6bKV/wWQ== 0000950009-95-000177.txt : 19950426 0000950009-95-000177.hdr.sgml : 19950426 ACCESSION NUMBER: 0000950009-95-000177 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 19950425 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NBD BANCORP INC /DE/ CENTRAL INDEX KEY: 0000070040 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 381984850 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 033-58791 FILM NUMBER: 95531008 BUSINESS ADDRESS: STREET 1: 611 WOODWARD AVE CITY: DETROIT STATE: MI ZIP: 48226 BUSINESS PHONE: 3132251000 MAIL ADDRESS: STREET 1: NBD BANCORP INC STREET 2: 611 WOODWARD AVE CITY: DETROIT STATE: MI ZIP: 48226 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL DETROIT CORP DATE OF NAME CHANGE: 19810522 S-4 1 As filed with the Securities and Exchange Commission on April 25, 1995 Registration No. 33-__________ - ------------------------------------------------------------------------------ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------ FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ NBD BANCORP, INC. (Exact name of registrant as specified in its charter) Delaware 6711 38-1984850 (State of incorporation) (Primary Standard Industrial (I.R.S. Employer Classification Code Number) Identification No.) 611 Woodward Avenue, Detroit, Michigan 48226 (313) 225-1000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ------------------------ DANIEL T. LIS Senior Vice President and Secretary NBD Bancorp, Inc. 611 Woodward Avenue Detroit, Michigan 48226 (313) 225-1000 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies of Communications to: MICHAEL D. VANHEMERT JOHN BRUNO NBD Bancorp, Inc. Muldoon, Murphy & Faucette 611 Woodward Avenue 5101 Wisconsin Avenue, N.W. Detroit, Michigan 48226 Washington, D.C. 20016 (313) 225-1000 (202) 362-0840 ------------------------ Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effective date of the Registration Statement. ------------------------ If the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. / /
CALCULATION OF REGISTRATION FEE =============================================================================================== Proposed Proposed Title of Each Maximum Maximum Class of Amount Offering Aggregate Amount of Securities to be Price Per Offering Registration to be Registered Registered Unit (1) Price (1) Fee - ----------------------------------------------------------------------------------------------- Common Stock ($1.00 par value)........ 4,350,000 Shares $28.06 $118,681,500 $40,925 =============================================================================================== (1) Estimated solely for the purpose of calculating the registration fee.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. NBD BANCORP, INC. CROSS REFERENCE SHEET Pursuant to Item 501 of Regulation S-K showing the location in the Proxy Statement-Prospectus of the responses to the Items of Part I of Form S-4. Registration Statement Proxy Statement- Item and Caption Prospectus Caption ---------------------- ------------------ 1. Forepart of Registration Statement and Outside Front Cover Page of Prospectus Cover Page; Inside Front Cover Page 2. Inside Front and Outside Back Cover Pages of Prospectus Inside Front Cover Page; Table of Contents; Available Information 3. Risk Factors, Ratio of Earnings to Fixed Charges and Other Information Summary 4. Terms of the Transaction Summary; Proposed Merger; Description of NBD Capital Stock; Comparative Rights of Holders of Capital Stock of Deerbank and NBD 5. Pro Forma Financial Information Not Applicable 6. Material Contracts with the Company Being Acquired Summary; Proposed Merger 7. Additional Information Required for Reoffering by Persons and Parties Deemed to Be Underwriters Not Applicable 8. Interests of Named Experts and Counsel Experts; Legal Matters 9. Disclosure of Commission Position on Indemnification for Securities Act Liabilities Not Applicable 10. Information With Respect to S-3 Registrants Summary; Information Incorporated by Reference 11. Incorporation of Certain Information by Reference Information Incorporated by Reference; Description of NBD Capital Stock 12. Information With Respect to S-2 or S-3 Registrants Not Applicable 13. Incorporation of Certain Information by Reference Not Applicable 14. Information With Respect to Registrants Other than S-2 or S-3 Registrants Not Applicable 15. Information With Respect to S-3 Companies Summary; Information Incorporated by Reference 16. Information With Respect to S-2 or S-3 Companies Not Applicable 17. Information With Respect to Companies Other Than S-2 or S-3 Companies Not Applicable 18. Information if Proxies, Consents or Authorizations Are To Be Solicited Information Incorporated by Reference; Summary; Meeting Information; Proposed Merger 19. Information if Proxies, Consents or Authorizations Are Not To Be Solicited or in an Exchange Offer Not Applicable DEERBANK CORPORATION 745 Deerfield Road Deerfield, Illinois 60015 (708) 945-2550 ________________, 1995 Dear Stockholder: You are cordially invited to attend a Special Meeting of Stockholders (the "Special Meeting") of Deerbank Corporation ("Deerbank") which will be held on _____day, ________________, 1995 at ____ _.m., local time, at the corporate offices of Deerbank, 745 Deerfield Road, Deerfield, Illinois 60015. At the Special Meeting, you will be asked to consider and vote upon a proposal to approve an Agreement and Plan of Merger (the "Merger Agreement") dated as of January 7, 1995 between NBD Bancorp, Inc. ("NBD"), NBD Illinois, Inc. ("NBD Illinois") and Deerbank pursuant to which Deerbank will be merged (the "Merger") with and into NBD Illinois, a wholly owned subsidiary of NBD. Pursuant to a related Agreement of Merger, it is intended that immediately following the Merger, Deerfield Federal Savings and Loan Association ("Deerfield"), a federally chartered savings and loan association and a wholly owned subsidiary of Deerbank, will be merged (the "Subsidiary Bank Merger") with and into NBD Bank, an Illinois-chartered commercial bank and a wholly-owned subsidiary of NBD Illinois. If the proposed Merger is consummated, each share of Common Stock of Deerbank will be converted into and be exchangeable for the number of shares of Common Stock, $1.00 par value per share, of NBD ("NBD Common Stock") equal to a fraction, the numerator of which shall be equal to $45.00, and the denominator of which shall be equal to the average closing price per share of NBD Common Stock as reported on the New York Stock Exchange Composite Tape for the ten trading days ending on the fifth trading day prior to the Effective Date of Merger, as defined in the Merger Agreement. The proposed Merger has been unanimously approved by the Boards of Directors of both Deerbank and NBD. The investment banking firm of The Chicago Corporation has issued its written opinion to the Deerbank Board of Directors to the effect that the merger consideration is fair, from a financial point of view, to Deerbank's stockholders as of the _______________, 1995 date of its written opinion. The written opinion of The Chicago Corporation is reproduced in full as Appendix B to the enclosed Proxy Statement-Prospectus, and Deerbank's stockholders are urged to read such opinion. Consummation of the Merger is subject to certain conditions including, but not limited to, approvals by the requisite vote of the stockholders of Deerbank and certain regulatory approvals. The enclosed Notice of Special Meeting and Proxy Statement-Prospectus describe the terms of the Merger as well as other information relating to Deerbank and NBD. Please read these materials carefully. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" APPROVAL OF THE PROPOSED MERGER AGREEMENT. IN ORDER TO ASSURE THAT YOUR SHARES WILL BE REPRESENTED AND VOTED AT THE MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY, AND MAIL IT IN THE RETURN ENVELOPE PROVIDED. A FAILURE TO VOTE WILL BE THE EQUIVALENT OF A VOTE "AGAINST" THE MERGER AGREEMENT. Thank you for your prompt attention to this important matter. Sincerely yours, [SIG] Wayne V. Ecklund President and Chief Executive Officer DEERBANK CORPORATION 745 Deerfield Road Deerfield, Illinois 60015 (708) 945-2550 ------------------------- NOTICE OF SPECIAL MEETING OF STOCKHOLDERS To Be Held On _________________, 1995 ------------------------- NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Deerbank Corporation ("Deerbank") will be held on _____day, ____________, 1995, at ____ _.m., local time, at the corporate offices of Deerbank, 745 Deerfield Road, Deerfield, Illinois 60015. The Special Meeting is for the purpose of considering and voting upon the following matters: 1. To approve and adopt the Agreement and Plan of Merger dated as of January 7, 1995 (the "Merger Agreement") by and between NBD Bancorp, Inc. ("NBD"), NBD Illinois, Inc. ("NBD Illinois"), and Deerbank and the transactions contemplated thereby, including the proposed merger (the "Merger") of Deerbank with and into NBD Illinois, a wholly-owned subsidiary of NBD. 2. To transact such other business as may properly come before the Special Meeting or any adjournments or postponements thereof including, without limitation, a motion to adjourn or postpone the Special Meeting to another time and/or place for the purpose of soliciting additional proxies in order to approve the Merger Agreement or otherwise. Pursuant to the Deerbank Bylaws, the Board of Directors has fixed ______________, 1995, as the record date for the determination of stockholders entitled to notice of and to vote at the Special Meeting and at any adjournments or postponements thereof. Only stockholders of record at the close of business on that date will be entitled to vote at the Special Meeting or any adjournments or postponements thereof. A list of Deerbank stockholders entitled to vote at the Special Meeting will be available for examination for any purpose germane to the Special Meeting, during ordinary business hours, at the principal executive offices of Deerbank, located at 745 Deerfield Road, Deerfield, Illinois 60015, for 10 days prior to the Special Meeting, and such list will also be available at the Special Meeting. In the event there are not sufficient votes for a quorum or to approve the Merger Agreement or otherwise at the time of the Special Meeting, the Special Meeting may be adjourned in order to permit further solicitation of proxies by Deerbank. The affirmative vote of the holders of a majority of the outstanding shares of Deerbank Common Stock entitled to vote is required for approval of the Merger Agreement. EACH STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE SPECIAL MEETING, IS REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY FILING WITH THE SECRETARY OF DEERBANK A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE SPECIAL MEETING MAY REVOKE HIS OR HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE SPECIAL MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED APPROPRIATE DOCUMENTATION FROM YOUR RECORDHOLDER TO VOTE PERSONALLY AT THE SPECIAL MEETING. By Order of the Board of Directors [SIG] John A.S. Lindemann Secretary Deerfield, Illinois ________________, 1995 THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL TO APPROVE THE MERGER AGREEMENT. PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. DEERBANK CORPORATION PROXY STATEMENT For Special Meeting of Stockholders to be held on _____________, 1995 NBD BANCORP, INC. PROSPECTUS Up to ______________Shares of Common Stock (Par Value $1.00 Per Share) This Proxy Statement-Prospectus is being furnished to the Stockholders of Deerbank Corporation ("Deerbank") in connection with the solicitation of proxies by the Deerbank Board of Directors for use at the Special Meeting of Stockholders, including any adjournments or postponements thereof (the "Special Meeting"). The Special Meeting will be held on _________________, 1995 at ____ _.m., local time, at the corporate offices of Deerbank, 745 Deerfield Road, Deerfield, Illinois 60015. The Special Meeting is being held for the purpose of considering and voting upon a proposal to approve and adopt the Agreement and Plan of Merger dated as of January 7, 1995 (the "Merger Agreement") by and between NBD Bancorp, Inc. ("NBD"), NBD Illinois, Inc. ("NBD Illinois") and Deerbank and the transactions contemplated thereby, including the proposed merger (the "Merger") of Deerbank with and into NBD Illinois, a wholly-owned subsidiary of NBD. Pursuant to a related Agreement of Merger, it is intended that immediately following the Merger, Deerfield Federal Savings and Loan Association ("Deerfield"), a federally chartered savings and loan association and a wholly-owned subsidiary of Deerbank, shall merge (the "Subsidiary Bank Merger") with and into NBD Bank, an Illinois-chartered commercial bank and a wholly-owned subsidiary of NBD Illinois ("NBD Bank"). If the Merger becomes effective, each share of common stock, $.01 par value per share, of Deerbank ("Deerbank Common Stock") will be converted into and exchanged for the number of shares of common stock, $1.00 par value per share, of NBD ("NBD Common Stock") equal to a fraction, the numerator of which shall be equal to $45.00, and the denominator of which shall be equal to the average closing price per share of NBD Common Stock as reported on the New York Stock Exchange Composite Tape for the ten trading days ending on the fifth trading day prior to the Effective Date of Merger, as defined in the Merger Agreement. At the Special Meeting, the Deerbank stockholders of record as of the close of business on _________________, 1995 will consider and vote upon a proposal to approve the Merger Agreement. This Proxy Statement-Prospectus also constitutes a prospectus of NBD in respect of approximately _______________ shares of NBD Common Stock to be issued to stockholders of Deerbank pursuant to the Merger in accordance with the terms of the Merger Agreement. For a more complete description of the terms of the Merger Agreement, which is attached as Appendix A and is incorporated herein by reference, see "PROPOSED MERGER". NBD Common Stock is listed on the New York Stock Exchange. The last reported sale price of NBD Common Stock on the New York Stock Exchange Composite Tape on ________________, 1995 was $_________ per share. This Proxy Statement-Prospectus and the accompanying form of proxy is first being mailed to stockholders of Deerbank on or about _________________, 1995. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT-PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE SHARES OF NBD COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE BANK INSURANCE FUND OR THE SAVINGS ASSOCIATION INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. The date of this Proxy Statement-Prospectus is _______________, 1995 PROXY STATEMENT-PROSPECTUS TABLE OF CONTENTS Page AVAILABLE INFORMATION............................................. 3 INFORMATION INCORPORATED BY REFERENCE............................. 4 SUMMARY........................................................... 5 The Parties..................................................... 5 The Meeting..................................................... 6 The Proposed Merger............................................. 6 Merger Consideration............................................ 7 Recommendation of the Board of Directors........................ 7 Opinion of Financial Advisor.................................... 7 Stock Option Agreement.......................................... 8 Effective Date of Merger........................................ 8 Conditions to the Merger and Termination........................ 8 Interests of Certain Persons in the Merger...................... 9 Appraisal Rights................................................ 9 Liquidation Account............................................. 9 Certain Federal Income Tax Consequences of the Merger........... 9 Stock Exchange Listing.......................................... 10 Resales of NBD Common Stock..................................... 10 Accounting Treatment............................................ 10 Conduct of Business Prior to the Merger......................... 10 Comparison of Stockholder Rights................................ 11 Selected Financial Data......................................... 11 Market Value of Securities...................................... 13 Comparative Per Share Data (Unaudited).......................... 14 Recent Financial Developments................................... 14 MEETING INFORMATION............................................... 16 Introduction.................................................... 16 Purpose......................................................... 16 Voting Rights and Record Date................................... 16 Voting and Revocation of Proxies................................ 17 Solicitation of Proxies......................................... 17 PROPOSED MERGER................................................... 17 General......................................................... 17 Background of the Merger........................................ 18 Reasons for the Merger.......................................... 19 Effective Date of Merger........................................ 20 Opinion of Financial Advisor to Deerbank........................ 20 Consideration for Shares........................................ 23 Delivery of NBD Common Stock.................................... 24 Source of NBD Common Stock...................................... 24 Conditions to the Merger........................................ 25 Regulatory Matters.............................................. 25 Termination, Amendment and Waiver............................... 26 Business of Deerbank Pending the Merger......................... 27 Interests of Certain Persons in the Merger...................... 27 Resales of NBD Common Stock..................................... 30 Stock Option Agreement.......................................... 30 Appraisal Rights................................................ 31 Certain Federal Income Tax Consequences of the Merger........... 32 Stock Exchange Listing.......................................... 33 Accounting Treatment............................................ 34 DESCRIPTION OF NBD CAPITAL STOCK.................................. 34 COMPARATIVE RIGHTS OF HOLDERS OF CAPITAL STOCK OF DEERBANK AND NBD................................ 35 INDEPENDENT AUDITORS OF DEERBANK.................................. 37 EXPERTS........................................................... 38 LEGAL MATTERS..................................................... 38 OTHER MATTERS..................................................... 38 APPENDIX A -- MERGER AGREEMENT.................................... A-1 APPENDIX B -- OPINION OF THE CHICAGO CORPORATION.................. B-1 2 NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT-PROSPECTUS, OR INCORPORATED BY REFERENCE HEREIN, IN CONNECTION WITH THE SOLICITATION OF PROXIES OR THE OFFERING OF SECURITIES MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY NBD OR DEERBANK. THIS PROXY STATEMENT-PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, ANY SECURITIES OFFERED BY THIS PROXY STATEMENT-PROSPECTUS, OR THE SOLICITATION OF A PROXY, IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER, OR SOLICITATION OF AN OFFER, OR PROXY SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROXY STATEMENT-PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES OFFERED PURSUANT TO THIS PROXY STATEMENT-PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF DEERBANK, NBD, OR NBD ILLINOIS OR THE INFORMATION HEREIN OR THE DOCUMENTS OR REPORTS INCORPORATED BY REFERENCE SINCE THE DATE OF THIS PROXY STATEMENT-PROSPECTUS. AVAILABLE INFORMATION NBD has filed a Registration Statement on Form S-4 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), with the Securities and Exchange Commission (the "Commission") covering the shares of NBD Common Stock to be issued in connection with the Merger. As permitted by the rules and regulations of the Commission, this Proxy Statement-Prospectus omits certain information, exhibits and undertakings contained in the Registration Statement. For further information pertaining to the securities offered hereby, reference is made to the Registration Statement, including the exhibits filed as a part thereof. Such additional information may be inspected and copied as set forth below. The descriptions in this Proxy Statement-Prospectus of the terms of the Merger Agreement as well as the Agreement and Plan of Reorganization and the Stock Option Agreement, each dated as of January 7, 1995 (respectively, the "Reorganization Agreement" and the "Option Agreement"), are summaries only and are qualified in their entirety by reference to the Merger Agreement, which is attached as Appendix A to this Proxy Statement-Prospectus, as well as the Reorganization Agreement and the Option Agreement which are attached as exhibits to the Registration Statement of which this Proxy Statement-Prospectus is a part and are incorporated herein by reference. A copy of the Reorganization Agreement and Option Agreement will be provided without charge to any person to whom this Proxy Statement-Prospectus is delivered upon written request to C. David Mullins, Executive Vice President of Deerbank, or Daniel T. Lis, Senior Vice President and Secretary of NBD, at their respective addresses indicated below. NBD and Deerbank are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, file reports, proxy statements and other information with the Commission. Reports, proxy statements and other information filed by NBD and Deerbank can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; and at its Regional Offices located at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of such material can be obtained from the Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, NBD Common Stock is listed on the New York Stock Exchange ("NYSE") and such material as to NBD can be inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005, and the Deerbank Common Stock is listed on the Nasdaq National Market and such material as to Deerbank can be inspected at the offices of the National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006. 3 THIS PROXY STATEMENT-PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST AND WITHOUT CHARGE WITH RESPECT TO DEERBANK FROM C. DAVID MULLINS, EXECUTIVE VICE PRESIDENT OF DEERBANK CORPORATION, 745 DEERFIELD ROAD, DEERFIELD, ILLINOIS 60015 (TELEPHONE NUMBER 708-945-2550) AND WITH RESPECT TO NBD FROM DANIEL T. LIS, SENIOR VICE PRESIDENT AND SECRETARY, NBD BANCORP, INC., 611 WOODWARD AVENUE, DETROIT, MICHIGAN 48226 (TELEPHONE NUMBER 313-225-1000). IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS TO A PERSON WHO DESIRES TO EXAMINE THE DOCUMENTS PRIOR TO THE SPECIAL MEETING, ANY REQUEST FOR DOCUMENTS MUST BE RECEIVED BY _________________, 1995. INFORMATION INCORPORATED BY REFERENCE NBD (Commission File No. 1-7127) incorporates herein by reference: (a) NBD's Annual Report on Form 10-K for the year ended December 31, 1994; and (b) the description of the NBD Common Stock contained in NBD's registration statement filed pursuant to Section 12 of the Exchange Act, and any amendment or report filed for the purpose of updating such description. Deerbank (Commission File No. 0-870571) incorporates herein by reference: (a) Deerbank's Annual Report on Form 10-K for the year ended September 30, 1994; (b) Deerbank's Quarterly Report on Form 10-Q for the quarter ended December 31, 1994; (c) the description of Deerbank's Common Stock set forth in Deerbank's Registration Statement filed on Form 8-B Dated February 21, 1991, and any amendments or updates thereto; (d) Deerbank's Reports on Form 8-K dated January 18, 1995 and January 23, 1995; and (e) the portions of Deerbank's Proxy Statement for the Annual Meeting of Stockholders held on January 25, 1995 that have been incorporated by reference into the 1994 Deerbank Form 10-K. All documents subsequently filed by NBD and Deerbank pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this Proxy Statement-Prospectus and prior to the date of the Special Meeting, shall be deemed to be incorporated by reference into this Proxy Statement-Prospectus and to be a part hereof from the dates of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference in this Proxy Statement-Prospectus shall be deemed to be modified or superseded for purposes of this Proxy Statement-Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Proxy Statement-Prospectus. 4 SUMMARY This summary is necessarily general and abbreviated and has been prepared to assist Deerbank stockholders in their review of this Proxy Statement-Prospectus. This summary is not intended to be a complete explanation of the matters covered in this Proxy Statement-Prospectus and is qualified in all respects by reference to the more detailed information contained elsewhere in this Proxy Statement-Prospectus, the Appendices hereto and in the documents incorporated by reference in this Proxy Statement-Prospectus, all of which the stockholders are urged to read carefully. The descriptions in this Proxy Statement-Prospectus of the terms of the Merger Agreement, Reorganization Agreement and the Option Agreement (collectively, the "Agreements") are summaries only and are qualified in their entirety by reference to the Merger Agreement, which is attached as Appendix A to this Proxy Statement-Prospectus, as well as the Reorganization Agreement and the Option Agreement, which are attached as exhibits to the Registration Statement of which this Proxy Statement-Prospectus is a part and are incorporated herein by reference. A copy of the Reorganization Agreement and Option Agreement will be provided without charge to any person to whom this Proxy Statement-Prospectus is delivered upon written request to C. David Mullins, Executive Vice President of Deerbank, or Daniel T. Lis, Senior Vice President and Secretary of NBD, at their respective addresses as indicated under "AVAILABLE INFORMATION." The Parties NBD is a registered bank holding company which was incorporated under the laws of Delaware in 1972. Based on rankings of total assets at December 31, 1994, NBD was the 18th largest bank holding company in the United States. Through its banking subsidiaries, NBD provides domestic retail banking, worldwide commercial banking, trust and investment management services. Through its non-banking subsidiaries, NBD engages in mortgage lending and servicing, insurance, leasing, community development, discount brokerage and data processing activities. The principal subsidiary of NBD is NBD Bank of Detroit, Michigan, formerly named NBD Bank, N.A. and prior to that National Bank of Detroit, which was among the 20 largest commercial banks in the United States based on total deposits at December 31, 1994. NBD Bank became a state-chartered bank under Michigan law as of January 1, 1995. NBD has expanded significantly in recent years through selective acquisitions, and it regularly explores opportunities for additional acquisitions of financial institutions and related businesses. At December 31, 1994, NBD and its subsidiaries had total assets of $47.1 billion, total deposits of $33.2 billion and shareholders' equity of $3.3 billion. The principal executive offices of NBD are located at 611 Woodward Avenue, Detroit, Michigan 48226 and its telephone number is 313-225-1000. NBD Illinois was incorporated under the laws of Delaware in 1985 as a wholly-owned subsidiary of NBD. Between 1987 and 1991 NBD acquired four bank holding companies in Illinois and merged them into NBD Illinois, and in December 1992 merged 17 of the Illinois bank subsidiaries of those acquired companies into NBD Bank, an Illinois-chartered commercial bank and wholly-owned subsidiary of NBD Illinois. A second NBD Illinois subsidiary, NBD Skokie Bank, N.A., provides traditional banking services while also serving as NBD's credit card bank. These Illinois subsidiaries provide retail, commercial and trust banking and investment management services through 68 offices located in the Chicago metropolitan area. At December 31, 1994, NBD Illinois and its subsidiaries had total assets of $5.7 billion, total deposits of $4.0 billion and shareholders' equity of $455 million. Effective January 9, 1995, NBD acquired AmeriFed Financial Corp., a one-thrift holding company with $910 million in assets and $796 million in deposits located primarily in Will County, Illinois, and immediately merged the AmeriFed thrift subsidiary into NBD Bank. The principal executive offices of NBD Illinois and NBD Bank are located at 55 East Euclid, Mt. Prospect, Illinois 60056 and its telephone number is 708-392-1600. 5 Deerbank, a registered savings and loan holding company, was incorporated under the laws of Delaware in 1990 as part of a plan to reorganize Deerfield, a federally chartered savings and loan association, into a holding company structure. Deerfield was incorporated in 1927 as an Illinois mutual savings and loan association, converted to a federally chartered mutual savings and loan association in 1981 and to a federally chartered stock savings and loan association in 1987. Deerfield operates as a full-service financial institution and conducts its activities from its principal office and fourteen other full-service facilities. Deerfield's principal business is originating residential and commercial real estate loans, non-real estate commercial loans and consumer loans and investing in corporate and government securities and other investments. Deerfield funds these activities, principally, from deposits, FHLB of Chicago advances and other borrowings, and from the amortization and prepayment of loans and mortgage-backed securities. Deerfield also has three wholly-owned subsidiaries. Northern Illinois Financial Service Corporation engages in the business of originating real estate loans in the northern suburbs of Chicago. Deer Insurance Services, Inc. engages in writing casualty and life insurance in the Deerfield and Will County markets. Holbrook Enterprises, Inc. is engaged in the development of real estate. At December 31, 1994, Deerbank and its subsidiaries had total assets of $758.6 million, total deposits of $654.2 million and shareholders' equity of $58.5 million. The principal executive offices of Deerbank and Deerfield are located at 745 Deerfield Road, Deerfield, Illinois 60015 and its telephone number is 708-945-2550. The Meeting The Special Meeting will be held on ____day, ___________, 1995 at _:00 _.m., local time, at the corporate offices of Deerbank, 745 Deerfield Road, Deerfield, Illinois 60015. At the Special Meeting, the stockholders of Deerbank will be asked to approve the Merger Agreement. See "MEETING INFORMATION -- Purpose." Only holders of record of Deerbank Common Stock at the close of business on ______________, 1995 (the "Record Date") will be entitled to vote at the Special Meeting. On the Record Date, there were outstanding and entitled to vote ______________ shares of Deerbank Common Stock. Each share of Deerbank Common Stock is entitled to one vote, except as described under "MEETING INFORMATION --Voting Rights and Record Date." On the Record Date, the directors and executive officers of Deerbank and their affiliates beneficially owned approximately ____________ shares, or ____% of the outstanding shares of Deerbank Common Stock (excluding currently exercisable options). Pursuant to individual voting agreements with NBD, each director of Deerbank has agreed, in their individual capacity as stockholders, to vote for the approval and adoption of the Merger Agreement. An independent corporate trustee of the Deerfield Federal Savings and Loan Association Employee Stock Ownership Plan ("ESOP") beneficially owned _______ shares of Deerbank Common Stock on the Record Date (constituting approximately ____% of the outstanding shares). Pursuant to the terms of the ESOP, shares held by the ESOP that are allocated to the accounts of the ESOP participants shall be voted by the ESOP trustee as directed by such participants so long as such vote is in accordance with the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Shares held by the ESOP that are currently unallocated shall be voted by the ESOP trustee proportionate to the directions given by ESOP participants with respect to allocated shares. The affirmative vote of the holders of a majority of the outstanding shares of Deerbank Common Stock entitled to vote is required to approve the Merger Agreement. See "MEETING INFORMATION -- Voting Rights and Record Date." The Proposed Merger On January 7, 1995, Deerbank, NBD Illinois and NBD entered into the Agreements, which provide for the merger of Deerbank into NBD Illinois. The Merger Agreement sets forth the terms upon which the Merger, if consummated, will be effected. The Reorganization Agreement sets forth various representations, 6 warranties and covenants of the parties relating to the consummation of the Merger as well as the conditions which must be satisfied for the Merger to be completed. See "PROPOSED MERGER -- Conditions to the Merger." Although the Merger Agreement and the Reorganization Agreement relate to the same transaction, separate agreements are being used because the former relates primarily to the Merger itself, whereas the latter establishes the respective obligations of the parties with respect to the Merger. The terms of the Option Agreement are described under "PROPOSED MERGER -- Stock Option Agreement." The Merger Agreement is attached to this Proxy Statement-Prospectus as Appendix A. A COPY OF THE REORGANIZATION AGREEMENT AND OPTION AGREEMENT WILL BE PROVIDED WITHOUT CHARGE TO ANY PERSON TO WHOM THIS PROXY STATEMENT-PROSPECTUS IS DELIVERED UPON WRITTEN REQUEST TO C. DAVID MULLINS, EXECUTIVE VICE PRESIDENT OF DEERBANK, OR DANIEL T. LIS, SENIOR VICE PRESIDENT AND SECRETARY OF NBD, AT THEIR RESPECTIVE ADDRESSES INDICATED UNDER "AVAILABLE INFORMATION". On January 7, 1995, NBD Bank and Deerfield entered into an Agreement of Merger pursuant to which Deerfield would be merged (the "Subsidiary Bank Merger") into NBD Bank immediately following the Merger of Deerbank into NBD Illinois. As a result of the Subsidiary Bank Merger, the Deerfield assets (including branch facilities and customer loans), liabilities (including deposits) and employees will immediately become assets, liabilities and employees of NBD Bank at the date of the parent company Merger. Merger Consideration Upon consummation of the Merger, each outstanding share of Deerbank Common Stock (except for shares owned by NBD, NBD Illinois or Deerbank) will be automatically converted into a number of whole shares of NBD Common Stock equal to a fraction, the numerator of which shall be equal to $45.00, and the denominator of which shall be equal to the average closing price per share of NBD Common Stock as reported on the NYSE Composite Tape for the ten trading days ending on the fifth trading day prior to the Effective Date of Merger, as defined below. Cash will be paid in lieu of the fractional shares of NBD Common Stock. See "PROPOSED MERGER -- Consideration for Shares." Recommendation of the Board of Directors Deerbank received indications of interest concerning the acquisition of Deerbank from NBD and other financial institution holding companies. After consulting with The Chicago Corporation and legal counsel, Deerbank negotiated the proposed Agreements with NBD. Following an in-depth analysis, review and discussion of the Agreements by and among The Chicago Corporation, Deerbank's legal counsel and the Deerbank Board of Directors (the "Deerbank Board"), including The Chicago Corporation's advice that the consideration to be received pursuant to the Merger is fair from a financial point of view to holders of Deerbank Common Stock, the Deerbank Board unanimously voted to accept the Agreements proposed by NBD. The Deerbank Board believes that the Merger will provide Deerbank's stockholders with increased value and liquidity for their stock and will provide its communities and customers with expanded services and products. The Deerbank Board recommends that Deerbank's stockholders vote "FOR" approval of the Merger Agreement. For additional details regarding the recommendation of the Deerbank Board, see "PROPOSED MERGER -- Background of the Merger" and "-- Reasons for the Merger." Opinion of Financial Advisor The Chicago Corporation, Deerbank's financial advisor, has rendered its written opinion to the Deerbank Board that the consideration to be received by Deerbank stockholders pursuant to the Merger is fair, from a financial point of view, to Deerbank's stockholders. 7 For information on the procedures followed, assumptions made, matters considered in and qualifications of the review undertaken, and other matters in connection with rendering the opinion by The Chicago Corporation, see "PROPOSED MERGER -- Opinion of Financial Advisor to Deerbank" and the opinion of The Chicago Corporation attached as Appendix B to this Proxy Statement-Prospectus, which should be read carefully by Deerbank stockholders. Stock Option Agreement At the time of execution of the Agreements, Deerbank and NBD entered into a Stock Option Agreement dated as of January 7, 1995 (the "Option Agreement") pursuant to which Deerbank granted an option to NBD to purchase up to an aggregate of 270,000 shares of Deerbank Common Stock, or approximately 10.6% of the then outstanding Deerbank Common Stock, at a price per share of $32.75 (the "Option"), exercisable only upon the happening of certain events. In addition, the Option is exercisable only if NBD has fully complied with the terms of the Agreements at the time of exercise. Depending on the number of shares purchased, exercise of the Option may be subject to the prior approval of certain government regulatory authorities. The Option Agreement is intended to make it more difficult for another party to acquire Deerbank, thereby increasing the likelihood that the Merger will occur. See "PROPOSED MERGER -- Stock Option Agreement." Effective Date of Merger The Merger will be consummated at the close of business on the date specified in a Certificate of Merger filed in accordance with the Delaware General Corporation Law. The date on which the Merger will be consummated is referred to herein as the "Effective Date of Merger". It is anticipated that if the stockholders of Deerbank approve the Merger Agreement at the Special Meeting and the approvals of all requisite government regulatory authorities are obtained, the Effective Date of Merger will be in the summer of 1995, provided that the Agreements are not terminated prior to such time. See "PROPOSED MERGER -- Effective Date of Merger" and "--Conditions to the Merger." Conditions to the Merger and Termination Consummation of the Merger is subject to the satisfaction or waiver of various conditions, including among other things, the approval of the Merger Agreement by the stockholders of Deerbank, approval of the Merger by all requisite government regulatory authorities without any conditions which in the reasonable opinion of NBD or Deerbank are materially adverse, the receipt by Deerbank of an opinion of Muldoon, Murphy & Faucette that the Merger will constitute a reorganization for federal income tax purposes, and satisfaction of various other conditions specified in the Reorganization Agreement. Applications for prior approval of the Merger and/or the Subsidiary Bank Merger were previously submitted to the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, the Federal Reserve Bank of Chicago, and the Illinois Commissioner of Banks and Trust Companies. While each of these regulatory approvals has been received, there can be no assurance that all of these regulatory authorities will take other required action with respect to the Merger or Subsidiary Bank Merger or as to the date of such actions. See "PROPOSED MERGER -- Conditions to the Merger" and "-- Regulatory Matters". The Merger may be terminated notwithstanding stockholder approval if certain specified events occur. For instance, either Deerbank or NBD may terminate the Agreements if the Merger has not been consummated by December 31, 1995 or if any requisite government regulatory authority shall refuse to approve the Merger or shall condition an approval in a manner not reasonably satisfactory to NBD. See "PROPOSED MERGER -- Termination, Amendment and Waiver." 