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): April 29, 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 1 of 5

<PAGE>
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS;  ELECTION OF DIRECTORS,
APPOINTMENT OF PRINCIPAL OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

(d)  First Merchants  Corporation (the  "Corporation")  previously reported on a
     Form 8-K, dated October 23, 2007, that William L. Hoy had been appointed to
     the  Corporation's  Board of  Directors.  On April 29,  2008,  Mr.  Hoy was
     appointed to the Audit Committee of the Corporation's Board of Directors.

(e)  On April  29,  2008,  the  Corporation  entered  into a Change  of  Control
     Agreement  with Michael J. Stewart,  its Executive Vice President and Chief
     Banking Officer. This agreement provides for certain payments to be made to
     Mr. Stewart upon certain "Changes in Control" of the Corporation. A copy of
     this agreement is attached hereto as Exhibit 10.1.

ITEM  5.05.  AMENDMENTS  TO THE  REGISTRANT'S  CODE OF  ETHICS,  OR  WAIVER OF A
PROVISION OF THE CODE OF ETHICS.

(a)  On April 29, 2008,  the Board of Directors of the  Corporation  amended the
     Corporation's Code of Conduct to clarify internal  cross-references  to the
     supplemental Code of Ethics applicable to the Corporation's chief executive
     officer and senior financial  officers.  A copy of the Code of Conduct,  as
     amended, is attached hereto as Exhibit 14.1.

ITEM 8.01  OTHER EVENTS

On May 5, 2008, First Merchants  Corporation  issued a press release  announcing
the  declaration  of a  quarterly  cash  dividend  of $0.23 per share.  The cash
dividend  is payable on June 20,  2008 to  stockholders  of record as of June 6,
2008.  A copy of the press  release is furnished as Exhibit 99.1 to this Current
Report on Form 8-K.

     The  information  in this Form 8-K and the  attached  exhibit  shall not be
deemed  "filed" for  purposes of Section 18 of the  Securities  Exchange  Act of
1934,  as amended (the  "Exchange  Act"),  or  incorporated  by reference in any
filing under the Securities Act of 1933, as amended, or the Exchange Act, except
as shall be expressly set forth by specific reference in such a filing.

ITEM 9.01  FINANCIAL STATEMENTS AND EXHIBITS.

(a)        Not applicable.

(b)        Not applicable.

(c)        Not applicable.

(d)        Exhibits.

           Exhibit 10.1      Michael J.  Stewart  Change of  Control  Agreement,
                             dated April 29, 2008

           Exhibit 14.1      Code of Conduct, as amended April 29, 2008

           Exhibit 99.1      Press Release, dated May 5, 2008, issued  by  First
                             Merchants Corporation

                                  Page 2 of 5
<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.

                                 First Merchants Corporation
                                        (Registrant)

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


Dated:  May 5, 2008


                                  Page 3 of 5
<PAGE>
                                 EXHIBIT INDEX
                                 -------------

Exhibit No.
-----------
    10.1                Description
                        -----------
                        Michael  J. Stewart  Change of Control  Agreement, dated
                        April 29, 2008.

    14.1                Description
                        -----------
                        Code of Conduct, as amended April 29, 2008.

    99.1                Description
                        -----------
                        Press Release, dated May 5, 2008, issued by
                        First Merchants Corporation.


                                  Page 4 of 5
<PAGE>

                          First Merchants Corporation

                                 Exhibit No. 10.1

      Michael J. Stewart Change of Control Agreement, dated April 29, 2008


                           CHANGE OF CONTROL AGREEMENT


This  Agreement is made and entered  into as of April 29,  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  Michael  J.  Stewart   (hereinafter   referred  to  as
"Executive"), of Indianapolis, 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 Executive Vice President and Chief Banking 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
<page>
               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.
<page>
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;
<page>

          (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 two and
          ninety-nine  hundredths  (2.99)  times the sum of (a) the  Executive's
<page>
          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  ss280G  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 ss4999 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;
<page>
     (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.
<page>

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                           Michael J. Stewart
     President & Chief Executive Officer

