UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 8-K

                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                         ------------------------------

       DATE OF REPORT (Date of earliest event reported): October 23, 2007

                         ------------------------------

                           FIRST MERCHANTS CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

                         -------------------------------

         INDIANA                     0-17071                     35-1544218
(State or other jurisdiction   (Commission file number)        (IRS Employer
     of incorporation)                                       Identification No.)

                             200 East Jackson Street
                                  P.O. Box 792
                              Muncie, IN 47305-2814
          (Address of Principal Executive Offices, including Zip Code)


                                 (765) 747-1500
              (Registrant's Telephone Number, including Area Code)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
    230.425)

[ ] Soliciting material pursuant to  Rule 14a-12 under  the Exchange Act (17 CFR
    240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))

Item 1.01.        Entry into a Material Definitive Agreement.

(a) On October 23, 2007, First Merchants Corporation (the "Corporation") entered
into a Change of Control Agreement with each of the following individuals:  Jami
L. Bradshaw,  its Senior Vice President and Chief Accounting  Officer;  David W.
Spade,  its Senior  Vice  President  and Chief  Credit  Officer;  and Jeffrey B.
Lorentson,  its Senior Vice President and Chief Risk Officer.  These  agreements
provide  for  certain  payments to be made to Ms.  Bradshaw,  Mr.  Spade and Mr.
Lorentson upon certain "Changes in Control" of the Corporation.  Copies of these
agreements are attached hereto as Exhibits 10.1, 10.2 and 10.3, respectively.

Item 5.02.         Departure of Directors or Principal Officers; Election
                   of Directors; Appointment of Principal Officers.

(d) On October 23, 2007, the Board of Directors of the Corporation (the "Board")
appointed  William  L.  Hoy to fill  the  vacancy  on the  Board  caused  by the
amendment to the  Corporation's  Bylaws described in this Form 8-K. Mr. Hoy will
serve as a Director until the 2008 Annual Meeting of the Shareholders,  at which
time he will be  considered  for  election to serve the balance of his Class III
term that will expire at the 2009 Annual Meeting of the Shareholders.  As of the
date of this report,  the Board has not yet  determined on which  committees Mr.
Hoy will serve. A copy of the  Corporation's  press  release,  dated October 29,
2007, announcing the appointment of Mr. Hoy is attached hereto as Exhibit 99.1.

Item 5.03.         Amendments to Articles of Incorporation or Bylaws; Change in
                   Fiscal Year.

(a) On  October  23,  2007,  the  Board  amended  Article  V,  Section  1 of the
Corporation's  Bylaws to provide for: (i) eleven (11) Directors  rather than the
previous ten (10) and (ii) four (4) Class III Directors rather than the previous
three (3).

Item 9.01.        Financial Statements and Exhibits.

(d) Exhibits.

(10.1) Change of Control Agreement between First Merchants  Corporation and Jami
L. Bradshaw, dated October 23, 2007.

(10.2) Change of Control Agreement between First Merchants Corporation and David
W. Spade, dated October 23, 2007.

(10.3) Change of Control  Agreement  between  First  Merchants  Corporation  and
Jeffrey B. Lorentson, dated October 23, 2007.

(99.1) Press Release dated October 29, 2007.



<PAGE>



                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

DATE:  October 29, 2007.

                                             FIRST MERCHANTS CORPORATION


                                             By:/s/Mark K. Hardwick
                                                ---------------------------
                                                Mark K. Hardwick
                                                Executive Vice President and
                                                Chief Financial Officer and
                                                (Principal Financial and
                                                Principal Accounting Officer)

<PAGE>

                                  EXHIBIT INDEX
                                  -------------


     10.1 Change of Control  Agreement  between First Merchants  Corporation and
Jami L. Bradshaw, dated October 23, 2007.

     10.2 Change of Control  Agreement  between First Merchants  Corporation and
David W. Spade, dated October 23, 2007.

     10.3 Change of Control  Agreement  between First Merchants  Corporation and
Jeffrey B. Lorentson, dated October 23, 2007.

     99.1 Press Release dated October 29, 2007.


<PAGE>

                                  Exhibit 10.1

                                    BRADSHAW
                           CHANGE OF CONTROL AGREEMENT


     This  Agreement  is made and entered  into as of October 24,  2007,  by and
between  First  Merchants  Corporation,   an  Indiana  corporation  (hereinafter
referred to as  "Corporation"),  with its principal  office  located at 200 East
Jackson Street, Muncie, Indiana, and Jami Lynn Bradshaw (hereinafter referred to
as "Executive"), of Muncie, Indiana.

     WHEREAS,  the  Corporation  considers the  continuance  of  proficient  and
experienced  management  to be essential to  protecting  and  enhancing the best
interests of the Corporation and its shareholders; and

     WHEREAS,  the Corporation  desires to assure the continued  services of the
Executive on behalf of the Corporation; and

     WHEREAS,  the  Corporation  recognizes  that if faced with a proposal for a
Change of Control, as hereinafter defined, the Executive will have a significant
role in helping the Board of Directors assess the options and advising the Board
of  Directors  on what  is in the  best  interests  of the  Corporation  and its
shareholders;  and it is necessary  for the Executive to be able to provide this
advice  and  counsel  without  being  influenced  by  the  uncertainties  of the
Executive's own situation; and

     WHEREAS, the Corporation desires to provide fair and reasonable benefits to
the  Executive  on the terms and  subject  to the  conditions  set forth in this
Agreement.

     NOW,  THEREFORE,  in consideration of the mutual covenants and undertakings
herein  contained  and  the  continued   employment  of  the  Executive  by  the
Corporation  as its Senior Vice  President  and Chief  Accounting  Officer,  the
Corporation and the Executive,  each intending to be legally bound, covenant and
agree as follows:

         1. Term of Agreement.

     This  Agreement  shall  continue  in  effect  through  December  31,  2007;
provided,  however,  that  commencing  on December 31, 2007 and each December 31
thereafter,  the term of this Agreement shall  automatically be extended for one
additional  year  unless,  not  later  than  October  31,  2007  or  October  31
immediately  preceding any December 31 thereafter,  the  Corporation  shall have
given the Executive  notice that it does not wish to extend this Agreement;  and
provided further, that if a Change of Control of the Corporation,  as defined in
Section 2, shall have  occurred  during the  original or  extended  term of this
Agreement, this Agreement shall continue in effect for a period of not less than
twenty-four  (24)  months  beyond  the month in which  such  Change  of  Control
occurred.



<PAGE>

         2. Definitions.

         For purposes of this Agreement, the following definitions shall apply:

                    (A)  Cause: "Cause" shall mean:

                           (1) professional incompetence;

                           (2)      willful misconduct;

                           (3)      personal dishonesty;

                           (4)      breach of fiduciary duty involving personal
                                    profit;

                           (5)      intentional failure to perform stated
                                    duties;

                           (6)      willful violation of any law, rule or
                                    regulation (other than traffic violations or
                                    similar offenses) or final cease and desist
                                    orders; and

                           (7)      any intentional material breach of any term,
                                    condition or covenant of this Agreement.

                    (B)  Change of Control: "Change of Control" shall mean:

                           (1)      any person (as such term is used in Sections
                                    13(d) and 14(d) of the Securities Exchange
                                    Act of 1934 ["Exchange Act"]), other than
                                    the Corporation, is or becomes the
                                    Beneficial Owner (as defined in Rule 13d-3
                                    under the Exchange Act) directly or
                                    indirectly of securities of the Corporation
                                    representing twenty-five percent (25%) or
                                    more of the combined voting power of the
                                    Corporation's then outstanding securities;

                           (2)      persons constituting a majority of the Board
                                    of Directors of the Corporation were not
                                    directors of the Corporation for at least
                                    the twenty-four (24) preceding months;

                           (3)      the stockholders of the Corporation approve
                                    a merger or consolidation of the Corporation
                                    with any other corporation, other than (a) a
                                    merger or consolidation which would result
                                    in the voting securities of the Corporation
                                    outstanding immediately prior thereto
                                    continuing to represent (either by remaining
                                    outstanding or by being converted into
                                    voting securities of the surviving entity)
                                    more than fifty percent (50%) of the
                                    combined voting power of the voting
                                    securities of the Corporation or such
                                    surviving entity outstanding immediately
                                    after such a merger or consolidation, or (b)
                                    a merger or consolidation effected to
                                    implement a recapitalization of the
                                    Corporation (or similar transaction) in
                                    which no person acquires fifty percent (50%)
                                    or more of the combined voting power of the
                                    Corporation's then outstanding securities;
                                    or

                           (4)      the stockholders of the Corporation approve
                                    a plan of complete liquidation of the
                                    Corporation or an agreement for the sale or
                                    disposition by the Corporation of all or
                                    substantially all of the Corporation's
                                    assets.