8 Interests of Certain Persons in the Merger Certain members of Deerbank's management and the Deerbank Board may be deemed to have certain interests in the Merger that are in addition to their interests as stockholders generally. Deerfield maintains employment agreements with its executive officers which provide for certain payments and benefits in the event such officers are terminated in the context of a change in control such as the Merger. In addition, the Merger will result in the acceleration of vesting of certain option and stock awards under Deerbank's director and employee stock award plans. Finally, the Reorganization Agreement provides that NBD will indemnify the Deerbank Board and management against certain liabilities for a period of two (2) years following the Merger. See "PROPOSED MERGER -- Interests of Certain Persons in the Merger." Appraisal Rights Under Delaware law, the Deerbank stockholders will not be entitled to appraisal or dissenters' rights with respect to the Merger. See "PROPOSED MERGER - -- Appraisal Rights." Liquidation Account In connection with its conversion from the mutual to the stock form of ownership, Deerfield was required to establish a "liquidation account" for the benefit of savings account holders at the time of the conversion. In addition, liquidation accounts were established in conjunction with Deerfield's acquisitions of independent mutual savings associations in 1990 and 1992. These liquidation accounts grant such savings account holders who have continued to maintain their savings accounts at Deerfield the right to a priority distribution from the liquidation account before any distribution is made with respect to Deerfield common stock in the event of a complete liquidation of Deerfield. Neither the Merger nor the Subsidiary Bank Merger constitutes a complete liquidation and will not trigger a distribution from the liquidation accounts. Upon consummation of the Merger and the Subsidiary Bank Merger, the liquidation accounts will be maintained by NBD Bank. Certain Federal Income Tax Consequences of the Merger Deerbank has obtained an opinion from Muldoon, Murphy & Faucette, counsel to Deerbank, substantially to the effect that the Merger will be treated as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code") and, accordingly, for federal income tax purposes, no gain or loss will be recognized by Deerbank or Deerfield as a result of the Merger except, with respect to the Subsidiary Bank Merger, to the extent Deerbank or Deerfield is required to recognize taxable income due to the recapture of Deerfield's bad debt reserves. Deerbank has obtained an opinion substantially to the effect that, for federal income tax purposes: (i) assuming that the Merger transaction constitutes a merger under the applicable state or federal law, the merger of Deerbank with and into NBD Illinois will constitute a reorganization within the meaning of Section 368(a)(1)(A) and Section 368(a)(2)(D) of the Code, and Deerbank, NBD Illinois and NBD will each be a "party to a reorganization" within the meaning of Section 368(b) of the Code; (ii) the basis of the assets of Deerbank to be received by NBD Illinois will be the same as the basis of those assets in the hands of Deerbank immediately prior to the Merger; (iii) the holding period of the assets of Deerbank to be received by NBD Illinois will include the holding period of those assets in the hands of Deerbank immediately prior to the Merger; (iv) no gain or loss will be recognized by NBD Illinois and NBD upon receipt of the assets of Deerbank by NBD Illinois in exchange for the consideration provided for in the Merger Agreement and the assumption by NBD Illinois of the liabilities of Deerbank; (v) NBD Illinois will succeed to and take into account the items of Deerbank described in Section 381(c) of the Code and NBD Illinois will be the "acquiring corporation" within the meaning of Section 1.381(a)-1(b)(2) of the regulations promulgated by the 9 Department of Treasury ("Treasury Regulations") and these items will be taken into account by NBD Illinois subject to the conditions and limitations specified in Sections 381, 382 and 383 of the Code and the Treasury Regulations thereunder; (vi) no gain or loss will be recognized by Deerbank upon the transfer of its assets to NBD Illinois in exchange for the consideration provided for in the Merger Agreement and the assumption by NBD Illinois of the liabilities of Deerbank; (vii) no gain or loss will be recognized by the shareholders of Deerbank who receive shares of NBD Common Stock in exchange for all of their shares of Deerbank Common Stock, except to the extent of any cash received in lieu of a fractional share of NBD Common Stock; (viii) the basis of NBD Common Stock to be received by shareholders of Deerbank will, in each instance, be the same as the basis of the shares of Deerbank Common Stock surrendered in exchange therefor; (ix) the holding period of the NBD Common Stock received by shareholders of Deerbank will, in each instance, include the holding period of the shares of Deerbank Common Stock surrendered in exchange therefor, provided that Deerbank Common Stock was, in each instance, held as a capital asset in the hands of the stockholders of Deerbank on the Effective Date of Merger; and (x) the payments of cash in lieu of fractional share interests of NBD Common Stock will be treated as having been received as distributions in full payment in exchange for the stock redeemed as provided in Section 302(a) of the Code. Deerbank stockholders are urged to consult their tax advisors concerning the specific tax consequences to them of the Merger, including the applicability and effect of various state, local and foreign tax laws. See "PROPOSED MERGER -- Certain Federal Income Tax Consequences of the Merger" and "-- Conditions to the Merger." Stock Exchange Listing The NBD Common Stock is listed on the NYSE. NBD has agreed to cause the shares of NBD Common Stock to be issued in the Merger to be approved for listing on the NYSE. The obligation of each of NBD and Deerbank to consummate the Merger is subject to approval for listing by the NYSE of such shares. See "PROPOSED MERGER -- Conditions to the Merger." Resales of NBD Common Stock The NBD Common Stock will be freely transferrable by the holders of such shares, except for those shares held by those holders who may be deemed to be "affiliates" (generally including directors, certain executive officers and ten percent or more shareholders) of Deerbank or NBD under applicable federal securities laws. See "PROPOSED MERGER -- Resales of NBD Common Stock." Accounting Treatment The Merger is expected to qualify as a "purchase" for accounting and financial reporting purposes. See "PROPOSED MERGER -- Accounting Treatment." Conduct of Business Prior to the Merger The Reorganization Agreement contains certain covenants, to which Deerbank has agreed, regarding the business of Deerbank prior to the Merger. The covenants remain in effect until the Effective Date of Merger or until the Agreements are terminated, and include, among other things, an agreement that Deerbank and each of its subsidiaries will conduct its affairs in the ordinary course of business consistent with past and current practice, use its best efforts to maintain and preserve its business organization, employees and advantageous business relationships and to retain the services of its key officers and employees. See "PROPOSED MERGER -- Business of Deerbank Pending the Merger." 10 Comparison of Stockholder Rights Upon the exchange of Deerbank Common Stock for NBD Common Stock at or after the Effective Date of Merger, Deerbank stockholders will become stockholders of NBD and their rights will be governed by Delaware General Corporation Law and by NBD's Restated Certificate of Incorporation and Bylaws. The rights of stockholders of NBD differ from those of Deerbank with respect to certain important matters, including, among others, the absence of a 10% voting limit and supermajority approval provisions in the NBD Certificate. See "COMPARATIVE RIGHTS OF HOLDERS OF CAPITAL STOCK OF DEERBANK AND NBD." Selected Financial Data The following tables set forth certain historical consolidated financial data for NBD for the five years ended December 31, 1994, and for Deerbank for the five years ended September 30, 1994 and the three months ended December 31, 1994 and 1993. This information is based on, and should be read in conjunction with, the consolidated financial statements of NBD and Deerbank, including applicable notes, as incorporated by reference herein. See "INFORMATION INCORPORATED BY REFERENCE." The financial data for the three months ended December 31, 1994 and 1993 for Deerbank, reflect, in the opinion of the management of Deerbank, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of such data. Results for these interim periods are not necessarily indicative of the results which may be expected for any other interim period or for the entire year. 11
NBD Year Ended December 31 ------------------------------------------------------------------------- 1994 1993 1992 1991 1990 ---- ---- ---- ---- ---- (dollars in thousands, except per share amounts) Summary of Operating Results: Interest Income.............. $ 2,915,394 $ 2,622,820 $ 2,843,797 $ 3,138,893 $ 3,320,312 Interest Expense............. (1,290,626) (1,064,713) (1,334,026) (1,800,759) (2,077,923) ----------- ----------- ----------- ----------- ----------- Net Interest Income.......... 1,624,768 1,558,107 1,509,771 1,338,134 1,242,389 Provision for Possible Credit Losses..................... (52,032) (119,674) (228,480) (166,212) (151,086) Non-Interest Income.......... 545,566 585,383 529,208 473,027 412,339 Non-Interest Expenses........ (1,304,270) (1,321,840) (1,338,119) (1,161,127) (1,055,774) ----------- ----------- ----------- ----------- ----------- Income before Income Taxes... 814,032 701,976 472,380 483,822 447,868 Income Tax Expense........... (266,753) (220,135) (134,361) (122,288) (99,319) ----------- ----------- ----------- ----------- ----------- Income before Extraordinary Item and Cumulative Effect of Accounting Change.... 547,279 481,841 338,019 361,534 348,549 Extraordinary Item (Redemption of Debt)...... (7,730) - - - - Cumulative Effect of Accounting Change......... (7,885) 3,950 (37,885) - - ----------- ----------- ----------- ----------- ----------- Net Income.................. $ 531,664 $ 485,791 $ 300,134 $ 361,534 $ 348,549 =========== =========== =========== =========== =========== Net Income Per Share (on average shares outstanding): Income before Extraordinary Item and Cumulative Effect of Accounting Change...... $ 3.45 $ 2.98 $ 2.11 $ 2.27 $ 2.19 Extraordinary Item (Redemption of Debt)....... (0.05) - - - - Cumulative Effect of Accounting Change......... (0.05) 0.03 (0.24) - - ----------- ----------- ----------- ----------- ----------- Net Income.................. $ 3.35 $ 3.01 $ 1.87 $ 2.27 $ 2.19 =========== =========== =========== =========== =========== Common Stock Data: Dividends Declared Per Share..................... $ 1.23 $ 1.08 $ 1.04 $ 0.95 $ 0.91 Book Value Per Share (Period-end)............... $ 21.11 $ 20.21 $ 18.34 $ 17.26 $ 15.98 Balance Sheet Data (Period-end): Shareholders' Equity......... $ 3,291,543 $ 3,248,599 $ 2,940,893 $ 2,716,137 $ 2,533,339 Long-Term Debt............... $ 2,504,348 $ 1,434,947 $ 975,381 $ 533,571 $ 325,216 Total Assets............... $47,111,133 $40,775,905 $40,937,190 $38,760,388 $36,879,336 Capital Ratios (Period-end): Tier 1 Capital Ratio (Minimum -- 4%)............ 8.44% 9.13% 8.48% 8.19% 8.26% Total Capital Ratio (Minimum -- 8%)............ 12.50% 13.61% 12.01% 10.68% 10.16% Tier 1 Leverage Ratio (Minimum -- 3%)............ 6.77% 7.33% 6.46% 6.24% 6.30%
12
Deerbank Three Months Ended December 31 Year Ended September 30 ----------------------- -------------------------------------------------------- 1994 1993 1994 1993 1992 1991 1990 ---- ---- ---- ---- ---- ---- ---- (dollars in thousands, except per share amounts) Summary of Operating Results: Interest Income ................ $ 12,437 $ 11,945 $ 47,668 $ 51,166 $ 46,378 $ 47,764 $ 26,029 Interest Expense ............... (6,240) (5,668) (22,208) (25,032) (26,944) (31,326) (16,134) -------- -------- -------- -------- -------- -------- -------- Net Interest Income ............ 6,197 6,277 25,460 26,134 19,434 16,438 9,895 Provision for Possible Credit Losses........................ (15) (45) (180) (480) (390) (480) (302) Non-Interest Income ............ 785 877 2,849 2,941 2,147 1,443 576 Non-Interest Expenses .......... (3,890) (3,764) (15,511) (16,363) (12,318) (10,631) (4,594) -------- -------- -------- -------- -------- -------- -------- Income before Income Taxes ..... 3,077 3,345 12,618 12,232 8,873 6,770 5,575 Income Tax Expense ............. (1,006) (1,125) (4,114) (4,223) (3,150) (2,150) (2,033) -------- -------- -------- -------- -------- -------- -------- Net Income ..................... $ 2,071 $ 2,220 $ 8,504 $ 8,009 $ 5,723 $ 4,620 $ 3,542 ======== ======== ======== ======== ======== ======== ======== Net Income Per Share (on average shares outstanding) .................. $ 0.78 $ 0.82 $ 3.15 $ 3.00 $ 2.31 $ 1.94 $ 1.48 ======== ======== ======== ======== ======== ======== ======== Common Stock Data: Dividends Declared Per Share ... $ 0.30 $ 0.30 $ 0.75 $ 0.68 $ 0.55 $ 0.55 $ 0.55 Book Value Per Share (Period-end):................. $ 22.88 $ 21.07 $ 23.32 $ 20.51 $ 18.39 $ 16.91 $ 15.37 Balance Sheet Data (Period-end): Shareholders' Equity ........... $ 58,519 $ 54,253 $ 59,623 $ 52,806 $ 45,780 $ 38,904 $ 35,354 Long-Term Debt ................. $ 1,600 $ 1,600 $ 1,600 $ 1,600 $ 1,600 $ 1,600 $ 1,600 Total Assets ................... $758,599 $760,432 $765,886 $742,318 $764,222 $526,632 $511,067 Capital Ratios (Period-end) (a): Tangible Capital Ratio (Minimum -- 1.5%)............. 7.34% 6.81% 7.03% 6.68% 5.50% 6.46% 6.92% Core Capital Ratio (Minimum -- 3%)............... 7.34% 6.81% 7.03% 6.68% 5.50% 6.46% 6.92% Risk-Based Capital Ratio (Minimum -- 8%)............. 18.59% 19.54% 18.49% 18.56% 12.48% 12.90% 12.95% (a) Capital ratios presented are for Deerfield.
Market Value of Securities The Deerbank equivalent per share market value shown in the following table is calculated on the basis that one share of Deerbank Common Stock is equivalent to approximately 1.579 shares of NBD Common Stock. The assumed exchange ratio is based on the number of shares of fully diluted Deerbank Common Stock outstanding at December 31, 1994, the fixed transaction price of $45.00 per share of Deerbank Common Stock, and the average closing price of NBD Common Stock over a ten day trading period ending December 31, 1994 ($28.50). The actual Exchange Ratio will be determined based on the average closing price per share of NBD Common Stock for the ten trading days ending on the fifth trading day prior to the Effective Date of Merger.
NBD Deerbank ----------- ----------- ----------- Historical Historical Equivalent Basis Basis Per Share ----------- ----------- ----------- Market value of Common Stock at the close of business on last trading day preceding public announcement of the proposed Merger (January 6, 1995)... $27 7/8 $32 3/4 $44
13 Comparative Per Share Data (Unaudited) The following table presents NBD's historical and pro forma per share data as well as Deerbank's historical and equivalent pro forma per share data. The information is based on the historical financial statements of NBD and Deerbank. The pro forma data do not purport to be indicative of the results of future operations or the combined results that would have occurred had the Merger been consummated at the beginning of the period presented. The pro forma data give effect to the Merger and are based on numerous assumptions and estimates. The pro forma data have been included as required by the rules of the Commission and are provided for comparative purposes only. The information presented below should be read in conjunction with other unaudited financial information included elsewhere in this Proxy Statement-Prospectus, and with the separate consolidated financial statements of NBD and Deerbank, including applicable notes, incorporated by reference herein.
NBD Deerbank ---------------------- -------------------------- Equivalent Pro Pro Historical Forma(a) Historical(b) Forma(a) ---------- -------- ------------- ----------- Per Share: Book Value -- December 31, 1994................... $21.11 $21.11 $22.88 $33.33 Income before Extraordinary Item and Accounting Change (on average shares outstanding) -- Year Ended December 31, 1994.................... 3.45 3.41 3.15 5.38 Cash Dividends Declared (Common) -- Year Ended December 31, 1994.................... 1.23 1.23 0.75 1.94 (a) The pro forma computations assume that for each share of Deerbank Common Stock outstanding the Deerbank stockholders would receive approximately 1.579 shares of NBD Common Stock at December 31, 1994. The assumed exchange ratios are based on the number of shares of fully diluted Deerbank Common Stock outstanding at December 31, 1994, the fixed transaction price of $45.00 per share of Deerbank Common Stock, and the average closing price of NBD Common Stock over a ten day trading period ending December 31, 1994 ($28.50). The pro forma computations exclude amounts attributable to AmeriFed Financial Corp., which was acquired by NBD in January 1995. (b) The historical Income and Cash Dividends Declared for Deerbank are for the fiscal year ended September 30, 1994.
Recent Financial Developments NBD. NBD earned net income of $140.9 million, or $0.88 per share, for the quarter ended March 31, 1995, compared with net income of $107.3 million, or $0.67 per share, for the quarter ended March 31, 1994. Income before the effect of an extraordinary item and an accounting change for the quarter ended March 31, 1994, was $122.9 million, or $0.77 per share. Total assets were $47.8 billion and $42.9 billion at March 31, 1995 and 1994, respectively, and total deposits were $31.6 billion and $30.2 billion. Total loans and leases were $30.7 billion at March 31, 1995, and the ratio of nonperforming loans to total loans was 0.54%, compared with total loans and leases of $25.9 billion and a ratio of nonperforming loans to total loans of 0.96% at March 31, 1994. 14 Shareholders' equity totaled $3.5 billion at March 31, 1995, compared with $3.3 billion at March 31, 1994. NBD's Tier 1 Capital Ratio was 8.20% at March 31, 1995, the Total Capital Ratio was 12.14% and the Tier 1 Leverage Ratio was 6.81%. The above financial information was derived from unaudited financial statements and includes, in the opinion of NBD management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation. The financial information is not necessarily indicative of the results that may be expected for the full year or any other interim period. Deerbank. Deerbank earned net income of $2.27 million, or $0.84 per share, for the quarter ended March 31, 1995, compared with net income of $2.11 million, or $0.78 per share, for the quarter ended March 31, 1994. Total assets were $757.8 million and $754.3 million at March 31, 1995 and 1994, respectively, and total deposits were $645.4 million and $679.6 million. Total loans and leases were $433.7 million at March 31, 1995, and the ratio of nonperforming loans to total loans was 0.68%, compared with total loans and leases of $379.6 million and a ratio of nonperforming loans to total loans of 0.78% at March 31, 1994. Shareholders' equity totaled $62.1 million at March 31, 1995, compared with $56.1 million at March 31, 1994. Deerfield's Tangible Capital Ratio was 7.69% at March 31, 1995, the Core Capital Ratio was 7.69% and the Risk Based Capital Ratio was 18.83%. When the capital of Deerbank is included, the consolidated capital ratio at March 31, 1995 is 8.19% of total assets. The above financial information was derived from unaudited financial statements and includes, in the opinion of Deerbank management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation. The financial information is not necessarily indicative of the results that may be expected for the full year or any other interim period. 15 MEETING INFORMATION Introduction This Proxy Statement-Prospectus is being furnished to the stockholders of Deerbank in connection with the solicitation of proxies by the Deerbank Board for use at the Special Meeting. The Special Meeting will be held on ______day, _____________, 1995 at _:00 _.m., local time, at the corporate offices of Deerbank, 745 Deerfield Road, Deerfield, Illinois 60015. Purpose The Special Meeting will be held for the purpose of considering and voting upon a proposal to approve the Merger Agreement and to transact any and all other business that may properly come before the Special Meeting. Voting Rights and Record Date Only holders of record of Deerbank Common Stock at the close of business on the Record Date are entitled to notice of and to vote at the Special Meeting. On the Record Date, _________ shares of Deerbank Common Stock were issued and outstanding. Approximately _______ shares (constituting approximately ____% of the outstanding shares of Deerbank Common Stock excluding currently exercisable options) were beneficially owned by directors and executive officers of Deerbank and their affiliates on the Record Date. Pursuant to individual voting agreements with NBD, each director of Deerbank has agreed, in their individual capacity as stockholders, to vote for the approval and adoption of the Merger Agreement. An independent corporate trustee of the Deerbank ESOP owned _______ shares of Deerbank Common Stock on the Record Date (constituting approximately ____% of the outstanding shares). Pursuant to the terms of the ESOP, shares held by the ESOP that are allocated to the accounts of the ESOP participants shall be voted by the ESOP trustee as directed by such participants. Shares held by the ESOP that are currently unallocated shall be voted by the ESOP trustee proportionate to the directions given by ESOP participants with respect to allocated shares so long as such vote is in accordance with the provisions of ERISA. Each holder of record of shares of Deerbank Common Stock on the Record Date will be entitled to one vote for each share registered in his or her name on each matter presented to a vote of the stockholders at the Special Meeting, except as described below. As provided in Deerbank's Restated Certificate of Incorporation, holders of Deerbank Common Stock who beneficially own in excess of 10% of the outstanding shares of Deerbank Common Stock (the "Limit") are not entitled to any vote in respect to the shares held in excess of the Limit. However, shares held in excess of the Limit may be voted if the acquisition of such shares or the offer to acquire such shares is approved in advance by a two-thirds vote of the Deerbank Board. The provision of Deerbank's Restated Certificate of Incorporation relating to the Limit is a five year provision which expires on March 31, 1997, but may be renewed by a vote of stockholders prior to such time. The Option Agreement granted to NBD in connection with the Merger was approved by at least a two-thirds vote of the Deerbank Board. See "PROPOSED MERGER -- Stock Option Agreement". A person or entity is deemed to beneficially own shares owned by an affiliate of, as well as persons acting in concert with, such person or entity. The presence, in person or by proxy, of a majority of the outstanding shares of Deerbank Common Stock entitled to vote (after subtracting any shares in excess of the Limit) is necessary to constitute a quorum of the shareholders in order to take action at the Special Meeting. For these purposes, shares of Deerbank Common Stock which are present or represented by proxy at the Special Meeting will be counted for quorum purposes regardless of whether the holder of the shares or proxy fails to vote on the Merger Agreement or whether a broker with discretionary authority fails to exercise its discretionary voting authority. 16 Once a quorum is established, approval of the Merger Agreement requires the affirmative vote of holders of a majority of the outstanding shares of Deerbank Common Stock. THUS, FOR VOTING PURPOSES, ABSTENTIONS AND "BROKER NON-VOTES" WILL HAVE THE SAME EFFECT AS VOTES "AGAINST" THE MERGER AGREEMENT. Voting and Revocation of Proxies Any stockholder giving a proxy prior to the Special Meeting has the right to revoke it prior to its exercise by executing and delivering a later-dated proxy, by delivering a written notice of revocation to John A.S. Lindemann, Secretary of Deerbank, or by attending the Special Meeting and voting in person. ALL PROXIES WILL BE VOTED IN ACCORDANCE WITH THE DIRECTIONS OF THE STOCKHOLDER EXECUTING SUCH PROXY AND, TO THE EXTENT NO DIRECTIONS ARE GIVEN, WILL BE VOTED "FOR" APPROVAL OF THE MERGER AGREEMENT. Solicitation of Proxies The enclosed proxy is being solicited by the Deerbank Board for use in connection with its Special Meeting. Deerbank will bear its own expenses in connection with the solicitation of proxies for its Special Meeting, except that NBD shall pay the cost incurred in printing this Proxy Statement-Prospectus. In addition to solicitation of proxies by use of the mails, Regan & Associates, Inc., a proxy solicitation firm, will assist Deerbank in soliciting proxies for the Special Meeting and will be paid a fee estimated to be $3,000, plus out-of-pocket expenses. Directors, officers and other employees of Deerbank and its subsidiaries may also make solicitations of proxies of stockholders either personally or by telephone, telegram or other forms of communication. These persons will not be specifically compensated for soliciting proxies. Brokerage houses, custodians, nominees and fiduciaries will be requested to forward the proxy soliciting materials to the beneficial owners of shares of Deerbank Common Stock held of record by such persons, and Deerbank will reimburse them for their charges and expenses. PROPOSED MERGER This section of the Proxy Statement-Prospectus describes the material features of the Agreements and the transactions contemplated thereunder. The Merger Agreement sets forth the terms upon which the Merger, if consummated, will be effected. The Reorganization Agreement sets forth various representations, warranties and covenants of the parties relating to the consummation of the Merger as well as the conditions which must be satisfied for the Merger to be completed. The following description does not purport to be complete and is qualified in its entirety by reference to the Agreements. All stockholders are urged to read the Merger Agreement, which is set forth as Appendix A to this Proxy Statement-Prospectus, in its entirety. A COPY OF THE REORGANIZATION AGREEMENT WILL BE PROVIDED WITHOUT CHARGE TO ANY PERSON TO WHOM THIS PROXY STATEMENT-PROSPECTUS IS DELIVERED UPON WRITTEN REQUEST TO C. DAVID MULLINS, EXECUTIVE VICE PRESIDENT OF DEERBANK, OR DANIEL T. LIS, SENIOR VICE PRESIDENT AND SECRETARY OF NBD, AT THEIR RESPECTIVE ADDRESSES INDICATED UNDER "AVAILABLE INFORMATION". General Under the terms of the Merger Agreement, Deerbank will be merged with and into NBD Illinois, a wholly-owned subsidiary holding company of NBD. Pursuant to the Subsidiary Bank Merger, it is intended that immediately following the Merger Deerfield will merge with and into NBD Bank, a wholly-owned subsidiary of NBD Illinois. If the proposed Merger is consummated, each share of Deerbank Common Stock will be converted into and be exchangeable for the number of shares of NBD Common Stock equal to a fraction, the numerator of which shall be equal to $45.00, and the denominator of which shall be equal to the average closing price 17 per share of NBD Common Stock as reported on the NYSE Composite Tape for the ten trading days ending on the fifth trading day prior to the Effective Date of Merger. Background of the Merger Originally chartered in 1927 as an Illinois mutual savings and loan association, Deerfield converted to a federally chartered mutual savings and loan association in 1981 and to a federally chartered stock savings and loan association in March of 1987. In December of 1990, Deerfield reorganized into a holding company structure and Deerbank became the parent savings and loan holding company for Deerfield. The period subsequent to Deerfield's conversion from mutual to stock form has been one of continued and substantial change in the banking industry, characterized by heightened regulatory scrutiny as well as intensifying competition and consolidation. Management and the Deerbank Board focused on these changes and sought to best position Deerbank and its stockholders. Although Deerbank was not actively soliciting offers to acquire or merge with Deerbank, the Deerbank Board, in consultation with senior management of Deerbank, established certain criteria which, if met, permitted Deerbank's chief executive officer to enter into informal discussions regarding potential strategic alliances with other parties. Such criteria included items relating to the potential value offered to Deerbank's stockholders, the structure of the proposed transaction and the long-term prospects of the potential merger partner. During the period from 1991 through January of 1995, Deerbank received several preliminary indications of interest from entities concerning the possibility of pursuing a merger with or acquisition of Deerbank. One such indication of interest came from NBD in July of 1993. Other than with respect to those matters discussed below, these indications of interest were informal in nature and no formal offers resulted therefrom. Each of these indications of interest was rejected by Deerbank after failing to meet the pre-established criteria set by the Deerbank Board and following a determination that the indication of interest would not be an appropriate method to enhance stockholder value. In November of 1994, NBD representatives once again approached Deerbank's Chief Executive Officer, Wayne Ecklund, concerning NBD's interest in pursuing a possible acquisition of Deerbank. NBD's renewed preliminary indication of interest fell within the pre-established criteria set by the Deerbank Board. As a result, the Deerbank Board authorized Mr. Ecklund to enter into negotiations with NBD. At this time, The Chicago Corporation began rendering financial advisory services, including merger and acquisition services, for Deerbank. Additionally, NBD performed a preliminary due diligence review and submitted draft acquisition agreements regarding the structure and terms of the proposed transaction. On January 6, 1995, the Deerbank Board met to evaluate the NBD proposal. At the meeting, a report was presented by The Chicago Corporation regarding the NBD proposal. The Chicago Corporation representatives discussed the financial terms of the NBD proposal, a description of the historical market prices of NBD, a comparison of the financial and market performance of Deerbank to that of a group of savings institutions in the Midwest, a comparison of the NBD proposal to numerous recent transactions, an analysis of NBD's financial ability to acquire Deerbank relative to the abilities of certain other banking institutions and an analysis of the range of potential values, based on a discounted cash flow analysis of Deerbank Common Stock. Legal counsel, which was also present, discussed the Deerbank Board's fiduciary obligations in connection with the merger or acquisition of Deerbank. Members of senior management of Deerbank, together with the legal and financial advisors of Deerbank, reviewed with the Deerbank Board, among other things, the background of the transaction and the 18 potential benefits of the transaction, including the strategic rationale for the transaction. At such time, The Chicago Corporation rendered an oral opinion that the NBD consideration to be paid to holders of Deerbank Common Stock was fair from a financial point of view. Following further discussion, the Deerbank Board unanimously approved the proposed merger with NBD, with one member abstaining due to his affiliation with The Chicago Corporation, and authorized Mr. Ecklund to execute the Agreements after review and approval by legal counsel. On January 7, 1995, the Agreements were executed and a press release was issued that same day announcing the proposed affiliation. Reasons for the Merger The Deerbank Board, with the assistance of outside financial and legal advisors, has evaluated the financial, legal and market conditions bearing on the decision to recommend the Merger. The terms of the Merger, including the price, are a result of arm's-length negotiations between representatives of Deerbank and NBD. In reaching its determination that the Agreements are fair to, and in the best interest of, Deerbank and holders of Deerbank Common Stock, the Deerbank Board considered a number of factors, both from a short and long-term perspective, including without limitation the following: (i) the Deerbank Board's familiarity with and review of Deerbank's business, financial condition, results of operations, management, prospects, including but not limited to its potential growth, development, productivity and profitability, and the business risks associated therewith; (ii) the current and prospective environment in which Deerbank operates, including national and local economic conditions, the competitive environment for financial institutions generally, the increased regulatory burden on financial institutions generally and the trend toward consolidation in the financial services industry, particularly in Deerbank's market area; (iii) information concerning the business, operations, asset quality and prospects of NBD, including recent acquisitions and the recent performance of NBD Common Stock; (iv) the relative financial strength of NBD; (v) the oral and written presentation and oral opinion of Deerbank's financial advisor, The Chicago Corporation, that the consideration was fair to the holders of Deerbank Common Stock from a financial point of view; (vi) the financial and other significant terms of the NBD proposal; (vii) the potential upside value offered in connection with the NBD proposal and the downside protection associated with the NBD proposal; (viii) the review by the Deerbank Board with its legal and financial advisors of the provisions of the proposed form of Agreements; (ix) the Deerbank Board's belief that the terms of the proposed form of Merger Agreement with NBD were attractive in that they would allow Deerbank stockholders to receive stock in the Merger, thus permitting stockholders to defer any tax liability associated with the increase in the value of their stock as a result of the Merger and to become stockholders in NBD, an institution with strong operations, management and earnings performance; 19 (x) the expectation that NBD will continue to provide quality service to the communities and customers served by Deerbank; (xi) the compatibility of the respective business and management philosophies of Deerbank and NBD; (xii) the broad range of products and services, as well as greater convenience, which will be afforded Deerbank customers as a result of the Merger; and (xiii) the alternative strategic courses available to Deerbank, including remaining independent or exploring other indications of interest from other potential acquirors. THE IMPORTANCE OF THESE FACTORS RELATIVE TO ONE ANOTHER CANNOT PRECISELY BE DETERMINED OR STATED HEREIN. THE DEERBANK BOARD UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT DEERBANK STOCKHOLDERS VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT. Effective Date of Merger The Merger will be consummated at the close of business on the date specified in a Certificate of Merger filed in accordance with the Delaware General Corporation Law. The date on which the Merger will be consummated is referred to herein as the "Effective Date of Merger." It is anticipated that if the stockholders of Deerbank approve the Merger Agreement at the Special Meeting and the approvals of all requisite government regulatory authorities are obtained, the Effective Date of Merger will be in the summer of 1995, provided that the Agreements are not terminated prior to such time. See "PROPOSED MERGER -- Conditions to the Merger" and "-- Termination, Amendment and Waiver." Opinion of Financial Advisor to Deerbank The Chicago Corporation has delivered its written opinion to the Deerbank Board that, based upon and subject to the various considerations set forth in the opinion dated , 1995, the consideration being received by Deerbank stockholders in the Merger is fair from a financial point of view to Deerbank's stockholders as of the date of its opinion. At each stage of The Chicago Corporation's engagement, the Deerbank Board carefully and thoroughly reviewed the materials and presentations of The Chicago Corporation and made inquiries of The Chicago Corporation personnel as to the methodology and the assumptions utilized in its analysis. No limitations were imposed by the Deerbank Board upon The Chicago Corporation with respect to the investigations made or procedures followed by it in rendering its opinion. The full text of the opinion of The Chicago Corporation, which sets forth assumptions made, matters considered and limitations on the review undertaken, is attached hereto as Appendix B. Deerbank stockholders are urged to read the opinion in its entirety. The Chicago Corporation's opinion is directed only to the consideration to be received in the Merger and does not constitute a recommendation to any Deerbank stockholders as to how such stockholder should vote at the Annual Meeting. The summary of the opinion of The Chicago Corporation set forth in this Proxy Statement-Prospectus is qualified in its entirety by reference to the full text of such opinion attached hereto as Appendix B. Deerbank retained The Chicago Corporation as its financial advisor on the basis of the firm's reputation, experience and familiarity with the banking industry and with merger and acquisition transactions. As part of its investment banking business, The Chicago Corporation is regularly engaged in the valuation of businesses in connection with mergers and acquisitions, negotiated 20 underwritings, secondary distributions of listed and unlisted securities, private placements and valuation for corporate and other purposes. During the course of its engagement, and as a basis for arriving at its opinion, The Chicago Corporation reviewed and analyzed material bearing upon the financial and operating condition of Deerbank and NBD and material prepared in connection with the Merger, as follows: (i) the Merger Agreement; (ii) publicly available information concerning Deerbank and NBD, consisting of required regulatory financial statements and Consolidated Reports of Condition and Income for each of the last five fiscal years; (iii) the nature and terms of recent sale and merger transactions involving thrift and bank holding companies that The Chicago Corporation considered reasonably similar to Deerbank and NBD in size, financial character, operating character, historical performance and geographic market; (iv) historical and current market data for Deerbank Common Stock and NBD Common Stock and financial and other information provided to The Chicago Corporation by management of Deerbank and NBD, consisting of loan review and asset quality information, asset-liability management information, subsidiary bank performance and management reports, and budget and planning information; and (v) the Registration Statement and this Proxy Statement-Prospectus. These analyses are discussed in more detail below. In addition, The Chicago Corporation conducted meetings with members of senior management of Deerbank and NBD for the purpose of reviewing the future prospects of Deerbank and NBD. The Chicago Corporation evaluated the pro forma ownership of NBD Common Stock by Deerbank stockholders, relative to the pro forma contribution of Deerbank's assets, liabilities, equity and earnings of the proposed combined company. The Chicago Corporation also took into account its experience in other transactions, as well as its knowledge of the banking industry and its general experience in securities valuations. In rendering its opinion, The Chicago Corporation assumed, without independent verification, the accuracy and completeness of the financial and other information and representations provided to it by Deerbank and NBD. The following is a summary of all material terms considered and the analyses performed by The Chicago Corporation in rendering its opinion during the course of its engagement in connection with its , 1995 opinion. Net Present Value Analysis. The Chicago Corporation prepared a net present value analysis which indicated theoretical values for Deerbank based on return on average assets ranging between 1.0% and 1.5% and asset growth rates ranging between 4.0% and 12.0%. The results of this analysis indicated a range of theoretical values for Deerbank between $27.33 per share (1.0% return on average assets; 4.0% asset growth rate) and $52.45 per share (1.5% return on average assets; 12.0% asset growth rate). At a return on average assets ratio of 1.1%, which approximated Deerbank's recent historical performance, theoretical values ranged from $30.03 (4.0% asset growth rate) to $38.55 (12.0% asset growth rate). At an asset growth rate of 8.0%, which approximated Deerbank's recent historical performance, theoretical values ranged from $31.02 (1.0% return on average assets) to $46.37 (1.5% return on average assets). The nominal value of the offer from NBD was $45.00. Contribution Analysis. The Chicago Corporation prepared a contribution analysis showing the percentages of assets, deposits, tangible equity as well as 1993, 1994 and estimated 1995 net income contributed to the combined company on a pro forma basis by Deerbank and NBD, and compared these percentages to the pro forma ownership of NBD. This analysis showed that Deerbank, as of September 30, 1994, would contribute 1.65% of pro forma consolidated total assets, 2.13% of deposits, 1.86% of tangible equity, 1.62% of 1993 net income and 1.63% of 1994 net income and 1.66% of estimated 1995 net income. Based on the exchange ratio calculated on January 6, 1995, stockholders of Deerbank would own approximately 2.68% of the pro forma outstanding NBD Common Stock. 