<page>
                          First Merchants Corporation

                                 Exhibit No. 14.1

                   Code of Conduct, as amended April 29, 2008





                           FIRST MERCHANTS CORPORATION

                                 CODE OF CONDUCT


























                                                              Revised April 2008

<page>
<table>
<caption>

                                                  TABLE OF CONTENTS
<S>             <C>                                                                                     <C>
A.       Introduction....................................................................................1
B.       Confidential Information........................................................................2
   1.    Customer and Supplier Information...............................................................2
   2.    Employee Information............................................................................3
   3.    Inside Information..............................................................................3
C.       Conflicts of Interest...........................................................................3
   1.    Dealing with Customers, Suppliers or Competitors in Business Ventures...........................4
   2.    Borrowing from Customers or Suppliers...........................................................4
   3.    Gifts to Employees, Officers or Directors.......................................................4
D.       Public Communications...........................................................................5
   1.    Regulatory Disclosures and Public Comments......................................................5
   2.    Media Inquiries.................................................................................5
E.       Lending Practices...............................................................................6
   1.    Granting of Preferential Rates..................................................................6
   2.    Prohibited Lending Practices....................................................................6
F.       Political Contributions.........................................................................6
   1.    Prohibitions....................................................................................6
   2.    Personal Political Contributions................................................................7
G.       Outside Activities..............................................................................7
   1.    Community Service...............................................................................7
   2.    Fiduciary Appointments..........................................................................7
   3.    Political Activities............................................................................7
   3.    Political Activities............................................................................7
   4.    Outside Employment and Board Service............................................................8
H.       Personal Financial Responsibility...............................................................8
   1.    General.........................................................................................8
   2.    Borrowing from other Financial Institutions.....................................................8
   3.    Borrowing from Customers or Suppliers...........................................................9
   4.    Taking Advantage of a Business Opportunity that Rightfully Belongs to the Company...............9
   5.    Corporate Property Services.....................................................................9
   6.    Employee Purchase of Company Assets.............................................................9
   7.    Purchase of Property Held by the Company as a Fiduciary........................................10
   8.    Handling of Personal Accounts..................................................................10
I.       Personal Trading and Investments...............................................................10
   1.    Investment in Securities of a Customer, Supplier, or Competitor................................10
   2.    Securities Trading.............................................................................11
   3.    Non-public and/or Material Inside Information..................................................12
   4.    Preferential Treatment.........................................................................12
   5.    Securities Transactions by Trust and Investment Personnel......................................12
   6.    Investment in First Merchants Corporation Securities...........................................12
J.       Code of Ethics for First Merchants Corporation Financial Management............................12
</table>


<page>


                           First Merchants Corporation
                                 Code of Conduct

A.   Introduction

The First Merchants  Corporation  Code of Conduct  consists of two parts:  (1) a
comprehensive  code of ethical and legal  business  conduct  (Sections A-I) that
applies to all directors,  officers and employees of First Merchants Corporation
and its affiliates (collectively, the "Company";  and (2) a supplemental Code of
Ethics for First Merchants  Corporation  Financial  Management  (Section J) that
applies to the chief executive  officer and senior  financial  officers of First
Merchants  Corporation,  in  recognition  of their unique  responsibilities  for
assuring proper accounting, financial reporting and internal controls.

The comprehensive  code of ethical and legal business conduct  applicable to all
of the Company's directors, officers and employees is adopted in accordance with
NASDAQ Marketplace Rule 4350(n);  and the supplemental code of ethics applicable
to the chief  executive  officer  and senior  financial  officers  is adopted in
accordance with Section 406 of the Sarbanes-Oxley Act of 2002 and Securities and
Exchange  Commission  ("SEC")  Regulation S-K, Item 406. The text of the Code of
Conduct  has been  posted on the  Company's  Internet  website.  The text of the
supplemental  Code of Ethics  for  Financial  Management  has also  been  posted
separately on the website.

The Code of Conduct provides general principles of personal and business conduct
that are  intended to promote  ethical  behavior,  proper  handling of actual or
apparent  conflicts of interest,  full and fair disclosure,  and compliance with
applicable  laws,  rules and  regulations.  It does not  cover  all  conceivable
situations  but sets forth basic  responsibilities  for  representatives  of the
Company.  It sets forth basic  standards of conduct,  not  necessarily  ideal or
maximum standards.

The essence of the financial services industry is trust and confidence. Thus, it
is imperative that  representatives of the Company display,  and be perceived by
the public as displaying,  the highest  principles of personal and  professional
integrity.  They must always  keep in mind that the  standards  of behavior  and
performance  the  public  expects  of  the  Company's  directors,  officers  and
employees, and that the Company has pledged to meet, are higher than the general
norms for the business world.  The Company assumes that its employees,  officers
and directors will comply with all laws, rules and regulations applicable to the
Company and their own personal conduct.

Compliance with the Code of Conduct is a condition of employment and for service
as a director.  Anyone who is aware of a violation  or apparent  violation by an
employee,  officer or director should report the same to the appropriate  person
or persons,  which,  depending on the nature of the alleged violation and/or the
position  held by the alleged  violator,  may be a  supervisor,  the Director of
Human Resources,  the CEO or other executive officer of the Company or a Company
affiliate, the Chairman of the Board or of the Audit Committee of the Company or
a Company  affiliate,  and/or the Company's  Legal Counsel  (which may be either
in-house  counsel  or counsel  to the Board of  Directors).  Failure to report a
serious violation of which an employee, officer or director is aware to a proper
Company  official or  representative  may itself be a  violation  of the Code of
Conduct, depending on the circumstances. The Company will take such disciplinary
<page>
or preventive  action as is appropriate  under the  circumstances to address any
existing or potential  violation  that is brought to the attention of the proper
authority.  No adverse  action will be taken against  anyone who, in good faith,
reports a violation or potential violation of the Code of Conduct.

Any waiver of a provision  of the Code of Conduct  applicable  to  directors  or
executive  officers of the Company must be approved by the Board of Directors of
First Merchants Corporation.  The Company shall disclose such waiver, along with
the reasons for the waiver, in a Form 8-K filed with the Securities and Exchange
Commission  ("SEC") within four (4) business  days.  With rare  exceptions,  the
Company will not grant or permit such waivers.

The First Merchants  Corporation Audit Committee is responsible for ensuring the
enforcement  of the Code of Conduct and for  interpreting  its  provisions.  The
Company's Chief Risk Officer is responsible for ongoing compliance by employees,
officers and directors with the Code of Conduct and for overseeing  training and
monitoring  compliance of such persons with respect to its  provisions;  and for
these  purposes he or she shall  report to directly to the Chairman of the Audit
Committee as well as to the CEO of the Company.  A request for an interpretation
of any  provision  of the Code of Conduct may be directed to a  supervisor,  the
Director  of  Human  Resources  or  Legal  Counsel.  A  written  request  for an
interpretation  may also be submitted  to the  Chairman of the Audit  Committee,
setting forth the relevant  facts and  circumstances.  The Audit  Committee will
respond to such a request,  after  consulting  with the Company's  Legal Counsel
and/or other outside legal counsel if and to the extent it deems appropriate.

