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): January 1, 2008

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

                           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)

                                 Not Applicable
          (Former name or former address, if changed since last report)

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))

<PAGE>
Item 1.01.        Entry into a Material Definitive Agreement.

     (a) Effective as of January 1, 2008,  First Merchants  Corporation  amended
its  Change  of  Control   Agreements  (the  "Agreements")  with  the  following
individuals:  Robert R. Connors, its Senior Vice President and Chief Information
Officer;  and Kimberly J.  Ellington,  its Senior Vice President and Director of
Human  Resources.   The  amendments  serve  to  modify  the  "Compensation  Upon
Termination"  section  of each  Agreement  to provide  for a lump sum  severance
payment  equal to one and five tenths  (1.50)  times the sum of the defined base
salary rate and bonus,  rather than the previous multiple of two (2.00).  Copies
of the  Agreements,  as amended,  are attached hereto as Exhibits 10.1 and 10.2,
respectively.

Item 9.01.        Financial Statements and Exhibits.

     (d) Exhibits.

     (10.1) Change of Control Agreement between First Merchants  Corporation and
Robert R. Connors, dated August 14, 2002, as amended on January 1, 2008.

     (10.2) Change of Control Agreement between First Merchants  Corporation and
Kimberly J. Ellington, dated January 1, 2005, as amended on January 1, 2008.


<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:  January 3, 2008

                                          FIRST MERCHANTS CORPORATION


                                          By:  /s/ Mark K. Hardwick
                                                Mark K. Hardwick,
                                                Executive Vice President and
                                                Chief Financial Officer


<PAGE>
                                  EXHIBIT INDEX


     10.1 Change of Control  Agreement  between First Merchants  Corporation and
Robert R. Connors, dated August 14, 2002, as amended on January 1, 2008.

     10.2 Change of Control  Agreement  between First Merchants  Corporation and
Kimberly J. Ellington, dated January 1, 2005, as amended on January 1, 2008.

<PAGE>
                                  Exhibit 10.1
                                     CONNORS
                           CHANGE OF CONTROL AGREEMENT


     This  Agreement  is made and  entered  into as of January  1, 2008,  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 Robert C. Connors (hereinafter referred to
as "Executive"), of Carmel, 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  Information  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,  2008;
provided,  however,  that  commencing  on December 31, 2008 and each December 31
thereafter,  the term of this Agreement shall  automatically be extended for one
additional  year  unless,  not  later  than  October  31,  2008  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                             Robert C. Connors
    President & Chief Executive Officer


<PAGE>

                                  Exhibit 10.2
                                    ELLINGTON
                           CHANGE OF CONTROL AGREEMENT


     This  Agreement  is made and  entered  into as of January  1, 2008,  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 Kimberly J. Ellington (hereinafter referred
to as "Executive"), of Yorktown, 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 Director of Human  Resources,  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,  2008;
provided,  however,  that  commencing  on December 31, 2008 and each December 31
thereafter,  the term of this Agreement shall  automatically be extended for one
additional  year  unless,  not  later  than  October  31,  2008  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                            Kimberly J. Ellington
    President & Chief Executive Officer