21 Comparable Transaction Analysis. The Chicago Corporation reviewed selected comparable merger and acquisition transactions. The following merger transactions were reviewed based on publicly available data (the acquiror is named first and underlined, followed by the seller): Fifth Third Bancorp, Falls Financial Inc; First Financial Corp, FirstRock Bancorp; TCF Financial Corp, Great Lakes Bancorp; Mid Am, Inc, Security First Corp; Firstar Corporation, Investors Bank Corp; First Bancorporation of Ohio, CIVISTA Corporation; Mercantile Bancorporation, UNSL Financial Corp; First Bank System, Inc., Metropolitan Financial; NBD, AmeriFed Financial Corp; Fifth Third Bancorp, Cumberland Federal; Roosevelt Financial, Farm & Home Financial; Fourth Financial Corporation, Great Southern Bancorp; ABN-AMRO Holding, Cragin Financial; First of America Bank Corporation, LGF Bancorp; First Bancorporation of Ohio, Great Northern Financial; Roosevelt Financial, Home Federal Bancorp of MO; and Mercantile Bancorp, United Postal Bancorp. Transactions were selected on the basis of comparability of absolute transaction value and the perceived comparability of the markets served by the acquired institutions to those of Deerbank. For the comparable transactions, the multiple of price to trailing 12 months earnings ranged from 7.41 to 20.05 with an average of 14.20. The NBD proposed purchase price represented a multiple of price to trailing 12 months earnings through September 30, 1994 of 14.29. For the comparable transactions, the multiple of purchase price to tangible book value ranged from 1.34 to 2.19 with an average of 1.76. The NBD offer to Deerbank represented a multiple of price to September 30, 1994 tangible book value of 1.94. Financial Implications to Deerbank Stockholders. The Chicago Corporation prepared an analysis of the financial implications of the NBD offer to a Deerbank stockholder. This analysis indicated that on a pro forma equivalent basis a stockholder of Deerbank would achieve increases in earnings per share, per share dividends and book value per share as a result of the consummation of the Merger. Comparative Stockholder Returns. The Chicago Corporation presented an analysis of comparative theoretical stockholder returns for several scenarios, including Deerbank remaining independent, Deerbank being acquired in 1998 and Deerbank being acquired in 1995. This analysis, which was based on the net present value of projected dividend streams and projected 1998 common stock valuations (using current price-to-earnings multiples), indicated total stockholder returns of 12.57% for Deerbank remaining independent, 21.75% for a merger in 1998 and 25.76% based on the acceptance of the NBD proposal in 1995. The Chicago Corporation also prepared an analysis of the possible pricing of a merger transaction with certain other midwest-based thrift and bank holding companies using estimated 1995 net income for Deerbank and stock prices of selected companies and assuming no earnings-per-share dilution for the buyer if 20% operating efficiencies are achieved as well as a 100% common stock exchange accounted for as a "pooling of interests" transaction without share repurchases by the acquiror. The holding companies reviewed included: BankAmerica Corporation; NationsBank Corporation; Banc One Corporation; First Chicago Corporation; Norwest Corporation; NBD; Comerica Incorporated; National City Corporation; First Bank System, Inc.; First of America Bank Corporation; Huntington Bancshares Inc.; Firstar Corporation; Fifth Third Bancorp; Marshall & Ilsley Corporation; Standard Federal Bank; Old Kent Financial Corporation; Michigan National Corporation; TCF Financial Corp; St. Paul Bancorp, Inc.; First Midwest Bancorp, Inc.; Bell Bancorp; AMCORE Financial, Inc.; Firstbank of Illinois Co.; and River Forest Bancorp. Given the assumptions, the analysis indicated that these companies could pay a high of $47.34 per share and a low of $28.25 per share, as adjusted for outliers, for all of the outstanding shares of Deerbank Common Stock. The average price all 24 of these companies could pay was $36.81. While these prices indicate the ability of an acquiror to pay a particular price, based on the given assumptions, they do not reflect any indications of interest or the willingness of an acquiror to pay such a price. 22 Comparable Company Analysis. The Chicago Corporation compared the market price, market-to-book value and price-to-earnings multiples of NBD Common Stock with the individual market multiples and averages of the following selected comparable companies which it deemed to be reasonably similar to NBD in size, financial character, operating character, historical performance and/or geographic market: BankAmerica Corporation; NationsBank Corporation; Banc One Corporation; First Chicago Corporation; Norwest Corporation; Comerica Incorporated; National City Corporation; First Bank System, Inc.; First of America Bank Corporation; Huntington Bancshares Inc.; Firstar Corporation; Fifth Third Bancorp; Marshall & Ilsley Corporation; Standard Federal Bank; Old Kent Financial Corporation; Michigan National Corporation; TCF Financial Corp.; St. Paul Bancorp, Inc.; First Midwest Bancorp, Inc.; Bell Bancorp; AMCORE Financial, Inc.; Firstbank of Illinois Co.; and River Forest Bancorp. This analysis indicated that NBD Common Stock sold at a price of 1.48 times September 30, 1994, tangible book value and the comparables sold at an average price of 1.60 times tangible book value. NBD's Common Stock sold at a multiple of price to trailing 12 months earnings of 8.97, while the comparable group's average price-to-earnings multiple was 10.05. The summary of The Chicago Corporation analysis set forth above is a fair summary thereof but does not propose to be a complete description of the presentations by The Chicago Corporation to the Deerbank Board. The Chicago Corporation believes that its analysis and the summary set forth above must be considered as a whole and that selecting portions of analysis, without considering all factors and analyses, could create an incomplete view of the process by which a fairness opinion is rendered. In connection with its analyses, The Chicago Corporation assumed that there would not be material adverse changes in general economic, business, market and/or regulatory conditions, all of which are beyond the control of NBD and Deerbank. The analysis performed by The Chicago Corporation are not necessarily indicative of actual values of future results, which may be significantly more or less favorable than suggested by such analyses. Fees and Indemnification. The fees due to The Chicago Corporation under the agreement between The Chicago Corporation and Deerbank ("The Chicago Corporation Agreement") are payable by Deerbank as follows: $10,000 at the date of execution of The Chicago Corporation Agreement, a cash fee equal to $240,000 payable at the time this Proxy Statement-Prospectus is mailed and a cash fee equal to 0.80% of the total consideration of the transaction (less the $10,000 and the $240,000) payable at the closing. In addition to such fees, Deerbank has agreed to reimburse The Chicago Corporation for all reasonable out-of-pocket expenses and will pay to The Chicago Corporation a fee of $1,500 per day for preparation and court appearances should The Chicago Corporation be called upon in any legal proceeding to deliver expert testimony with regard to the fairness opinion. Deerbank has also agreed to indemnify The Chicago Corporation, its officers, directors, agents, employees and certain controlling persons from and against any losses, claims, damages and liabilities in connection with or arising out of the transactions or services referred to in The Chicago Corporation Agreement. This indemnification is subject to certain conditions and procedures set forth in The Chicago Corporation Agreement. Consideration for Shares The rate of exchange and general terms of the Agreements were arrived at through arm's-length negotiations between NBD and Deerbank. NBD Common Stock in the Merger. Upon consummation of the Merger, each outstanding share of Deerbank Common Stock (other than shares owned by NBD, NBD Illinois or Deerbank, which will be cancelled) will be automatically converted and exchanged for a number of shares of NBD Common Stock equal to a fraction, the numerator of which shall be equal to $45.00, and the denominator of which shall 23 be equal to the average closing price per share of NBD Common Stock as reported on the NYSE Composite Tape for the ten trading days ending on the fifth trading day prior to the Effective Date of Merger, as defined in the Merger Agreement. Cash in Lieu of Fractional Shares. Each holder of a certificate or certificates representing shares of Deerbank Common Stock who would otherwise have been entitled to receive a fraction of a share of NBD Common Stock (after taking into account all Deerbank Common Stock represented by such certificate or certificates then delivered by such holder) shall receive, in lieu thereof, an amount of cash (without interest) determined by multiplying such fraction by the average closing price of a whole share of NBD Common Stock on the NYSE Composite Tape during the ten trading days ending on the fifth trading day prior to the Effective Date of Merger. Delivery of NBD Common Stock On or about the Effective Date of Merger, NBD will cause appropriate transmittal materials to be mailed to each Deerbank stockholder of record as of the Effective Date of Merger for the purpose of exchanging his or her share certificates. NBD or State Street Bank and Trust Company, as exchange agent (the "Exchange Agent"), will mail or deliver to each former Deerbank stockholder whose shares have been converted into NBD Common Stock and who has surrendered his or her certificates representing Deerbank Common Stock, a certificate or certificates representing the number of whole shares of NBD Common Stock to which the stockholder is entitled plus a check in the amount of cash paid in lieu of fractional shares. The Merger Agreement provides that after the Effective Date of Merger and until Deerbank Common Stock certificates are exchanged, no dividend payable with respect to NBD Common Stock will be paid to the holders of certificates previously representing Deerbank Common Stock. Upon exchange of such certificates, however, there will be paid the amount (without interest and less the amount of taxes, if any, which may have been imposed or paid thereon) of all dividends, if any, which shall have been declared and paid after the Effective Date of Merger with respect to the shares of NBD Common Stock issuable under the Merger Agreement in respect of the Deerbank Common Stock represented by such surrendered certificates. To avoid backup Federal income tax withholding on payments made to them, stockholders of Deerbank will be required to furnish their taxpayer identification numbers and appropriate certifications to the Exchange Agent on the transmittal form. After the Effective Date of Merger, there will be no further transfer on the books of Deerbank of certificates theretofore representing Deerbank Common Stock and, if such certificates are presented for transfer, they will be cancelled against delivery of certificates for NBD Common Stock as described herein. CERTIFICATES FOR DEERBANK COMMON STOCK SHOULD NOT BE SENT TO THE EXCHANGE AGENT AT THIS TIME, BUT ONLY WHEN A STOCKHOLDER HAS RECEIVED A TRANSMITTAL FORM. Shares of NBD Common Stock issued and outstanding immediately prior to the Effective Date of Merger will remain issued and outstanding and will be unaffected by the Merger, and holders of such NBD Common Stock will not be required to exchange the certificates evidencing such stock or take any other action by reason of the consummation of the Merger. Source of NBD Common Stock The shares of NBD Common Stock that will be utilized in the Merger may be authorized and unissued shares and/or treasury shares. At the time of the announcement of execution of the Agreements, NBD also announced its intention to repurchase the number of shares of NBD Common Stock to be exchanged in the Merger, and that repurchase program has been actively pursued. All such repurchases have and shall comply with the requirements of the Commission, the NYSE and applicable regulatory authorities. 24 Conditions to the Merger The Reorganization Agreement sets forth various representations, warranties and covenants of the parties relating to the consummation of the Merger, conditions which must be satisfied before the Merger may be consummated and grounds for termination of the Merger, as discussed below. The representations and warranties include, among other things, the parties' organization, financial condition, capitalization, pending and threatened litigation and enforceability of the Merger Agreement. The obligations of NBD, NBD Illinois and Deerbank to cause the Merger to be consummated are subject to the following conditions, among others: (i) approval of the Merger Agreement by the stockholders of Deerbank; (ii) approval of the Merger by all requisite government regulatory authorities without any conditions which in the reasonable opinions of NBD and Deerbank are materially adverse, and such approvals have not been withdrawn or stayed, and all statutory waiting periods have expired; (iii) delivery of officers' certificates by each party certifying as to representations and warranties made by each party; (iv) delivery of certain legal opinions, including a favorable tax opinion; (v) the Registration Statement, of which this Proxy Statement-Prospectus is a part, is declared effective under the Securities Act of 1933, as amended, and no stop order has been issued or threatened; (vi) neither NBD nor Deerbank is subject to any order or decree of a court or agency of competent jurisdiction enjoining or prohibiting the Merger; (vii) the shares of NBD Stock to be delivered to Deerbank shareholders pursuant to the Merger are approved for listing on the NYSE; and (viii) an opinion has been received by Deerbank from The Chicago Corporation to the effect that consideration received by Deerbank stockholders in the Merger is fair from a financial point of view. Regulatory Matters Bank holding companies (such as NBD and NBD Illinois), savings and loan holding companies (such as Deerbank), and their respective depository institution subsidiaries (including NBD Bank and Deerfield, respectively) are highly regulated institutions, with numerous federal and state laws and regulations governing their activities. Among these are laws and regulations requiring prior approval by applicable government regulatory authorities in connection with acquisition and merger transactions such as the Merger and the Subsidiary Bank Merger, as summarized below. In addition, these institutions are subject to ongoing supervision, regulation, and periodic examination by various federal and state financial institution regulatory agencies. Detailed discussions of such ongoing regulatory oversight and the laws and regulations under which it is carried out can be found in the Forms 10-K of each of NBD and Deerbank incorporated by reference herein. See "AVAILABLE INFORMATION" and "INFORMATION INCORPORATED BY REFERENCE." Those summaries are qualified in their entirety by the actual language of the laws and regulations, which are subject to change based on recently enacted and future legislation and action by regulatory agencies. As an example, recently enacted legislation would, among other things, permit nationwide interstate bank acquisitions later this year and nationwide interstate branching in two years, subject in the case of branching to the right of states to "opt out" of the legislation. Applications or notifications seeking approval of the Merger and/or the Subsidiary Bank Merger were previously submitted to the Federal Deposit Insurance Corporation ("FDIC"), the Federal Reserve Bank of Chicago (the "FRB"), the Office of Thrift Supervision ("OTS"), and the Illinois Commissioner of Banks and Trust Companies (the "Illinois Commissioner"), and each of these regulatory agencies has issued its approval of the transaction. The FDIC application, which was approved on April 19, 1995, was submitted pursuant to Sections 5(d)(3)("Oakar II") and 18(c)(the "Bank Merger Act") of the Federal Deposit Insurance Act. The Bank Merger Act requires that the applicable regulator take into consideration, among other factors, the financial and managerial resources and future prospects of the merging institutions as well as the convenience and needs of the communities to be served by the resulting institution (including compliance with anti-competitive concerns, Community Reinvestment Act provisions, and fair 25 lending laws). Under the Bank Merger Act, the proposed transaction may not be consummated prior to the 30th day following the date of approval of the applicable federal regulatory agency, during which time the United States Department of Justice (the "DOJ") may challenge the transaction on antitrust grounds. The post-approval waiting period may be reduced by the FDIC, with the concurrence of the DOJ, to a minimum of 15 days, and this reduced waiting period has been made applicable to the Merger and Subsidiary Bank Merger. The FRB notification, which was approved on April 5, 1995, was submitted pursuant to Sections 4(a)(2) and 4(c)(8) of the Bank Holding Company Act, under which the FRB takes into consideration substantially the same factors considered under the Bank Merger Act. The OTS application and notification, which were approved on March 24, 1995, were filed pursuant to the provisions of the Home Owners Loan Act and related OTS regulations, pursuant to which the OTS takes into consideration a number of factors similar to those indicated above as well as the structure of the proposed transaction, whether the acquiring bank agreed to assume the thrift's liquidation account obligations, and whether the terms of the transaction and the benefits to be received by management of the thrift have been fully disclosed to the thrift's stockholders. The application filed with the Illinois Commissioner, which was approved April 19, 1995, seeks approval for the Subsidiary Bank Merger pursuant to the Illinois Banking Act, and focuses on substantially the same considerations as the Bank Merger Act. The Merger and therefore the Subsidiary Bank Merger cannot proceed in the absence of all requisite regulatory approvals. There can be no assurance that the FDIC and the Illinois Commissioner will approve the Merger and/or the Subsidiary Bank Merger, and if they are approved, there can be no assurance as to the date of such approvals. Termination, Amendment and Waiver It is contemplated that the conditions to the Merger noted above will be fulfilled prior to the consummation of the Merger. If, however, any one or more of such conditions, other than the approval of the Merger Agreement by the stockholders of Deerbank and the approval of the transaction by all required governmental authorities, shall not have been satisfied, the party whose obligation to proceed is made subject to the satisfaction of such condition may, nevertheless, at its election waive such condition and proceed with the Merger. The Agreements may be terminated and the Merger abandoned at any time prior to the Effective Date of the Merger, either before or after approval of the Merger Agreement by the stockholders of Deerbank, in any of the following ways among others: (i) by mutual consent of NBD and Deerbank; (ii) by either NBD or Deerbank if the terminating party provides written notice of a material breach of any representation, warranty or agreement contained in the Reorganization Agreement within a specified period after its discovery and such breach is not cured within sixty days after such written notice; (iii) by either NBD or Deerbank if the Effective Date of Merger has not occurred on or before December 31, 1995; (iv) by either NBD or Deerbank if a final unappealable injunction or other judgment shall have been issued by a court restraining or prohibiting consummation of the transactions contemplated by the Reorganization Agreement; and (v) by either NBD or Deerbank if a required government regulatory approval shall have been refused or shall have been conditioned in a manner not reasonably satisfactory to NBD, provided that NBD shall have the right to initiate and pursue expeditiously an appeal from any such refusal or imposition of an unsatisfactory condition and, in the event of such appeal, such refusal or imposition of condition shall be deemed not to have been made until the termination of such appeal or the time that such refusal or imposition of a condition has become final and non-appealable. Any such termination shall be approved by the appropriate Board of Directors. In the event the Agreements are terminated and the Merger abandoned by virtue of the grounds set forth in clause (ii) above, the party causing such breach shall reimburse the other party for all reasonable expenses incurred by such 26 party in connection with the transactions contemplated by the Merger Agreement. In the event of such a termination due to any other cause, each party shall bear its own expenses. In the event the Agreements are terminated and the Merger abandoned despite the best efforts of the parties, no party shall incur any liability except to the extent described above with respect to expenses. The Agreements may be amended, or any of the terms or conditions thereof waived, at any time before or after approval of the Merger Agreement by the stockholders of Deerbank; provided, however, that any such change which is proposed subsequent to stockholder approval may not, without further approval of such stockholders, alter or change the amount or kind of consideration to be received in the Merger or alter or change any of the terms and conditions of the Merger Agreement if such alternation or change would adversely affect such stockholders. Business of Deerbank Pending the Merger The Reorganization Agreement also contains covenants to which Deerbank has agreed. The covenants remain in effect until the Effective Date of Merger or until the Agreements are terminated, and include, among others, an agreement that Deerbank and each of its subsidiaries will conduct its affairs in the ordinary course of business consistent with past and current practice, use its best efforts to maintain and preserve its business organization, employees and advantageous business relationships and to retain the services of its key officers or employees. Neither Deerbank nor its subsidiaries shall, without prior written consent of NBD: (i) enter into any employment, severance or other personnel contract or plan with any director, officer or employee, except for approval of renewal of existing agreements and payment of bonuses in the normal course of business and consistent with past practice; (ii) except for shares issued pursuant to employee and director stock options, issue any capital stock or any security convertible into capital stock, or grant any option, warrant or other rights to acquire capital stock, effect any stock split, adjustment or recapitalization, or otherwise alter its capital structure; (iii) propose or adopt any amendment to its articles of incorporation, association or other charter document; (iv) purchase, redeem, retire or otherwise acquire or dispose of any shares of its capital stock; (v) take any action which would cause any significant decrease in the book value of the shares of its capital stock or which would have a material adverse affect on its financial condition, subject to the right of Deerbank and its subsidiaries to value assets in accordance with applicable legal and accounting requirements; (vi) enter into any contract or arrangement other than in the ordinary course of business; (vii) make or commit to make any capital expenditure in an amount exceeding $100,000; (viii) purchase any investment securities for portfolio other than U.S. Treasury or Agency Securities (which shall not be deemed to include any mortgage derivative, mortgage pool or mortgage backed securities) with remaining maturities of two (2) years or less; (ix) record any fifteen (15) and thirty (30) year fixed rate first mortgage loans into Deerfield's loan portfolio other than such loans which are intended and qualified for sale to investors in the secondary markets; (x) declare or pay a dividend on Deerbank's capital stock other than regular quarterly cash dividends upon Deerbank Common Stock at the rate of fifteen cents (15(cent)) per share; or (xi) take any action that would adversely effect or delay the ability of NBD or Deerbank to obtain requisite regulatory approvals or to perform any of the covenants and agreements under the Reorganization Agreement, or which would make any of the representations and warranties made in the Reorganization Agreement untrue or incorrect in any material respect. Interests of Certain Persons in the Merger At ______________, 1995, all directors and executive officers of Deerbank as a group beneficially owned _______ shares or ____ percent of the outstanding shares of Deerbank Common Stock, including options which are currently exercisable. Wayne V. Ecklund, Deerbank President and Chief Executive Officer, owns 3,194 shares of NBD Common Stock as a result of the conversion of the common stock of AmeriFed Financial Corp. to NBD Common Stock following the consummation 27 of NBD's acquisition of AmeriFed Financial Corp. No other director or executive officer of Deerbank owns any NBD Common Stock. Certain members of Deerbank's management and the Deerbank Board may be deemed to have certain interests in the Merger that are in addition to their interests as stockholders of Deerbank generally, including the interests described below. The Deerbank Board was aware of these interests, and considered them, among other matters, in approving the Merger Agreement and the transactions contemplated thereby. Employment Agreements. Deerfield maintains employment agreements with each of the following executive officers: Wayne V. Ecklund, C. David Mullins, James A. Miller, Mark Babicz and James M. Murphy. Mr. Ecklund's employment agreement currently is for a three-year term, which, upon each anniversary date, may be extended for an additional year, with approval of the Board of Directors, so that the remaining term shall be three years. The current base salary under the agreement, which may be increased at the discretion of the Board of Directors, is $250,000. In addition to the base salary, the contract provides, among other things, for participation in stock option plans and other benefits applicable to executive personnel. The contract provides for termination by Deerfield for "cause," as defined in the contract, at any time, or in certain instances specified by the rules and regulations of the OTS. In the event Deerfield chooses to terminate Mr. Ecklund's employment for reasons other than for cause or he is terminated upon a change in control, as defined below, or, in the event of his subsequent death, he, or his beneficiary, would be entitled to a sum equal to 36 times the highest monthly rate of salary, bonus and additional compensation amounts paid to him under the contract. In the cases of Messrs. Mullins, Miller and Babicz, the employment contracts each are for a term of three years and with respect to Messrs. Mullins and Miller are automatically renewed by the Board of Directors for one year at the end of the initial term and each year thereafter, unless notice of termination is given to such officers by Deerfield. With respect to Mr. Babicz, the Board of Directors must affirmatively approve the one-year extension of the term of his contract at the end of each year. The contract between Deerfield and Mr. Murphy is for a term of three years to be extended annually for an additional year upon the review and approval of the Board of Directors of Deerbank so that upon each anniversary date, if approved, Mr. Murphy has a contract with a three year term. The current base salaries under the agreements, which may be increased at the discretion of the Board of Directors, are as follows: Mr. Mullins - $115,000, Mr. Miller - $100,000, Mr. Babicz - $77,500 and Mr. Murphy $125,000. Under the agreements (except the agreement with Mr. Murphy), if Deerfield chooses to terminate the employment of these officers without cause, Messrs. Mullins, Miller and Babicz would be entitled to receive termination benefits equal to the greater of 24 times the highest monthly salary paid to such individual or the payments owed for the remaining terms of the applicable agreement. In the event of a change in control (as defined below), Messrs. Miller and Mullins would be entitled to a sum equal to 24 times the highest monthly salary and Mr. Babicz would be entitled to a sum equal to 12 times the highest monthly salary. Under Mr. Murphy's agreement, if Mr. Murphy is terminated without cause or as a result of a change in control, Mr. Murphy would be entitled to termination benefits equal to the greater of the salary due for the remaining term of the agreement or three times the average of Mr. Murphy's three preceding years' salary. For the purposes of the employment agreements, a change in control is generally defined to mean: (i) a change in control of a nature that would be required to be reported in an SEC Form 8-K or as defined by the rules and regulations of the OTS; (ii) the acquisition by a person or group of persons of beneficial ownership of 9.9% or more of the Deerbank Common Stock during the term of the agreements (except for Mr. Murphy's employment agreement, which requires the beneficial ownership of 20% or more); (iii) a tender offer, business 28 combination, sale of assets, or change of a majority of the current Board of Directors (generally disregarding any change approved by such Board); or (iv) a solicitation of proxies by someone other than the Deerbank management, seeking stockholder approval of a business combination. If an executive officer leaves after the change in control and one of the other factors described above occurs, based upon current compensation, Messrs. Ecklund, Mullins, Miller, Babicz or Murphy would receive severance payments of approximately $913,631, $230,000, $200,000, $77,500, and $375,411, respectively. The Reorganization Agreement provides that NBD will honor these agreements. Payments under the employment agreements and special termination agreements in the event of a change in control may constitute an excess parachute payment under Section 280G of the Internal Revenue Code of 1986, as amended, (the "Code"), resulting in the imposition of an excise tax on the recipient and denial of a deduction to Deerbank generally for all amounts in excess of the executive's average annual compensation for the five tax years preceding the change in control (the "Base Amount"). Such excise tax and denial are triggered by payments in excess of three times the Base Amount. The agreements (except the agreement with Mr. Murphy) provide that benefits payable to the executive under a change in control may be reduced to an amount that would not constitute an excess parachute payment (as that term is defined in Section 280G of the Code) if the reduced amount is greater than the non-reduced amount less payment of any excise tax. Mr. Murphy's agreement provides that payment made under the agreement following a change in control will be reduced to one dollar below the amount that would trigger such adverse tax treatment. Option Plans and Recognition and Retention Plan. Deerbank maintains certain incentive stock option plans and a recognition and retention plan which provide for an immediate acceleration of the vesting period for benefits payable to directors and certain employees upon a change in control. The Merger will constitute a change in control under such plans. Messrs. Ecklund, Mullins, Miller, Babicz and Murphy also have Limited Rights under the option plans which entitle them to a cash payment equal to the difference between the exercise price of each option and the fair market value of the Deerbank Common Stock on the date of the exercise of the Limited Rights, multiplied by the number of Limited Rights exercised. However, Limited Rights may only be exercised upon the event of a change in control. Additionally, pursuant to the terms of the Reorganization Agreement with respect to officers and employees of Deerbank or Deerfield who will remain employed by NBD or any of its subsidiaries, each option granted by Deerbank to purchase shares of Deerbank Common Stock which is outstanding and unexercised immediately prior to the Effective Date of Merger shall be converted automatically into an option to purchase a number of shares of NBD Common Stock equal to a fraction, the numerator of which shall be equal to $45.00 and the denominator of which shall be equal to the average closing price per share of NBD Common Stock as reported on the NYSE Composite Tape for ten trading days ending on the fifth trading day prior to the Effective Date of the Merger (the "Exchange Ratio"). The exercise price per NBD share under the converted option shall be equal to the exercise price per Deerbank share under the original option divided by the Exchange Ratio. With respect to directors of Deerbank or Deerfield as well as officers and employees of Deerbank or Deerfield holding options of Deerbank whose service will terminate in connection with the Merger, each option to purchase shares of Deerbank Common Stock which is outstanding and unexercised immediately prior to the Effective Date of Merger shall be converted automatically into a number of shares of NBD Common Stock equal to a fraction, the numerator of which shall be equal to $45.00 less the option exercise price and the denominator of which shall be equal to the average closing price per share of NBD Common Stock as reported on the NYSE Composite Tape for ten trading days ending on the fifth trading day prior to the Effective Date of Merger. 29 Post-Merger Compensation Benefits. The Reorganization Agreement provides that, after the Effective Date of Merger, employees and officers of Deerbank who become employees of NBD or its subsidiaries shall be entitled to participate in NBD's pension, benefit and similar plans on the same terms and conditions as employees and officers of NBD, giving effect to years of service with Deerbank as if such service were with NBD. The Reorganization Agreement provides that each employee who, except for those executive officers who have employment agreements, is terminated will receive salary continuation payments under the terms of the Deerfield Employee Severance Compensation Plan (the "Severance Plan"). Under the Severance Plan, in the event a change in control of Deerbank or Deerfield occurs, participants in the Severance Plan who are terminated or terminate (as determined under the Severance Plan) will be entitled to receive a severance payment. If the participant whose employment has terminated has completed at least five years of service, the participant will be entitled to a cash severance payment equal to one-twelfth of the compensation paid during the 12 months preceding the participant's termination for each year of employment. The Reorganization Agreement provides for the termination of the Deerbank ESOP whereby all accrued benefits shall be distributed to the accounts of participants. Indemnification; Insurance. The Reorganization Agreement provides that NBD will indemnify the directors and officers of Deerbank and Deerfield against certain liabilities following consummation of the Merger for a period of two (2) years after the Merger. In addition, the Reorganization Agreement requires the liability insurance maintained by NBD to be applicable to directors and officers of Deerbank and Deerfield during such period. Resales of NBD Common Stock All shares of NBD Common Stock received by Deerbank stockholders pursuant to the Merger will be freely tradeable except that such shares received by persons who are deemed to be "affiliates" of Deerbank for the purposes of Rule 145 under the Securities Act may be resold by them only in transactions permitted by such rule, or as otherwise permitted under the Securities Act. In the Reorganization Agreement, Deerbank has agreed to deliver to NBD a letter identifying all persons who it deems to be "affiliates" for this purpose, and each such person shall deliver to NBD, at least 10 days prior to the Effective Date of Merger, a written agreement that such person shall not offer to sell or otherwise dispose of any shares of NBD Common Stock issued to such person pursuant to the Merger in violation of the Securities Act or the regulations thereunder. Stock Option Agreement The following description of the Option Agreement is qualified in its entirety by reference to the Option itself. A COPY OF THE OPTION AGREEMENT WILL BE PROVIDED WITHOUT CHARGE TO ANY PERSON TO WHOM THIS PROXY STATEMENT-PROSPECTUS IS DELIVERED UPON WRITTEN REQUEST TO C. DAVID MULLINS, EXECUTIVE VICE PRESIDENT OF DEERBANK, OR DANIEL T. LIS, SENIOR VICE PRESIDENT AND SECRETARY OF NBD, AT THEIR RESPECTIVE ADDRESSES INDICATED UNDER "AVAILABLE INFORMATION". At the time of execution of the Agreements, Deerbank and NBD entered into a Stock Option Agreement dated as of January 7, 1995, pursuant to which Deerbank granted an option to NBD to purchase up to 270,000 shares of Deerbank Common Stock, or approximately 10.6% of the then outstanding shares, at a price per share of $32.75 (the "Option"), exercisable only upon the happening of certain events that in general would indicate that a third party is attempting to acquire control of Deerbank. The Option is exercisable only if NBD has fully complied with the terms of the Agreements at the time of exercise. Depending on the number of shares purchased, the exercise of the Option may be subject to the approval of requisite government regulatory authorities. 