The Code of Conduct shall be reviewed at least  annually by the  Nominating  and
Governance Committee.

B.   Confidential Information

1.   Customer and Supplier Information

     Confidential   Information   received  from  or  concerning  customers  and
     suppliers  is to be held in  strictest  confidence.  The very nature of the
     Company's business is such that employees,  officers and directors may have
     access to a customer's business plans,  financial  information,  forecasts,
     decisions,  problems and other data. This  information is to be used solely
     for business purposes,  as an aid to providing  knowledgeable  service, and
     must  not be used for  personal  gain.  Such  information  should  never be
     transmitted to anyone outside the Company, including family and associates,
     or to employees of the Company who do not need to know such  information in
     performing their jobs.

     Exceptions  to this policy  include:  (a)  routine  credit  inquiries;  (b)
     disclosures required by legal process or upon advice of the Company's Legal
     Counsel; and (c) information  authorized for release by written approval of
     a customer or supplier.

     Directors,  officers  and  employees  should take  appropriate  measures to
     protect the security of confidential  information by ensuring, when leaving
     the office, that open areas and work spaces are cleared of paperwork,  that
     confidential  information  is  locked in desks or file  cabinets,  and that
     access  to  all  files  containing  confidential  information  is  properly
     controlled.   They   should   also  avoid   displaying   documents   in  an
     indiscriminate manner or engaging in inappropriate  business  conversations
     in public places, on or off the Company's premises.
<page>
2.   Employee Information

     The Company will safeguard the  confidential  aspects of the  relationships
     between the Company and its employees.  Requests for information concerning
     present or former employees relating to their employment or to matters such
     as  salary   verification   should  be  referred  to  the  Human  Resources
     Department.  The Credit  Department  or other  office(s)  designated  under
     published  Company  policies  and  procedures  may  answer  routine  credit
     inquiries  about  Company  employees  in  response to proper  requests  for
     checking account, savings or loan information.  This policy applies to both
     oral and written requests.

3.   Inside Information

     The use or disclosure of "material inside  information"  about the Company,
     defined as information not publicly  disseminated but significant enough to
     possibly  materially affect the Company and/or its securities,  is not only
     prohibited,  but may be a serious  violation of federal or state securities
     laws. Directors,  officers and employees who have a question which involves
     the use or  disclosure  of  information  that  has not  yet  been  publicly
     disseminated  should  contact  their  supervisor,  the  Director  of  Human
     Resources,  or the Company's Legal Counsel,  as appropriate,  prior to such
     use or disclosure.

C.   Conflicts of Interest

     A conflict of interest occurs when a person's personal interests improperly
     interfere,  or appear to  interfere,  with the  interests of the Company or
     with the person's  judgment in performing  his or her  responsibilities  on
     behalf of the Company.  Employees,  officers  and  directors of the Company
     must  never  allow  their  personal   interests  to  interfere  with  their
     objectivity in performing their  responsibilities to the Company,  and they
     must never use or attempt to use their  position with the Company to obtain
     any  improper  financial  or other  benefit for  themselves,  their  family
     members, or any other person.

     The Company will conduct an appropriate  review,  in accordance with NASDAQ
     Marketplace Rule 4350(h),  of all related party  transactions for potential
     conflict of interest  situations on an ongoing basis. All such transactions
     must be approved by the First Merchants  Corporation  Audit Committee.  For
     this purpose,  "related party transactions" are transactions  involving the
     Company's  directors or executive  officers,  or members of their immediate
     family, which must be disclosed pursuant to SEC Regulation S-K, Item 404.

     Employees, officers and directors of the Company should always consider, in
     advance of taking any action,  whether  such action might pose an actual or
     apparent  conflict of interest and whether such conflict would prevent them
     from complying with the principles set forth in the first paragraph of this
     Section.  They should be familiar and strive to comply with both the letter
     and  spirit of  applicable  federal  and state  statutes  and  regulations,
     Company bylaws, and common law fiduciary  principles  relating to conflicts
     of interest.  Although it is  frequently  difficult  to  determine  when an
     actual or apparent  conflict of interest  exists,  the  following  sections
     contain  guidelines for proper  conduct in some of the situations  that may
     arise from time to time.

1.   Dealing with Customers, Suppliers or Competitors in Business Ventures
<page>
     Employees,  officers and directors of the Company should not own,  directly
     or indirectly, a significant financial interest in any business entity that
     does or seeks to do business with, or is in  competition  with, the Company
     unless the  interest  has been fully  disclosed  in advance to the Board of
     Directors and has been determined to not improperly  influence any decision
     that they might be  required  to make in  performing  their  duties for the
     Company.

2.   Borrowing from Customers or Suppliers

     See "Personal Financial Responsibility"

3.   Gifts to Employees, Officers or Directors

     The Company expects  employees,  officers and directors to render efficient
     and  courteous  service to its  customers  at all times  without  expecting
     reward  other  than  compensation  or fees  regularly  received  for  their
     employment or service to the Company.  Accordingly, they shall not solicit,
     receive or participate in any  arrangement  leading to the payment of money
     or anything of value to them, their relatives or friends for past or future
     business  conducted  with the  Company.  To avoid  even the  appearance  of
     impropriety,  it is  important  that they decline any gifts from present or
     prospective  customers or suppliers if acceptance would raise the slightest
     doubt of improper influence.