                    (C)  Date of Termination:  "Date of Termination"  shall mean
                         the  date  stated  in the  Notice  of  Termination  (as
                         hereinafter  defined) or thirty (30) days from the date
                         of delivery of such  notice,  as  hereinafter  defined,
                         whichever comes first.

                    (D)  Disability:  "Disability"  shall mean the definition of
                         such  term  as used in the  disability  policy  then in
                         effect for the Corporation, and a determination of full
                         disability  by the  Corporation;  provided  that in the
                         event there is no disability  insurance  then in force,
                         "disability"  shall mean  incapacity due to physical or
                         mental  illness which will have caused the Executive to
                         have  been  unable  to  perform  his  duties  with  the
                         Corporation on a full time basis for one hundred eighty
                         (180) consecutive calendar days.

                    (E)  Notice of Termination:  "Notice of  Termination"  shall
                         mean  a  written  notice,  communicated  to  the  other
                         parties  hereto,  which  shall  indicate  the  specific
                         termination  provisions of this  Agreement  relied upon
                         and set  forth  in  reasonable  detail  the  facts  and
                         circumstances   claimed   to   provide   a  basis   for
                         termination  of the  Executive's  employment  under the
                         provisions so indicated.

                    (F)  Retirement:  "Retirement"  shall  mean  termination  of
                         employment  by the  Executive  in  accordance  with the
                         Corporation's   normal   retirement   policy  generally
                         applicable  to its salaried  employees in effect at the
                         time of a Change of Control.

         3. Termination.

                    (A)  General.  If any of the events  described  in Section 2
                         constituting  a Change in  Control  of the  Corporation
                         shall have occurred, the Executive shall be entitled to
                         the benefits described in Section 4 upon the subsequent
                         termination of the  Executive's  employment  during the
                         term of this Agreement,  unless such termination is (a)
                         because of the death or  Disability  of the  Executive,
                         (b)  by  the  Corporation  for  Cause,  or  (c)  by the
                         Executive   other  than  on  account  of   Constructive
                         Termination (as hereinafter defined).

                    (B)  If,  following  a Change of  Control,  the  Executive's
                         employment   shall  be   terminated   for  Cause,   the
                         Corporation  shall pay him his salary  through the Date
                         of Termination at the rate in effect on the date of the
                         Notice of Termination,  and the Corporation  shall have
                         no  further  obligations  under  this  Agreement.   If,
                         following   a  Change  of  Control,   the   Executive's
                         employment  shall be terminated as a result of death or
                         Disability, compensation to the Executive shall be made
                         pursuant to the Corporation's then existing policies on
                         death or Disability,  and the Corporation shall have no
                         further obligations under this Agreement. If, following
                         a Change of  Control,  the  Executive's  employment  is
                         terminated  by and at the request of the Executive as a
                         result of  Retirement,  compensation  to the  Executive
                         shall  be made  pursuant  to the  Corporation's  normal
                         retirement policy generally  applicable to its salaried
                         employees at the time of the Change of Control, and the
                         Corporation  shall  have no further  obligations  under
                         this Agreement.

                    (C)  Constructive   Termination.   The  Executive  shall  be
                         entitled  to   terminate   his   employment   upon  the
                         occurrence of Constructive Termination. For purposes of
                         this Agreement,  "Constructive Termination" shall mean,
                         without the Executive's  express written  consent,  the
                         occurrence,   after  a  Change   of   Control   of  the
                         Corporation, of any of the following circumstances:

                           (1)      the assignment to the Executive of any
                                    duties inconsistent (unless in the nature of
                                    a promotion) with the position in the
                                    Corporation that the Executive held
                                    immediately prior to the Change of Control
                                    of the Corporation, or a significant adverse
                                    reduction or alteration in the nature or
                                    status of the Executive's position, duties
                                    or responsibilities or the conditions of the
                                    Executive's employment from those in effect
                                    immediately prior to such Change of Control;

                           (2)      a reduction in the Executive's annual base
                                    salary, as in effect immediately prior to
                                    the Change of Control of the Corporation or
                                    as the same may be adjusted from time to
                                    time, except for across-the-board salary
                                    reductions similarly affecting all
                                    management personnel of the Corporation;

                           (3)      the Corporation requires the Executive to be
                                    relocated anywhere other than its offices in
                                    Muncie, Indiana;

                           (4)      the taking of any action to deprive the
                                    Executive of any material fringe benefit
                                    enjoyed by him at the time of the Change of
                                    Control, or the failure to provide him with
                                    the number of paid vacation days to which he
                                    is entitled on the basis of years of service
                                    with the Corporation and in accordance with
                                    the Corporation's normal vacation policy in
                                    effect at the time of the Change of Control;

                           (5)      the failure to continue to provide the
                                    Executive with benefits substantially
                                    similar to those enjoyed by the Executive
                                    under any of the Corporation's life
                                    insurance, medical, health and accident, or
                                    disability plans in which the Executive was
                                    participating at the time of the Change of
                                    Control of the Corporation, or the taking of
                                    any action which would directly or
                                    indirectly materially reduce any of such
                                    benefits; or

                           (6)      the failure of the Corporation to continue
                                    this Agreement in effect, or to obtain a
                                    satisfactory agreement from any successor to
                                    assume and agree to perform this Agreement,
                                    as contemplated in Section 5 hereof.

         4. Compensation Upon Termination.

     Following a Change of Control,  if his employment by the Corporation  shall
be terminated by the Executive on account of Constructive  Termination or by the
Corporation other than for Cause,  death,  Disability,  or Retirement (by and at
the  request of the  Executive),  then the  Executive  shall be  entitled to the
benefits provided below:

                    (A)  No  later  than the  fifth  day  following  the Date of
                         Termination, the Corporation shall pay to the Executive
                         his full base salary  through the Date of  Termination,
                         at the rate in effect at the time Notice of Termination
                         is given, plus all other amounts to which the Executive
                         is  entitled  under  any  incentive,   bonus  or  other
                         compensation  plan of the  Corporation in effect at the
                         time such payments are due;

                    (B)  In lieu of any further salary payments to the Executive
                         for periods  subsequent to the Date of Termination,  no
                         later  than  the  fifth  day   following  the  Date  of
                         Termination, the Corporation shall pay to the Executive
                         a lump sum severance payment, in cash, equal to one and
                         one-half  (1.50)  times the sum of (a) the  Executive's
                         annual base salary rate as in effect on the date of the
                         Notice  of  Termination,  and  (b)  the  largest  bonus
                         received  by the  Executive  during  the two (2)  years
                         immediately preceding the Date of Termination under the
                         Corporation's  Management  Incentive  Plan covering the
                         Executive;

                    (C)  During the period  beginning with the Executive's  Date
                         of Termination and continuing  until the earlier of (a)
                         the second anniversary of such Date of Termination,  or
                         (b)  Executive's   sixty-fifth  (65th)  birthday,   the
                         Corporation shall arrange to provide the Executive with
                         life,   disability,   accident  and  health   insurance
                         benefits  substantially  similar  to  those  which  the
                         Executive was receiving immediately prior to the Notice
                         of Termination and shall pay the same percentage of the
                         cost of such benefits as the  Corporation was paying on
                         the Executive's behalf on the date of such Notice;