30 If the conditions to exercise of the Option have been met, the Option may be exercised by NBD in whole or in part at any time prior to December 31, 1995, provided that the Option may not be exercised at any time after termination of the Agreements. NBD has paid $1,000 as cash consideration for the Option. In the event that NBD exercises the Option, the option fee of $1,000 shall be applied against the purchase price of the shares. The Option Agreement provides that NBD may exercise the Option only if any of the following events has occurred: (i) the making, other than by NBD or any of its subsidiaries, of a tender or exchange offer for 10% or more of the shares of Deerbank Common Stock and the persons making such offer have made the required filings with the Commission and received regulatory approvals from the proper regulatory authorities; (ii) the acquisition by any person or group of persons, other than by NBD or any of its subsidiaries, of beneficial ownership, as defined by the Securities Exchange Act of 1934, as amended, of 10% or more of the outstanding shares of Deerbank Common Stock; or (iii) the acceptance by Deerbank of any firm proposal, however conditional or future, by any person, other than NBD or any of its subsidiaries, to: (a) acquire Deerbank (or any of its banking subsidiaries) by merger, consolidation, purchase of all or substantially all of Deerbank's or such subsidiary's assets or other similar transaction, or (b) make a tender or exchange offer described in (i) above. At any time the Option is exercisable upon the occurrence of one of the foregoing events, Deerbank, at NBD's request, shall repurchase the Option from NBD at a price which represents the amount by which the third-party offer exceeds the Option exercise price. The Option provides that in the event the Option is exercised by NBD and the Agreements are terminated by reason of mutual agreement of the parties or material breach by NBD, Deerbank shall have the right to purchase for cash all of the option shares, provided Deerbank gives NBD written notice of its intention to purchase such shares within seven business days after termination of the Agreements. Further, regardless of the reason for the termination of the Agreements, if the option shares have been purchased by NBD after an event set forth in (i) or (iii) of the above paragraph has occurred, and subsequently the tender or exchange offer or proposal contemplated thereby is terminated, then Deerbank shall have the right at the end of six months after such termination and within seven business days thereafter to repurchase all of the option shares from NBD. Further, regardless of the reason for the termination of the Agreements, if the option shares have been purchased by NBD after an event set forth in (ii) of the above paragraph has occurred, and subsequently a tender or exchange offer or other proposal to acquire Deerbank is not consummated by the acquiring persons within six months after such purchase, then Deerbank shall have the right at the end of six months thereafter and within seven business days thereof to repurchase all of the option shares from NBD. The purchase price for such shares shall be that paid by NBD for its purchase of such shares plus interest at the rate equal to the rate publicly announced by NBD Bank of Detroit, Michigan from time to time as the "Prime Rate" from the date of purchase to the date of repurchase. The Option further provides that at any time the Option is exercisable, at the request of NBD, Deerbank shall repurchase the Option from NBD at a price equal to (i) the amount by which the market price or offer price for Deerbank Common Stock exceeds the option price multiplied by the number of shares under the Option plus (ii) NBD's out-of-pocket expenses. Appraisal Rights Pursuant to 262(b) of the Delaware General Corporation Law, stockholders of Delaware corporations do not have the right to object and obtain payment of the fair value of their shares in business combination transactions if, on the record date fixed to determine the stockholders entitled to receive notice of and vote at the meeting at which the corporate action is to be taken, such shares are registered on a United States securities exchange registered under the Securities Exchange Act of 1934 or traded on Nasdaq National Market or a similar market. Deerbank Common Stock was traded on Nasdaq National Market on the Record Date and 31 the NBD Common Stock to be issued in the Merger will be listed on NYSE, and therefore appraisal rights will not be available with respect to the Merger. Certain Federal Income Tax Consequences of the Merger The following is a discussion of certain federal income tax consequences of the Merger and the Subsidiary Bank Merger to Deerbank, Deerfield and holders of Deerbank Common Stock. The discussion is based upon the Code, Treasury Regulations, Internal Revenue Service (the "Service") rulings, and judicial and administrative decisions in effect as of the date hereof, all of which are subject to change at any time, possibly with retroactive effect. This discussion assumes that Deerbank Common Stock is held as a "capital asset" within the meaning of Section 1221 of the Code (i.e., property generally held for investment). This discussion does not address all of the tax consequences that may be relevant to a holder of Deerbank Common Stock in light of his or her particular circumstances or to holders subject to special rules, such as foreign persons, financial institutions, tax-exempt organizations or insurance companies. The opinions of such counsel referred to in this section will be based on facts existing at the Effective Date of Merger, and in rendering such opinions, such counsel will require and rely upon representations contained in certificates of officers of Deerbank, Deerfield, as well as NBD, NBD Illinois and others. HOLDERS OF DEERBANK COMMON STOCK SHOULD CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF ANY FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS. It is a condition to the obligation of NBD to consummate the Merger that Deerbank shall have received an opinion from Muldoon, Murphy & Faucette, counsel to Deerbank, substantially to the effect that the Merger will be treated as a reorganization within the meaning of Section 368(a) of the Code and, accordingly, for federal income tax purposes, no gain or loss will be recognized by Deerbank or Deerfield as a result of the Merger except, with respect to the Subsidiary Bank Merger, to the extent Deerbank or Deerfield is required to recognize taxable income due to the recapture of Deerfield's bad debt reserves. Additionally, no gain or loss will be recognized by holders of Deerbank Common Stock except with respect to any cash received in lieu of fractional shares. More specifically, Deerbank has received an opinion of Muldoon, Murphy & Faucette with respect to the Merger that, for federal income tax purposes: (i) Assuming that the Merger transaction constitutes a merger under the applicable state or federal law, the merger of Deerbank with and into NBD Illinois will constitute a reorganization within the meaning of Section 368(a)(1)(A) and Section 368(a)(2)(D) of the Code, and Deerbank, NBD Illinois and NBD will each be a "party to a reorganization" within the meaning of Section 368(b) of the Code. (ii) The basis of the assets of Deerbank to be received by NBD Illinois will be the same as the basis of those assets in the hands of Deerbank immediately prior to the Merger. (iii) The holding period of the assets of Deerbank to be received by NBD Illinois will include the holding period of those assets in the hands of Deerbank immediately prior to the Merger. (iv) No gain or loss will be recognized by NBD Illinois and NBD upon receipt of the assets of Deerbank by NBD Illinois in exchange for the consideration provided for in the Merger Agreement and the assumption by NBD Illinois of the liabilities of Deerbank. (v) NBD Illinois will succeed to and take into account the items of Deerbank described in Section 381(c) of the Code and NBD Illinois will be the "acquiring corporation" within the meaning of Section 1.381(a)-1(b)(2) of the Treasury Regulations. These items will be 32 taken into account by NBD Illinois subject to the conditions and limitations specified in Sections 381, 382 and 383 of the Code and the Treasury Regulations thereunder. (vi) No gain or loss will be recognized by Deerbank upon the transfer of its assets to NBD Illinois in exchange for the consideration provided for in the Merger Agreement and the assumption by NBD Illinois of the liabilities of Deerbank. (vii) No gain or loss will be recognized by the stockholders of Deerbank who receive shares of NBD Common Stock in exchange for all of their shares of Deerbank Common Stock, except to the extent of any cash received in lieu of a fractional share of NBD Common Stock. (viii) The basis of NBD Common Stock to be received by stockholders of Deerbank will, in each instance, be the same as the basis of the shares of Deerbank Common Stock surrendered in exchange therefor. (ix) The holding period of the NBD Common Stock received by stockholders of Deerbank will, in each instance, include the holding period of the shares of Deerbank Common Stock surrendered in exchange therefor, provided that Deerbank Common Stock was, in each instance, held as a capital asset in the hands of the stockholder of Deerbank on the Effective Date of Merger. (x) The payments of cash in lieu of fractional share interests of NBD Common Stock will be treated as having been received as distributions in full payment in exchange for the stock redeemed as provided in Section 302(a) of the Code. Based upon the current ruling position of the Service, cash received by a holder of Deerbank Common Stock in lieu of a fractional share interest in NBD Common Stock will be treated as received in exchange for such fractional share interest, and gain or loss will be recognized for federal income tax purposes measured by the difference between the amount of cash received and the portion of the basis of the share of Deerbank Common Stock allocable to such fractional share interest. Such gain or loss should be long-term capital gain or loss if such share of Deerbank Common Stock has been held for more than one year at the Effective Date of Merger. Ordinary income, in an amount equal to the fair market value of NBD Common Stock received, will be realized by holders of options, whether incentive stock options or non-qualified stock options, who receive NBD Common Stock in exchange for their options. The basis of the NBD Common Stock received by holders of options will be equal to the amount of ordinary income recognized and the holding period will begin on the exchange date. Pursuant to the Subsidiary Bank Merger Agreement of Merger, Deerfield will be merged with and into NBD Bank and, consequently, will no longer be entitled to use the reserve method for computing and deducting its losses for bad debts. In addition, as a result of the Subsidiary Bank Merger, the entire amount of Deerfield's bad debt reserve, which is currently approximately $14.9 million, will be required to be included in income currently, or possibly spread over a period of years. Stock Exchange Listing The NBD Common Stock is listed on the NYSE. NBD has agreed to cause the shares of the NBD Common Stock to be issued in the Merger to be approved for listing on the NYSE, subject to official notice of issuance, prior to or at the Effective Date of Merger. The obligations of the parties to consummate the Merger are subject to approval for listing by the NYSE of such shares. See "PROPOSED MERGER -- Conditions to the Merger." 33 Accounting Treatment The Merger will be accounted for as a purchase and certain adjustments will have to be made with respect to the acquired assets and liabilities of Deerbank based upon estimated fair market values. The actual adjustments will be made on the basis of appraisals and evaluations as of the date of consummation of the Merger. DESCRIPTION OF NBD CAPITAL STOCK General Under the Restated Certificate of Incorporation of NBD, as amended (the "NBD Certificate"), its authorized capital stock consists of 10,000,000 shares of Preferred Stock, without par value, and 500,000,000 shares of NBD Common Stock with a par value of $1.00 per share. At _______________, 1995, ___________ shares of NBD Common Stock were outstanding. Although no shares of Preferred Stock were outstanding at such date, shares of Preferred Stock were reserved for issuance pursuant to potential NBD exercise of the purchase contracts under the Preferred Purchase Units as described below under "-- Preferred Stock." In addition, the NBD Certificate authorizes the issuance of 460,000 shares of Series A Preferred Stock, all of which were issued in 1987 and redeemed in 1988. The NBD Certificate contains specific provisions with respect to the election of directors, which include the provision that the Board of Directors is divided into three classes, each having a number of directors as nearly equal as possible, and each class being elected for a three-year term, with one class being elected each year. The NBD Certificate also includes specific provisions with respect to mergers and other business combinations. In general, these provisions require that in the case of a proposed merger or other business combination involving NBD and an interested stockholder (in general defined as one owning 10% or more of the voting power of the then outstanding NBD capital stock) the approving vote of the holders of at least a majority of the voting power of all the shares of voting stock held by persons who are not interested stockholders or persons affiliated with interested stockholders is required unless the business combination has been approved by a majority of directors not affiliated with the interested stockholder or unless certain conditions regarding minimum price and procedural protections are met with respect to each class of NBD's then outstanding voting stock. They also require that the NBD Board of Directors shall not approve a proposal for a business combination or a tender offer until the Board has evaluated the proposal in light of its effect on the stockholders and employees of NBD and the communities served by NBD. These provisions of the NBD Certificate could be used to make more difficult a change in control of NBD. Preferred Stock The NBD Board of Directors is authorized, without further action by the NBD stockholders, to issue Preferred Stock, without par value, in one or more series, from time to time, with such voting powers, full or limited but not to exceed one vote per share, or without voting powers, and with such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations and restrictions thereof, as may be provided in a resolution or resolutions adopted by the Board of Directors. The authority of the Board of Directors includes, but is not limited to, the determination or fixing of the following with respect to shares of such class or any series thereof: (i) the number of shares and designation; (ii) the dividend rate and whether dividends are to be cumulative; (iii) whether shares are to be redeemable and, if so, the terms and amount of any sinking fund providing for the purchase or redemption of such shares; (iv) whether shares shall be convertible and, if so, the terms and provisions applying; (v) what voting rights are to apply, if any, not to exceed one vote per share; and (vi) what restrictions are to apply, if any, on the issue or reissue of any additional Preferred Stock. No Preferred 34 Stock of this class has been issued. If Preferred Stock of the class were to be issued, it would be preferred to the NBD Common Stock with respect to dividends and other matters and might have the effect of making more difficult any change in control of NBD. On May 11, 1993 NBD issued 6,000,000 Units of which each 7 1/2% Preferred Purchase Unit consisted of a 30-year subordinated debenture and a purchase contract requiring the purchase on May 10, 2023 (or earlier at NBD's election) of NBD 7 1/2% Cumulative Preferred Stock (the "7 1/2% Preferred") at a purchase price of $25 per share. NBD may redeem any or all of the Units anytime after May 10, 1998, at par, and as a result some or all of the 7 1/2% Preferred may not be issued by NBD. The 7 1/2% Preferred would rank prior to the NBD Common Stock, but would have no voting rights except if the Units were in default or the NBD Certificate was proposed to be amended in a manner adverse to the 7 1/2% Preferred stockholder. The Preferred Stock which could be issued pursuant to the purchase contract has been reserved by NBD on its stock records. Common Stock Dividend Rights. Subject to any prior rights of the Preferred Stock then outstanding, holders of the NBD Common Stock are entitled to receive such dividends as are declared by the NBD Board of Directors out of funds legally available for that purpose. Voting Rights -- Non-Cumulative Voting. Subject to the voting rights, if any, of the Preferred Stock, all voting rights are vested in the holders of shares of NBD Common Stock, each share being entitled to one vote. The shares of NBD Common Stock have non-cumulative voting rights, which means that the holders of more than 50% of the shares of NBD Common Stock voting for the election of directors can elect 100% of the directors standing for election at any meeting if they choose to do so and, in such event, the holders of the remaining shares voting for the election of directors will not be able to elect any person or persons to the Board of Directors at that meeting. Liquidation Rights. Subject to the rights of the Preferred Stock, in the event of liquidation, the holders of the NBD Common Stock will be entitled to receive pro rata any assets distributable to stockholders in respect of shares held by them. Preemptive Rights. Holders of NBD Common Stock do not have any right to subscribe to any additional securities which may be issued by NBD. Accordingly, holders of NBD Common Stock have no statutory right to purchase a proportionate share of any new NBD Common Stock or other securities issued by NBD. Other Matters. The NBD Common Stock does not have any redemption provisions applicable thereto, and all outstanding shares are fully paid and non-assessable. COMPARATIVE RIGHTS OF HOLDERS OF CAPITAL STOCK OF DEERBANK AND NBD The rights of holders of shares of Deerbank Common Stock are governed by Deerbank's Restated Certificate of Incorporation, as amended (the "Deerbank Certificate"), By-laws and Delaware law, while the rights of holders of shares of NBD Common Stock are governed by the NBD Certificate, NBD's By-Laws and Delaware law. In some respects the rights of holders of Deerbank Common Stock and NBD Common Stock are similar. For example, each holder is entitled to one vote for each share held (although Deerbank has a 10% voting limitation as discussed subsequently); each is entitled to receive pro rata any assets distributed to holders of Common Stock upon liquidation; and each is subject to the rights of any preferred stock, when issued. Neither has any preemptive rights to subscribe for or purchase additional shares or cumulative voting rights in the election of directors. 35 There are, however, some differences between the rights of holders of Deerbank Common Stock and holders of NBD Common Stock. A summary of these differences is set forth subsequently. This summary, however, does not purport to be complete and is qualified in its entirety by reference to the respective Restated Certificates and By-Laws of NBD and Deerbank and the applicable provisions of Delaware law. Anti-Takeover and Supermajority Provisions Delaware law contains an anti-takeover provision that prevents buyers who acquire 15% or more of a target company's stock from completing a hostile takeover for three years. A takeover can, however, be completed if the buyer, while acquiring this 15% interest, manages to acquire at least 85% of the outstanding stock. The 85% excludes shares owned by directors who are also officers and certain shares held under certain employee stock plans. The takeover can also be completed if it is approved by the target company's board of directors prior to the date the buyer became a 15% or more stockholder or after the date the buyer became a 15% or more stockholder if it is approved by the target company's board of directors and two-thirds of the shares voting at an annual or special meeting of stockholders, excluding shares held by the buyer. The anti-takeover provision applies automatically to Delaware corporations except those corporations with less than 2,000 stockholders of record or those that do not have voting stock listed on a national securities exchange or listed for quotation with a registered national securities association. Such a corporation may, if it wishes, "opt in" by amending its certificate of incorporation to adopt the provision. Any corporation may decide to "opt out" of the statute at any time, by action of its stockholders. Under the Deerbank Certificate, an affirmative vote of 80% of the then outstanding shares of stock of Deerbank entitled to vote in the election of directors ("Deerbank Voting Stock") is required to approve certain business combination transactions with a beneficial owner of 10% or more of the Deerbank Voting Stock when the combination has not been approved by Deerbank's Board. The NBD Certificate also contains specific provisions with respect to mergers and other business combinations. See "DESCRIPTION OF NBD CAPITAL STOCK -- General." Capitalization Deerbank is authorized to issue 3,000,000 shares of Deerbank Common Stock, $.01 par value. At ______________, 1995, there were ____________ shares of Deerbank Common Stock outstanding, held of record by approximately ______ holders. Deerbank is authorized to issue 1,000,000 shares of preferred stock, $.01 par value ("Deerbank Preferred Stock"). The Deerbank Board is authorized to provide for the issuance of Deerbank Preferred Stock in series, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations, or restrictions thereof. There are currently no shares of Deerbank Preferred Stock outstanding. For a discussion of the capitalization of NBD, see "DESCRIPTION OF NBD CAPITAL STOCK" above. Board of Directors Both the Deerbank Certificate and NBD Certificate provide for a classified Board of Directors. The classification of directors could be used to make it more difficult to change the membership of the Board of Directors since at least two annual stockholder meetings would be required to effect a change in a majority of the directors. See "DESCRIPTION OF NBD CAPITAL STOCK - -- General." 36 Under the NBD Certificate, NBD's directors may only be removed for cause and only by a majority vote of stockholders. The Deerbank Certificate provides that directors may only be removed for cause and only by the affirmative vote of holders of not less than 80 percent of the Deerbank Voting Stock. Both the Deerbank By-laws and NBD Certificate contain procedures for nominations by stockholders of candidates for election as a director. Notices containing prescribed information on nominations by stockholders of candidates for election as a director of NBD must be appropriately delivered at least 60 days but not more than 90 days prior to the anniversary date of the immediately preceding NBD annual meeting of stockholders. The specified written notice for nominations by stockholders of candidates for a Deerbank director must be appropriately delivered generally not less than 30 days prior to the date of the annual meeting; provided, however, in the event that less than 40 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholders must be received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. Action by Stockholders Both the Deerbank Certificate and NBD Certificate prohibit stockholder action by written consent and require that any stockholder action be taken at a meeting of stockholders. Also, under the Deerbank Certificate and NBD Certificate, stockholders are not permitted to call a special meeting of stockholders. Voting Limitation The Deerbank Certificate contains a provision limiting the voting rights of any person who beneficially owns more than 10% of the then-outstanding shares of Deerbank Common Stock (the "Limit"). A person who beneficially owns Deerbank Common Stock in excess of the limit shall not be entitled, or permitted to any vote in respect of the shares held in excess of the Limit. The Limit will not apply to (i) any offer made with a view toward public resale made to Deerbank or any underwriter acting on behalf of Deerbank in connection with the public offering of Deerbank stock, (ii) to an acquisition of shares, or to an offer to acquire shares, of Deerbank stock that has been approved in advance by the affirmative vote of two-thirds of the Deerbank Board or (iii) to shares owned by any employee stock benefit plan of Deerbank. The provision of the Deerbank Certificate relating to the Limit is a five year provision which expires on March 31, 1997, but may be renewed by a vote of Deerbank stockholders prior to such time. There is no comparable limitation in NBD's Certificate or By-laws. Amendment or Repeal of Certain Provisions The provisions of the Deerbank Certificate described herein may be amended only by the affirmative vote of at least 80 percent of the outstanding shares entitled to vote on the proposed amendment. The Deerbank By-laws may be amended by a majority of the Deerbank Board or by the affirmative vote of at least 80 percent of the Deerbank Voting Stock. NBD's Certificate contains similar stockholder vote for the amendment of the provisions discussed under "-- Board of Directors," "Action by Stockholders" and "DESCRIPTION OF NBD CAPITAL STOCK -- General." NBD By-laws, however, may only be amended by a majority of the NBD Board. INDEPENDENT AUDITORS OF DEERBANK Ernst & Young LLP is currently serving as the independent auditors for Deerbank. It is expected that a representative of Ernst & Young LLP will be present at the Special Meeting of Stockholders to respond to appropriate 37 questions and such representative will have an opportunity to make a statement if he or she so desires. EXPERTS The consolidated financial statements of NBD incorporated in this Proxy Statement-Prospectus by reference from NBD's Annual Report on Form 10-K for the year ended December 31, 1994, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The consolidated financial statements of Deerbank incorporated by reference in Deerbank's Annual Report (Form 10-K) for the year ended September 30, 1994, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. LEGAL MATTERS Legal matters in connection with the Merger will be passed upon for NBD by Daniel T. Lis, internal legal counsel to NBD. Mr. Lis is a Senior Vice President and Secretary of NBD, and is also a stockholder of NBD and a holder of options to purchase shares of NBD. Legal matters in connection with the Merger will be passed upon for Deerbank by Muldoon, Murphy & Faucette, Washington, D.C., including an opinion concerning certain federal income tax consequences of the Merger. OTHER MATTERS The Deerbank Board of Directors, as of the date hereof, is not aware of any business to be presented at the Special Meeting, other than that referred to in the Notice of Special Meeting of Stockholders and discussed herein. IF ANY OTHER MATTERS SHOULD PROPERLY COME BEFORE THE SPECIAL MEETING, THE PERSONS NAMED AS PROXIES WILL HAVE AUTHORITY TO VOTE THE SHARES REPRESENTED BY PROXIES IN ACCORDANCE WITH THEIR DISCRETION AND JUDGMENT AS TO THE BEST INTERESTS OF DEERBANK. By Order of the Board of Directors [SIG] John A.S. Lindemann Secretary Deerfield, Illinois ______________, 1995 YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. 38 APPENDIX A AGREEMENT AND PLAN OF MERGER THIS AGREEMENT AND PLAN OF MERGER, dated as of January 7, 1995 by and between NBD Illinois, Inc., a Delaware corporation ("Bancorp Subsidiary"), and Deerbank Corporation, a Delaware corporation (the "Company"), joined in by NBD Bancorp, Inc., a Delaware corporation ("Bancorp"). Bancorp Subsidiary and the Company are hereinafter sometimes collectively referred to as the "Constituent Corporations". Bancorp is a party to this Agreement and Plan of Merger as a parent corporation and not as a constituent corporation. WITNESSETH: WHEREAS, Bancorp Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. As of the date hereof, the authorized capital stock of Bancorp Subsidiary consists of 10,000 shares of Common Stock, $1.00 par value, of which 1,000 shares are issued and outstanding and owned by Bancorp; WHEREAS, the Company is a corporation duly organized and validly existing under the laws of the State of Delaware. As of the date hereof, the authorized capital stock of the Company consists of: 3,000,000 shares of Common Stock, $.01 par value (the "Company Common Stock"), of which as of December 31, 1994, 2,557,160 shares of Company Common Stock were issued and outstanding, 155,560 shares of Company Common Stock are reserved for issuance under outstanding stock options, and 25,000 shares of Company Common Stock are held in its treasury; and 1,000,000 shares of Preferred Stock, $.01 par value, of which no shares are issued and outstanding or held in treasury; WHEREAS, Bancorp Subsidiary, the Company and Bancorp have entered into an Agreement and Plan of Reorganization dated as of the date hereof (the "Reorganization Agreement"), setting forth certain representations, warranties and agreements in connection with the transactions therein and herein contemplated and which contemplates the merger of the Company with and into Bancorp Subsidiary (the "Merger") in accordance with this Agreement and Plan of Merger (the "Merger Agreement"); WHEREAS, Bancorp has undertaken to authorize the issuance of shares of its Common Stock (the "Bancorp Common Stock") for the purposes of this Merger Agreement; WHEREAS, the respective Boards of Directors of the Company, Bancorp and Bancorp Subsidiary deem the Merger advisable and in the best interests of each such corporation and their respective shareholders. The respective Boards of Directors of Bancorp Subsidiary and the Company, by resolutions duly adopted, have adopted and approved the Reorganization Agreement and this Merger Agreement and the Boards of Directors of the Company and Bancorp Subsidiary have directed that this Merger Agreement be submitted to their respective shareholders for adoption and approval; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto hereby covenant and agree as follows: ARTICLE I 1.1 Merger of the Company into Bancorp Subsidiary. The Company shall be merged into Bancorp Subsidiary on the date specified therefor in a Certificate of Merger filed by Bancorp Subsidiary in accordance with the General Corporation Law of the State of Delaware (the close of business on the date so specified A-1 being referred to herein as the "Effective Date of Merger"). The separate corporate existence of the Company shall thereupon cease and Bancorp Subsidiary shall be the surviving corporation. Bancorp Subsidiary is herein sometimes referred to as the "Surviving Corporation". 1.2 Effect of the Merger. From and after the Effective Date of Merger: (a) The separate existence of the Constituent Corporations (except the Surviving Corporation) shall cease and be merged into one, the Surviving Corporation, which shall possess all of the rights, privileges, immunities, powers and franchises of a public as well as of a private nature, and shall be subject to all of the restrictions, disabilities and duties, of each of the Constituent Corporations so merged; and all and singular rights, privileges, immunities, powers and franchises of each of the Constituent Corporations, and all property, real, personal and mixed, and all debts due to either of the Constituent Corporations on whatever account, including subscriptions to shares, and all other things in action or belonging to each of the Constituent Corporations shall be vested in the Surviving Corporation resulting from the Merger; and all property, rights, privileges, immunities, powers and franchises, and all and every interest, shall be thereafter as effectually the property of the Surviving Corporation as they were of the Constituent Corporations and the title to any real estate, vested by deed or otherwise, in either of the Constituent Corporations, shall not revert or be in any way impaired by reason of the Merger. (b) All rights of creditors and all liens upon any property of either of the Constituent Corporations shall be preserved unimpaired and all debts, liabilities and duties of the respective Constituent Corporations shall thenceforth attach to the Surviving Corporation and may be enforced against the Surviving Corporation to the same extent as if said debts, liabilities and duties had been incurred or contracted by it. (c) Any action or proceeding, whether civil, criminal or administrative, pending by or against either Constituent Corporation shall be prosecuted as if the Merger had not taken place, or the Surviving Corporation may be substituted as a party in such action or proceeding in place of the Constituent Corporation. 1.3 Additional Actions. If, at any time after the Effective Date of Merger, the Surviving Corporation shall consider or be advised that any further assignments or assurances in law or any other acts are necessary or desirable to (a) vest, perfect or confirm, of record or otherwise, in the Surviving Corporation its rights, title or interest in, to or under any of the rights, properties or assets of the Company acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger, or (b) otherwise carry out the purposes of this Merger Agreement, the Company and its proper officers and directors shall be deemed to have granted to the Surviving Corporation an irrevocable power of attorney to execute and deliver all such proper deeds, assignments and assurances in law and to do all acts necessary or proper to vest, perfect or confirm title to and possession of such rights, properties or assets in the Surviving Corporation and otherwise to carry out the purposes of this Merger Agreement; and the proper officers and directors of the Surviving Corporation are fully authorized in the name of the Company or otherwise to take any and all such action. ARTICLE II 2.1 Name. The name of the Surviving Corporation shall be NBD Illinois, Inc. A-2 2.2 Certificate of Incorporation. From and after the Effective Date of Merger, the Certificate of Incorporation of Bancorp Subsidiary shall be the Certificate of Incorporation of the Surviving Corporation until duly amended in accordance with law. 2.3 Bylaws. The Bylaws of Bancorp Subsidiary, as in effect immediately prior to the Effective Date of Merger, shall be the Bylaws of the Surviving Corporation until duly amended in accordance with law. 2.4 Directors and Officers. The directors and officers of the Surviving Corporation shall be the directors and officers of Bancorp Subsidiary immediately prior to the Effective Date of Merger. ARTICLE III 3.1 Manner and Basis of Converting Shares. At the Effective Date of Merger: (a) Each share of Bancorp Common Stock and of Bancorp Subsidiary Common Stock which is issued and outstanding immediately prior to the Effective Date of Merger shall continue to be outstanding without any change therein. (b) All shares of Company Common Stock held in the treasury of the Company and all shares of Company Common Stock held by Bancorp or Bancorp Subsidiary immediately prior to the Effective Date of Merger shall be cancelled, and no Bancorp Common Stock, cash or other consideration shall be issuable or exchangeable with respect thereto. (c) To the extent that there may exist rights of appraisal with respect to the Merger, each outstanding share of Company Common Stock as to which appraisal is demanded in accordance with the procedures of the General Corporation Law of the State of Delaware ("Appraisal Shares") prior to the vote of the Company's shareholders on the Merger and not withdrawn shall be accorded the rights provided by such Law and shall not be converted into or represent a right to receive shares of Bancorp Common Stock hereunder unless and until the holder shall have failed to perfect or shall have effectively withdrawn or lost his or her right to appraisal of and payment for his or her shares of Company Common Stock. (d) Subject to sub-paragraphs (b) and (c) preceding, each share of Company Common Stock which is outstanding immediately prior to the Effective Date of Merger shall be converted without any action on the part of the holder thereof into and be exchangeable for the number of shares of Bancorp Common Stock (rounded to the nearest thousandth of a share) equal to a fraction, the numerator of which shall be equal to $45.00, and the denominator of which shall be equal to the average closing price per share of Bancorp Common Stock as reported on the New York Stock Exchange Composite Tape for the ten trading days ending on the fifth trading day prior to the Effective Date of Merger (such fraction being the "Exchange Ratio", which shall be rounded to the nearest thousandth of a share), subject to the payment of cash in lieu of fractional shares in accordance with Section 3.4 hereof. The shares of Bancorp Common Stock to be issued in accordance with this Merger Agreement may be authorized but unissued shares or treasury shares; provided that repurchases of Bancorp Common Stock by Bancorp shall be in accordance with the provisions of the Reorganization Agreement. 