     The Federal Bank Bribery Act (18 U.S.C. ss215)  generally  makes it a crime
     for a person  associated with a bank or a bank holding  company,  including
     employees,  officers,  directors,  agents and attorneys of the bank or bank
     holding  company,  to seek or accept  anything  of value from any person or
     entity in  connection  with any  transaction  or  business  of such bank or
     holding company with which the person is associated.  It is a crime for the
     giver as well as the receiver.  The Act cannot be read in a vacuum and must
     be interpreted and administered accordingly. The Act is intended to prevent
     a  pay-off  to bank or bank  holding  company  officials  as a quid pro quo
     either to induce a particular  transaction or as a "gratuity" on account of
     a particular  transaction.  Thus, where a benefit is given or received as a
     result of a banking transaction,  the Act may be violated. However, the Act
     is not  intended  to  proscribe  the  receipt  of  gratuities  or favors of
     reasonable value where it is clear from the circumstances that the customer
     is not  trying to exert  influence  over the bank or bank  holding  company
     official in connection with a transaction, and the gratuity or favor is, in
     fact,  unsolicited.  The  term  "gift"  includes,  but is not  limited  to,
     substantial  favors,  money,  credit,  special discounts on goods or money,
     tickets  to  entertainment   events,   trips,  hotel  expenses,   excessive
     entertainment,  and  food or  beverages.  Gifts  to  immediate  family  are
     included in this prohibition.

     Employees  of the  Company  should not accept  gifts of cash in any amount.
     However,  the Company recognizes that situations may arise when it would be
     appropriate for an employee to accept the benefit of another's expenditure.
     Such situations include:

          a.   Gifts of  reasonable  value  (not in  excess  of  $100)  given at
               Christmas,  other holidays or special occasions,  which represent
               expressions of friendship;

          b.   Reasonable entertainment at luncheon, dinner or business meetings
               with present or  prospective  customers  and  suppliers  when the
<page>
               return  of the  expenditure  on a  comparable  basis is likely to
               occur and the expenditure is a proper business expense;

          c.   Unsolicited  advertising or  promotional  material  (e.g.,  pens,
               calendars, etc.) of a value not exceeding $100;

          d.   Awards  given by  charitable,  educational,  civic  or  religious
               organizations or meritorious contributions or service; and

          e.   Gifts or bequests based upon family relationships.

     Circumstances  surrounding  a gift may be such that  rejection or return of
     the gift would cause  embarrassment  or would  potentially  damage friendly
     relationships between a customer or supplier and the Company. In that case,
     the employee should report the gift and its estimated value to the Director
     of Human Resources.

     Employees  may not accept a devise of  property  or an interest in property
     from a customer  or  supplier  of the  Company  (other than a relative or a
     person who has never  dealt with the  employee as a  representative  of the
     Company) under a will,  trust, or other estate  planning  instrument at any
     time.  The fact  that the  employee  did not know of the  bequest  does not
     justify an exception.

D.   Public Communications

1.   Regulatory Disclosures and Public Comments

     Employees,  officers and  directors  of the Company  shall strive to ensure
     that all reports,  documents and other  information  that the Company files
     with or submits to the SEC and in other public  communications  made by the
     Company  are  accurate,  complete,  timely  and fair,  in  accordance  with
     applicable disclosure  standards,  including standards of materiality where
     appropriate.   Employees,   officers  and  directors  shall  not  knowingly
     misrepresent,  or cause others to  misrepresent,  material  facts about the
     Company to others, including, without limitation, the Company's independent
     auditors and governmental regulators or other governmental officials.

     Employees,  officers  and  directors  who are  requested  to make a  public
     statement or comment on a law,  regulation  or other  matter  related to or
     affecting  the Company  should first submit a copy of the  statement to the
     CEO  (or in the  case  of a  director,  to the  Chairman  of the  Board  of
     Directors) for approval. Company letterhead shall not be used in commenting
     on any law,  regulation  or matter  that only  relates  to or  affects  the
     employee, officer or director personally and not the Company.

2.   Media Inquiries

     Only the  Director of  Marketing,  members of executive  management  or, in
     appropriate cases, the Chairman of the Board of Directors,  should initiate
     or respond to contacts  with the media on behalf of the Company.  Any media
     inquiries  should be directed to the  Marketing  Department  and  employees
     should only respond to media inquiries after being cleared by the Marketing
     Department or a member of executive management.  In the event of a robbery,
     disturbance or other emergencies,  all communications should be referred to
     the  appropriate  bank  security  officer,  the  Director of Marketing or a
     member of executive management.
<page>
E.   Lending Practices

1.   Granting of Preferential Rates

     The lending  services of the  Company's  affiliate  banks are  available to
     equitably serve the legitimate and deserving credit needs of customers. All
     loans  should be based  solely  upon a  borrower's  credit  worthiness  and
     overall  relationship  with the  Company.  Preferential  rates shall not be
     granted  to any  employee,  officer or  director  in  violation  of Company
     policy. If questions arise concerning  lending  services,  consult the loan
     policy manual or a senior loan officer.