                    (D)  In lieu of shares of  common  stock of the  Corporation
                         ("Corporation  Shares")  issuable  upon the exercise of
                         outstanding options ("Options"), if any, granted to the
                         Executive  under  any  Corporation  stock  option  plan
                         (which  Options  shall be cancelled  upon the making of
                         the payment  referred to below),  the  Executive  shall
                         receive an amount in cash  equal to the  product of (a)
                         the  excess  of the  higher  of the  closing  price  of
                         Corporation  Shares as reported on the NASDAQ  National
                         Market  System,  the American Stock Exchange or the New
                         York Stock Exchange, wherever listed, on or nearest the
                         Date of  Termination or the highest per share price for
                         Corporation Shares actually paid in connection with any
                         Change  of  Control  of the  Corporation,  over the per
                         share  exercise  price  of  each  Option  held  by  the
                         Executive  (whether  or not  then  fully  exercisable),
                         times (b) the number of  Corporation  Shares covered by
                         each such Option;

                    (E)  If the payments or benefits,  if any, received or to be
                         received by the Executive (whether under this Agreement
                         or under  any other  plan,  arrangement,  or  agreement
                         between  the   Executive  and  the   Corporation),   in
                         connection with termination or Constructive Termination
                         of the  Executive's  employment  following  a Change of
                         Control,   constitute  an  "excess  parachute  payment"
                         within the meaning of ss.280G of the  Internal  Revenue
                         Code  ("Code"),   the  Corporation  shall  pay  to  the
                         Executive,  no later than the fifth day  following  the
                         Date  of   Termination,   an   additional   amount  (as
                         determined  by  the  Corporation's  independent  public
                         accountants)  equal to the excise tax, if any,  imposed
                         on the "excess parachute  payment" under ss.4999 of the
                         Code;  provided,  however, if the amount of such excise
                         tax is finally  determined  to be more or less than the
                         amount paid to the Executive hereunder, the Corporation
                         (or the Executive if the finally  determined  amount is
                         less  than the  original  amount  paid)  shall  pay the
                         difference  between the amount  originally paid and the
                         finally  determined  amount to the other party no later
                         than  the  fifth  day  following  the date  such  final
                         determination is made;

                    (F)  The   Corporation   shall  pay  to  the  Executive  all
                         reasonable  legal  fees and  expenses  incurred  by the
                         Executive  as a result of such  termination  (including
                         all  such  fees  and  expenses,  if  any,  incurred  in
                         contesting  or  disputing  any such  termination  or in
                         seeking  to obtain  or  enforce  any  right or  benefit
                         provided by this Agreement),  unless the decision-maker
                         in  any   proceeding,   contest,   or  dispute  arising
                         hereunder makes a formal finding that the Executive did
                         not  have  a  reasonable  basis  for  instituting  such
                         proceeding, contest, or dispute;

                    (G)  The  Corporation   shall  provide  the  Executive  with
                         individual  out-placement  services in accordance  with
                         the general custom and practice  generally  accorded to
                         an executive of the Executive's position.

         5. Successors; Binding Agreement.

                    (A)  The  Corporation  shall require any successor  (whether
                         direct or indirect, by purchase, merger,  consolidation
                         or  otherwise)  to  all  or  substantially  all  of the
                         business  and/or assets of the Corporation to expressly
                         assume and agree to perform this  Agreement in the same
                         manner  and to the same  extent  that  the  Corporation
                         would be required  to perform it if no such  succession
                         had taken place.  Failure of the  Corporation to obtain
                         such    assumption   and   agreement   prior   to   the
                         effectiveness  of any such succession shall be a breach
                         of this  Agreement  and shall  entitle the Executive to
                         compensation  from the  Corporation  in the same amount
                         and on the same terms to which the  Executive  would be
                         entitled  hereunder  if the  Executive  terminates  his
                         employment  on  account  of  Constructive   Termination
                         following  a  Change  of  Control  of the  Corporation,
                         except  that  for  the  purposes  of  implementing  the
                         foregoing,  the  date  on  which  any  such  succession
                         becomes   effective   shall  be  deemed   the  Date  of
                         Termination.   As   used  in   this   Agreement,   "the
                         Corporation"   shall  mean  the   Corporation  and  any
                         successor  to its business  and/or  assets as aforesaid
                         which assumes and agrees to perform this Agreement,  by
                         operation of law or otherwise.

                    (B)  This  Agreement  shall  inure to the  benefit of and be
                         enforceable  by the Executive and his personal or legal
                         representatives, executors, administrators, successors,
                         heirs,  distributees,  devisees  and  legatees.  If the
                         Executive  should die while any amount  would  still be
                         payable to the  Executive  hereunder  had the Executive
                         continued to live, all such amounts,  unless  otherwise
                         provided  herein,  shall be paid in accordance with the
                         terms of this  Agreement  to the  devisee,  legatee  or
                         other designee or, if there is no such designee, to his
                         estate.

         6. Miscellaneous.

     No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by the
Executive and such officer as may be specifically designated by the Corporation.
No waiver by either  party  hereto at the time of any breach by the other  party
hereto of, or compliance  with,  any condition or provision of this Agreement to
be  performed  by such  other  party  shall be  deemed a waiver  of  similar  or
dissimilar  provisions  or  conditions at the same or at any prior or subsequent
time. No agreement or  representations,  oral or otherwise,  express or implied,
with respect to the subject  matter  hereof have been made by either party which
are not expressly  set forth in this  Agreement.  The validity,  interpretation,
construction  and performance of this Agreement shall be governed by the laws of
the State of Indiana  without  regard to its  conflicts of law  principles.  All
references  to a section of the Exchange Act or the Code shall be deemed also to
refer to any successor  provisions to such  section.  Any payments  provided for
hereunder  shall  be  paid  net of any  applicable  withholding  required  under
federal,  state or local law. The obligations of the Corporation under Section 4
shall survive the expiration of the term of this Agreement.

         7. Validity.

     The invalidity or unenforceability of any provision of this Agreement shall
not  affect  the  validity  or  enforceability  of any other  provision  of this
Agreement, which shall remain in full force and effect.

         8. Counterparts.

     This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original,  but all of which together shall constitute one and
the same instrument.

         9. Arbitration.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
Agreement shall be settled exclusively by arbitration,  conducted before a panel
of three (3) arbitrators in Muncie,  Indiana in accordance with the rules of the
American Arbitration  Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that the
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination  during the pendency of any dispute or controversy
arising under or in connection with this Agreement.



<PAGE>

         10.      Entire Agreement.

         This Agreement sets forth the entire agreement of the parties hereto in
respect  of the  subject  matter  contained  herein  and  supersedes  all  prior
agreements, promises, covenants, arrangements,  communications,  representations
or  warranties,   whether  oral  or  written,   by  any  officer,   employee  or
representative  of any party  hereto;  and any prior  agreement  of the  parties
hereto in respect of the subject matter  contained  herein is hereby  terminated
and cancelled.

         IN  WITNESS  WHEREOF,  the  Corporation has caused this Agreement to be
executed by their duly  authorized  officers,  and the  Executive  has hereunder
subscribed his name, as of the day and year first above written.


"CORPORATION"                                        "EXECUTIVE"

FIRST MERCHANTS CORPORATION


By ______________________________           By ______________________________
   Michael C. Rechin                           Jami Lynn Bradshaw
   President & Chief Executive Officer



<PAGE>

                                  Exhibit 10.2

                                      SPADE
                           CHANGE OF CONTROL AGREEMENT


     This  Agreement  is made and entered  into as of October 24,  2007,  by and
between  First  Merchants  Corporation,   an  Indiana  corporation  (hereinafter
referred to as  "Corporation"),  with its principal  office  located at 200 East
Jackson Street,  Muncie,  Indiana,  and David Spade (hereinafter  referred to as
"Executive"), of Muncie, Indiana.