3.2 Cessation of Shareholder Status. Holders of certificates which represent shares of Company Common Stock outstanding immediately prior to the Effective Date of Merger (hereinafter called "Old Certificates" when referring to the Company) shall cease to be, and shall have no rights as, shareholders of the Company. A-3 3.3 Surrender of Old Certificates. After the Effective Date of Merger, Old Certificates shall be exchangeable, subject to Section 3.4 hereof, by the holders thereof in the manner provided in the transmittal materials described below for cash or new certificates for the number of shares of Bancorp Common Stock to which such holders shall be entitled. As promptly as practicable after the completion of all requisite actions and the receipt of the final banking authority regulatory approval required for the Merger, Bancorp shall send or cause to be sent to each former shareholder of record of Company Common Stock transmittal materials for use in exchanging his or her Old Certificates for certificates representing Bancorp Common Stock. The letter of transmittal will contain instructions with respect to the surrender of Old Certificates. Whenever a dividend is declared by Bancorp on the Bancorp Common Stock to be issued hereunder after the Effective Date of Merger, the declaration shall include dividends on all shares issuable hereunder, but no former shareholder of the Company who is entitled to receive Bancorp Common Stock will be deemed to be a record owner nor be entitled to receive his or her distribution of such dividends until physical exchange of his or her Old Certificates shall have been effected. Upon physical exchange of his or her Old Certificates, any such person shall be entitled to receive from Bancorp an amount equal to all such dividends (without interest thereon and less the amount of taxes, if any, which may have been imposed or paid thereon) declared, and for which the payment has occurred, on the shares represented thereby. On or after the Effective Date of Merger there shall be no transfers on the stock transfer books of the Company or Bancorp of the shares of Company Common Stock which were issued and outstanding immediately prior to the Effective Date of Merger. If, after the Effective Date of Merger, Old Certificates are properly presented to Bancorp, they shall be cancelled and exchanged for cash or certificates representing shares of Bancorp Common Stock as herein provided. 3.4 Cash in lieu of Fractional Shares. Each holder of Old Certificates who would otherwise have been entitled to receive a fraction of a share of Bancorp Common Stock (after taking into account all shares of the Company Common Stock represented by the Old Certificates then delivered by such holder) shall receive, in lieu thereof, an amount of cash (without interest) determined by multiplying such fraction by the average closing price per share of Bancorp Common Stock as reported on the New York Stock Exchange Composite Tape for the ten trading days ending on the fifth trading day prior to the Effective Date of Merger. 3.5 Adjustments. If, between the date of this Merger Agreement and the Effective Date of Merger, the outstanding shares of Bancorp Common Stock or Company Common Stock shall have been changed into a different number of shares or a different class by reason of any reclassification, recapitalization, reverse split, split-up, combination, exchange of shares or readjustment, or a stock dividend thereon shall be declared with a record date within said period, the number of shares of Bancorp Common Stock into which shares of Company Common Stock are to be converted shall be correspondingly adjusted. ARTICLE IV 4.1 Counterparts. This Merger Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one agreement. 4.2 Governing Law. This Merger Agreement shall be governed in all respects, including, but not limited to, validity, interpretation, effect and performance, by the laws of the State of Delaware. 4.3 Amendment. Subject to applicable law, this Merger Agreement may be amended, modified or supplemented only by written agreement of Bancorp, Bancorp Subsidiary and the Company, by their respective officers thereunto duly A-4 authorized by the Boards of Directors of the respective parties, at any time prior to the Effective Date of Merger; provided, however, that, after the adoption of this Merger Agreement by the shareholders of the Company and Bancorp Subsidiary, no such amendment, modification or supplement shall (i) alter or change the amount or kind of consideration to be received in exchange for or on conversion of all or any of the shares of any class or series thereof of the Company or (ii) alter or change any of the terms and conditions of this Merger Agreement if such alteration or change would adversely affect the holders of any class or series of capital stock of the Company. 4.4 Waiver. Subject to applicable provisions of the General Corporation Law of the State of Delaware, any of the terms or conditions of this Merger Agreement may be waived at any time by whichever of the Constituent Corporations is, or the shareholders of which are, entitled to the benefit thereof by action taken by the Board of Directors of such Constituent Corporation. 4.5 Termination. This Merger Agreement shall terminate upon the termination of the Reorganization Agreement and there shall be no liability hereunder on the part of any of the parties hereto (or any of their respective directors or officers). 4.6 Assignment. The parties hereby agree that the rights and duties of Bancorp Subsidiary hereunder may be assigned and delegated to a newly formed wholly-owned subsidiary of Bancorp or to Bancorp itself at any time if Bancorp determines in its sole discretion that such assignment and delegation is desirable to effect the transactions contemplated in this Agreement. IN WITNESS WHEREOF, each of the Constituent Corporations and Bancorp has caused this Merger Agreement to be executed on its behalf by its officers hereunto duly authorized and its corporate seal to be affixed hereto, all as of the date first above written. ATTEST: NBD BANCORP, INC. By: /s/ Joseph E. Ernsteen By: /s/ James R. Lancaster ---------------------- ---------------------- James R. Lancaster Executive Vice President ATTEST: NBD ILLINOIS, INC. By: /s/ Joseph E. Ernsteen By: /s/ James R. Lancaster ---------------------- ---------------------- James R. Lancaster President ATTEST: DEERBANK CORPORATION By: /s/ John A.S. Lindemann By: /s/ Wayne V. Ecklund ----------------------- -------------------- Wayne V. Ecklund President and Chief Executive Officer A-5 APPENDIX B THE CHICAGO CORPORATION _________________, 1995 Board of Directors Deerbank Corporation 745 Deerfield Road Deerfield, Illinois 60015 Members of the Board: You have requested our opinion as to the fairness of the merger consideration (the "Merger Consideration"), from a financial point of view, to the shareholders of Deerbank Corporation ("Deerbank") with respect to the proposed merger of Deerbank with and into NBD Bancorp, Inc. ("NBD"). Deerbank has entered into an Agreement and Plan of Reorganization and a related Agreement and Plan of Merger (collectively, the "Agreements"), both dated as of January 7, 1995, between NBD, NBD Illinois, Inc. ("NBD Illinois") and Deerbank. As is set forth in the Agreements, each outstanding share of common stock of Deerbank will be converted into and be exchangeable for the number of shares of Common Stock, $1.00 par value per share, of NBD equal to a fraction, the numerator of which shall be equal to $45.00 and the denominator of which shall be equal to the average closing price per share of NBD Common Stock as reported on the New York Stock Exchange Composite Tape for the ten trading days ending on the fifth trading day prior to the Effective Date of Merger. During the course of our engagement, we have, among other things: 1) reviewed the Agreements, the audited financial statements for Deerbank for the three fiscal years ended September 30, 1994 and for NBD for the three fiscal years ended December 31, 1993, and the unaudited financial statements for Deerbank for the quarter ended December 31, 1994 and for NBD for the year ended December 31, 1994 as provided to us, as well as other internally generated Deerbank reports relating to asset/liability management, asset quality and so forth; 2) reviewed and analyzed other material bearing upon the financial and operating condition of NBD and Deerbank and material prepared in connection with the proposed transaction; 3) reviewed the operating characteristics of certain other financial institutions deemed relevant to the contemplated transaction; 4) reviewed the nature and terms of recent sale and merger transactions involving banks, thrifts, bank and thrift holding companies and other financial institutions that we consider relevant; 5) reviewed historical and current market data for NBD and Deerbank common stock; 6) reviewed financial and other information provided to us by the managements of NBD and Deerbank; B-1 Board of Directors Deerbank Corporation ____________, 1995 Page 2 7) conducted meetings with members of the senior management of NBD and Deerbank for the purpose of reviewing the future prospects of NBD and Deerbank; 8) reviewed certain information including forecasts pertaining to prospective cost savings and revenue enhancements relative to the proposed transactions; and 9) evaluated the pro forma ownership of NBD common stock by Deerbank shareholders, relative to the pro forma contribution of Deerbank's assets, liabilities, equity and earnings to the pro forma company. The Chicago Corporation, as part of its investment banking business, is continually engaged in the valuation of banks and bank holding companies and thrifts and thrift holding companies in connection with mergers and acquisitions, initial and secondary offerings of securities as well as valuations for other purposes. The Chicago Corporation is a member of all principal U.S. Securities exchanges and in the conduct of our broker-dealer activities may from time to time purchase securities from, and sell securities to, Deerbank and NBD and as a market maker buy or sell the equity securities of Deerbank for our own account and for the accounts of customers. In rendering this fairness opinion we have acted exclusively on behalf of the Board of Directors of Deerbank and will receive a fee from Deerbank for our services. In rendering this opinion, we have relied upon, without independent verification, the accuracy and completeness of the financial and other information and representations provided to us by NBD and Deerbank. We have relied upon the management of Deerbank and NBD as to the reasonableness and achievability of the financial forecasts and projections (and the assumptions and basis therefore) provided to us, and have assumed that such forecasts and projections are the best available estimates of management. Based on the foregoing and our experience as investment bankers, we are of the opinion that, as of the date hereof, the Merger Consideration to be paid to the shareholders of Deerbank as described in the Agreements, is fair from a financial point of view. Sincerely, THE CHICAGO CORPORATION B-2 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 20. Indemnification of Directors and Officers. Article Eighth of the Registrant's Restated Certificate of Incorporation, as amended, provides for indemnification of directors and officers. The provision provides that any person shall be indemnified and reimbursed by the Registrant for expenses and liabilities imposed upon the person in connection with any action, suit or proceeding, civil or criminal, or threat thereof, in which the person may be involved by reason of the person being or having been a director, officer, employee or agent of the Registrant, or of any corporation or organization which the person served in any capacity at the request of the Registrant, if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Registrant and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. Provided, however, that no indemnification shall be made in respect of any matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of the person's duty to the Registrant unless the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that such person is fairly and reasonably entitled to indemnity. The directors and officers of the Registrant are covered by an insurance policy, indemnifying them against certain civil liabilities, including liabilities under the federal securities laws, which might be incurred by them in such capacity. Item 21. Exhibits and Financial Statement Schedules. The following exhibits are filed as part of this Registration Statement: The Exhibits marked with one asterisk below were filed as Exhibits to Registration Statement No. 33-40535 filed on June 6, 1991 and are incorporated herein by reference, the Exhibit numbers in brackets being those in such Registration Statement. (2)(a) Agreement and Plan of Reorganization among NBD Bancorp, Inc., NBD Illinois, Inc., and Deerbank Corporation, dated as of January 7, 1995. (2)(b) Merger Agreement between Deerbank Corporation and NBD Illinois, Inc., joined in by NBD Bancorp, Inc., dated as of January 7, 1995, is set forth in full in Appendix A to the Proxy Statement-Prospectus which is part of this Registration Statement. (3)(a)* Restated Certificate of Incorporation of Registrant, as amended. [(3)(a)] (3)(b)* By-Laws of Registrant. [(3)(b)] (5) Opinion of Legal Counsel of Registrant. (8) Tax Opinion of Muldoon, Murphy & Faucette. (21) Subsidiaries of Registrant. (23)(a) Consent of Deloitte & Touche LLP. (23)(b) Consent of Ernst & Young LLP. (23)(c) Consent of Legal Counsel of Registrant -- included in Exhibit 5 hereof. (23)(d) Consent of Muldoon, Murphy & Faucette -- included in Exhibit 8 hereof. (23)(e) Consent of The Chicago Corporation. (99)(a) Stock Option Agreement between NBD Bancorp, Inc. and Deerbank Corporation, dated as of January 7, 1995. (99)(b) Agreement of Merger between NBD Bank and Deerfield Federal Savings and Loan Association, dated as of January 7, 1995. (99)(c) Proxy for Deerbank Corporation. (99)(d) Opinion of The Chicago Corporation is set forth in full in Appendix B to the Proxy Statement-Prospectus which is part of this Registration Statement. II-1 Item 22. Undertakings. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. The undersigned Registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders of NBD and Deerbank, that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report of NBD and Deerbank, that is specifically incorporated by reference in the prospectus to provide such interim financial information. The undersigned Registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this Registration Statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the Registrant undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called by the other Items of the applicable form. The Registrant undertakes that every prospectus (i) that is filed pursuant to the immediately preceding paragraph, or (ii) that purports to meet the requirement of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415 will be filed as a part of an amendment to the Registration Statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under Item 20, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request. II-2 The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective. The undersigned Registrant hereby undertakes to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represents a fundamental change in the information set forth in this Registration Statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in this Registration Statement. The Registrant further undertakes: (i) that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof, and (ii) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Detroit and State of Michigan, on April 21, 1995. NBD BANCORP, INC. By: /s/ VERNE G. ISTOCK -------------------------------- Verne G. Istock, Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement or amendment thereto has been signed below by the following persons in the capacities indicated on April 21, 1995. Signature Title - -------------------------------- ----------------- /s/ VERNE G. ISTOCK Chairman, CEO and Director - -------------------------------- (Principal Executive Officer) Verne G. Istock /s/ PHILIP S. JONES Executive Vice President, Treasurer - -------------------------------- and Chief Financial Officer Philip S. Jones (Principal Financial Officer) /s/ GERALD K. HANSON Senior Vice President and Comptroller - -------------------------------- (Principal Accounting Officer) Gerald K. Hanson /s/ TERENCE E. ADDERLEY Director - -------------------------------- Terence E. Adderley /s/ JAMES K. BAKER Director - -------------------------------- James K. Baker /s/ DON H. BARDEN Director - -------------------------------- Don H. Barden /s/ SIEGFRIED BUSCHMANN Director - -------------------------------- Siegfried Buschmann /s/ BERNARD B. BUTCHER Director - -------------------------------- Bernard B. Butcher /s/ JOHN W. DAY Director - -------------------------------- John W. Day Director - -------------------------------- Maureen A. Fay, O.P. Director - -------------------------------- Charles T. Fisher III II-4 /s/ ALFRED R. GLANCY III Director - -------------------------------- Alfred R. Glancy III /s/ DENNIS J. GORMLEY Director - -------------------------------- Dennis J. Gormley Director - -------------------------------- Joseph L. Hudson, Jr. /s/ THOMAS H. JEFFS II Director - -------------------------------- Thomas H. Jeffs II /s/ JOHN E. LOBBIA Director - -------------------------------- John E. Lobbia Director - -------------------------------- Richard A. Manoogian /s/ WILLIAM T. MCCORMICK, JR. Director - -------------------------------- William T. McCormick, Jr. /s/ THOMAS E. REILLY, JR. Director - -------------------------------- Thomas E. Reilly, Jr. /s/ IRVING ROSE Director - -------------------------------- Irving Rose Director - -------------------------------- Robert C. Stempel /s/ PETER W. STROH Director - -------------------------------- Peter W. Stroh /s/ ORMAND J. WADE Director - -------------------------------- Ormand J. Wade II-5 EXHIBIT INDEX Exhibit Number Description (2)(a) Agreement and Plan of Reorganization among NBD Bancorp, Inc., NBD Illinois, Inc., and Deerbank Corporation, dated as of January 7, 1995. (2)(b) Merger Agreement between Deerbank Corporation and NBD Illinois, Inc., joined in by NBD Bancorp, Inc., dated as of January 7, 1995, is set forth in full in Appendix A to the Proxy Statement-Prospectus which is part of this Registration Statement. (3)(a)* Restated Certificate of Incorporation of Registrant, as amended. [(3)(a)] (3)(b)* By-Laws of Registrant. [(3)(b)] (5) Opinion of Legal Counsel of Registrant. (8) Tax Opinion of Muldoon, Murphy & Faucette. (21) Subsidiaries of Registrant. (23)(a) Consent of Deloitte & Touche LLP. (23)(b) Consent of Ernst & Young LLP. (23)(c) Consent of Legal Counsel of Registrant -- included in Exhibit 5 hereof. (23)(d) Consent of Muldoon, Murphy & Faucette -- included in Exhibit 8 hereof. (23)(e) Consent of The Chicago Corporation. (99)(a) Stock Option Agreement between NBD Bancorp, Inc. and Deerbank Corporation, dated as of January 7, 1995. (99)(b) Agreement of Merger between NBD Bank and Deerfield Federal Savings & Loan Association, dated as of January 7, 1995. (99)(c) Proxy for Deerbank Corporation. (99)(d) Opinion of The Chicago Corporation is set forth in full in Appendix B to the Proxy Statement-Prospectus which is part of this Registration Statement. * The Exhibits marked with one asterisk above were filed as Exhibits to Registration Statement No. 33-40535 filed on June 6, 1991 and are incorporated herein by reference, the Exhibit numbers in brackets being those in such Registration Statement. EX-2.A 2 Exhibit (2)(a) AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION, dated as of January 7, 1995, by and among NBD Bancorp, Inc., a Delaware corporation ("Bancorp"), NBD Illinois, Inc., a Delaware corporation ("Bancorp Subsidiary"), and Deerbank Corporation, a Delaware corporation (the "Company"). WITNESSETH: WHEREAS, Bancorp Subsidiary is a wholly-owned subsidiary of Bancorp, and Bancorp and the Company desire that the Company be merged into Bancorp Subsidiary in accordance with the applicable laws, rules and regulations of the State of Delaware and in accordance with an Agreement and Plan of Merger (the "Merger Agreement") substantially on the terms and in the form attached hereto as Exhibit A (the merger provided for therein being herein called the "Merger"); and WHEREAS, in consideration of the execution of this Agreement by Bancorp, Company is granting to Bancorp an option to acquire up to 270,000 shares of the authorized but unissued Company Common Stock on the terms and in the form attached hereto as Exhibit B (the "Option Agreement"). NOW, THEREFORE, in consideration of the premises and the mutual and dependent promises hereinafter contained, the parties do represent, warrant, covenant and agree as follows: ARTICLE I THE MERGER 1.1 Merger Agreement. The Boards of Directors of Bancorp Subsidiary and the Company have adopted resolutions approving and adopting the Merger Agreement, and Bancorp, Bancorp Subsidiary, and the Company shall execute and deliver the Merger Agreement. 1.2 The Closing. The Merger shall be consummated, subject to the terms and conditions of this Agreement and the Merger Agreement, as promptly as possible after a closing (the "Closing") to be held at such place and on such date and time as the parties may agree upon (the "Closing Date"), which shall be as soon as practicable after the last to occur of the following events: (i) the receipt by Bancorp and the Company of the opinions of legal counsel contemplated by Section 4.2 hereof; (ii) the receipt of the consent of all government regulatory authorities whose consent is a legally requisite condition to the consummation of the Merger and the expiration of all statutory waiting periods; and (iii) the requisite approval of the Merger Agreement by the shareholders of the Company. The parties shall cooperate in seeking and obtaining all such opinions, consents and approvals. 1.3 Effective Date of Merger. The Merger shall be consummated upon the date specified therefor in a Certificate of Merger filed by Bancorp Subsidiary as the surviving corporation in the form and manner required by the General Corporation Law of the State of Delaware (the "Delaware Act"), which shall be done as soon as practicable following the Closing. The close of business on the date specified in such Certificate of Merger is herein referred to as the "Effective Date of Merger". 1.4 Merger of Association and Bank. The Company owns all of the issued and outstanding shares of Deerfield Federal Savings and Loan Association, a federally chartered savings and loan association ("Association"). Bancorp and the Company agree and acknowledge that, contemporaneous with or as soon as practicable following the Effective Date of Merger, Association shall be merged with and into NBD Bank, an Illinois state bank and a wholly owned subsidiary of Bancorp Subsidiary ("Bank"), in a transaction that satisfies the requirements of Section 5(d)(3) of the Federal Deposit Insurance Act, pursuant to an agreement the form of which is attached hereto as Exhibit C. ARTICLE II BANCORP'S REPRESENTATIONS AND WARRANTIES Bancorp and Bancorp Subsidiary represent and warrant to the Company as follows (the word "material" meaning material to Bancorp and its subsidiaries taken as a whole): 2.1 Corporate Standing of Bancorp. Bancorp is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, is a registered bank holding company under the Bank Holding Company Act of 1956, as amended (the "BHCA"), is duly qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted or the properties or assets owned or leased by it makes such qualification necessary and has the corporate power to carry on its business as and where conducted, to own, lease and operate its properties, to execute and deliver this Agreement and the Merger Agreement and to consummate the transactions contemplated thereby, subject to having obtained all requisite shareholder and regulatory approvals contemplated by this Agreement. 2.2 Corporate Standing of Bancorp Subsidiary. Bancorp Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, is a registered bank holding company under the BHCA, is authorized to transact business as a foreign corporation under the laws of the State of Illinois and has the corporate power to carry on its business as and where conducted. 2.3 Authorization. The execution, delivery and performance of this Agreement and the Merger Agreement by Bancorp and by Bancorp Subsidiary have been duly authorized and approved by all necessary corporate action, and this Agreement is, and the Merger Agreement when adopted by Bancorp as the sole shareholder of Bancorp Subsidiary will be, legally binding on and enforceable against Bancorp and Bancorp Subsidiary in accordance with their terms. The execution and delivery of this Agreement and the Merger Agreement do not, and the consummation of the Merger will not, violate the provisions of Bancorp's or Bancorp Subsidiary's respective Certificates of Incorporation, as amended, or By-Laws, as amended. The consummation of the Merger will not result in any breach or violation of, or default under, any judgment, decree, mortgage, agreement, indenture or other instrument to which Bancorp, Bancorp Subsidiary or their assets may be bound and which would have a material adverse effect on the business, operations or prospects of Bancorp. Other than in connection or in compliance with the provisions of the Delaware Act, the Securities Act of 1933, as amended, and the rules and regulations thereunder (the "Securities Act"), the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the "Exchange Act"), the securities or blue sky laws of the various states, consents, authorizations, approvals or exemptions from the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), the Office of Thrift Supervision (the "OTS"), the Federal Deposit Insurance Corporation (the "FDIC") or the regulatory authorities of the States of Illinois and Michigan, no notice to, filing with, authorization of, exemption by, or consent or approval of, any public body or authority is necessary for the consummation by Bancorp and Bancorp Subsidiary of the transactions contemplated by this Agreement and the Merger Agreement. 2.4 Capital Stock. The authorized capital stock of Bancorp consists of 500,000,000 shares of Common Stock, $1.00 par value; 460,000 shares of Preferred Stock, $1.00 par value; and 10,000,000 shares of Preferred Stock, without par value. As of December 27, 1994, 155,908,672 shares of Bancorp Common Stock were issued and outstanding, fully paid and nonassessable; and no shares of Bancorp Preferred Stock were issued and outstanding. 2.5 Financial Statements. Bancorp has delivered or will deliver to the Company copies of the following financial statements: (i) The consolidated balance sheet of Bancorp and its subsidiaries as of December 31, 1993, and the consolidated statements of income, shareholders' equity and cash flows for the three years ended December 31, 1993, as certified by Deloitte & Touche, independent auditors; (ii) Each of its unaudited quarterly financial statements prepared from December 31, 1993, until the date of this Agreement; (iii) Promptly after the publication or submission thereof, each audited consolidated balance sheet and related consolidated statements of income, shareholders' equity and cash flows, unaudited quarterly financial statement, and financial report or statement filed with the Securities and Exchange Commission ("SEC") or filed with or submitted to any other regulatory authority after the date of this Agreement until the Effective Date of Merger. Such financial statements have been or will be prepared in accordance with U.S. generally accepted accounting principles ("GAAP") applied on a consistent basis, and present or will present fairly the consolidated financial position of Bancorp and its subsidiaries at the dates shown and the consolidated results of their operations and changes in financial position for the periods covered. 2.6 Absence of Material Adverse Change. Since December 31, 1993, there has been no material adverse change in the financial position, business or prospects of Bancorp. 2.7 Absence of Litigation. There is no action, suit, proceeding, claim or investigation of any kind or nature pending or, to the knowledge of Bancorp, threatened against Bancorp or any of its subsidiaries, or the assets or business of Bancorp or any of its subsidiaries which could reasonably be expected to have a material adverse effect on Bancorp's consolidated business, condition or prospects, or challenging or seeking to enjoin or prohibit the transactions contemplated by this Agreement. Neither the Bancorp nor any of its subsidiaries is subject to, or in default with respect to, nor are any of their assets subject to, any outstanding judgment, order, injunction or decree or any other requirement of any court or of any governmental agency which would have a material adverse effect on Bancorp's consolidated financial condition, properties, assets, liabilities, operations or business. 2.8 Conduct of Business. Bancorp and each of its subsidiaries has conducted business and used its property substantially in compliance with all federal, state, and local laws, ordinances and regulations, particularly, but not by way of limitation, applicable banking laws, federal and state securities laws, and laws and regulations concerning truth-in-lending, usury, fair credit reporting, consumer protection, occupational safety, environmental, fair employment practices and fair labor standards, violation of which would have a material adverse effect on Bancorp's consolidated business or condition. 2.9 Bancorp Common Stock. The shares of Bancorp Common Stock to be issued in accordance with the Merger Agreement have been duly authorized and, when issued as contemplated thereby, will be duly and validly issued and outstanding, fully paid and nonassessable shares of Bancorp Common Stock free and clear of all claims, liens, encumbrances and security interests and of any preemptive or other similar rights, and prior to the Closing shall have been listed on the New York Stock Exchange, subject to official notice of issuance. The shares of Bancorp Common Stock to be issued in accordance with the Merger Agreement may be authorized but unissued shares or treasury shares; provided that Bancorp may not purchase any shares of Bancorp Common Stock in the five trading day period prior to the ten trading days ending on the fifth trading day prior to the Effective Date of Merger; and provided further that repurchases of Common Stock by Bancorp shall comply with the rules and regulations of the SEC, the New York Stock Exchange and all regulatory authorities. 2.10 Absence of Undisclosed Liabilities. Except as and to the extent reflected or reserved against in the consolidated balance sheet of Bancorp as of December 31, 1993, and the notes thereto, and to be reflected or reserved against in the most recent quarterly unaudited consolidated balance sheet of Bancorp prior to the Closing, Bancorp had or will have, as of the date of such balance sheets, no material liabilities or obligations of any nature, secured or unsecured (whether accrued, absolute, contingent or otherwise), required to be reflected in its balance sheet, or the notes thereto, prepared in accordance with GAAP or which would have a materially adverse effect on the consolidated financial position of Bancorp. Bancorp further represents and warrants that it does not know or have reason to believe that there is or will be any basis for assertion against it or any of its subsidiaries of any liability or obligation of any nature or any amount not fully reflected or reserved against in the consolidated financial statements as of said dates or as of such subsequent dates and for such subsequent periods as reflected in subsequent financial statements which would have a material adverse effect on the consolidated financial position of Bancorp. 2.11 Absence of Defaults under Contracts. To the best knowledge of Bancorp, there is not, under any material contract or agreement to which Bancorp or its subsidiaries is a party, any existing default by Bancorp or its subsidiaries which could have a material adverse effect on the financial position, business or prospects of Bancorp. No default or breach of contract will occur by virtue of the Merger under any material contract or agreement to which Bancorp or its subsidiaries is a party and no material contract rights of Bancorp or its subsidiaries under any existing contracts or agreements to which Bancorp or its subsidiaries is a party will be extinguished or impaired by virtue of the Merger. 2.12 Filings. Bancorp has filed in a timely manner and will continue to file in a timely manner all required filings with the SEC, including all Form 10-K and 10-Q Reports, and with all other regulatory bodies where such filings are required; and, to the best knowledge of Bancorp, all such filings were complete and accurate in all material respects as of the dates of the filings, and there were no material misstatements or omissions therein. Except for normal examinations conducted by the Internal Revenue Service or various regulatory authorities in the regular course of the business of the Bancorp and its subsidiaries, no federal, state or local governmental agency, commission or other entity has initiated any proceedings or, to the best knowledge of Bancorp, investigation into the business or operations of the Bancorp and its subsidiaries within the past five years which would have a material adverse effect on the consolidated financial condition of Bancorp. To Bancorp's knowledge, there is no unresolved violation, criticism or exception of a material nature by the SEC or any regulatory authority or other agency, commission or entity with respect to any report or statement referred to herein. Since the date of any filings with any regulatory authority there has been no material change in Bancorp's condition, financial or otherwise, such that had such change occurred prior to any such filing, such change would have been required to be disclosed or described therein. 2.13 Registration Statement, Etc. None of the information to be supplied by Bancorp for inclusion, or incorporated by reference, in (i) the Registration Statement to be filed by Bancorp with the SEC (the "Registration Statement") to register the Bancorp Common Stock to be issued in the Merger, (ii) the Proxy Statement-Prospectus to be mailed to the shareholders of the Company in connection with the meeting (the "Shareholders' Meeting") to be called to consider the Merger (the "Proxy Statement"), or (iii) any other documents to be filed with the SEC or any regulatory agency in connection with the transactions contemplated hereby or by the Merger Agreement will, at the respective times such documents are filed, and in the case of the Registration Statement when it becomes effective, and with respect to the Proxy Statement when mailed, be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein not misleading or, in the case of the Proxy Statement or any amendment thereof or supplement thereto, at the time of the Shareholders' Meeting, be false or misleading with respect to any material fact, or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of any proxy for such Shareholders' Meeting. All documents which Bancorp is responsible for filing with the SEC and any regulatory agency in connection with the Merger will comply as to form in all material respects with the provisions of applicable law. 2.14 Employee Benefit Plans. All of the employee benefit plans of Bancorp or its subsidiaries are in substantial compliance with any and all federal and state laws and regulations in effect at the date hereof covering employee benefit plans and there are no unfunded liabilities relating to any of such plans. 2.15 Community Reinvestment Act. None of Bancorp's banking subsidiaries has received a rating from its principal banking regulator which is less than "satisfactory" in its most recent examination under the applicable provisions of the Community Reinvestment Act of 1977 and the regulations promulgated thereunder, nor does Bancorp have any reason to believe that any such banking subsidiary will receive a rating which will be less than "satisfactory" in its next regulatory examination. 2.16 Advice of Changes. Between the date hereof and the Effective Date of Merger, Bancorp shall promptly advise the Company in writing of any fact which, if existing or known at the date hereof, would have been required to be set forth or disclosed in or pursuant to this Agreement or of any fact which, if existing or known at the date hereof, would have made any of the representations contained herein materially untrue. 2.17 Approvals. Bancorp knows of no reason why all regulatory approvals necessary to permit it to consummate the transactions contemplated hereby in the manner provided herein should not be obtained or why the opinion letter referred to in Section 7.2 hereof cannot be obtained. 2.18 Tax and Regulatory Matters. Neither the Bancorp nor any of its subsidiaries has taken or agreed to take any action or has any knowledge of any fact or circumstance that would (i) prevent the transactions contemplated hereby and by the Merger Agreement from qualifying as a tax-free reorganization under the Internal Revenue Code of 1986, as amended, or (ii) materially impede or delay receipt of the approvals referred to in Section 6.3. ARTICLE III THE COMPANY'S REPRESENTATIONS AND WARRANTIES The Company represents and warrants to Bancorp and Bancorp Subsidiary as follows (the word "material" meaning material to the Company and its subsidiaries taken as a whole): 3.1 Corporate Standing. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, is a registered savings and loan holding company under the Savings and Loan Holding Company Act, is duly qualified to do business as a foreign corporation in the State of Illinois, and has the corporate power to carry on its business as and where conducted, to own, lease and operate its properties, to execute and deliver this Agreement and the Merger Agreement and to consummate the transactions contemplated thereby, subject to having obtained all requisite shareholder and regulatory approvals contemplated by this Agreement. 3.2 Capital Stock. The authorized capital stock of the Company consists of 3,000,000 shares of Common Stock, $.01 par value, of which, as of December 31, 1994, 2,557,160 shares of Common Stock were issued and outstanding, fully paid and nonassessable, 155,560 shares of Company Common Stock are reserved for issuance under outstanding stock options, and 25,000 shares of Company Common Stock are held in its treasury; and 1,000,000 shares of Preferred Stock, $.01 par value, of which no shares are issued and outstanding. Except as disclosed in Schedule 3.2 hereto, there are no other outstanding subscriptions, options, warrants, agreements, understandings or arrangements to which the Company is a party or by which it is or may become bound relating to its authorized or issued capital stock, or pursuant to which the Company may be obligated to issue additional shares of capital stock. 3.3 Subsidiaries. The Company owns free and clear of all liens, claims, charges or encumbrances of any sort whatsoever all of the issued and outstanding capital stock of Association and the Association's operating subsidiaries listed in Schedule 3.3 hereto (collectively with Association, the "Subsidiaries"), which are the only entities in which the Company has a direct or indirect ownership interest, except for the shares of stock of the Federal Home Loan Bank of Chicago which the Association is required to hold. The Subsidiaries are duly organized, validly existing and in good standing under the laws of the jurisdiction of their incorporation, and have the corporate power to carry on their business as and where conducted. The Subsidiaries are not and may not be obligated to issue any shares of their capital stock, or any option, warrant or right to purchase any such shares. The Company holds no interest in any partnership or joint venture of any kind, except as disclosed in Schedule 3.3 hereto. The deposits of Association are insured by the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation ("FDIC"). Association is a member of the Federal Home Loan Bank of Chicago, and has purchased all stock and paid all memberships and other fees required as a result thereof. Association is a "domestic building and loan association" as defined in Section 7701(a)(19) of the Internal Revenue Code of 1986, as amended. 