2.   Prohibited Lending Practices

     The following  lending  practices are  prohibited  either by law or Company
     policy. For purposes of this section,  the term "lending officer" refers to
     any Company employee who has lending authority. A lending officer:

          a.   Shall not extend  credit to a customer if any of the proceeds are
               to be given or loaned to the  lending  officer,  or to pay a debt
               owed to the  lending  officer or members of his or her  immediate
               family.

          b.   Shall not extend  credit to a customer to enable the  customer to
               purchase  real  estate  or  personal  property  from the  lending
               officer,  unless prior written approval is obtained from a senior
               loan officer.

          c.   Shall not extend  credit to a relative  of the  lending  officer,
               whether by blood or marriage, or to an individual residing in the
               lending officer's household.

          d.   Shall not extend credit to a company in which the lending officer
               has  an  interest  as a  director,  officer  or  partner,  or  an
               ownership  interest  exceeding  five percent  (5%), or in which a
               relative of the lending  officer,  whether by blood or  marriage,
               has such an interest.

          e.   Shall not loan his or her personal  funds,  or the personal funds
               of other  employees,  to a customer  or  supplier  of the Company
               where   the   lending   officer   or  other   employee   has  any
               responsibility for the Company's  relationship with such customer
               or supplier.

F.   Political Contributions

1.   Prohibitions

     It is unlawful for the Company to make  contributions  or  expenditures  in
     connection  with any election.  Federal and state laws prohibit the Company
     from  contributing  corporate  funds or  property in support of a political
     party or candidate for public office.  In addition to cash  payments,  this
     prohibition applies to contributions of meeting rooms, food, beverages, and
     reimbursement  of  expenses  to third  parties or anything of value for the
     purpose of influencing any election.
<page>
2.   Personal Political Contributions

     The policy of the Company regarding  corporate  political  contributions is
     not intended to discourage  employees,  officers and directors  from making
     personal  contributions to candidates or political parties of their choice.
     The  Company  does  not and will  not  exert  pressure,  either  direct  or
     indirect,  that  infringes  on  their  right  to  decide  to whom  personal
     political contributions will be made.

G.   Outside Activities

1.   Community Service

     The Company recognizes its responsibilities to the communities,  states and
     nation in which it  operates  and whose  citizens  it serves.  The  Company
     considers itself socially responsible and responsive. It recognizes that it
     cannot thrive unless the communities in which it operates  thrive,  nor can
     it exist without public support.  The Company endeavors to strengthen these
     communities,  states  and  nation,  and  the  free  enterprise  system,  by
     encouraging  its  employees,  officers and directors to become  involved in
     charitable,  civic and  community  causes and  organizations  and by making
     appropriate   financial  and  other   contributions  to  these  causes  and
     organizations.

2.   Fiduciary Appointments

     Employees  of the  Company  shall not accept an  appointment  as a personal
     representative,   executor,  trustee,  administrator,   guardian  or  other
     fiduciary  relationship,  whether such appointment is as the sole fiduciary
     or as a  co-fiduciary.  Exceptions  may be made for fiduciary  appointments
     based upon close family or personal  relationships  where the circumstances
     warrant.  The First Merchants  Corporation Audit Committee must approve all
     exceptions prior to acceptance of such an appointment.

3.   Political Activities

     Employees,  officers and directors are encouraged to take an active part in
     supporting their political party and their individual  candidates,  such as
     by serving as a volunteer,  an active party worker, an appointed  official,
     or an elected  official.  Employees whose  participation  will require time
     away from the Company must obtain prior approval from the Director of Human
     Resources.

     In all cases,  individuals who are seeking elective office or participating
     in political  activities do so as an individual and not as a representative
     of the Company.  To prevent any impression of sponsorship or endorsement by
     the  Company,  they  must  not use the  Company's  name or its  address  in
     campaign  materials  or in  collecting  funds.  The  Company  shall  not be
     identified in any advertisements or literature except as may be appropriate
     in biographical information.

4.   Outside Employment and Board Service

     The Company  recognizes that there may be times when employees will want to
     obtain  outside  employment  or  serve on  boards  of  directors.  Any such
<page>
     employment or service must be secondary to their  position with the Company
     and must not interfere with their work or responsibilities with the Company
     or involve improper diversion of Company resources.

     An employee who wishes to obtain outside  employment must notify his or her
     supervisor  in  advance  and  submit a  statement  to the  Human  Resources
     Department  describing  the intended  new  employment  and the  anticipated
     number of hours  and  location  of the work.  Should  this job  affect  the
     employee's work  performance or attendance,  the supervisor in consultation
     with the Human Resources Department will take appropriate action.

     An employee who wishes to serve on a  for-profit  board must have the prior
     approval of the CEO of the  Company or Company  affiliate  as  appropriate;
     provided,  however,  if the  employee  wishing  to  serve is the CEO of the
     Company or a Company affiliate,  such approval must come from the Company's
     or affiliate's  Board Chairman  instead.  Service as a director of a family
     business or corporation must be reported but will generally be approved.

     An employee who wishes to serve on a  not-for-profit  board shall  disclose
     his or  her  intention  to do so to the  CEO  of  the  Company  or  Company
     affiliate as appropriate;  provided,  however,  if the employee  wishing to
     serve is the CEO of the  Company or a Company  affiliate,  such  disclosure
     shall be made to the  Company's  or  affiliate's  Board  Chairman  instead.
     Service on a not-for-profit board does not require prior approval; however,
     the CEO or Board Chairman may affirmatively deny permission for an employee
     to do so  under  circumstances  involving  potential  material  harm to the
     interests of the Company.