     WHEREAS,  the  Corporation  considers the  continuance  of  proficient  and
experienced  management  to be essential to  protecting  and  enhancing the best
interests of the Corporation and its shareholders; and

     WHEREAS,  the Corporation  desires to assure the continued  services of the
Executive on behalf of the Corporation; and

     WHEREAS,  the  Corporation  recognizes  that if faced with a proposal for a
Change of Control, as hereinafter defined, the Executive will have a significant
role in helping the Board of Directors assess the options and advising the Board
of  Directors  on what  is in the  best  interests  of the  Corporation  and its
shareholders;  and it is necessary  for the Executive to be able to provide this
advice  and  counsel  without  being  influenced  by  the  uncertainties  of the
Executive's own situation; and

     WHEREAS, the Corporation desires to provide fair and reasonable benefits to
the  Executive  on the terms and  subject  to the  conditions  set forth in this
Agreement.

     NOW,  THEREFORE,  in consideration of the mutual covenants and undertakings
herein  contained  and  the  continued   employment  of  the  Executive  by  the
Corporation  as  its  Senior  Vice  President  and  Chief  Credit  Officer,  the
Corporation and the Executive,  each intending to be legally bound, covenant and
agree as follows:

         1. Term of Agreement.

     This  Agreement  shall  continue  in  effect  through  December  31,  2007;
provided,  however,  that  commencing  on December 31, 2007 and each December 31
thereafter,  the term of this Agreement shall  automatically be extended for one
additional  year  unless,  not  later  than  October  31,  2007  or  October  31
immediately  preceding any December 31 thereafter,  the  Corporation  shall have
given the Executive  notice that it does not wish to extend this Agreement;  and
provided further, that if a Change of Control of the Corporation,  as defined in
Section 2, shall have  occurred  during the  original or  extended  term of this
Agreement, this Agreement shall continue in effect for a period of not less than
twenty-four  (24)  months  beyond  the month in which  such  Change  of  Control
occurred.


<PAGE>

         2. Definitions.

         For purposes of this Agreement, the following definitions shall apply:

                    (A)  Cause: "Cause" shall mean:

                           (1) professional incompetence;

                           (2)      willful misconduct;

                           (3)      personal dishonesty;

                           (4)      breach of fiduciary duty involving personal
                                    profit;

                           (5)      intentional failure to perform stated
                                    duties;

                           (6)      willful violation of any law, rule or
                                    regulation (other than traffic violations or
                                    similar offenses) or final cease and desist
                                    orders; and

                           (7)      any intentional material breach of any term,
                                    condition or covenant of this Agreement.

                    (B)  Change of Control: "Change of Control" shall mean:

                           (1)      any person (as such term is used in Sections
                                    13(d) and 14(d) of the Securities Exchange
                                    Act of 1934 ["Exchange Act"]), other than
                                    the Corporation, is or becomes the
                                    Beneficial Owner (as defined in Rule 13d-3
                                    under the Exchange Act) directly or
                                    indirectly of securities of the Corporation
                                    representing twenty-five percent (25%) or
                                    more of the combined voting power of the
                                    Corporation's then outstanding securities;

                           (2)      persons constituting a majority of the Board
                                    of Directors of the Corporation were not
                                    directors of the Corporation for at least
                                    the twenty-four (24) preceding months;

                           (3)      the stockholders of the Corporation approve
                                    a merger or consolidation of the Corporation
                                    with any other corporation, other than (a) a
                                    merger or consolidation which would result
                                    in the voting securities of the Corporation
                                    outstanding immediately prior thereto
                                    continuing to represent (either by remaining
                                    outstanding or by being converted into
                                    voting securities of the surviving entity)
                                    more than fifty percent (50%) of the
                                    combined voting power of the voting
                                    securities of the Corporation or such
                                    surviving entity outstanding immediately
                                    after such a merger or consolidation, or (b)
                                    a merger or consolidation effected to
                                    implement a recapitalization of the
                                    Corporation (or similar transaction) in
                                    which no person acquires fifty percent (50%)
                                    or more of the combined voting power of the
                                    Corporation's then outstanding securities;
                                    or

                           (4)      the stockholders of the Corporation approve
                                    a plan of complete liquidation of the
                                    Corporation or an agreement for the sale or
                                    disposition by the Corporation of all or
                                    substantially all of the Corporation's
                                    assets.

                    (C)  Date of Termination:  "Date of Termination"  shall mean
                         the  date  stated  in the  Notice  of  Termination  (as
                         hereinafter  defined) or thirty (30) days from the date
                         of delivery of such  notice,  as  hereinafter  defined,
                         whichever comes first.

                    (D)  Disability:  "Disability"  shall mean the definition of
                         such  term  as used in the  disability  policy  then in
                         effect for the Corporation, and a determination of full
                         disability  by the  Corporation;  provided  that in the
                         event there is no disability  insurance  then in force,
                         "disability"  shall mean  incapacity due to physical or
                         mental  illness which will have caused the Executive to
                         have  been  unable  to  perform  his  duties  with  the
                         Corporation on a full time basis for one hundred eighty
                         (180) consecutive calendar days.

                    (E)  Notice of Termination:  "Notice of  Termination"  shall
                         mean  a  written  notice,  communicated  to  the  other
                         parties  hereto,  which  shall  indicate  the  specific
                         termination  provisions of this  Agreement  relied upon
                         and set  forth  in  reasonable  detail  the  facts  and
                         circumstances   claimed   to   provide   a  basis   for
                         termination  of the  Executive's  employment  under the
                         provisions so indicated.

                    (F)  Retirement:  "Retirement"  shall  mean  termination  of
                         employment  by the  Executive  in  accordance  with the
                         Corporation's   normal   retirement   policy  generally
                         applicable  to its salaried  employees in effect at the
                         time of a Change of Control.

         3. Termination.

                    (A)  General.  If any of the events  described  in Section 2
                         constituting  a Change in  Control  of the  Corporation
                         shall have occurred, the Executive shall be entitled to
                         the benefits described in Section 4 upon the subsequent
                         termination of the  Executive's  employment  during the
                         term of this Agreement,  unless such termination is (a)
                         because of the death or  Disability  of the  Executive,
                         (b)  by  the  Corporation  for  Cause,  or  (c)  by the
                         Executive   other  than  on  account  of   Constructive
                         Termination (as hereinafter defined).

                    (B)  If,  following  a Change of  Control,  the  Executive's
                         employment   shall  be   terminated   for  Cause,   the
                         Corporation  shall pay him his salary  through the Date
                         of Termination at the rate in effect on the date of the
                         Notice of Termination,  and the Corporation  shall have
                         no  further  obligations  under  this  Agreement.   If,
                         following   a  Change  of  Control,   the   Executive's
                         employment  shall be terminated as a result of death or
                         Disability, compensation to the Executive shall be made
                         pursuant to the Corporation's then existing policies on
                         death or Disability,  and the Corporation shall have no
                         further obligations under this Agreement. If, following
                         a Change of  Control,  the  Executive's  employment  is
                         terminated  by and at the request of the Executive as a
                         result of  Retirement,  compensation  to the  Executive
                         shall  be made  pursuant  to the  Corporation's  normal
                         retirement policy generally  applicable to its salaried
                         employees at the time of the Change of Control, and the
                         Corporation  shall  have no further  obligations  under
                         this Agreement.