3.4 Authorization. The execution, delivery and performance of this Agreement and the Merger Agreement by the Company have been duly authorized and approved by all necessary corporate action and each of the Agreements are legally binding on and enforceable against the Company in accordance with their terms, subject to the adoption of the Merger Agreement by the shareholders of the Company. The only shareholder vote required for the Company to carry out its obligations hereunder is the affirmative vote of the holders of a majority of the outstanding shares of the Company's Common Stock. The execution and delivery of the Agreements do not, and the consummation of the Merger will not, violate the Company's Certificate of Incorporation, as amended, or Bylaws, as amended. The consummation of the Merger will not result in any breach or violation of, or default under, any judgment, decree, mortgage, agreement, indenture or other instrument applicable to the Company or Subsidiaries or the assets thereof. Other than in connection or in compliance with the provisions of the Delaware Act, the Securities Act, the Exchange Act, the securities or blue sky laws of the various states, consents, authorizations, approvals or exemptions required by the Federal Reserve Board, the OTS, the FDIC and regulatory authorities of the States of Michigan and Illinois, no notice to, filing with, authorization of, exemption by, or consent or approval of, any public body or authority is necessary for the consummation by the Company of the transactions contemplated by this Agreement and the Merger Agreement. 3.5 Financial Statements. The Company has delivered or will deliver to Bancorp copies of the following financial statements: (i) The consolidated balance sheet of the Company and Subsidiary as at September 30, 1994, and the consolidated statements of income, changes in capital accounts and cash flows for the three years ended September 30, 1994, as certified by Ernst & Young, independent auditors; (ii) Each financial report or statement submitted to regulatory authorities since September 30, 1994, until the date of this Agreement; and (iii) Promptly after the publication or submission thereof, each audited consolidated balance sheet and related consolidated statements of income, shareholders' equity and cash flows, unaudited quarterly financial statement, and financial report or statement filed with the SEC or filed with or submitted to any regulatory authorities after the date of this Agreement until the Effective Date of Merger. Such financial statements have been or will be prepared in accordance with GAAP, and present or will present fairly the consolidated financial position of the Company and the Subsidiaries at the dates shown and the results of their operations and changes in financial position for the periods covered. Neither the Company nor the Subsidiaries have changed their independent auditing firm since September 30, 1994, or changed in any material respect the manner in which they have reported their financial condition and results of operations and changes in financial position, or revalued any of its assets, other than as required by GAAP or applicable regulatory accounting principles. 3.6 Absence of Material Adverse Change. Since September 30, 1994, there has not been any material adverse change in the financial position, business or prospects of the Company. 3.7 Absence of Litigation. There is no action, suit, proceeding, claim or investigation of any kind or nature pending or, to the knowledge of the Company, threatened against the Company or the Subsidiaries or the assets or business of any of them which could reasonably be expected to have a material adverse effect on the Company's consolidated business, condition or prospects or challenging or seeking to enjoin or prohibit the transactions contemplated by this Agreement. 3.8 Conduct of Business. The Company and the Subsidiaries have conducted their business and used their property substantially in compliance with all federal, state, and local laws, ordinances and regulations, particularly, but not by way of limitation, applicable banking laws, federal and state securities laws, and laws and regulations concerning truth-in-lending, usury, fair credit reporting, consumer protection, occupational safety, environmental, fair employment practices and fair labor standards, violation of which would have a material adverse effect on the Company's consolidated business, condition or prospects. Neither the Company nor any of the Subsidiaries has received any notification or communication from any agency or department of any federal, state or local government or regulatory authority or the staffs thereof (i) asserting that either the Company or the Subsidiaries are not in substantial compliance with any of the statutes, regulations or ordinances that such agency, department or regulatory authority enforces, or of its internal policies and procedures, except with respect to matters which (A) are set forth in any writing previously furnished to Bancorp and (B) could not reasonably be expected to have a material adverse effect on the business, condition or prospects of the Company, (ii) threatening to revoke any license, franchise, permit or governmental authorization that is material to the business, condition or prospects of the Company, including, without limitation, Association's status as an insured depository institution under the Federal Deposit Insurance Act, (iii) requiring or threatening to require either the Company or any Subsidiary or indicating that either the Company or such Subsidiary is or may be required to enter into a cease and desist order, agreement or memorandum of understanding or any other agreement restricting or limiting or purporting to direct, restrict or limit in any manner the operations of either the Company or such Subsidiary, including without limitation any restriction on the payment of dividends. No such cease and desist order, agreement or memorandum of understanding or other agreement is currently in effect. Neither the Company nor Association is required by Section 32 of the Federal Deposit Insurance Act to give prior notice to any federal banking agency of the proposed addition of an individual to its board of directors or the employment of an individual as a senior executive officer. 3.9 Tax Returns. Neither the Company nor any of the Subsidiaries is delinquent in the payment of any material tax, assessment or governmental charge, nor has it requested any extension of time within which to file any tax returns in respect of any fiscal year which have not since been filed, and no requests for waivers of the time to assess any tax are pending. The federal and state income tax returns of the Company and the Subsidiaries have been audited by the Internal Revenue Service or appropriate state tax authorities; such audits have been completed and settled for all periods ended through September 30, 1984 for federal tax returns and through September 30, 1991 for state tax returns. There is no deficiency or refund litigation or matter in controversy with respect to the tax returns of the Company or the Subsidiaries. Neither the Company nor any of the Subsidiaries has extended or waived any statute of limitations on the assessment of any tax due that is currently in effect. The provisions made for taxes, if any, on the consolidated balance sheet of the Company and the Subsidiaries as of the most recent quarterly consolidated balance sheet of the Company prior to the Closing are sufficient for the payment of all federal, state, county and local taxes of the Company and the Subsidiaries accrued but unpaid as of the date indicated, whether or not disputed, with respect to all periods through the date of such balance sheet. 3.10 Absence of Undisclosed Liabilities. Except as and to the extent reflected or reserved against in the consolidated balance sheet of the Company as of September 30, 1994, and the notes thereto, and to be reflected or reserved against in the most recent quarterly unaudited consolidated balance sheet of the Company prior to the Closing, the Company had or will have, as of the dates of such balance sheets, no material liabilities or obligations, secured or unsecured (whether accrued, absolute, contingent or otherwise), of a nature required to be reflected in its consolidated balance sheet, or the notes thereto, prepared in accordance with GAAP or which would have a materially adverse effect on the consolidated financial position of the Company. The Company further represents and warrants that it does not know or have reason to believe that there is or will be any basis for assertion against it or any of its Subsidiaries of any liability or obligation of any nature or any amount not fully reflected or reserved against in the consolidated financial statements as of said dates or as of such subsequent dates and for such subsequent periods as reflected in subsequent financial statements which would have a material adverse effect on the consolidated financial position of the Company. 3.11 Title to Properties. The Company and the Subsidiaries have good and sufficient title to all their material properties and assets, real and personal, reflected in their books and records as being owned (including those reflected in the consolidated balance sheet of the Company as of September 30, 1994, except as since sold or otherwise disposed of in the ordinary course of business), free and clear of all liens and encumbrances, except such as are reflected on the consolidated balance sheet of the Company as of September 30, 1994, and the notes thereto, except for liens for current taxes not yet due and payable, and liens or encumbrances which are normal to the business of the Company and the Subsidiaries and are not, in the aggregate, material in relation to the assets of the Company, and except also for such imperfections of title, easements and encumbrances, if any, as do not materially interfere with the present use of the properties subject thereto or affected thereby, or otherwise materially impair business operations or the marketability of the properties. Any material leases pursuant to which the Company or the Subsidiaries, as lessee, leases real or personal property are in good standing, valid and effective in accordance with their respective terms, and there is not, under any of such leases, any material existing default or any event which with notice or lapse of time or both would constitute such a default, nor does any of such leases contain a prohibition against assignment by the Company or the Subsidiaries or any other provision which would preclude Bancorp or any of its subsidiaries from occupying and using the leased premises for the same purposes and upon the same rental and other terms as are applicable to the occupation and use by the Company or the Subsidiaries. 3.12 Absence of Defaults under Contracts. To the best knowledge of the Company, there is not, under any material contract or agreement to which the Company or the Subsidiaries is a party, any existing default by the Company or the Subsidiaries which could have a material adverse effect on the financial position, business or prospects of the Company or the Subsidiaries. Except as disclosed in Schedule 3.12, no default or breach of contract will occur by virtue of the Merger under any material contract or agreement to which the Company or the Subsidiaries is a party and no material contract rights of the Company or the Subsidiaries under any existing contracts or agreements to which the Company or the Subsidiaries is a party will be extinguished or impaired by virtue of the Merger. 3.13 Licenses, Permits, Etc. The Company and the Subsidiaries hold all licenses, certificates, permits, franchises and rights from all appropriate federal, state and other public authorities necessary for the conduct of their businesses the lack of which would have a material adverse effect on such conduct; neither the Company nor any of the Subsidiaries has been charged with, or to the best of its knowledge is under governmental investigation with respect to, any actual or alleged violation of any statute, ordinance, rule or regulation which, if determined adversely, would have a material adverse effect on the Company's consolidated business, condition or prospects; and, to the best knowledge of the Company, neither the Company nor any of the Subsidiaries is the subject of any pending or threatened proceeding by any regulatory authority having jurisdiction over the business, properties or operations of either the Company or the Subsidiaries. 3.14 Certain Employment Obligations. All material obligations of the Company and the Subsidiaries, whether arising by operation of law, contract or custom, for payments to trusts or other funds or to any governmental agency or to any individual, director, officer, employee or agent (or his or her heirs, legatees or legal representatives) with respect to unemployment compensation benefits, profit sharing, pension or retirement benefits or social security benefits, or for vacation or holiday pay, bonuses and other forms of compensation which are payable to its directors, officers, employees or agents, have been paid when due. Except as disclosed in Schedule 3.14 hereto, there are no material contracts, understandings or arrangements between the Company or the Subsidiaries and any director, officer or employee of either of them. Except as disclosed in Schedule 3.14 hereto, neither the Company nor either of the Subsidiaries has any material written or oral bonus, pension, profit sharing, retirement, deferred compensation, savings, stock purchase, stock option, severance, hospitalization, insurance or other plan providing employee benefits or any employment, agency, consulting or similar contract, not in the ordinary course of business. 3.15 Employee Benefit Plans. The Company has provided to Bancorp copies of all of the Company's and the Subsidiaries' pension, profit sharing, health, accident, welfare, life insurance and other employee benefit plans within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended. All of such plans are in substantial compliance with any and all federal and state laws and regulations thereunder in effect at the date hereof covering employee benefit plans and there are no unfunded liabilities relating to any of such plans. 3.16 Filings. The Company and the Subsidiaries have filed in a timely manner and will continue to file in a timely manner all required filings with the SEC, including all Form 10-K and 10-Q Reports, and with all other regulatory bodies where such filings are required; and, to the best knowledge of the Company, all such filings were complete and accurate in all material respects as of the dates of the filings, and there were no material misstatements or omissions therein. Except for normal examinations conducted by the Internal Revenue Service or various regulatory authorities in the regular course of the business of the Company and its Subsidiaries, no federal, state or local governmental agency, commission or other entity has initiated any proceedings or, to the best knowledge of Company, investigation into the business or operations of the Company and its Subsidiaries within the past five years which would have material adverse effect on the consolidated financial condition of the Company. To the Company's knowledge, there is no unresolved violation, criticism or exception of a material nature by the SEC or any regulatory authority or other agency, commission or entity with respect to any report or statement referred to herein. Since the date of any filings with any regulatory authority there has been no material change in the Company's condition, financial or otherwise, such that had such change occurred prior to any such filing, such change would have been required to be disclosed or described therein. 3.17 Broker's and Finder's Fees. Except as disclosed in Schedule 3.17 hereto, no agent, broker, investment banker, person or firm acting on behalf of the Company or under its authority is or will be entitled to any broker's or finder's fee or any other commission or similar fee directly or indirectly in connection with any of the transactions contemplated herein. 3.18 Registration Statement, Etc. None of the information supplied or to be supplied by the Company for inclusion, or incorporated by reference, in (i) the Registration Statement, (ii) the Proxy Statement, or (iii) any other documents to be filed with the SEC or any regulatory agency in connection with the transactions contemplated hereby or by the Merger Agreement will, at the respective times such documents are filed, and in the case of the Registration Statement when it becomes effective, and with respect to the Proxy Statement when mailed, be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein not misleading or, in the case of the Proxy Statement or any amendment thereof or supplement thereto, at the time of the Shareholders' Meeting, be false or misleading with respect to any material fact, or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of any proxy for the Shareholders' Meeting. All documents which the Company is responsible for filing with the SEC and any regulatory agency in connection with the Merger will comply as to form in all material respects with the provisions of applicable law. 3.19 Tax and Regulatory Matters. Neither the Company nor any of the Subsidiaries has taken or agreed to take any action or has any knowledge of any fact or circumstance that would (i) prevent the transactions contemplated hereby and by the Merger Agreement from qualifying as a tax-free reorganization under the Internal Revenue Code of 1986, as amended, or (ii) materially impede or delay receipt of the approvals referred to in Section 6.3. 3.20 Environmental Matters. (a) For purposes of this Section 3.20 the following terms shall have the following respective meanings: (i) "Environmental Law(s)" means any law, regulation, rule, ordinance or similar requirement which governs or protects the environment enacted by the United States, any state, or any county, city or agency or subdivision of the United States or any state. (ii) "Hazardous Material(s)" means any material or substance: (1) which is a "hazardous substance," "pollutant," or "contaminant," pursuant to the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA") (42 USC 9601 et seq.) as amended and regulations promulgated thereunder; (2) containing gasoline, oil, diesel fuel or other petroleum products; (3) which is "hazardous waste" pursuant to the Federal Resource Conservation and Recovery Act ("RCRA") (42 U.S.C. Section 6901 et seq.) as amended and regulations promulgated thereunder; (4) containing polychlorinated biphenyls (PCBs); (5) containing asbestos; (6) which is radioactive; (7) the presence of which requires investigation or remediation under any Environmental Law (defined above); or (8) which is defined or identified as a "hazardous waste," "hazardous substance," "pollutant," "contaminant," or "biologically Hazardous Material" under any Environmental Law. (iii) "Properties" means (1) the real estate owned or leased by the Company and the Subsidiaries and used as a banking related facility; (2) other real estate owned ("OREO") by the Company or the Subsidiaries as defined by the Office of the Comptroller of the Currency at 12 CFR Part 34 Subpart E or as defined by any other federal or state financial institution regulatory agency with regulatory authority for the Company or the Subsidiaries; (3) real estate that is in the process of pending foreclosure or forfeiture proceedings conducted by the Company or the Subsidiaries; (4) real estate that is held in trust for others by the Subsidiaries of the Company; and (5) real estate owned or leased by a partnership or joint venture in which the Company or a Subsidiary has an ownership interest. (b) Except as disclosed in Schedule 3.20, to the best knowledge of the Company after such inquiry and investigation as the Company deems appropriate, there are no present or past conditions on the Properties, involving or resulting from a past or present storage, spill, discharge, leak, emission, injection, escape, dumping or release of any kind whatsoever of any Hazardous Materials or from any generation, transportation, treatment, storage, disposal, use or handling of any Hazardous Materials, that may reasonably be expected to result in a material adverse effect on the Company's consolidated business, financial condition or prospects. (c) The Company and the Subsidiaries are in substantial compliance with all applicable Environmental Laws. Neither the Company nor the Subsidiaries have received notice of, nor to the best of their knowledge are there outstanding or pending, any public or private claims, lawsuits, citations, penalties, unsatisfied abatement obligations or notices or orders of non-compliance relating to the environmental condition of the Properties, which have or may have a material adverse effect on the Company's consolidated business, financial condition or prospects. (d) To the best knowledge of the Company after such inquiry and investigation as the Company deems appropriate, no Properties are currently undergoing remediation or clean-up of Hazardous Materials or other environmental conditions, the actual or estimated cost of which may have a material adverse effect on the Company's consolidated business, financial condition or prospects. (e) To the best knowledge of the Company after such inquiry and investigation as the Company deems appropriate, the Company and the Subsidiaries have all governmental permits, licenses, certificates of inspection and other authorizations governing or protecting the environment necessary to conduct its present business. Further, the Company warrants and represents that these permits, licenses, certificates of inspection and other authorizations are fully transferrable, to the extent permitted by law, to Bancorp. 3.21 Community Reinvestment Act. Association has not received a rating from the OTS which is less than "satisfactory" in its most recent examination under the applicable provisions of the Community Reinvestment Act of 1977 and the regulations promulgated thereunder, nor does the Company have any reason to believe that Association will receive a rating which will be less than "satisfactory" in its next regulatory examination. 3.22 Advice of Changes. Between the date hereof and the Effective Date of Merger, the Company shall promptly advise Bancorp in writing of any fact which, if existing or known at the date hereof, would have been required to be set forth or disclosed in or pursuant to this Agreement or of any fact which, if existing or known at the date hereof, would have made any of the representations contained herein materially untrue. 3.23 Approvals. The Company knows of no reason why all regulatory approvals necessary to permit it to consummate the transactions contemplated hereby in the manner provided herein should not be obtained or why the opinion letter referred to in Section 6.2 hereof cannot be obtained. ARTICLE IV CERTAIN COVENANTS OF THE COMPANY The Company covenants with Bancorp as follows: 4.1 Conduct of Business. Until the Effective Date of Merger, the Company and each of the Subsidiaries will each conduct its affairs in the ordinary course of business consistent with past and current practice, use its best efforts to maintain and preserve its business organization, employees and advantageous business relationships and to retain the services of its key officers or employees. Neither the Company nor any of the Subsidiaries shall, without the prior written consent of Bancorp, (i) enter into any employment, severance or other personnel contract or plan with any director, officer or employee, except for approval of renewal of existing agreements and payment of bonuses in the normal course of business and consistent with past practice, (ii) except for shares issued pursuant to the options disclosed pursuant to Section 3.2, issue any capital stock or any security convertible into capital stock, or grant any option, warrant or other rights to acquire capital stock, effect any stock split, adjustment or recapitalization, or otherwise alter its capital structure, (iii) propose or adopt any amendment to its articles of incorporation, association or other charter document, (iv) purchase, redeem, retire or otherwise acquire or dispose of any shares of its capital stock, (v) take any action which would cause any significant decrease in the book value of the shares of its capital stock or which would have a material adverse affect on its financial condition, subject to the right of the Company and the Subsidiaries to value assets in accordance with applicable legal and accounting requirements, (vi) enter into any contract or arrangement other than in the ordinary course of business, (vii) make or commit to make any capital expenditure in an amount exceeding $100,000, (viii) purchase any investment securities for portfolio other than U.S. Treasury or Agency Securities (which shall not be deemed to include any mortgage derivative, mortgage pool or mortgage backed securities) with remaining maturities of two (2) years or less; (ix) record any fifteen (15) and thirty (30) year fixed rate first mortgage loans into Association's loan portfolio other than such loans which are intended and qualified for sale to investors in the secondary markets; (x) declare or pay a dividend on Company's capital stock other than regular quarterly cash dividends upon Company Common Stock at the rate of fifteen cents (15(cent)) per share; or (xi) take any action that would adversely affect or delay the ability of Bancorp or the Company to obtain the approvals referred to in Section 6.3 or to perform any of the covenants and agreements under this Agreement, or which would make any of the representations and warranties made in this Agreement untrue or incorrect in any material respect. 4.2 Tax Matters. The Company will seek to obtain an opinion of legal counsel acceptable in form and content to Bancorp and the Company, substantially to the effect that: (i) The merger of the Company with and into Bancorp Subsidiary will constitute a reorganization within the meaning of Section 368(a)(1)(A) and Section 368(a)(2)(D) of the Internal Revenue Code of 1986, as amended (the "Code"), and the Company, Bancorp Subsidiary and Bancorp will each be a "party to a reorganization" within the meaning of Section 368(b) of the Code. (ii) The basis of the assets of the Company to be received by Bancorp Subsidiary will be the same as the basis of those assets in the hands of the Company immediately prior to the Merger. (iii) The holding period of the assets of the Company to be received by Bancorp Subsidiary will include the holding period of those assets in the hands of the Company immediately prior to the Merger. (iv) No gain or loss will be recognized by Bancorp Subsidiary and Bancorp upon receipt of the assets of the Company by Bancorp Subsidiary in exchange for the consideration provided for in the Merger Agreement and the assumption by Bancorp Subsidiary of the liabilities of the Company. (v) Bancorp Subsidiary will succeed to and take into account the items of the Company described in Section 381(c) of the Code and Bancorp Subsidiary will be the "acquiring corporation" within the meaning of Section 1.381(a)-1(b)(2) of the regulations promulgated by the Department of Treasury ("Treasury Regulations"). These items will be taken into account by Bancorp Subsidiary subject to the conditions and limitations specified in Sections 381, 382(b) and 383 of the Code and the Treasury Regulations thereunder. (vi) No gain or loss will be recognized by the Company upon the transfer of its assets to Bancorp Subsidiary in exchange for the consideration provided for in the Merger Agreement and the assumption by Bancorp Subsidiary of the liabilities of the Company. (vii) No gain or loss will be recognized by the shareholders of the Company who receive shares of Bancorp Common Stock in exchange for all of their shares of Company Common Stock, except to the extent of any cash received in lieu of a fractional share of Bancorp Common Stock. (viii) The basis of Bancorp Common Stock to be received by shareholders of the Company will, in each instance, be the same as the basis of the shares of the Company Common Stock surrendered in exchange therefor. (ix) The holding period of the Bancorp Common Stock received by shareholders of the Company will, in each instance, include the holding period of the shares of the Company Common Stock surrendered in exchange therefor, provided that the Company Common Stock was, in each instance, held as a capital asset in the hands of the shareholder of the Company on the Effective Date of Merger. (x) The payments of cash in lieu of fractional share interests of Bancorp Common Stock will be treated as having been received as distributions in full payment in exchange for the stock redeemed as provided in Section 302(a) of the Code. 4.3 Agreements of Affiliates. As soon as practicable after this Agreement is submitted to a vote of the stockholders of the Company (and in any event at least 10 days prior to the Closing), the Company shall deliver to Bancorp a letter identifying all persons whom the Company believes to be, at such time, "affiliates" of the Company for purposes of Rule 145 under the Securities Act. The Company shall use its best efforts to cause each person who is so identified as an "affiliate" to deliver to Bancorp as soon as practicable thereafter (and in any event no later than 10 days prior to the Closing) a written agreement in a form set forth as Exhibit D providing that from the date of such agreement each such person will agree not to sell, pledge, transfer or otherwise dispose of any shares of stock of the Company held by such person or any shares of stock of Bancorp to be received by such person in the Merger except in compliance with the applicable provisions of the Securities Act. Prior to the Effective Date of Merger, the Company shall amend and supplement such letter and use its best efforts to cause each additional person who is identified as an "affiliate" to execute a written agreement as set forth in this Section 4.3. ARTICLE V ADDITIONAL AGREEMENTS 5.1 Bancorp's Registration Statement. Bancorp agrees to prepare and file as soon as is reasonably practicable with the SEC under the Securities Act, the Registration Statement and the related Proxy Statement included as a part thereof covering the issuance by Bancorp of the shares of its Common Stock contemplated by the Merger Agreement. The Company and Subsidiary shall promptly provide Bancorp all information as Bancorp may reasonably request in connection therewith. 5.2 Investigation. Bancorp and Company agree that each may conduct a thorough due diligence investigation of the other party within 45 business days after the date of execution of this Agreement unless such period is extended by written agreement of the parties. In the event either party learns of any information or matters during such investigation that such party believes may constitute or reveal a material breach of the other party's representations, warranties, covenants or agreements contained herein, such party shall provide the other party with a written notice within 15 business days after completion of its due diligence investigation contemplated by this Section 5.2 specifying the information or matters learned and the basis upon which they may constitute or reveal a material breach of the other party's representations, warranties, covenants or agreements. No breach of representation, warranty, covenant or agreement that is learned by a party pursuant to its investigation of the other party contemplated by this Section 5.2 shall constitute a material breach of representation, warranty, covenant or agreement by the other party under any provision of or for any purpose under this Agreement and the information or matters underlying such breach shall be deemed to have been fully disclosed in such other party's disclosure pursuant to this Agreement, unless the party learning of such breach provides the other party with a written notice relating thereto delivered within the time period provided in the immediately preceding sentence and such party exercises its right to terminate this Agreement on the basis thereof in accordance with Section 8.1(ii). Each party agrees to treat as strictly confidential during and after the investigation contemplated by this Section 5.2 and agrees not to divulge to any other person, natural or corporate (other than essential employees and agents of such party) any financial statements, schedules, contracts, agreements, instruments, papers, documents and other information relating to the other party which it may come to know or which may come into its possession during the course of such investigation and, if the transactions contemplated hereby are not consummated for any reason, each party agrees promptly to return to the other party all written material furnished in connection with such investigation. Notwithstanding the foregoing, all information of one party to this Agreement, as well as any information reasonably derived from such information, which is provided to the other party to this Agreement as of or prior to the date of this Agreement, shall modify the providing party's representations, warranties, covenants and obligations and shall not constitute a breach or default of any of the providing party's representations, warranties, covenants and obligations under this Agreement. In this regard, the parties hereby agree that the information provided pursuant to the previous sentence by Bancorp to Company consists of the financial statements described in Section 2.5 of this Agreement, and the information provided by Company to Bancorp consists of the items disclosed in the Schedules hereto, including Schedule 5.2. 5.3 Press Releases. The Company and Bancorp shall consult with each other with respect to the form and substance of any press release or other public disclosure of matters related to this Agreement or any of the transactions contemplated hereby. 5.4 Miscellaneous Agreements and Consents. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement and the Merger Agreement as soon as reasonably practicable. Bancorp and the Company will use their best efforts to obtain consents of all third parties and governmental bodies necessary or desirable for the consummation of the transactions contemplated by this Agreement and the Merger Agreement as soon as reasonably practicable. 5.5 Indemnification. Bancorp agrees that all provisions for indemnification now existing in favor of the employees, agents, directors or officers of the Company and the Subsidiaries as provided in their respective certificate or articles of incorporation or other charter document or by-laws shall survive the Merger and shall continue in full force and effect for a period of two years with respect to acts or omissions occurring prior to the Effective Date of Merger. Any liability insurance, self insurance plan or combination thereof maintained by Bancorp for the benefit of its directors, officers and employees shall be equally applicable to the directors, officers and employees and to the former directors, officers and employees of Company or Association for purposes of the indemnification provided for hereunder. In the event of any claim or litigation giving rise to such indemnification, Bancorp will provide the indemnified party with reasonable access to and the right to copy all documents and other information relating to the subject matter of the litigation and will reasonably cooperate in the defense of such litigation. An employee, agent, director or officer of the Company or Subsidiary seeking indemnification pursuant to the provisions of the Company's or Subsidiary's certificate or articles of incorporation or by-laws shall be entitled to have the resolution of any dispute regarding the right to and the extent of the indemnification, including without limitation the right to the advancement of or the reimbursement of legal fees and expenses related to such claim or litigation, resolved by an arbitrator selected by Bancorp and the indemnified party in accordance with the rules of the American Arbitration Association. 5.6 Stock Options. With respect to officers and employees holding options of the Company who shall remain in the employ of Bancorp or an affiliate subsequent to the Merger, each option to purchase Common Stock of the Company which is outstanding immediately prior to the Merger shall be converted into and represent an option to purchase shares of Bancorp Common Stock in an amount and at an exercise price determined as provided below: (1) The number of shares of Bancorp Common Stock to be subject to the new option shall be equal to the product of (i) the number of shares of Company Common Stock subject to the original option and (ii) a fraction the numerator of which shall be equal to $45.00 and the denominator of which shall be equal to the average closing price per share of Bancorp Common Stock as reported on the New York Stock Exchange Composite Tape for the ten trading days ending on the fifth trading day prior to the Effective Date of the Merger (the "Exchange Ratio", which shall be rounded to the nearest thousandth of a share); and (2) The exercise price per share of Bancorp Common Stock under the new option shall be equal to the exercise price per share of Company Common Stock under the original option divided by the Exchange Ratio. With respect to directors of the Company as well as officers and employees holding options of the Company whose service shall terminate in connection with the Merger, each option to purchase Common Stock of the Company which is outstanding immediately prior to the Merger shall be converted into a number of shares of Bancorp Common Stock equal to a fraction, the numerator of which shall be equal to $45.00 less the exercise price of the option and the denominator of which shall be equal to the average closing price per share of Bancorp Common Stock as reported on the New York Stock Exchange Composite Tape for ten trading days ending on the fifth trading day prior to the Effective Date of the Merger. 