H.   Personal Financial Responsibility

1.   General

     It is  important  that  employees,  officers  and  directors  of  financial
     services  organizations  properly  manage their  personal  finances and use
     credit  intelligently.  Imprudent  personal  financial  management  and its
     consequent  hardships  often  affect  job  performance  and may even  tempt
     individuals in positions of trust to violate their fiduciary obligations to
     the  Company  and/or its  customers.  Employees  who are  having  financial
     problems  should  consult  with their  supervisor  or the Director of Human
     Resources or his or her  delegate.  Directors and CEOs of the Company or an
     affiliate  who are  having  financial  problems  should  consult  with  the
     Company's or affiliate's Board Chairman or the Chairman of the Company's or
     affiliate's Audit Committee.

2.   Borrowing from other Financial Institutions

     Borrowing from other financial institutions, including correspondent banks,
     is  permitted  as long as the loan is  obtained on  substantially  the same
     rates,  terms and conditions as the financial  institution  offers to other
     customers of similar credit worthiness.

3.   Borrowing from Customers or Suppliers

     Employees  are not permitted to borrow from  customers or suppliers  except
     those that engage in lending in the usual  course of their  business.  Even
<page>
     then,  borrowing  must  only be on  terms  offered  to  others  in  similar
     circumstances,  without special  treatment as to interest rates,  repayment
     terms,  security or other  provisions.  This  prohibition does not preclude
     borrowing from individuals related to an employee by blood or marriage.

4.   Taking Advantage of a Business  Opportunity that Rightfully  Belongs to the
     Company

     Employees,  officers and directors  must not take personal  advantage of an
     opportunity  that rightfully  belongs to the Company.  Whenever the Company
     has been  actively  soliciting a business  opportunity  or has been offered
     such an opportunity, or whenever the funds, facilities,  personnel or other
     resources  of the Company have been used in pursuing an  opportunity,  that
     opportunity  belongs  to the  Company  and  shall  not be  diverted  to the
     personal  benefit  of  any  employee,  officer  or  director.  Examples  of
     improperly taking advantage of a Company  opportunity may include,  without
     limitation:

          a.   Selling or improperly  disclosing  information  to which a person
               has access because of his or her position.

          b.   Acquiring  a property  interest  when the  Company is known to be
               interested  in  purchasing  or leasing the  property  interest in
               question.

          c.   Receiving a  commission,  fee or other  payment on a  transaction
               that would otherwise accrue to the Company.

          d.   Diverting  business from the Company or encouraging  employees to
               leave their employment with the Company.

          e.   Otherwise improperly profiting, either directly or indirectly, to
               the detriment of the Company.

5.   Corporate Property Services

     Employees are not permitted to act as a principal for either  themselves or
     their close family members in the supply of goods,  property or services to
     the Company. Using the services of other Company employees or other Company
     resources during working hours for personal purposes is also prohibited.

6.   Employee Purchase of Company Assets

     It is improper  for  employees  to purchase,  directly or  indirectly,  any
     Company assets other than at public sale. Any such transaction is likely to
     subject the Company to criticism and, depending on the  circumstances,  may
     even result in liability, even if entered into innocently.  Company assets,
     including  repossessed  loan  collateral,  will not be sold to employees or
     members of their  immediate  family except at public sale. This policy also
     extends to "friends" who purchase an asset from the Company and then resell
     it to an employee or member of his or her immediate  family.  Upon approval
     of the executive  officer  responsible  for the Company's or an affiliate's
     physical properties,  items of Company equipment or other property that are
     of nominal value may be sold to employees when the return to the Company or
     affiliate will equal or exceed that from other methods of disposal.
<page>
7.   Purchase of Property Held by the Company as a Fiduciary

     Property  held  by  the  Company  as a  fiduciary  shall  not  be  sold  or
     transferred,  by loan or otherwise, to the Company or any of its directors,
     officers or employees, or to any other individual or organization with whom
     there  exists a  connection  or interest  that might  adversely  affect the
     Company's  exercise of sound  judgment or the  financial  interests  of the
     Company or any beneficial  owner of the property in selling or transferring
     such  property;  provided,  however,  an  exception  may be made  where (a)
     expressly authorized by the instrument creating the fiduciary  relationship
     or by court order,  or (b) such sale or transfer is made in accordance with
     applicable  laws and with the prior approval of the Company's Legal Counsel
     or the First Merchants Corporation Audit Committee.

     It is also  improper  for an employee to become a tenant of any real estate
     managed by First Merchants Trust Company.

8.   Handling of Personal Accounts

     All employees,  officers and directors shall handle their personal checking
     accounts  satisfactorily,  avoiding  overdrafts  and  avoiding  the  use of
     facilities  at  other   financial   institutions   to  disguise   potential
     overdrafts.  The  use of two or more  financial  institutions  to  disguise
     overdrafts,  sometimes referred to as "kiting", is both a violation of this
     Code and a violation of the law.

I.   Personal Trading and Investments

     While it is not the  intent  of the  Company  to  unduly  limit  employees,
     officers  and  directors  in  their  personal   trading  and   investments,
     transactions  must be  avoided  that  would  involve or appear to involve a
     conflict of interest  between the individual and the Company or between the
     Company and any customer.  Trading on inside or confidential information is
     also prohibited.  This policy covers  transactions for the personal account
     of the  employee,  officer  or  director,  as well as members of his or her
     immediate family and close relatives, whether by blood or marriage.