                    (C)  Constructive   Termination.   The  Executive  shall  be
                         entitled  to   terminate   his   employment   upon  the
                         occurrence of Constructive Termination. For purposes of
                         this Agreement,  "Constructive Termination" shall mean,
                         without the Executive's  express written  consent,  the
                         occurrence,   after  a  Change   of   Control   of  the
                         Corporation, of any of the following circumstances:

                           (1)      the assignment to the Executive of any
                                    duties inconsistent (unless in the nature of
                                    a promotion) with the position in the
                                    Corporation that the Executive held
                                    immediately prior to the Change of Control
                                    of the Corporation, or a significant adverse
                                    reduction or alteration in the nature or
                                    status of the Executive's position, duties
                                    or responsibilities or the conditions of the
                                    Executive's employment from those in effect
                                    immediately prior to such Change of Control;

                           (2)      a reduction in the Executive's annual base
                                    salary, as in effect immediately prior to
                                    the Change of Control of the Corporation or
                                    as the same may be adjusted from time to
                                    time, except for across-the-board salary
                                    reductions similarly affecting all
                                    management personnel of the Corporation;

                           (3)      the Corporation requires the Executive to be
                                    relocated anywhere other than its offices in
                                    Muncie, Indiana;

                           (4)      the taking of any action to deprive the
                                    Executive of any material fringe benefit
                                    enjoyed by him at the time of the Change of
                                    Control, or the failure to provide him with
                                    the number of paid vacation days to which he
                                    is entitled on the basis of years of service
                                    with the Corporation and in accordance with
                                    the Corporation's normal vacation policy in
                                    effect at the time of the Change of Control;

                           (5)      the failure to continue to provide the
                                    Executive with benefits substantially
                                    similar to those enjoyed by the Executive
                                    under any of the Corporation's life
                                    insurance, medical, health and accident, or
                                    disability plans in which the Executive was
                                    participating at the time of the Change of
                                    Control of the Corporation, or the taking of
                                    any action which would directly or
                                    indirectly materially reduce any of such
                                    benefits; or

                           (6)      the failure of the Corporation to continue
                                    this Agreement in effect, or to obtain a
                                    satisfactory agreement from any successor to
                                    assume and agree to perform this Agreement,
                                    as contemplated in Section 5 hereof.

         4. Compensation Upon Termination.

     Following a Change of Control,  if his employment by the Corporation  shall
be terminated by the Executive on account of Constructive  Termination or by the
Corporation other than for Cause,  death,  Disability,  or Retirement (by and at
the  request of the  Executive),  then the  Executive  shall be  entitled to the
benefits provided below:

                    (A)  No  later  than the  fifth  day  following  the Date of
                         Termination, the Corporation shall pay to the Executive
                         his full base salary  through the Date of  Termination,
                         at the rate in effect at the time Notice of Termination
                         is given, plus all other amounts to which the Executive
                         is  entitled  under  any  incentive,   bonus  or  other
                         compensation  plan of the  Corporation in effect at the
                         time such payments are due;

                    (B)  In lieu of any further salary payments to the Executive
                         for periods  subsequent to the Date of Termination,  no
                         later  than  the  fifth  day   following  the  Date  of
                         Termination, the Corporation shall pay to the Executive
                         a lump sum severance payment, in cash, equal to one and
                         one-half  (1.50)  times the sum of (a) the  Executive's
                         annual base salary rate as in effect on the date of the
                         Notice  of  Termination,  and  (b)  the  largest  bonus
                         received  by the  Executive  during  the two (2)  years
                         immediately preceding the Date of Termination under the
                         Corporation's  Management  Incentive  Plan covering the
                         Executive;

                    (C)  During the period  beginning with the Executive's  Date
                         of Termination and continuing  until the earlier of (a)
                         the second anniversary of such Date of Termination,  or
                         (b)  Executive's   sixty-fifth  (65th)  birthday,   the
                         Corporation shall arrange to provide the Executive with
                         life,   disability,   accident  and  health   insurance
                         benefits  substantially  similar  to  those  which  the
                         Executive was receiving immediately prior to the Notice
                         of Termination and shall pay the same percentage of the
                         cost of such benefits as the  Corporation was paying on
                         the Executive's behalf on the date of such Notice;

                    (D)  In lieu of shares of  common  stock of the  Corporation
                         ("Corporation  Shares")  issuable  upon the exercise of
                         outstanding options ("Options"), if any, granted to the
                         Executive  under  any  Corporation  stock  option  plan
                         (which  Options  shall be cancelled  upon the making of
                         the payment  referred to below),  the  Executive  shall
                         receive an amount in cash  equal to the  product of (a)
                         the  excess  of the  higher  of the  closing  price  of
                         Corporation  Shares as reported on the NASDAQ  National
                         Market  System,  the American Stock Exchange or the New
                         York Stock Exchange, wherever listed, on or nearest the
                         Date of  Termination or the highest per share price for
                         Corporation Shares actually paid in connection with any
                         Change  of  Control  of the  Corporation,  over the per
                         share  exercise  price  of  each  Option  held  by  the
                         Executive  (whether  or not  then  fully  exercisable),
                         times (b) the number of  Corporation  Shares covered by
                         each such Option;

                    (E)  If the payments or benefits,  if any, received or to be
                         received by the Executive (whether under this Agreement
                         or under  any other  plan,  arrangement,  or  agreement
                         between  the   Executive  and  the   Corporation),   in
                         connection with termination or Constructive Termination
                         of the  Executive's  employment  following  a Change of
                         Control,   constitute  an  "excess  parachute  payment"
                         within the meaning of ss.280G of the  Internal  Revenue
                         Code  ("Code"),   the  Corporation  shall  pay  to  the
                         Executive,  no later than the fifth day  following  the
                         Date  of   Termination,   an   additional   amount  (as
                         determined  by  the  Corporation's  independent  public
                         accountants)  equal to the excise tax, if any,  imposed
                         on the "excess parachute  payment" under ss.4999 of the
                         Code;  provided,  however, if the amount of such excise
                         tax is finally  determined  to be more or less than the
                         amount paid to the Executive hereunder, the Corporation
                         (or the Executive if the finally  determined  amount is
                         less  than the  original  amount  paid)  shall  pay the
                         difference  between the amount  originally paid and the
                         finally  determined  amount to the other party no later
                         than  the  fifth  day  following  the date  such  final
                         determination is made;

                    (F)  The   Corporation   shall  pay  to  the  Executive  all
                         reasonable  legal  fees and  expenses  incurred  by the
                         Executive  as a result of such  termination  (including
                         all  such  fees  and  expenses,  if  any,  incurred  in
                         contesting  or  disputing  any such  termination  or in
                         seeking  to obtain  or  enforce  any  right or  benefit
                         provided by this Agreement),  unless the decision-maker
                         in  any   proceeding,   contest,   or  dispute  arising
                         hereunder makes a formal finding that the Executive did
                         not  have  a  reasonable  basis  for  instituting  such
                         proceeding, contest, or dispute;

                    (G)  The  Corporation   shall  provide  the  Executive  with
                         individual  out-placement  services in accordance  with
                         the general custom and practice  generally  accorded to
                         an executive of the Executive's position.

         5. Successors; Binding Agreement.

                    (A)  The  Corporation  shall require any successor  (whether
                         direct or indirect, by purchase, merger,  consolidation
                         or  otherwise)  to  all  or  substantially  all  of the
                         business  and/or assets of the Corporation to expressly
                         assume and agree to perform this  Agreement in the same
                         manner  and to the same  extent  that  the  Corporation
                         would be required  to perform it if no such  succession
                         had taken place.  Failure of the  Corporation to obtain
                         such    assumption   and   agreement   prior   to   the
                         effectiveness  of any such succession shall be a breach
                         of this  Agreement  and shall  entitle the Executive to
                         compensation  from the  Corporation  in the same amount
                         and on the same terms to which the  Executive  would be
                         entitled  hereunder  if the  Executive  terminates  his
                         employment  on  account  of  Constructive   Termination
                         following  a  Change  of  Control  of the  Corporation,
                         except  that  for  the  purposes  of  implementing  the
                         foregoing,  the  date  on  which  any  such  succession
                         becomes   effective   shall  be  deemed   the  Date  of
                         Termination.   As   used  in   this   Agreement,   "the
                         Corporation"   shall  mean  the   Corporation  and  any
                         successor  to its business  and/or  assets as aforesaid
                         which assumes and agrees to perform this Agreement,  by
                         operation of law or otherwise.

                    (B)  This  Agreement  shall  inure to the  benefit of and be
                         enforceable  by the Executive and his personal or legal
                         representatives, executors, administrators, successors,
                         heirs,  distributees,  devisees  and  legatees.  If the
                         Executive  should die while any amount  would  still be
                         payable to the  Executive  hereunder  had the Executive
                         continued to live, all such amounts,  unless  otherwise
                         provided  herein,  shall be paid in accordance with the
                         terms of this  Agreement  to the  devisee,  legatee  or
                         other designee or, if there is no such designee, to his
                         estate.