5.7 Employment Agreements, Severance and Benefit Plans. Bancorp agrees to honor existing employment and special termination agreements between the Company and Association and certain officers as described in Schedule 3.14 (collectively, the "Employment Agreements"). Each employee of the Company or Association (other than employees who are subject to the Employment Agreements) who is terminated from employment, other than for cause, following the Effective Date of Merger will be provided salary continuation payments for such period (the "Salary Continuation Period") and under the terms and conditions of Association's Employee Severance Compensation Plan as in effect on the date of this Agreement, a copy of which has been previously provided to Bancorp. For purposes of determining entitlement to benefits under such policy, each such terminated employee will be credited for periods of full-time service with the Company or Association prior to the Effective Date of Merger. During the Salary Continuation Period, such employees will continue to participate in Bancorp's employee medical coverage for a period of six months following termination. Bancorp maintains a 401(k) plan (the "NBD Savings and Investment Plan") and a flexible benefits program (the "NBD New Benefit Directions program"), collectively referred to herein as the "NBD Plans". As soon as practicable following the Effective Date of Merger, the Company and Association's 401(k) plan shall be merged with and into the NBD Savings and Investment Plan. All eligible employees of the Company or Association shall participate in the NBD New Benefit Directions program as soon as is practicable following the Effective Date of Merger. No Company or Association employee presently participating in Company or Association's medical plan will be precluded from participating in medical plans under the NBD New Benefit Directions program on account of a pre-existing medical condition. For purposes of determining eligibility to participate and vesting rights under the NBD Plans, all of an employee's service with the Company or Association shall be counted as credited service. Nothing herein shall obligate Bancorp to provide benefits which are duplicative of benefits provided under any plan of the Company or Association which is continued for any period after the Effective Date of Merger, nor to prohibit Bancorp from subsequently amending or terminating any benefit plan or program. This Agreement shall not confer upon any Company or Association employee any rights or remedies and shall not constitute an offer or contract of employment with Bancorp or any Bancorp subsidiary. Bancorp and Bancorp Subsidiary agree to assume the unfunded liabilities of the Company and Association related to their directors' deferred compensation plans and to pay out to such directors the amounts deferred under such plan in accordance with the terms of such plans; provided that no additional fees earned by such directors after the Effective Date of Merger (as advisory directors or otherwise) may be deferred under such plans. 5.8 ESOP. Notwithstanding the provisions of Section 5.7, on or as soon as practicable after the Effective Date of Merger, the Association Employee Stock Ownership Plan and Trust (the "ESOP") shall be terminated, all accrued benefits shall be fully vested and nonforfeitable (which benefits shall become fully vested and nonforfeitable as of the Effective Date of Merger), and distribution thereof shall be made to the accounts of those Association employees who are participants and beneficiaries and such other participants and beneficiaries, if any (such Association employees and participants and beneficiaries hereafter, the "ESOP Participants"), pursuant to the terms of the ESOP. From and after the date of this Agreement to the Effective Date of Merger, in anticipation of such termination and distribution, Bancorp, Company, Association, and their respective representatives shall use their best efforts, and after the Effective Date of Merger, Bancorp and its representatives shall use their best efforts, to cause Association and its subsidiary to amend the ESOP and take other necessary and appropriate action to apply the Bancorp Common Stock acquired by the ESOP with respect to any outstanding securities acquisition loan to repay the outstanding securities acquisition loan, to allocate the amount of such Bancorp Common Stock in excess of the balance of such loan to the accounts of ESOP Participants in proportion to their account balances in accordance with the terms of the ESOP, to distribute such accounts as described above, and to maintain the status of the ESOP as a plan qualified under Section 401(a) and 4975 of the Code. In the event that Bancorp, Company and/or Association reasonably determines that the ESOP cannot be so amended or the amounts held thereby so applied, allocated and distributed without causing the ESOP to lose its qualified status, Bancorp, Company and/or Association shall take such action as they may determine with respect to the liquidation of the ESOP, provided that the assets of the ESOP shall be held or paid for the benefit of the ESOP Participants, and provided, further, in no event shall Bancorp cause any portion of the amounts held in the ESOP to revert, directly or indirectly, to Bancorp or any affiliate thereof. ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF BANCORP AND BANCORP SUBSIDIARY All obligations of Bancorp and Bancorp Subsidiary under this Agreement are subject to the fulfillment (or waiver in writing by a duly authorized officer of Bancorp), prior to or at the Closing, of each of the following conditions: 6.1 Renewal of Representations and Warranties, Etc. The Company's representations and warranties contained in this Agreement shall be deemed to have been made again at and as of the time of the Closing, and shall then be true in all material respects; the Company shall have performed and complied with all agreements, conditions and covenants required by this Agreement to be performed or complied with by the Company, prior to or at the Closing; and Bancorp shall have been furnished with a certificate of the Chief Executive Officer and the Secretary of the Company, dated the Closing Date, certifying in such detail as Bancorp may reasonably request to the fulfillment, to the best of the knowledge of such officers, of the foregoing conditions. 6.2 Opinion of Legal Counsel. The Company shall have delivered to Bancorp an opinion, dated the Closing Date, satisfactory to counsel for Bancorp, of Muldoon, Murphy & Faucette, counsel for the Company, to the effect that: (i) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has corporate power to carry on its business as described in the Proxy Statement. (ii) The Association is a corporation duly organized, validly existing and in good standing under the laws of the United States and has corporate power to carry on its business as described in the Proxy Statement; and the Company directly or indirectly owns all of the outstanding capital stock of the Association. (iii) Each of the Subsidiaries is validly existing and in good standing under the laws of the jurisdiction of its incorporation and has corporate power to carry on its business as described in the Proxy Statement; and the Company directly or indirectly owns all of the outstanding capital stock of each of the Subsidiaries. (iv) The execution, delivery and performance of this Agreement and the Merger Agreement and the consummation of the Merger as provided in the Merger Agreement by the Company have been duly authorized and approved by all requisite action of the Company's Board of Directors and its shareholders; this Agreement and the Merger Agreement have been duly executed and delivered by the Company and constitute the legal, valid and binding obligations of the Company, enforceable against it in accordance with their terms, subject to the effect of applicable bankruptcy, insolvency, receivership, conservatorship or other laws affecting the enforcement of creditors' rights generally or the rights of creditors of holding companies for insured depository institutions, the accounts of which are insured by the FDIC, and to general principles of equity; and, to the best knowledge of such counsel after due inquiry, the consummation by the Company of the transactions contemplated by this Agreement and the Merger Agreement will not result in any breach or violation of, or default under, any judgment, decree, mortgage, agreement, indenture or other instrument applicable to the Company or the Subsidiaries and which would be material to the Company and the Subsidiaries taken as a whole. (v) All other actions and proceedings required by law or this Agreement and the Merger Agreement to be taken by the Company at or prior to the Closing in connection with this Agreement and the Merger Agreement and the transactions provided for thereby, have been duly and validly taken. (vi) All such approvals, consents, authorizations or modifications as may, to the best knowledge of such counsel, be required to permit the performance by the Company of its obligations under this Agreement and the Merger Agreement and consummation of the transactions herein contemplated have been obtained (whether from governmental authorities or other persons). (vii) To the best knowledge of such counsel, such counsel does not know, except as set forth in the opinion, of any litigation, proceeding or governmental investigation pending or in prospect or threatened against or relating to the Company or the Subsidiaries or its or their respective properties or businesses, or the transactions contemplated by this Agreement, which will result in any material liability to the Company and the Subsidiaries taken as a whole. Such opinion shall also cover such other matters incident to the transactions herein contemplated as Bancorp and its counsel may reasonably request. In rendering its opinion, counsel for the Company may rely on certificates of officers of the Company or the Subsidiaries, opinions of other counsel and such other evidence as such counsel for the Company may deem necessary or desirable. 6.3 Required Approvals. Bancorp shall have received (i) all such approvals, consents, authorizations and licenses of all regulatory and other governmental authorities having jurisdiction as may be required to permit the performance by the Company, Bancorp and Bancorp Subsidiary of their obligations under this Agreement and the Merger Agreement and consummation of the transactions herein contemplated, without any conditions which in the reasonable opinion of Bancorp or the Company are materially adverse, and such approvals shall not have been withdrawn or stayed, and all statutory waiting periods shall have expired; and (ii) evidence of the requisite approval of the shareholders of the Company of the Merger Agreement and the consummation of the transactions herein contemplated. 6.4 Tax Matters. The Company shall have received a favorable opinion of legal counsel acceptable in form and content to Bancorp and to the Company as to the matters described in Section 4.2. 6.5 Registration Statement. The Registration Statement shall have been declared effective by the SEC and shall not be subject to a stop order or any threatened stop order. 6.6 Order, Decree, Etc. Neither Bancorp nor Bancorp Subsidiary shall be subject to any order or decree of a court or agency of competent jurisdiction which enjoins or prohibits the consummation of the Merger. 6.7 Listing. The shares of Bancorp Common Stock to be delivered to the shareholders of the Company pursuant to the Merger Agreement shall have been listed, subject to official notice of issuance, on the New York Stock Exchange. ARTICLE VII CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS All obligations of the Company under this Agreement are subject to the fulfillment (or waiver in writing by a duly authorized officer of the Company), prior to or at the Closing, of each of the following conditions: 7.1 Renewal of Representations and Warranties, Etc. Bancorp's representations and warranties contained in this Agreement shall be deemed to have been made again at and as of the time of the Closing, and shall then be true in all material respects; Bancorp shall have performed and complied with all agreements, conditions and covenants required by this Agreement to be performed or complied with by Bancorp prior to or at the Closing; and the Company shall have been furnished with a certificate of appropriate officers of Bancorp, dated the Closing Date, certifying in such detail as the Company may reasonably request to the fulfillment, to the best of the knowledge of such officers, of the foregoing conditions. 7.2 Opinion of Legal Counsel. Bancorp shall have delivered to the Company an opinion, dated the Closing Date, satisfactory to counsel for the Company, of counsel for Bancorp (which may be its in-house counsel) to the effect that: (i) Bancorp is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has corporate power to carry on its business as and where conducted. (ii) Bancorp Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, is qualified to transact business as a foreign corporation in the State of Illinois and has corporate power to carry on its business as and where conducted. (iii) The execution, delivery and performance of this Agreement and the Merger Agreement, and the issuance of shares of Bancorp Common Stock pursuant to the Merger Agreement, have been duly authorized and approved by all requisite action of the Board of Directors of Bancorp; the execution, delivery and performance of this Agreement and the Merger Agreement, and the consummation of the Merger as provided in the Merger Agreement, by Bancorp Subsidiary have been duly authorized by all requisite action of Bancorp Subsidiary's Board of Directors and its sole shareholder; and this Agreement has been duly executed and delivered by Bancorp and Bancorp Subsidiary, and the Merger Agreement has been duly executed and delivered by Bancorp (as a parent party corporation and not as a constituent corporation) and by Bancorp Subsidiary, and both this Agreement and the Merger Agreement constitute the legal, valid, and binding obligations of Bancorp and Bancorp Subsidiary, enforceable against them in accordance with their terms, subject to the effect of applicable bankruptcy, insolvency, receivership, conservatorship or other laws affecting the enforcement of creditors' rights generally or the rights of creditors of holding companies for depository institutions, the accounts of which are insured by the FDIC, and to general principles of equity. (iv) All other actions and proceedings required by law or this Agreement to be taken by Bancorp or Bancorp Subsidiary at or prior to the Closing in connection with this Agreement and the Merger Agreement and the transactions provided for thereby have been duly and validly taken. (v) All such approvals, consents, authorizations or modifications as may, to the best knowledge of such counsel, be required to permit the performance by Bancorp and Bancorp Subsidiary of their respective obligations under this Agreement and consummation of the transactions herein contemplated have been obtained (whether from governmental authorities or other persons). (vi) To the best knowledge of such counsel, such counsel does not know, except as set forth in the opinion, of any material litigation, proceeding or governmental investigation pending or in prospect or threatened against or relating to Bancorp or any of its subsidiaries, to its or their properties or businesses or to the transactions contemplated by this Agreement, which will result in any material liability to Bancorp and its subsidiaries taken as a whole. (vii) The shares of Bancorp Common Stock issued by Bancorp as contemplated by the Merger Agreement, and to be delivered to the shareholders of the Company, are duly and validly issued, fully paid and nonassessable, and have not been issued in violation of any preemptive rights of shareholders. Such opinion shall also cover such other matters incident to the transactions herein contemplated as the Company and its counsel may reasonably request. In rendering its opinion, Bancorp Counsel may rely on certificates of officers of Bancorp and its subsidiaries, opinions of other counsel and such other evidence as such counsel for Bancorp may deem necessary or desirable. 7.3 Tax Matters. The Company shall have received a favorable opinion of legal counsel acceptable in form and content to Bancorp and to the Company as to the matters described in Section 4.2. 7.4 Required Approvals. The Company shall have received all such approvals, consents, authorizations or modifications as may be required to permit the performance by the Company of its obligations under this Agreement and the Merger Agreement and the consummation of the transactions herein contemplated, without any conditions which in the reasonable opinion of Bancorp and the Company are materially adverse, and such approval shall not have been withdrawn or stayed, and all statutory waiting periods shall have expired. 7.5 Registration Statement. The Registration Statement shall have been declared effective by the SEC and shall not be subject to a stop order or any threatened stop order. 7.6 Order, Decree, Etc. The Company shall not be subject to any order, decree or injunction of a court or agency of competent jurisdiction which enjoins or prohibits the consummation of the Merger. 7.7 Listing. The shares of Bancorp Common Stock to be delivered to the shareholders of the Company pursuant to the Merger Agreement shall have been listed, subject to official notice of issuance, on the New York Stock Exchange. 7.8 Fairness Opinion. An opinion shall have been received by the Company from The Chicago Corporation prior to distribution of the Proxy Statement to the stockholders of the Company as required by Sections 2.13 and 5.1 of this Agreement, to the effect that the consideration to be received by the Company's stockholders pursuant to this Agreement is fair to the stockholders of the Company from a financial point of view, and such opinion shall not have been withdrawn or materially modified prior to the vote of the stockholders. ARTICLE VIII TERMINATION 8.1 Termination Provisions. This Agreement may be terminated and the Merger Agreement and the Merger abandoned at any time prior to the Effective Date of Merger (notwithstanding that approval by stockholders of the Company or Bancorp Subsidiary may have been obtained pursuant to this Agreement) as follows: (i) Mutual Consent. By mutual consent of Bancorp and the Company. (ii) Material Breach. By either Bancorp or Company in the event (A) any representation or warranty of the other party contained herein is or becomes materially inaccurate or any covenant or agreement of either party is materially breached, (B) the non-breaching party provides the breaching party with a written notice relating thereto within 15 business days of its discovery of such inaccuracy or breach, (C) the breaching party fails to cure such inaccuracy or breach within 60 calendar days of its receipt of such written notice, and (D) the non-breaching party provides the breaching party with a written notice of termination within 10 calendar days after the earlier of the expiration of such 60-day period or the date it receives a written notice from the breaching party stating that it is unable or unwilling to cure such inaccuracy or breach. (iii) Expiration Date. By either Bancorp or the Company if the Merger has not been consummated on or before December 31, 1995. (iv) Court Orders. By either Bancorp or the Company if a final unappealable injunction or other judgment shall have been issued by a court of competent jurisdiction restraining or prohibiting consummation of the transactions contemplated by this Agreement. (v) Governmental Approvals. By either Bancorp or the Company if the Federal Reserve Board or its delegate, the OTS, the FDIC or the cognizant authority of the State of Illinois shall have refused to approve the Merger or shall have conditioned an approval of the Merger in a manner not reasonably satisfactory to Bancorp, provided that Bancorp shall have the right to initiate and pursue expeditiously an appeal from any such refusal or imposition of an unsatisfactory condition and, in the event of such appeal, such refusal or imposition of condition shall be deemed not to have been made until the termination by Bancorp of such appeal or the time that such refusal or imposition of a condition has become final and non-appealable. 8.2 Approval by Board of Directors. Any such termination shall be approved by the Board of Directors or its delegate of the party seeking termination. ARTICLE IX AMENDMENT AND WAIVER 9.1 Amendment. This Agreement may be amended by the parties hereto, by action taken by their respective Boards of Directors or their delegates, at any time before or after adoption of the Merger Agreement by the stockholders of the Company; provided, however, that after such adoption by the stockholders of the Company, no such amendment shall alter or change the amount or kind of consideration to be received in exchange for or on conversion of all or any of the shares of any class or series thereof of the Company or alter or change any of the terms and conditions of the Merger Agreement if such alteration or change would adversely affect the holders of any class or series of capital stock of the Company. This Agreement and the Merger Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. 9.2 Waiver. Subject to applicable provisions of the Delaware Act, any of the terms or conditions of this Agreement may be waived at any time by whichever of the parties is, or the shareholders of which are, entitled to the benefit thereof, by action taken by the Board of Directors of such party or its delegate. The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect such party's right at a later time to enforce the same. No waiver by any party of any condition, or of the breach of any agreement, covenant, representation or warranty contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of the breach of any other agreement, covenant, representation or warranty. ARTICLE X MISCELLANEOUS 10.1 Expenses. Each party hereto shall pay its own expenses incident to preparing for, entering into and carrying out this Agreement and the consummation of the Merger. In the event that this Agreement shall terminate prior to the Effective Date of Merger by virtue of the ground set forth in clause (ii) of Section 8.1, the party causing such breach agrees to reimburse the other party for all reasonable expenses incurred by such party in connection with the transactions contemplated by this Agreement. 10.2 Termination of Representations and Warranties. All representations, warranties and agreements of Bancorp and the Company, other than those set forth in Sections 2.9, 2.13 (with respect to information supplied by Bancorp for inclusion, or incorporated by reference, in the Registration Statement or the Proxy Statement), 5.2 and 5.5 shall expire with, and be terminated and extinguished by, the consummation of the transactions contemplated hereby on the Effective Date of Merger. 10.3 Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered or mailed, registered or certified mail, postage prepaid, as follows: If to Bancorp or Bancorp Subsidiary: Philip S. Jones, Executive Vice President NBD Bancorp, Inc. 611 Woodward Avenue Detroit, Michigan 48226 with a copy to: Daniel T. Lis, Senior Vice President NBD Bancorp, Inc. 611 Woodward Avenue Detroit, Michigan 48226 If to the Company: Wayne V. Ecklund, President and Chief Executive Officer Deerbank Corporation 745 Deerfield Road Deerfield, Illinois 60015 with a copy to: John Bruno, Esquire Muldoon, Murphy & Faucette 5101 Wisconsin Avenue N.W. Washington, D.C. 20016 10.4 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware. 10.5 Entire Agreement. This Agreement and the Merger Agreement and the documents, schedules and letters described herein or therein or attached or delivered pursuant hereto or thereto set forth the entire agreement and understanding of the parties in respect of the transactions contemplated hereby and supersede all prior agreements, arrangements and understandings related to the subject matter hereof. 10.6 Method of Consent or Waiver. Any consent hereunder or any waiver of conditions or covenants as may be herein provided for, subject to all of the other requirements contained in this Agreement, shall be evidenced in writing, properly executed by the Chairman, the Chief Executive Officer, the President or one of the Vice Presidents of the party so electing hereunder, and such documents shall be attested to by the Secretary or an Assistant Secretary of the party so electing hereunder. 10.7 Liability of Bancorp and the Company. In the event the Merger is not consummated because one or more of the conditions to the obligations of any party under this Agreement have not been fulfilled, despite the best efforts of the other parties, or in the event this Agreement is terminated and the Merger Agreement is abandoned pursuant to Article VIII, none of Bancorp, Bancorp Subsidiary or the Company shall incur any liability whatsoever under or pursuant to this Agreement or the Merger Agreement except pursuant to the provisions of Section 10.1 relating to expenses. 10.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 10.9 Headings, Etc. The cover page, Article headings and Section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 10.10 Assignment. The parties hereby agree that the rights and duties of Bancorp Subsidiary hereunder may be assigned and delegated to a newly formed wholly-owned subsidiary of Bancorp or to Bancorp itself at any time if Bancorp determines in its sole discretion that such assignment and delegation is desirable to effect the transactions contemplated in this Agreement. IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this Agreement as of the date first above written. ATTEST: NBD BANCORP, INC. By: /s/ Joseph E. Ernsteen By: /s/ James R. Lancaster ---------------------- ---------------------- James R. Lancaster Executive Vice President ATTEST: NBD ILLINOIS, INC. By: /s/ Joseph E. Ernsteen By: /s/ James R. Lancaster ---------------------- ---------------------- James R. Lancaster President ATTEST: DEERBANK CORPORATION By: /s/ John A.S. Lindemann By: /s/ Wayne V. Ecklund ----------------------- -------------------- Wayne V. Ecklund President and Chief Executive Officer EX-5 3 Exhibit (5) [NBD Bancorp, Inc. letterhead] April 24, 1995 Securities and Exchange Commission Judiciary Plaza, 450 Fifth Street, N.W. Washington, D.C. 20549 Ladies and Gentlemen: I am acting as counsel for NBD Bancorp, Inc., a Delaware corporation ("NBD"), in connection with the merger (the "Merger") of Deerbank Corporation, a Delaware corporation ("Deerbank"), into NBD Illinois, Inc., a Delaware corporation and a wholly-owned subsidiary of NBD. Pursuant to the terms of the Merger, each outstanding share of Deerbank Common Stock will be converted into shares of NBD Common Stock. The shares of NBD Common Stock for which shares of Deerbank Common Stock may be exchanged pursuant to the terms of the Merger are being registered on a Form S-4 Registration Statement ("Registration Statement"), which is being filed by NBD with the Securities and Exchange Commission under the Securities Act of 1933, as amended. In preparation for rendering my opinions hereafter expressed, I have examined the originals or copies, certified to my satisfaction, of such corporate records and other documents and certificates as I deemed necessary. Based upon the above, I am of the opinion that: 1. NBD is a corporation duly organized and validly existing under and pursuant to the laws of the State of Delaware. 2. The shares of NBD Common Stock which are covered by the Registration Statement and which may be issued pursuant to the terms of the Merger as described in the Registration Statement, when issued, will be legally issued, fully paid and non-assessable. I hereby consent to the use of this opinion as Exhibit 5 to the Registration Statement and to the use of my name under the caption "Legal Matters" in the Registration Statement. Very Truly Yours, /s/ Daniel T. Lis - ----------------- Daniel T. Lis Senior Vice President Secretary and Legal Counsel EX-8 4 Exhibit (8) April 21, 1995 Board of Directors Deerbank Corporation 745 Deerfield Road Deerfield, Illinois 60015 Board of Directors Deerfield Federal Savings & Loan Association 745 Deerfield Road Deerfield, Illinois 60015 Re: Federal Tax Consequences of the Merger of Deerbank Corporation with and into NBD Illinois Gentlemen: You have requested an opinion on the federal income tax consequences of the proposed merger of Deerbank Corporation ("Deerbank") with and into NBD Illinois ("NBD Illinois"), all pursuant to an Agreement and Plan of Reorganization dated January 7, 1995 (the "Plan of Reorganization"). We note at the outset that there may be other taxes which could be applicable in connection with the Merger as to which we render no opinion. The proposed transaction is described in the section of this letter entitled "STATEMENT OF FACTS," and the federal income tax consequences of the proposed transaction will be as set forth in the section of this letter entitled "OPINION." STATEMENT OF FACTS Deerbank, a Delaware corporation with its principal place of business in Deerfield, Illinois, is a registered savings and loan holding company registered under the Home Owners' Loan Act, as amended. Deerbank owns 100 percent of the shares of Deerfield Federal Savings & Loan Association, a federally-chartered stock savings and loan association ("Deerfield"). NBD Bancorp, Inc. ("NBD Bancorp"), a Delaware corporation with its principal place of business in Detroit, Michigan, is a registered bank holding company registered under the Bank Holding Company Act of 1956, as amended. NBD Bancorp owns 100 percent of NBD Illinois, Inc. ("NBD Illinois"), a Delaware chartered bank holding company. Board of Directors April 21, 1995 Page 3 NBD Illinois owns 100 percent of the stock of NBD Bank, an Illinois-chartered commercial bank. Deerbank, NBD Bancorp, and NBD Illinois have entered into the Plan of Reorganization, which provides for the merger of Deerbank into NBD Illinois (the "Merger"), with NBD Illinois surviving such Merger in accordance with the applicable laws of the State of Delaware. The Plan of Reorganization also provides that, contemporaneous with or as soon as practicable following the effective date of the Merger (the "Effective Date"), Deerfield shall be merged with and into NBD Bank in a transaction that satisfies the requirements of Section 5(d)(3) of the Federal Deposit Insurance Act (the "Bank Subsidiary Merger"). On the Effective Date of the Merger, Deerbank shall merge with and into NBD Illinois; NBD Illinois shall be the surviving corporation in the Merger; and all of the property, rights, powers and duties and obligations of Deerbank shall be taken and deemed to be transferred to and vested in NBD Illinois, as the surviving corporation in the Merger, all in accordance with the applicable laws of the State of Delaware. The obligations of NBD Bancorp, NBD Illinois and Deerbank to cause the Merger to be consummated are subject to the following conditions, among others: (i) approval of the Merger Agreement by the stockholders of Deerbank; (ii) approval of the Merger by all requisite government regulatory authorities; (iii) delivery of Officers' certificates by each party certifying as to representations and warranties made by each party; and (iv) delivery of certain legal opinions, including a favorable tax opinion. Upon consummation of the Merger, each outstanding share of Deerbank Common Stock (other than shares owned by NBD Bancorp, NBD Illinois or Deerbank, which will be cancelled) will be automatically converted, and exchanged for a number of shares of NBD Bancorp Common Stock equal to a fraction, the numerator of which shall be equal to $45.00, and the denominator of which shall be equal to the average closing price per share of NBD Bancorp Common Stock as reported on the NYSE Composite Tape for the ten trading days ending on the fifth trading day prior to the Effective Date of Merger, as defined in the Merger Agreement. Each holder of a certificate or certificates representing shares of Deerbank Common Stock who would have been entitled to receive a fraction of a share of NBD Bancorp Common Stock (after aggregating all Deerbank Common Stock represented by such certificate or certificates then delivered by such holder) shall receive, in lieu thereof, an amount of cash (without interest) determined by multiplying such fraction by the average closing price of a whole share of NBD Bancorp Common Stock on the NYSE Composite Tape during the ten trading days ending on the fifth trading day prior to the Effective Date of Merger. As promptly as practicable after the Effective Date of the Merger, NBD Bancorp will cause appropriate transmittal materials to be mailed to each Deerbank stockholder of record Board of Directors April 21, 1995 Page 4 on the Effective Date of Merger for the purpose of exchanging his or her share certificates. The letter of transmittal will contain instructions with respect to the surrender of old certificates. Whenever a dividend is declared by NBD Bancorp, the declaration shall include dividends on all shares issuable under the terms of the Merger Agreement, but no former shareholder of Deerbank who is entitled to receive NBD Bancorp Common Stock will be deemed to be a record owner nor be entitled to receive his or her distribution of such dividends until physical exchange of his or her old certificates shall have been effected. Upon physical exchange of such certificates, any such person shall be entitled to receive from NBD Bancorp an amount equal to all such dividends (without interest thereon and less the amount of taxes, if any, which may have been imposed or paid thereon) declared, and for which the payment has occurred, on the shares represented thereby. After the Effective Date of Merger, there will be no further transfer on the books of Deerbank of certificates theretofore representing Deerbank Common Stock and, if such certificates are presented for transfer, they will be cancelled against delivery of certificates for NBD Bancorp Common Stock. Deerbank maintains an incentive stock option plan, a deferred fee stock unit plan, and certain recognition and retention plans. Such plans provide for an immediate acceleration of the vesting period for benefits payable under the plans upon a change in control. The Merger will constitute a change in control under such plans. Additionally, pursuant to the terms of the Plan of Reorganization with respect to officers and employees of Deerbank or Deerfield who will remain employed by NBD Illinois or any of its subsidiaries, each option granted by Deerbank to purchase shares of Deerbank Common Stock which is outstanding and unexercised immediately prior to the Effective Date of Merger shall be converted automatically into an option to purchase shares of NBD Bancorp Common Stock in an amount and at an exercise price determined as follows: (1) The number of shares of NBD Bancorp Common Stock to be subject to the new option shall be equal to the product of (i) the number of shares of Deerbank Common Stock subject to the original option and (ii) a fraction the numerator of which shall be equal to $45.00 and the denominator of which shall be equal to the average closing price per share of NBD Bancorp Common Stock as reported on the NYSE Composite Tape for the ten trading days ending on the fifth trading day prior to the Effective Date of the Merger (the "Exchange Ratio", which shall be rounded to the nearest thousandth of a share); and (2) the exercise price per share of NBD Bancorp Common Stock under the new option shall be equal to the exercise price per share of Deerbank Common Stock under the original option divided by the Exchange Ratio. * * * Board of Directors April 21, 1995 Page 5 You have also provided some of the following representations concerning this transaction. NBD Bancorp and NBD Illinois have provided some of the following representations. For purposes of these representations only, the term "the Company" refers to Deerbank; the term "the Company Bank" refers to Deerfield; the term "the Acquiror" refers to NBD Bancorp; the term "the Acquiror Subsidiary" refers to NBD Illinois; and the term "Acquiror Bank" refers to NBD Bank: a) As of the date hereof, the facts which relate to the Merger and related transactions and described in the Form S-4 Registration Statement, insofar as such facts pertain to the Company and the Company Bank, are true, correct and complete and, insofar as such facts pertain to the Acquiror, and the Acquiror Subsidiary and the Acquiror Bank, the management of the Company has no reason to believe that such facts are untrue, incorrect or incomplete. b) The Merger will be carried out strictly in accordance with the Merger Agreement, as described in the Form S-4 Registration Statement. c) As of the Effective Date of the Merger, the former shareholders of the Company will have a continuing interest through ownership of stock of the Acquiror that was received pursuant to the Merger equal in value to at least 50 percent of the total value of all of the formerly outstanding stock of the Company as of the same date. d) The authorized capital stock of the Company consists of 3,000,000 shares of Common Stock, $0.01 par value, of which, as of March 31, 1995, 2,557,160 shares of Common Stock were issued and outstanding, fully paid and nonassessable; and 1,000,000 shares of Preferred Stock, $.01 par value, of which no shares are issued and outstanding. Except as disclosed in the Plan of Reorganization, there are no other outstanding subscriptions, options, warrants, agreements, understandings or arrangements to which the Company is a party or by which it is or may become bound relating to its authorized or issued capital stock, or pursuant to which the Company may be obligated to issue additional shares of capital stock. e) The aggregate fair market value of the consideration to be received in the Merger by each holder of the Company Common Stock will be approximately equal to the aggregate fair market value of the Company Common Stock surrendered in exchange therefor, as determined by arm's length negotiations between the managements of the Company and the Acquiror Subsidiary. No holder of Company Common Stock will receive in exchange for such stock, directly or indirectly, any consideration other than Acquiror Common Stock and cash paid in lieu of a fractional share of Acquiror Common Stock. No cash or other property will be paid to any shareholder of the Company (or the Company Bank pursuant to the Bank Subsidiary Merger), and no shares of Board of Directors April 21, 1995 Page 6 Acquiror Common Stock will be issued pursuant to the Bank Subsidiary Merger. f) To the best knowledge of the management of the Company, there is no plan or intention by any of the holders of the Company Common Stock who own five percent (5%) or more of the aggregate value of all the outstanding Company Common Stock immediately prior to the Merger and, there is no plan or intention on the part of any remaining holders of Company Common Stock to sell, exchange, transfer by gift or otherwise dispose of any shares of the Acquiror Common Stock received by them in connection with the Merger, which taken together would be equal in value to at least 50% of the Company as of the Effective Date of the Merger. g) The assumption by the Acquiror Subsidiary of the liabilities of the Company, and the acquisition by the Acquiror Subsidiary of the assets of the Company which are subject to liabilities, pursuant to the Merger, are for a bona fide business purpose, and the principal purpose of the Acquiror Subsidiary for such assumption of liabilities and acquisition of assets subject to liabilities is not the avoidance of federal income tax on the transfer of such assets. Each of the Company liabilities to be assumed by the Acquiror Subsidiary or to which the transferred assets of the Company are subject has been incurred in the ordinary course of the Company's business. h) The Company, the Acquiror, and the Acquiror Subsidiary, and the shareholders of the Company will each pay their own expenses incurred in connection with the Merger and related transactions except for liabilities of the Company which are assumed by the Acquiror Subsidiary pursuant to the Merger and which will be paid solely out of the assets of the Company as constituted immediately prior to the Merger. i) Neither the Company nor the Acquiror nor the Acquiror Subsidiary has paid or will pay (or has reimbursed or will reimburse), directly or indirectly, any expenses incurred by any holder of