     Investment  situations  that might involve a conflict of interest are many,
     varied and not subject to simple  listing.  Anyone who has any  uncertainty
     about a  situation  should  consult  the  Company's  Legal  Counsel  or the
     Director of Human Resources.

1.   Investment in Securities of a Customer, Supplier, or Competitor

     Employees  should  generally  avoid  investing in securities of a customer,
     supplier,  borrower or competitor of the Company,  except for publicly held
     companies  where the  securities  have a broad market.  Participation  in a
     business  venture  with  such  parties  should  be  considered  the same as
     investing in their  securities  for these  purposes.  Such  investment  may
     affect an employee's judgment or decisions made on behalf of the Company.

2.   Securities Trading

     Employees  are  expressly  prohibited  from  buying or  selling  investment
     securities through the Company unless they establish their own account or a
     fiduciary  account,  following normal  procedures.  The commission  charged
<page>
     shall be as stated in the  published  fee  schedule  for  employees  of the
     Company.  This  section  is not  applicable  to  the  securities  of  First
     Merchants  Corporation,  which may be purchased  through  employee  benefit
     programs in which the employee is eligible to participate.

3.   Non-public and/or Material Inside Information

     Non-public or material inside information provided by customers,  suppliers
     and others in the normal  course of  business is  confidential  and must be
     held inviolate. Such information must never be used as a basis for personal
     investment  decisions.  Anyone who has  uncertainty  about the  information
     should consult the Company's Legal Counsel.

4.   Preferential Treatment

     Employees must never use commissions paid in the sale of securities for the
     Company's  customers to obtain special  concessions  from brokerage  firms.
     Employees  shall  not  accept  preferential  treatment  in the  form  of an
     allocation  of "hot"  new  issues  or any  other  securities  which  become
     available  prior to a public  offering  or that are or may  become  in such
     demand that the broker,  investment banker,  issuer, or other seller of the
     securities might expect to receive favorable treatment in return for making
     such allocation.

5.   Securities Transactions by Trust and Investment Personnel

     Trust and  investment  personnel,  because of their  responsibilities  with
     respect to  fiduciary  accounts,  are subject to further  restrictions  and
     guidelines relating to investments.  Specifically, any trust and investment
     personnel  involved in securing approval for trades and/or actually trading
     on behalf of a fiduciary  account must always place the  fiduciary  account
     before  his  or  her  own  personal  investments.  Other  restrictions  and
     guidelines  concerning  securities  trading  policies  and  procedures  are
     covered in the First  Merchants  Trust Company Trust and Investment  Policy
     Manual.

6.   Investment in First Merchants Corporation Securities

     Directors, officers and employees of the Company shall not execute personal
     transactions  in First  Merchants  Corporation  securities  if they possess
     material inside information that has not been disclosed to the public.

J.   Code of Ethics for First Merchants Corporation Financial Management

     This Code of Ethics for First Merchants Corporation Financial Management is
     adopted  pursuant  to  Section  406 of the  Sarbanes-Oxley  Act of 2002 and
     Securities and Exchange  Commission ("SEC") Regulation S-K, Item 406, which
     states that  issuers  shall  disclose  whether  they have adopted a code of
     ethics  that  applies  to  their  principal  executive  officer,  principal
     financial officer,  principal accounting officer or controller,  or persons
     performing similar functions. Although part of the Code of Conduct of First
     Merchants  Corporation  (the  "Company"),   this  Code  of  Ethics  applies
     specifically and separately to the following  officers of the Company:  the
     Chief Executive  Officer,  the Chief Financial  Officer,  the Chief Banking
     Officer,  the Chief Accounting Officer, the Corporate  Controller,  and the
     Corporate Treasurer (collectively, the "Senior Financial Officers").
<page>
     The Senior Financial Officers shall always act with integrity and engage in
     honest and ethical conduct. In addition to the policies set forth elsewhere
     in the Code of Conduct,  the Senior  Financial  Officers have the following
     obligations:

1.   The Senior Financial  Officers must never allow their personal interests to
     interfere with their  objectivity in performing their  responsibilities  to
     the Company;  and they must never use or attempt to use their position with
     the Company to obtain any improper personal  financial or other benefit for
     themselves,  for their family members, or for any other person. They should
     determine  in  advance of taking any action  whether  such  action  poses a
     conflict of interest  and whether  such  conflict  would  prevent them from
     complying with the above principles. A "conflict of interest" occurs when a
     person's personal interests improperly interferes with the interests of the
     Company.  Any actual or apparent  conflict  of interest  involving a Senior
     Financial  Officer shall be reported  immediately  to the  Company's  Legal
     Counsel  (which may be either  in-house  counsel or counsel to the Board of
     Directors),  who shall  promptly  report the matter to the  Chairman of the
     Audit  Committee.  Legal  Counsel and the  Chairman of the Audit  Committee
     shall ensure that appropriate  actions are taken to provide for the ethical
     handling of any actual or apparent conflict of interest reported to them.