         6. Miscellaneous.

     No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by the
Executive and such officer as may be specifically designated by the Corporation.
No waiver by either  party  hereto at the time of any breach by the other  party
hereto of, or compliance  with,  any condition or provision of this Agreement to
be  performed  by such  other  party  shall be  deemed a waiver  of  similar  or
dissimilar  provisions  or  conditions at the same or at any prior or subsequent
time. No agreement or  representations,  oral or otherwise,  express or implied,
with respect to the subject  matter  hereof have been made by either party which
are not expressly  set forth in this  Agreement.  The validity,  interpretation,
construction  and performance of this Agreement shall be governed by the laws of
the State of Indiana  without  regard to its  conflicts of law  principles.  All
references  to a section of the Exchange Act or the Code shall be deemed also to
refer to any successor  provisions to such  section.  Any payments  provided for
hereunder  shall  be  paid  net of any  applicable  withholding  required  under
federal,  state or local law. The obligations of the Corporation under Section 4
shall survive the expiration of the term of this Agreement.

         7. Validity.

     The invalidity or unenforceability of any provision of this Agreement shall
not  affect  the  validity  or  enforceability  of any other  provision  of this
Agreement, which shall remain in full force and effect.

         8. Counterparts.

     This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original,  but all of which together shall constitute one and
the same instrument.

         9. Arbitration.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
Agreement shall be settled exclusively by arbitration,  conducted before a panel
of three (3) arbitrators in Muncie,  Indiana in accordance with the rules of the
American Arbitration  Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that the
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination  during the pendency of any dispute or controversy
arising under or in connection with this Agreement.



<PAGE>

         10.      Entire Agreement.

         This Agreement sets forth the entire agreement of the parties hereto in
respect  of the  subject  matter  contained  herein  and  supersedes  all  prior
agreements, promises, covenants, arrangements,  communications,  representations
or  warranties,   whether  oral  or  written,   by  any  officer,   employee  or
representative  of any party  hereto;  and any prior  agreement  of the  parties
hereto in respect of the subject matter  contained  herein is hereby  terminated
and cancelled.

         IN  WITNESS  WHEREOF,  the  Corporation has caused this Agreement to be
executed by their duly  authorized  officers,  and the  Executive  has hereunder
subscribed his name, as of the day and year first above written.


"CORPORATION"                                        "EXECUTIVE"

FIRST MERCHANTS CORPORATION


By ______________________________           By ______________________________
  Michael C. Rechin                            David Spade
  President & Chief Executive Officer



<PAGE>

                                  Exhibit 10.3

                                    LORENTSON
                           CHANGE OF CONTROL AGREEMENT


     This  Agreement  is made and entered  into as of October 24,  2007,  by and
between  First  Merchants  Corporation,   an  Indiana  corporation  (hereinafter
referred to as  "Corporation"),  with its principal  office  located at 200 East
Jackson Street, Muncie,  Indiana, and Jeffrey B. Lorentson (hereinafter referred
to as "Executive"), of Muncie, Indiana.

     WHEREAS,  the  Corporation  considers the  continuance  of  proficient  and
experienced  management  to be essential to  protecting  and  enhancing the best
interests of the Corporation and its shareholders; and

     WHEREAS,  the Corporation  desires to assure the continued  services of the
Executive on behalf of the Corporation; and

     WHEREAS,  the  Corporation  recognizes  that if faced with a proposal for a
Change of Control, as hereinafter defined, the Executive will have a significant
role in helping the Board of Directors assess the options and advising the Board
of  Directors  on what  is in the  best  interests  of the  Corporation  and its
shareholders;  and it is necessary  for the Executive to be able to provide this
advice  and  counsel  without  being  influenced  by  the  uncertainties  of the
Executive's own situation; and

     WHEREAS, the Corporation desires to provide fair and reasonable benefits to
the  Executive  on the terms and  subject  to the  conditions  set forth in this
Agreement.

     NOW,  THEREFORE,  in consideration of the mutual covenants and undertakings
herein  contained  and  the  continued   employment  of  the  Executive  by  the
Corporation as its Senior Vice President and Chief Risk Officer, the Corporation
and the Executive,  each  intending to be legally  bound,  covenant and agree as
follows:

         1. Term of Agreement.

     This  Agreement  shall  continue  in  effect  through  December  31,  2007;
provided,  however,  that  commencing  on December 31, 2007 and each December 31
thereafter,  the term of this Agreement shall  automatically be extended for one
additional  year  unless,  not  later  than  October  31,  2007  or  October  31
immediately  preceding any December 31 thereafter,  the  Corporation  shall have
given the Executive  notice that it does not wish to extend this Agreement;  and
provided further, that if a Change of Control of the Corporation,  as defined in
Section 2, shall have  occurred  during the  original or  extended  term of this
Agreement, this Agreement shall continue in effect for a period of not less than
twenty-four  (24)  months  beyond  the month in which  such  Change  of  Control
occurred.



<PAGE>



         2. Definitions.

         For purposes of this Agreement, the following definitions shall apply:

                  (A) Cause: "Cause" shall mean:

                           (1) professional incompetence;

                           (2)      willful misconduct;

                           (3)      personal dishonesty;

                           (4)      breach of fiduciary duty involving personal
                                    profit;

                           (5)      intentional failure to perform stated
                                    duties;

                           (6)      willful violation of any law, rule or
                                    regulation (other than traffic violations or
                                    similar offenses) or final cease and desist
                                    orders; and

                           (7)      any intentional material breach of any term,
                                    condition or covenant of this Agreement.

                  (B) Change of Control: "Change of Control" shall mean:

                           (1)      any person (as such term is used in Sections
                                    13(d) and 14(d) of the Securities Exchange
                                    Act of 1934 ["Exchange Act"]), other than
                                    the Corporation, is or becomes the
                                    Beneficial Owner (as defined in Rule 13d-3
                                    under the Exchange Act) directly or
                                    indirectly of securities of the Corporation
                                    representing twenty-five percent (25%) or
                                    more of the combined voting power of the
                                    Corporation's then outstanding securities;

                           (2)      persons constituting a majority of the Board
                                    of Directors of the Corporation were not
                                    directors of the Corporation for at least
                                    the twenty-four (24) preceding months;

                           (3)      the stockholders of the Corporation approve
                                    a merger or consolidation of the Corporation
                                    with any other corporation, other than (a) a
                                    merger or consolidation which would result
                                    in the voting securities of the Corporation
                                    outstanding immediately prior thereto
                                    continuing to represent (either by remaining
                                    outstanding or by being converted into
                                    voting securities of the surviving entity)
                                    more than fifty percent (50%) of the
                                    combined voting power of the voting
                                    securities of the Corporation or such
                                    surviving entity outstanding immediately
                                    after such a merger or consolidation, or (b)
                                    a merger or consolidation effected to
                                    implement a recapitalization of the
                                    Corporation (or similar transaction) in
                                    which no person acquires fifty percent (50%)
                                    or more of the combined voting power of the
                                    Corporation's then outstanding securities;
                                    or

                           (4)      the stockholders of the Corporation approve
                                    a plan of complete liquidation of the
                                    Corporation or an agreement for the sale or
                                    disposition by the Corporation of all or
                                    substantially all of the Corporation's
                                    assets.

                  (C)      Date of Termination: "Date of Termination" shall mean
                           the date stated in the Notice of Termination (as
                           hereinafter defined) or thirty (30) days from the
                           date of delivery of such notice, as hereinafter
                           defined, whichever comes first.

                  (D)      Disability: "Disability" shall mean the definition of
                           such term as used in the disability policy then in
                           effect for the Corporation, and a determination of
                           full disability by the Corporation; provided that in
                           the event there is no disability insurance then in
                           force, "disability" shall mean incapacity due to
                           physical or mental illness which will have caused the
                           Executive to have been unable to perform his duties
                           with the Corporation on a full time basis for one
                           hundred eighty (180) consecutive calendar days.

                  (E)      Notice of Termination: "Notice of Termination" shall
                           mean a written notice, communicated to the other
                           parties hereto, which shall indicate the specific
                           termination provisions of this Agreement relied upon
                           and set forth in reasonable detail the facts and
                           circumstances claimed to provide a basis for
                           termination of the Executive's employment under the
                           provisions so indicated.