Company Common Stock in connection with the Merger or any related transactions. Neither the Company nor the Acquiror has agreed to assume nor will directly or indirectly assume, any expense or other liability, whether fixed or contingent, of any holder of Company Common Stock. j) Neither the Company nor the Company Bank is an "investment company" within the meaning of section 368(a)(2)(F) of the Code or a real estate investment trust within the meaning of section 856 of the Code. k) Neither the Company nor the Company Bank is under the jurisdiction of a bankruptcy court in a Title 11 or similar case within the meaning of section 368(a)(3)(A) of the Code. Board of Directors April 21, 1995 Page 7 l) Both the total adjusted basis and the total fair market value of the Company assets to be acquired by the Acquiror Subsidiary in the Merger exceed the total liabilities of the Company including the amount of liabilities, if any, to which the transferred assets are subject. m) No compensation received by any shareholder of the Company is or will be in consideration for, or allocable to, any of their shares of the Company Common Stock. Any compensation paid or to be paid to any shareholder of the Company who will be an employee of or perform advisory services for the Acquiror Subsidiary or any affiliate thereof after the Merger will be in consideration for services rendered or to be rendered, and such consideration will be commensurate with amounts paid to third parties bargaining at arm's length for similar services and has been bargained for independently of negotiations regarding consideration paid for the Company Common Stock. None of the shares of Acquiror Common Stock received by any shareholder of the Company is or will be separate consideration for, or allocable to, any employment, consulting or other arrangement which may be entered into between the Acquiror Subsidiary or any affiliate thereof and such shareholder for services rendered or to be rendered by any shareholder. n) There exists no intercorporate indebtedness between the Company or the Company Bank on the one hand and the Acquiror or the Acquiror Subsidiary on the other, that was issued, acquired, or will be settled at a discount. o) The Company has not redeemed any of the Company Common Stock, made any distribution with respect to the Company Common Stock or disposed of any of its assets in anticipation of or as part of the Merger. p) Except for the possible issuance of Company Common Stock pursuant to the Company Option Plans described in the Company Disclosure Schedule, the Company did not and will not issue any additional shares of stock between the date the Merger Agreement was executed and the Effective Date of the Merger. q) There exist no options, warrants, convertible securities or other rights to acquire capital stock of the Company except as described in the Form S-4 Registration Statement. r) No shares of the Company Common Stock are held by any affiliate of the Company except as disclosed in the Company's Form S-4 Registration Statement. s) During the five-year period ending at the Effective Date of the Merger, neither the Acquiror, the Acquiror Subsidiary nor any affiliate of the Acquiror has owned or owns, beneficially or of record, any stock or securities of the Board of Directors April 21, 1995 Page 8 Company or the Company Bank or any predecessor thereof or any instruments giving the holder the right to acquire any such stock or securities except as disclosed in the Form S-4 Registration Statement. t) The Company Bank is a domestic building and loan association as defined under section 7701(a)(19) of the Code that is entitled to take deductions for its reserve for bad debts under section 593 of the Code. u) The shareholders of Company (immediately before the proposed transaction) receiving shares of Acquiror Common Stock will not own (immediately after the proposed transaction) more than fifty percent of the fair market value of Acquiror. v) The Merger of the Company into the Acquiror Subsidiary will satisfy the applicable statutory requirements of the State of Delaware. Furthermore, the Merger will comply with the regulations and any other legal requirements imposed by the Delaware state statutes. w) No assets of the Company have been sold, transferred or otherwise disposed of which would prevent the Acquiror Subsidiary from continuing the historic business of the Company or from using a significant portion of the Company's historic business assets in a business following the Merger. Neither the Acquiror nor the Acquiror Subsidiary has any plan or intention to sell, exchange, distribute, transfer or otherwise dispose of any of the Company's assets to be acquired by the Acquiror Subsidiary in the Merger, except in the ordinary course of business and except for transfers permitted by section 368(a)(2)(C) of the Internal Revenue Code of 1986, as amended (the "Code"). It is the intention of the management of the Acquiror Subsidiary to continue the historic business of the Company and to use a significant portion of the Company's historic business assets in a business following the Merger. x) The payment in the Merger of cash in lieu of fractional shares of Acquiror Common Stock is solely for the purpose of avoiding the expense and inconvenience to the Acquiror of issuing fractional shares of Acquiror Common Stock and does not represent separately bargained for consideration. The total cash consideration that will be paid in the transaction to the Company shareholders instead of issuing fractional shares of Acquiror Common Stock will not exceed one percent of the total consideration that will be issued in the transaction to the Company shareholders in exchange for their shares of Company stock. The fractional share interests of each Company shareholder will be aggregated, and no Company shareholder will receive cash in an amount equal to or greater than the value of one full share of Acquiror Common Stock. Board of Directors April 21, 1995 Page 9 y) Neither the Acquiror, the Acquiror Subsidiary nor any affiliate of the Acquiror intends to acquire or redeem by purchase or otherwise reacquire any of the shares of the Acquiror Common Stock to be issued pursuant to the Merger, or to make any distributions with respect to such stock, except for regular, periodic dividends. z) The Acquiror has no plan or intention to liquidate, sell or dispose of the stock of the Acquiror Subsidiary into another corporation (except for the possible merger of Company Bank with and into the Acquiror Bank). LIMITATIONS ON OPINION Our opinions expressed herein are based solely upon current provisions of the Code, including applicable regulations thereunder and current judicial and administrative authority. Any future amendments to the Code or applicable regulations, or new judicial decisions or administrative interpretations, any of which could be retroactive in effect, could cause us to modify our opinion. No opinion is expressed herein with regard to the federal or state tax consequences of the Merger under any section of the Code (or under state or local tax law) except if and to the extent specifically addressed. OPINION Based solely upon the foregoing representations and information and assuming the transaction occurs in accordance with the Plan of Reorganization (and taking into consideration the limitations at the end of the opinion), it is our opinion that under current federal income tax law: (1) Provided that the Merger of Deerbank with and into NBD Illinois qualifies as a Merger under applicable state or federal law, the proposed Merger of Deerbank will be a reorganization within the meaning of section 368(a)(1)(A) of the Code. Deerbank, NBD Illinois and NBD Bancorp will each be a "party to a reorganization" within the meaning of section 368(b) of the Code. (2) The basis of the assets of Deerbank to be received by NBD Illinois will be the same as the basis of those assets in the hands of Deerbank immediately prior to the Merger. (3) The holding period of the assets of Deerbank to be received by NBD Illinois will include the holding period of those assets in the hands of Deerbank immediately prior to the Merger. (4) No gain or loss will be recognized by NBD Illinois and NBD Bancorp upon receipt of the assets of Deerbank by NBD Illinois in exchange for the consideration provided for in the Merger Agreement and the assumption by NBD Illinois of the liabilities of Deerbank. Board of Directors April 21, 1995 Page 10 (5) NBD Illinois will succeed to and take into account the items of Deerbank described in Section 381(c) of the Code and NBD Illinois will be the "acquiring corporation" within the meaning of Section 1.381(a)-1(b)(2) of the Treasury Regulations. These items will be taken into account by NBD Illinois subject to the conditions and limitations specified in Sections 381, 382 and 383 of the Code and the Treasury Regulations thereunder. (6) No gain or loss will be recognized by Deerbank upon the transfer of its assets to NBD Illinois in exchange for the consideration provided for in the Merger Agreement and the assumption by NBD Illinois of the liabilities of Deerbank. (7) No gain or loss will be recognized by the shareholders of Deerbank who receive shares of NBD Bancorp Common Stock in exchange for all of their shares of Deerbank Common Stock, except to the extent of any cash received in lieu of a fractional share of NBD Bancorp Common Stock. Gain, if any, will be recognized by holders of the shares of Deerbank Common Stock who receive both NBD Bancorp Common Stock (including a fractional share interest) and cash in exchange for their Deerbank Common Stock, but not in excess of the amount of cash received. If the exchange has the effect of the distribution of a dividend (determined with the application of section 318(a) of the Code), then the amount of the gain recognized that is not in excess of a shareholder's ratable share of undistributed earnings and profits will be treated as a dividend. The determination of whether the exchange has the effect of a dividend will be made in accordance with the principles set forth in Commissioner v. Clark, 489 U.S. 726 (1989). No loss will be recognized on the exchange of Deerbank Common Stock for NBD Bancorp Common Stock (including a fractional share interest, if any), and cash, as described above (section 354(a)(1) of the Code). (8) The basis of NBD Bancorp Common Stock to be received by shareholders of Deerbank will, in each instance, be the same as the basis of the shares of Deerbank Common Stock surrendered in exchange therefor. (9) The holding period of the NBD Bancorp Common Stock received by shareholders of Deerbank will, in each instance, include the holding period of the shares of Deerbank Common Stock surrendered in exchange therefor, provided that Deerbank Common Stock was, in each instance, held as a capital asset in the hands of the shareholder of Deerbank on the Effective Date of Merger. (10) The payments of cash in lieu of fractional share interests of NBD Bancorp Common Stock will be treated as having been received as distributions in full payment in exchange for the stock redeemed as provided in Section 302(a) of the Code. Board of Directors April 21, 1995 Page 11 * * * This opinion is based on the assumption that the transaction will be consummated in accordance with the Plan of Reorganization as well as all the information and representations referred to herein. Any change in the transaction could cause us to modify our opinion. We consent to the inclusion of this opinion as an exhibit to the Form S-4 Registration Statement of NBD Bancorp, Inc. and the references to and summary of this opinion in such Form S-4 Registration Statement. Sincerely, MULDOON, MURPHY & FAUCETTE EX-21 5 Exhibit (21) NBD BANCORP, INC. SUBSIDIARIES (Direct and Indirect) Bank Holding Company Subsidiaries Jurisdiction of Organization NBD Illinois, Inc. Delaware NBD Indiana, Inc. Delaware Bank Subsidiaries Jurisdiction of Organization NBD Bank (Detroit, MI) Michigan NBD Bank, N.A. (Indianapolis, IN) U.S.A. NBD Bank (Columbus, OH) Ohio NBD Bank (Elkhart, IN) Indiana NBD Bank (Wheaton, IL) Illinois NBD Bank, FSB (Venice, FL) U.S.A. NBD Bank, Canada Canada NBD Skokie Bank, N.A. U.S.A. National Bank of Detroit-Dearborn U.S.A. Bank-Related Subsidiaries Jurisdiction of Organization Charter Oak Insurance Agency of Michigan, Inc. Michigan International Bank of Detroit U.S.A. NBD Brokerage Services, Inc. Indiana NBD Community Development Corporation Michigan NBD Equipment Finance, Inc. Delaware NBD Insurance Agency, Inc. Michigan NBD Insurance Company Arizona NBD Mortgage Company Delaware NBD Neighborhood Revitalization Corporation Indiana NBD Real Estate Services, Inc. Indiana NBD Securities, Inc. Michigan NBD Service Corp. Delaware EX-23.A 6 Exhibit (23)(a) Independent Auditors' Consent We consent to the incorporation by reference in this Registration Statement of NBD Bancorp,Inc. on Form S-4 of our report dated January 17, 1995, appearing in and incorporated by reference in the Annual Report on Form 10-K of NBD Bancorp, Inc. for the year ended December 31, 1994 and to the reference to us under the heading "EXPERTS" in the Proxy Statement-Prospectus, which is part of this Registration Statement. /s/ Deloitte & Touche LLP Deloitte & Touche LLP Detroit, Michigan April 21, 1995 EX-23.B 7 Exhibit (23)(b) CONSENT OF ERNST & YOUNG LLP We consent to the reference to our firm under the captions "INDEPENDENT AUDITORS OF DEERBANK" and "EXPERTS" in the Registration Statement (S-4) of NBD Bancorp, Inc. for the registration of shares in connection with the acquisition of Deerbank Corporation and to the incorporation by reference therein of our report dated November 11, 1994, with respect to the consolidated financial statements of Deerbank Corporation incorporated by reference in its Annual Report (Form 10-K) for the year ended September 30, 1994, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP April 20, 1995 EX-23.E 8 Exhibit (23)(e) [The Chicago Corporation letterhead] Consent of The Chicago Corporation We hereby consent to the summarization of our fairness opinion letter and references to our firm under the captions "SUMMARY -- Opinion of Financial Advisor" and "PROPOSED MERGER" and to the inclusion of such letter as as Appendix to the Proxy Statement - Prospectus which is part of this Registration Statement on Form S-4 of NBD Bancorp, Inc. By giving such consent, we do not thereby admit that we are experts with respect to any part of such Registration Statement within the meaning of the term "expert" as used in the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission promulgated thereunder. The Chicago Corporation /s/The Chicago Corporation Chicago, Illinois April 18, 1995 EX-99.A 9 Exhibit (99)(a) STOCK OPTION AGREEMENT THIS STOCK OPTION AGREEMENT, dated as of January 7, 1995, by and between Deerbank Corporation, a Delaware corporation (the "Company"), and NBD Bancorp, Inc., a Delaware corporation ("Bancorp"). WITNESSETH: WHEREAS, the Company and Bancorp have entered into an Agreement and Plan of Reorganization and Agreement and Plan of Merger (collectively the "Agreements") of even date herewith providing for the merger of the Company with and into a subsidiary of Bancorp; and WHEREAS, Bancorp has paid the Company $1,000 as consideration for the grant of the Option (as hereinafter defined), which has further been made to induce Bancorp to enter into the Agreements; NOW, THEREFORE, in consideration of such cash payment and the mutual covenants and agreements set forth herein and in the Agreements, the parties hereto agree as follows: 1. Grant of Option. The Company hereby irrevocably grants to Bancorp an option (the "Option") to purchase up to 270,000 shares (the "Option Shares") of common stock of the Company (the "Company Common Stock") at a price per Option Share equal to $32.75 (the "Option Price"). 2. Exercise of Option. The Option may be exercised by Bancorp, in whole or in part, at any time or from time to time, on or before December 31, 1995; provided, however, the Option may not be exercised at any time that Bancorp is in material breach of the Agreements. In the event Bancorp wishes to exercise the Option, Bancorp shall send a written notice to the Company specifying the total number of Option Shares it will purchase and a place and date not later than 60 business days from the date such notice is mailed for the closing of such purchase (the "Closing"), provided that if the approval of any governmental authority requisite to such purchase shall not have been obtained prior to such Closing the date therefor shall be postponed to a date 10 business days following receipt of all such required approvals and provided further that Bancorp, at any time prior to such Closing, may rescind any notice delivered by it pursuant to this Section 2. The option fee of $1,000 shall be applied against the aggregate Option Price. 3. Pre-Conditions to Exercise of Option. Bancorp may exercise the Option only if any of the following events has occurred: (a) The making, other than by Bancorp (or any of its subsidiaries), of a tender or exchange offer for 10% or more of the shares of the Company Common Stock and the person making such tender or exchange offer has filed documents with the Securities and Exchange Commission (SEC) in connection therewith and has received all requisite regulatory approvals to own or control 10% or more of the Company Common Stock; (b) The acquisition hereafter, by any person or group of persons (other than Bancorp or any of its subsidiaries or a person or group which would be eligible to file an SEC Schedule 13G) of beneficial ownership of 10% or more of the outstanding shares of the Company Common Stock (the terms "group" and "beneficial ownership" having the meanings assigned thereto in Section 13(d) of the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder); (c) The acceptance by the Company of any firm proposal, however conditional or future, by any person other than Bancorp (or any of its subsidiaries), to: (i) acquire the Company (or any of its banking subsidiaries) by merger, consolidation, purchase of all or substantially all of the Company's or such subsidiary's assets or other similar transaction, or (ii) make a tender or exchange offer described in (a) above. 4. Payment and Delivery of Certificate(s). Subject to any necessary regulatory approval, at any Closing hereunder: (a) Bancorp will make payment to the Company of the aggregate price for the Option Shares so purchased by delivery of immediately available funds, and (b) the Company will deliver to Bancorp a certificate or certificates representing the Option Shares so purchased. 5. Representations and Warranties of the Company. The Company hereby represents and warrants to Bancorp as follows: (a) Due Authorization. This Stock Option Agreement has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed by a duly authorized officer of the Company and constitutes a valid and binding obligation of the Company. (b) Option Shares. Except for any filings required to be made with any governmental authorities, which filings shall be made as promptly as possible after the date hereof, the Company has taken all necessary corporate and other action to authorize and reserve and to permit it to issue, and at all times from the date hereof to such time as the obligation to deliver shares of the Company Common Stock hereunder terminates will have reserved for issuance upon exercise of the Option, 270,000 shares of the Company Common Stock, all of which, upon issuance pursuant hereto, shall be duly and validly issued, fully paid and nonassessable, shall be free and clear of all claims, liens, encumbrances, and security interests and will not have been issued in violation of any preemptive right of any of the shareholders of the Company. (c) Conflicting Instruments. Neither the execution and delivery of this Stock Option Agreement nor the consummation of the transactions contemplated hereby will violate or result in any violation of or be in conflict with or constitute a default under any term of the certificate of incorporation or by-laws of the Company or of any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to the Company. 6. Representations and Warranties of Bancorp. Bancorp hereby represents and warrants to the Company as follows: (a) Due Authorization. This Stock Option Agreement has been duly authorized by all necessary corporate action on the part of Bancorp and has been duly executed by a duly authorized officer of Bancorp and constitutes a valid and binding obligation of Bancorp. (b) Purchase for Own Account. Bancorp hereby represents and warrants to the Company that the Option is, and any shares of the Company Common Stock issued upon its exercise will be, purchased by Bancorp for its own account and not with a view to the public distribution thereof and will not be transferred except in a transaction registered or exempt from registration under the Securities Act of 1933, as amended (the "1933 Act"), and a legend to such effect shall be noted on such shares of Common Stock. 7. Adjustment Upon Changes in Capitalization. In the event of any change in the Company Common Stock by reason of stock dividends, split-ups, mergers, recapitalizations, combinations, exchanges of shares or the like, the number and kind of shares subject to the Option and the purchase price per share of the Company Common Stock shall be appropriately adjusted. 8. Right of Repurchase. In the event that (a) Option Shares have been purchased by Bancorp pursuant to the terms of this Stock Option Agreement and (b) the Agreements are terminated by reason of: (i) mutual agreement of the parties, or (ii) material breach thereof by Bancorp or any of its subsidiaries, the Company shall have the right to purchase for cash all but not less than all of the Option Shares theretofore purchased by Bancorp. This right of purchase shall be exercised by the Company by giving notice to Bancorp, within seven (7) business days after any such termination, of the Company's intention to purchase all of the Option Shares theretofore purchased by Bancorp. Further, if the Option Shares have been purchased by Bancorp after an event set forth in Paragraph 3(a) or (c) has occurred, and subsequently the tender or exchange offer or proposal contemplated thereby is terminated, then the Company shall have the right at the end of six (6) months after such termination and within seven (7) business days thereafter to repurchase all of the Option Shares from Bancorp by giving written notice of its intention to repurchase within such seven (7) business day period. Further, if the Option Shares have been purchased by Bancorp after an event set forth in Paragraph 3(b) has occurred, and subsequently a tender or exchange offer or other proposal to acquire the Company is not consummated by the acquiring persons within six (6) months after such purchase, then the Company shall have the right at the end of six (6) months thereafter and within seven (7) business days thereof to repurchase all of the Option Shares from Bancorp by giving written notice of its intention to repurchase within such seven (7) business day period. The purchase price per share of the Company Common Stock shall be equal to that paid by Bancorp in its purchase of such Option Shares plus interest payable at a rate equal to the rate publicly announced by NBD Bank (Michigan) from time to time as its Prime Rate from the date of the purchase referred to in Paragraph 4 hereof to the date of repurchase. The closing of any such repurchase by the Company shall take place on such date as shall be agreed upon by the parties as soon as practicable but in no event later than ten (10) business days after receipt of any necessary regulatory clearance and the Company shall promptly file any notice or application for such clearance. 9. Cash Put. At any time the Option is exercisable in accordance with Section 3, at the request of Bancorp, the Company shall repurchase the Option from Bancorp at a price (the "Option Repurchase Price") equal to (x) the amount by which (A) the market/offer price (as defined below) exceeds (B) the Option Price, multiplied by the number of shares for which the Option may be exercised plus (y) Bancorp's out-of-pocket expenses (as defined below), to the extent not previously reimbursed. The term "market/offer price" shall mean the highest of (i) the price per share of Company Common Stock at which a tender offer or exchange offer has been made, (ii) the price per share of Company Common Stock to be paid by any third party pursuant to an agreement with the Company, (iii) the highest closing price for a share of Company Common Stock within the six-month period immediately preceding the date Bancorp gives the notice of the required repurchase pursuant to this section and (iv) in the event of an agreement by the Company to sell all or substantially all of its assets, the sum of the price to be paid in such sale for such assets and the current market value of the remaining assets of the Company as determined by a nationally recognized independent investment banking firm selected by Bancorp, as the case may be, divided by the number of shares of Company Common Stock outstanding at the time of such sale. In determining the "market/offer price," the value of consideration other than cash shall be determined by such an investment banking firm. "Out-of-pocket expenses" shall mean Bancorp's reasonable out-of-pocket expenses incurred in connection with the transactions contemplated by the Agreements and this Agreement, including without limitation legal, accounting and investment banking fees. 10. Miscellaneous. (a) Assignment. This Stock Option Agreement shall not be sold, transferred, assigned, pledged or hypothecated by Bancorp, except to a wholly-owned subsidiary of Bancorp, without the prior written consent of the Company. (b) Amendments. This Stock Option Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto. (c) Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly received if so given) by delivery, by cable, telegram or telex, or by mail (registered or certified mail, postage prepaid, return receipt requested) to the respective parties as follows: If to Bancorp: Philip S. Jones, Executive Vice President NBD Bancorp, Inc. 611 Woodward Avenue Detroit, Michigan 48226 with a copy to: Daniel T. Lis, Senior Vice President NBD Bancorp, Inc. 611 Woodward Avenue Detroit, Michigan 48226 If to the Company: Wayne V. Ecklund, President and Chief Executive Officer Deerbank Corporation 745 Deerfield Road Deerfield, Illinois 60015 with a copy to: John Bruno, Esquire Muldoon, Murphy & Faucette 5101 Wisconsin Avenue N.W. Washington, D.C. 20016 or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall only be effective upon receipt. (d) Governing Law. This Stock Option Agreement shall be governed by and construed in accordance with the substantive law of the State of Delaware without giving effect to the principles of conflicts of laws thereof. (e) Counterparts. This Stock Option Agreement may be executed in several counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement. (f) Effect of Headings. The section headings herein are for convenience only and shall not affect the construction hereof. IN WITNESS WHEREOF, the undersigned parties have caused this Stock Option Agreement to be duly executed as of the day and year first above written. ATTEST: NBD BANCORP, INC. By:/s/ Joseph E. Ernsteen By: /s/ James R. Lancaster ---------------------- ---------------------- James R. Lancaster Executive Vice President ATTEST: DEERBANK CORPORATION By:/s/ John A.S. Lindemann By: /s/ Wayne V. Ecklund ----------------------- -------------------- Wayne V. Ecklund President and Chief Executive Officer EX-99.B 10 Exhibit (99)(b) AGREEMENT OF MERGER This Agreement of Merger is entered into as of January 7, 1995, by and between NBD Bank, an Illinois banking corporation having its principal office in the City of Wheaton, DuPage County, State of Illinois, referred to herein as "Surviving Bank", and Deerfield Federal Savings and Loan Association, a federal savings and loan association having its principal office in the City of Deerfield, Lake County, State of Illinois, referred to herein as "Merging Bank". The Surviving Bank and the Merging Bank are sometimes collectively referred to herein as "Constituent Banks". RECITALS Each Constituent Bank is duly organized and validly existing under the laws and regulations of its chartering authority. Surviving Bank is a wholly-owned subsidiary of NBD Illinois, Inc. ("Illinois"), a second tier bank holding company and wholly-owned subsidiary of NBD Bancorp, Inc. ("Bancorp"), a registered bank holding company having its principal office in Detroit, Michigan. Merging Bank is a wholly-owned subsidiary of Deerbank Corporation ("Company"), a registered thrift holding company having its principal office in Deerfield, Illinois. Schedule I attached hereto sets forth the name, address and shareholder of each Merging Bank. On January 7, 1995, Illinois, Bancorp and Company entered into an Agreement and Plan of Reorganization and an Agreement and Plan of Merger ("the Acquisition Agreements") which contemplate the acquisition of Company by Bancorp by means of a merger of Company into Illinois. The parties to the Acquisition Agreements now deem it advisable and in the best interests of those parties and their shareholders to effect the merger of the Merging Bank with and into the Surviving Bank immediately following the consummation of the acquisition and merger contemplated in the Acquisition Agreements. The respective Boards of Directors of the Surviving Bank and the Merging Bank deem it advisable and in the best interests of the banks and their shareholders that the Merging Bank be merged with and into the Surviving Bank pursuant to the terms of this Agreement of Merger, and pursuant to the authority given by and in accordance with the provisions of Sections 21 and 22 of the Illinois Banking Act (Ch. 17, Ill. Rev. St., P. 328 and 329). Now, therefore, in consideration of the mutual covenants herein contained, the parties hereto agree as follows: AGREEMENT Section 1 - Merger. The Merging Bank shall be merged with and into the Surviving Bank under the charter of Surviving Bank, a state nonmember bank, as of the date and time to be mutually agreed as soon as practicable following the merger approvals to be issued by the cognizant regulatory authorities and the satisfaction or waiver of the conditions as set forth in Section 13 hereof (the close of business on such date being referred to herein as the "Effective Time"). The separate corporate existence of Merging Bank shall cease upon the Effective Time of its merger into the Surviving Bank. Section 2 - Name. The name of the Surviving Bank shall be NBD Bank. Section 3 - Business. The business of the Surviving Bank shall be that of an Illinois nonmember state banking corporation. This business shall be conducted by the Surviving Bank at its main office which shall be located at 211 S. Wheaton Avenue, Wheaton, Illinois 60187, and at its legally established branches. Section 4 - Capital Account. The amount of the capital stock of the Surviving Bank shall be $2,000,000 divided into 100,000 shares of common stock, $20 par value per share, and at the Effective Time of the merger, it is anticipated that the Surviving Bank shall have capital, surplus and reserves in an amount equal to the combined capital, surplus and reserves of the Constituent Banks. Section 5 - Effect of the Merger. From and after the Effective Time of the merger, the Surviving Bank shall be liable for all liabilities of the Merging Bank and the Surviving Bank; and all debts, liabilities, and contracts of Merging Bank, matured or unmatured, whether accrued, absolute, contingent or otherwise, and whether or not reflected or reserved against on balance sheets, books of account or records of the Merging Bank, shall be those of the Surviving Bank and shall not be released or impaired by reason of the Merger; and all rights of creditors and other obligees and all liens on property of either the Merging Bank or the Surviving Bank shall be preserved unimpaired. Further, all rights, franchises and interests of the Merging Bank in and to every type of property (real, personal and mixed) and chooses in action shall be transferred to and vested in the Surviving Bank by virtue of such merger without any deed or other transfer, and the Surviving Bank, without any order or other action on the part of any court or otherwise, shall hold and enjoy all rights of property, franchises and interests, including appointments, designations and nominations, and all other rights and interests in every fiduciary capacity, in the same manner and to the same extent as such rights, franchises and interests were held or enjoyed by the Merging Bank and the Surviving Bank, respectively, at the Effective Time of the merger. Section 6 - Conversion of Shares Pursuant to Merger. As of the Effective Time, the presently issued and outstanding shares of common stock, $20 par value per share, of the Surviving Bank shall remain outstanding as shares of common stock of the Surviving Bank, $20 par value per share, and the holder thereof shall retain its present rights therein. The number of shares of capital stock of the Merging Bank issued and outstanding shall be deemed cancelled as of the Effective Time without any further act or action on the part of the shareholder thereof. Section 7 - Charter. As of the Effective Time, the charter of the Surviving Bank in effect immediately prior to the Effective Time shall constitute the charter of the Surviving Bank. Section 8 - Bylaws. As of the Effective Time, the by-laws of the Surviving Bank in effect immediately prior to the Effective Time shall constitute the by-laws of the Surviving Bank. Section 9 - Financial Statements - Post Merger. Attached as Schedule II and incorporated by reference herein is a pro forma financial statement as of September 30, 1994 showing the assets and liabilities of the Surviving Bank as they will exist after the Effective Time of the merger, subject to adjustment for changes occurring between the date of such statement and the Effective Time. Section 10 - Amendment. The Constituent Banks hereto by written agreement may change any of the provisions hereof; provided, however, that any material change to this Agreement of Merger shall be approved by the respective Boards of Directors of the Constituent Banks. Section 11 - Termination or Abandonment. This Agreement of Merger may be terminated by the unilateral action of the Board of Directors of either Constituent Bank prior to the approval by the shareholder of such Constituent Banks, or by the mutual consent of the Boards of Directors of the Constituent Banks after the shareholders have approved this Agreement of Merger. Section 12 - Governing Law. Except where federal law applies, this Agreement of Merger shall be construed and interpreted according to the laws of the State of Illinois. Section 13 - Conditions Precedent to Obligations. Each and every obligation of the Constituent Banks to be performed at or before the Effective Time shall be subject to the satisfaction prior thereto of the following conditions; provided, however, that the Illinois Commissioner of Banks and Trust Companies' expenses of examination will be paid by the Surviving Bank irrespective of the approval or disapproval of the Agreement of Merger by the Commissioner: A. Statutory Requirements. This Agreement of Merger shall have been duly and validly authorized and adopted by the Boards of Directors and, if required, the shareholders of the Constituent Banks, which approval may, if not prohibited by the charter or articles of association, as applicable, or the by-laws of the Constituent Banks, be by unanimous written consent in lieu of meeting. B. Regulatory Approvals. The cognizant regulatory authorities shall have granted all required approvals for the acquisition and merger and any applicable waiting periods relating to such approvals shall have expired. C. Holding Companies Merger. Company shall have been merged with and into Illinois as evidenced in a Certificate of Merger filed by Illinois in accordance with the General Corporation Law of the State of Delaware. Section 14 - Counterparts. This Agreement of Merger may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one agreement. WITNESS, the signature of said Constituent Banks as of this 7th day of January, 1995, each hereunto set by its President or a Vice President and attested by its Secretary or Cashier or Assistant Secretary or Deputy Cashier, pursuant to a resolution of its Board of Directors, acting by a majority thereof: ATTEST: NBD BANK /s/ Joseph E. Ernsteen By: /s/ James R. Lancaster - ---------------------- ---------------------- James R. Lancaster President ATTEST: DEERFIELD FEDERAL SAVINGS AND LOAN ASSOCIATION /s/ John A.S. Lindemann By: /s/ Wayne V. Ecklund - ----------------------- --------------------- Wayne V. Ecklund President and Chief Executive Officer EX-99.C 11 Exhibit (99)(c) REVOCABLE PROXY DEERBANK CORPORATION SPECIAL MEETING OF STOCKHOLDERS ____ __, 1995 __:00 _.m. The undersigned hereby appoints the official proxy committee, consisting of Messrs. __________, __________ and __________, of the Board of Directors of Deerbank Corporation ("Deerbank"), each with full power of substitution, to act as attorneys and proxies for the undersigned, and to vote all shares of common stock of Deerbank which the undersigned is entitled to vote only at the Special Meeting of Stockholders, to be held at the corporate offices of Deerbank, 745 Deerfield Road, Deerfield, Illinois 60015, on May __th, 1995, at __:00 _.m., and at any and all adjournments thereof, as follows: To consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger, dated January 7, 1995 (the "Merger Agreement"), by and between NBD Bancorp Inc. ("NBD"), NBD Illinois, Inc. ("NBD Illinois"), and Deerbank Corporation ("Deerbank" or the "Company") and the transactions contemplated thereby, including the merger of Deerbank with and into NBD Illinois, a wholly-owned subsidiary of NBD. / / FOR / / AGAINST / / ABSTAIN THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL. To transact such other business as may properly come before the Special Meeting or any adjournments or postponements thereof including, without limitation, a motion to adjourn or postpone the Special Meeting to another time and/or place for the purpose of soliciting additional proxies in order to approve the Merger Agreement or otherwise. / / FOR / / AGAINST / / ABSTAIN THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL. [BACK] This proxy is revocable and will be voted as directed, but if no instructions are specified, this signed proxy will be voted "FOR" the proposal. If any other business is presented at the Special Meeting, this proxy will be voted by those named in this proxy in their best judgment. At the present time, the Board of Directors knows of no other business to be presented at the Special Meeting. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS The undersigned acknowledges receipt from Deerbank prior to the execution of this proxy of a Notice of Special Meeting and of a Proxy Statement-Prospectus dated _______________, 1995. Dated: _____________________________ ____________________________________ SIGNATURE OF STOCKHOLDER ____________________________________ SIGNATURE OF STOCKHOLDER Please sign exactly as your name appears on this card. When signing as attorney, executor, administrator, trustee or guardian, please give your full title. If shares are held jointly, each holder may sign but only one signature is required. PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. -----END PRIVACY-ENHANCED MESSAGE-----