2.   The Senior  Financial  Officers shall strive to ensure that all reports and
     documents  that the Company files with, or submits to, the SEC and in other
     public  communications  made by the Company contain full,  fair,  accurate,
     timely  and  understandable  disclosures,  in  accordance  with  applicable
     disclosure   standards,   including   standards   of   materiality,   where
     appropriate.  Accordingly,  they shall not knowingly misrepresent, or cause
     others to  misrepresent,  material  facts  about  the  Company  to  others,
     including,  without  limitation,  the  Company's  independent  auditors and
     governmental regulators or other governmental officials. Within their areas
     of  responsibility,  they  shall  properly  review and  critically  analyze
     proposed disclosures for accuracy and completeness. In addition, they shall
     promptly bring to the attention of the Company's Legal Counsel any material
     information of which they become aware that affects the disclosures made by
     the Company in its public  filings or other  public  communications.  Legal
     Counsel shall,  in turn,  promptly  report the situation to the Chairman of
     the Audit Committee.

3.   It is the Company's policy to comply with all applicable governmental laws,
     rules and  regulations;  and all Senior  Financial  Officers must adhere to
     this policy. Activity which would be criminally or civilly actionable shall
     also  be  deemed  to be a  violation  of  this  policy.  For  example,  the
     anti-fraud provisions of the federal securities laws make it unlawful for a
     person  to  trade   securities   on  the  basis  of  material,   non-public
     information. Such illegal insider trading would also constitute a violation
     of this  policy.  Anyone  who is  uncertain  about  the  interpretation  or
     applicability  of a  law,  rule  or  regulation  should  consult  with  the
     Company's Legal Counsel before taking action.

4.   A Senior  Financial  Officer who becomes  aware of an existing or potential
     violation of this Code of Ethics shall promptly  notify the Company's Legal
     Counsel,  who shall promptly  inform the Chairman of the Audit Committee of
     the situation.  A Senior Financial  Officer's failure to report a violation
     of which he or she has  knowledge  is itself a violation  of the Code.  The
     Company will take such  disciplinary or preventive action as is appropriate
     under the circumstances to address any such existing or potential violation
<page>
     that is brought to its attention.  No adverse action shall be taken against
     anyone who, in good faith,  reports a violation or  potential  violation of
     this Code of Ethics.

5.   Compliance  with this Code of Ethics is a condition of employment,  and any
     violations  thereof may result in disciplinary  action, up to and including
     discharge.

     In any  circumstance  where the Company's  Legal Counsel is involved in the
     matter  giving rise to a violation or  potential  violation of this Code of
     Ethics,  the required internal  reporting or notification  shall instead be
     made directly to the Chairman of the Audit Committee.

     The Audit  Committee is  responsible  for  applying  this Code of Ethics to
     specific  situations  and has the  authority to interpret  this Code in any
     particular  situation.  Anyone desiring an interpretation of a provision of
     the Code of Ethics may consult  with the  Company's  Legal  Counsel  and/or
     submit a written  request  for an  interpretation  to the Audit  Committee,
     setting forth the relevant  facts and  circumstances.  The Audit  Committee
     shall respond to any such written  request as it deems  appropriate.  In so
     doing, it may consult with the Company's Legal Counsel and/or other outside
     legal counsel.

     The SEC requires  public  disclosure of any waiver from, or amendment to, a
     provision of this Code of Ethics.  The Company expects full compliance with
     this Code and, with rare exceptions,  will not grant or permit waivers from
     its  requirements.  Anyone requesting a waiver from a provision of the Code
     of Ethics shall submit the request to the Audit Committee,  which shall, in
     consultation  with the Company's  Legal Counsel  and/or other outside legal
     counsel, determine whether the request should be granted.

     The Chairman of the Audit  Committee shall inform the Board of Directors of
     any  violation of this Code of Ethics that is reported to the Committee and
     of any waiver from the Code's provisions that is approved by the Committee.


<page>

                          First Merchants Corporation

                                 Exhibit No. 99.1

                        Press Release, dated May 5, 2008


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

May 5, 2008

FOR IMMEDIATE RELEASE
For more information, contact:
Mark K. Hardwick, Executive Vice President/Chief Financial Officer, 765-751-1857
http://www.firstmerchants.com

SOURCE: First Merchants Corporation (Nasdaq: FRME), Muncie, Indiana

FIRST MERCHANTS CORPORATION ANNOUNCES QUARTERLY CASH DIVIDEND

At its  regularly  scheduled  meeting  held on  April  29,  2008,  the  Board of
Directors of First Merchants  Corporation  declared a quarterly cash dividend of
$0.23 per share on its common stock.

The cash  dividend is payable June 20, 2008, to  stockholders  of record June 6,
2008. For purposes of broker  trading,  the ex-date of the cash dividend is June
4, 2008.

About First Merchants Corporation

First  Merchants  Corporation is a financial  holding company  headquartered  in
Muncie,  Indiana.  Subsidiaries of the Corporation include First Merchants Bank,
N.A.,  First  Merchants Bank of Central  Indiana,  N.A.,  Lafayette Bank & Trust
Company,  N.A.,  Commerce National Bank and First Merchants Trust Company,  N.A.
The Corporation also operates First Merchants Insurance Services, a full-service
property  casualty,  personal lines,  and healthcare  insurance  agency and is a
majority  member of Indiana  Title  Insurance  Company,  LLC, a title  insurance
agency.

First Merchants  Corporation's  common stock is traded  over-the-counter  on the
NASDAQ National  Market System under the symbol FRME.  Quotations are carried in
daily  newspapers  and  can  be  found  on  the  company's   Internet  web  page
(http://www.firstmerchants.com).
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