                  (F)      Retirement: "Retirement" shall mean termination of
                           employment by the Executive in accordance with the
                           Corporation's normal retirement policy generally
                           applicable to its salaried employees in effect at the
                           time of a Change of Control.
         3. Termination.

                    (A)  General.  If any of the events  described  in Section 2
                         constituting  a Change in  Control  of the  Corporation
                         shall have occurred, the Executive shall be entitled to
                         the benefits described in Section 4 upon the subsequent
                         termination of the  Executive's  employment  during the
                         term of this Agreement,  unless such termination is (a)
                         because of the death or  Disability  of the  Executive,
                         (b)  by  the  Corporation  for  Cause,  or  (c)  by the
                         Executive   other  than  on  account  of   Constructive
                         Termination (as hereinafter defined).

                  (B)    If,  following  a Change of  Control,  the  Executive's
                         employment   shall  be   terminated   for  Cause,   the
                         Corporation  shall pay him his salary  through the Date
                         of Termination at the rate in effect on the date of the
                         Notice of Termination,  and the Corporation  shall have
                         no  further  obligations  under  this  Agreement.   If,
                         following   a  Change  of  Control,   the   Executive's
                         employment  shall be terminated as a result of death or
                         Disability, compensation to the Executive shall be made
                         pursuant to the Corporation's then existing policies on
                         death or Disability,  and the Corporation shall have no
                         further obligations under this Agreement. If, following
                         a Change of  Control,  the  Executive's  employment  is
                         terminated  by and at the request of the Executive as a
                         result of  Retirement,  compensation  to the  Executive
                         shall  be made  pursuant  to the  Corporation's  normal
                         retirement policy generally  applicable to its salaried
                         employees at the time of the Change of Control, and the
                         Corporation  shall  have no further  obligations  under
                         this Agreement.

                    (C)  Constructive   Termination.   The  Executive  shall  be
                         entitled  to   terminate   his   employment   upon  the
                         occurrence of Constructive Termination. For purposes of
                         this Agreement,  "Constructive Termination" shall mean,
                         without the Executive's  express written  consent,  the
                         occurrence,   after  a  Change   of   Control   of  the
                         Corporation, of any of the following circumstances:

                           (1)      the assignment to the Executive of any
                                    duties inconsistent (unless in the nature of
                                    a promotion) with the position in the
                                    Corporation that the Executive held
                                    immediately prior to the Change of Control
                                    of the Corporation, or a significant adverse
                                    reduction or alteration in the nature or
                                    status of the Executive's position, duties
                                    or responsibilities or the conditions of the
                                    Executive's employment from those in effect
                                    immediately prior to such Change of Control;

                           (2)      a reduction in the Executive's annual base
                                    salary, as in effect immediately prior to
                                    the Change of Control of the Corporation or
                                    as the same may be adjusted from time to
                                    time, except for across-the-board salary
                                    reductions similarly affecting all
                                    management personnel of the Corporation;

                           (3)      the Corporation requires the Executive to be
                                    relocated anywhere other than its offices in
                                    Muncie, Indiana;

                           (4)      the taking of any action to deprive the
                                    Executive of any material fringe benefit
                                    enjoyed by him at the time of the Change of
                                    Control, or the failure to provide him with
                                    the number of paid vacation days to which he
                                    is entitled on the basis of years of service
                                    with the Corporation and in accordance with
                                    the Corporation's normal vacation policy in
                                    effect at the time of the Change of Control;

                           (5)      the failure to continue to provide the
                                    Executive with benefits substantially
                                    similar to those enjoyed by the Executive
                                    under any of the Corporation's life
                                    insurance, medical, health and accident, or
                                    disability plans in which the Executive was
                                    participating at the time of the Change of
                                    Control of the Corporation, or the taking of
                                    any action which would directly or
                                    indirectly materially reduce any of such
                                    benefits; or

                           (6)      the failure of the Corporation to continue
                                    this Agreement in effect, or to obtain a
                                    satisfactory agreement from any successor to
                                    assume and agree to perform this Agreement,
                                    as contemplated in Section 5 hereof.

         4. Compensation Upon Termination.

     Following a Change of Control,  if his employment by the Corporation  shall
be terminated by the Executive on account of Constructive  Termination or by the
Corporation other than for Cause,  death,  Disability,  or Retirement (by and at
the  request of the  Executive),  then the  Executive  shall be  entitled to the
benefits provided below:

                    (A)  No  later  than the  fifth  day  following  the Date of
                         Termination, the Corporation shall pay to the Executive
                         his full base salary  through the Date of  Termination,
                         at the rate in effect at the time Notice of Termination
                         is given, plus all other amounts to which the Executive
                         is  entitled  under  any  incentive,   bonus  or  other
                         compensation  plan of the  Corporation in effect at the
                         time such payments are due;

                    (B)  In lieu of any further salary payments to the Executive
                         for periods  subsequent to the Date of Termination,  no
                         later  than  the  fifth  day   following  the  Date  of
                         Termination, the Corporation shall pay to the Executive
                         a lump sum severance payment, in cash, equal to one and
                         one-half  (1.50)  times the sum of (a) the  Executive's
                         annual base salary rate as in effect on the date of the
                         Notice  of  Termination,  and  (b)  the  largest  bonus
                         received  by the  Executive  during  the two (2)  years
                         immediately preceding the Date of Termination under the
                         Corporation's  Management  Incentive  Plan covering the
                         Executive;

                    (C)  During the period  beginning with the Executive's  Date
                         of Termination and continuing  until the earlier of (a)
                         the second anniversary of such Date of Termination,  or
                         (b)  Executive's   sixty-fifth  (65th)  birthday,   the
                         Corporation shall arrange to provide the Executive with
                         life,   disability,   accident  and  health   insurance
                         benefits  substantially  similar  to  those  which  the
                         Executive was receiving immediately prior to the Notice
                         of Termination and shall pay the same percentage of the
                         cost of such benefits as the  Corporation was paying on
                         the Executive's behalf on the date of such Notice;

                    (D)  In lieu of shares of  common  stock of the  Corporation
                         ("Corporation  Shares")  issuable  upon the exercise of
                         outstanding options ("Options"), if any, granted to the
                         Executive  under  any  Corporation  stock  option  plan
                         (which  Options  shall be cancelled  upon the making of
                         the payment  referred to below),  the  Executive  shall
                         receive an amount in cash  equal to the  product of (a)
                         the  excess  of the  higher  of the  closing  price  of
                         Corporation  Shares as reported on the NASDAQ  National
                         Market  System,  the American Stock Exchange or the New
                         York Stock Exchange, wherever listed, on or nearest the
                         Date of  Termination or the highest per share price for
                         Corporation Shares actually paid in connection with any
                         Change  of  Control  of the  Corporation,  over the per
                         share  exercise  price  of  each  Option  held  by  the
                         Executive  (whether  or not  then  fully  exercisable),
                         times (b) the number of  Corporation  Shares covered by
                         each such Option;

                    (E)  If the payments or benefits,  if any, received or to be
                         received by the Executive (whether under this Agreement
                         or under  any other  plan,  arrangement,  or  agreement
                         between  the   Executive  and  the   Corporation),   in
                         connection with termination or Constructive Termination
                         of the  Executive's  employment  following  a Change of
                         Control,   constitute  an  "excess  parachute  payment"
                         within the meaning of ss.280G of the  Internal  Revenue
                         Code  ("Code"),   the  Corporation  shall  pay  to  the
                         Executive,  no later than the fifth day  following  the
                         Date  of   Termination,   an   additional   amount  (as
                         determined  by  the  Corporation's  independent  public
                         accountants)  equal to the excise tax, if any,  imposed
                         on the "excess parachute  payment" under ss.4999 of the
                         Code;  provided,  however, if the amount of such excise
                         tax is finally  determined  to be more or less than the
                         amount paid to the Executive hereunder, the Corporation
                         (or the Executive if the finally  determined  amount is
                         less  than the  original  amount  paid)  shall  pay the
                         difference  between the amount  originally paid and the
                         finally  determined  amount to the other party no later
                         than  the  fifth  day  following  the date  such  final
                         determination is made;

                    (F)  The   Corporation   shall  pay  to  the  Executive  all
                         reasonable  legal  fees and  expenses  incurred  by the
                         Executive  as a result of such  termination  (including
                         all  such  fees  and  expenses,  if  any,  incurred  in
                         contesting  or  disputing  any such  termination  or in
                         seeking  to obtain  or  enforce  any  right or  benefit
                         provided by this Agreement),  unless the decision-maker
                         in  any   proceeding,   contest,   or  dispute  arising
                         hereunder makes a formal finding that the Executive did
                         not  have  a  reasonable  basis  for  instituting  such
                         proceeding, contest, or dispute;

                    (G)  The  Corporation   shall  provide  the  Executive  with
                         individual  out-placement  services in accordance  with
                         the general custom and practice  generally  accorded to
                         an executive of the Executive's position.

         5. Successors; Binding Agreement.

                    (A)  The  Corporation  shall require any successor  (whether
                         direct or indirect, by purchase, merger,  consolidation
                         or  otherwise)  to  all  or  substantially  all  of the
                         business  and/or assets of the Corporation to expressly
                         assume and agree to perform this  Agreement in the same
                         manner  and to the same  extent  that  the  Corporation
                         would be required  to perform it if no such  succession
                         had taken place.  Failure of the  Corporation to obtain
                         such    assumption   and   agreement   prior   to   the
                         effectiveness  of any such succession shall be a breach
                         of this  Agreement  and shall  entitle the Executive to
                         compensation  from the  Corporation  in the same amount
                         and on the same terms to which the  Executive  would be
                         entitled  hereunder  if the  Executive  terminates  his
                         employment  on  account  of  Constructive   Termination
                         following  a  Change  of  Control  of the  Corporation,
                         except  that  for  the  purposes  of  implementing  the
                         foregoing,  the  date  on  which  any  such  succession
                         becomes   effective   shall  be  deemed   the  Date  of
                         Termination.   As   used  in   this   Agreement,   "the
                         Corporation"   shall  mean  the   Corporation  and  any
                         successor  to its business  and/or  assets as aforesaid
                         which assumes and agrees to perform this Agreement,  by
                         operation of law or otherwise.

                    (B)  This  Agreement  shall  inure to the  benefit of and be
                         enforceable  by the Executive and his personal or legal
                         representatives, executors, administrators, successors,
                         heirs,  distributees,  devisees  and  legatees.  If the
                         Executive  should die while any amount  would  still be
                         payable to the  Executive  hereunder  had the Executive
                         continued to live, all such amounts,  unless  otherwise
                         provided  herein,  shall be paid in accordance with the
                         terms of this  Agreement  to the  devisee,  legatee  or
                         other designee or, if there is no such designee, to his
                         estate.

         6. Miscellaneous.

     No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by the
Executive and such officer as may be specifically designated by the Corporation.
No waiver by either  party  hereto at the time of any breach by the other  party
hereto of, or compliance  with,  any condition or provision of this Agreement to
be  performed  by such  other  party  shall be  deemed a waiver  of  similar  or
dissimilar  provisions  or  conditions at the same or at any prior or subsequent
time. No agreement or  representations,  oral or otherwise,  express or implied,
with respect to the subject  matter  hereof have been made by either party which
are not expressly  set forth in this  Agreement.  The validity,  interpretation,
construction  and performance of this Agreement shall be governed by the laws of
the State of Indiana  without  regard to its  conflicts of law  principles.  All
references  to a section of the Exchange Act or the Code shall be deemed also to
refer to any successor  provisions to such  section.  Any payments  provided for
hereunder  shall  be  paid  net of any  applicable  withholding  required  under
federal,  state or local law. The obligations of the Corporation under Section 4
shall survive the expiration of the term of this Agreement.

         7. Validity.

     The invalidity or unenforceability of any provision of this Agreement shall
not  affect  the  validity  or  enforceability  of any other  provision  of this
Agreement, which shall remain in full force and effect.

         8. Counterparts.

     This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original,  but all of which together shall constitute one and
the same instrument.

         9. Arbitration.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
Agreement shall be settled exclusively by arbitration,  conducted before a panel
of three (3) arbitrators in Muncie,  Indiana in accordance with the rules of the
American Arbitration  Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that the
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination  during the pendency of any dispute or controversy
arising under or in connection with this Agreement.

<PAGE>

         10.      Entire Agreement.

         This Agreement sets forth the entire agreement of the parties hereto in
respect  of the  subject  matter  contained  herein  and  supersedes  all  prior
agreements, promises, covenants, arrangements,  communications,  representations
or  warranties,   whether  oral  or  written,   by  any  officer,   employee  or
representative  of any party  hereto;  and any prior  agreement  of the  parties
hereto in respect of the subject matter  contained  herein is hereby  terminated
and cancelled.

         IN  WITNESS  WHEREOF,  the  Corporation has caused this Agreement to be
executed by their duly  authorized  officers,  and the  Executive  has hereunder
subscribed his name, as of the day and year first above written.


"CORPORATION"                                        "EXECUTIVE"

FIRST MERCHANTS CORPORATION


By ______________________________           By ______________________________
   Michael C. Rechin                           Jeffrey B. Lorentson
   President & Chief Executive Officer



<PAGE>

                                  Exhibit 99.1


N / E / W / S     R / E / L / E / A / S / E

FOR IMMEDIATE RELEASE
For more information, contact:
Andrew Weixler, 765-747-1360

First Merchants Corporation Elects William L. Hoy to its Board of Directors

October 29, 2007

Muncie, Indiana - First Merchants Corporation, a multi billion financial holding
company, elected William L. Hoy to its Board of Directors last week during their
regular meeting. Mr. Hoy is Vice President, Chief Executive Officer and Co-Owner
of The Columbus Sign Company,  a custom sign and graphic  fabricator  located in
Columbus,  Ohio.  Additionally,  Mr. Hoy is Co-Owner of Innocom Corporation,  an
environmental  graphic  design  and  custom  display  company,  as  well  as M&B
Properties, a real estate partnership.

Michael C. Rechin,  President  and Chief  Executive  Officer of First  Merchants
Corporation,  stated, "Bill's strong business acumen and experience, in addition
to his long-standing community leadership,  complements the values our board and
company  exemplify.  He joins a diverse group of individuals  with  professional
backgrounds in corporate and financial management,  academics and public service
to  ensure a broad  range of  skills,  experience  and  perspectives  among  the
leadership that will guide us in the future."

Mr. Hoy commented, "I am excited and honored to have the opportunity to share my
community based  experiences,  business  perspective and banking philosophy with
First Merchants Corporation."

Mr.  Hoy is a  resident  and  business  owner in  Central  Ohio and  serves  the
community through his work with local  organizations,  including  longtime board
membership and current president of the Columbus Zoo & Aquarium.  Bill is also a
member of the Columbus Area Chamber of Commerce and Experience Columbus. He is a
Commerce  National  Bank  founding  director  and board  member.  Mr. Hoy earned
undergraduate and graduate degrees from The Ohio State University.

About First Merchants Corporation

First  Merchants  Corporation  (Nasdaq:  FRME),  the largest  financial  holding
company based in Central Indiana with over $3.7 billion in assets, includes four
banks with 67 locations in 17 Indiana and three Ohio  counties,  a trust company
with assets in excess of $1.7 billion, and a multi-line insurance agency.

Subsidiaries of the Corporation include:

      *  First Merchants Bank in Adams, Delaware, Fayette, Hamilton, Henry,
         Howard, Jay, Miami, Randolph, Union, Wabash, Wayne and Butler (OH)
         counties

      *  First Merchants Bank of Central Indiana in Madison County

      *  Lafayette Bank and Trust Company in Tippecanoe, Carroll, Jasper and
         White counties

      *  Commerce National Bank in Franklin and Hamilton counties in Ohio

      *  First Merchants Trust Company

      *  First Merchants Insurance Services

For more information, visit www.firstmerchants.com.


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