SCHEDULE 14A

                                 (Rule 14a-101)

                     INFORMATION REQUIRED IN PROXY STATEMENT

                            SCHEDULE 14A INFORMATION

                Proxy Statement Pursuant to Section 14(a) of the
               Securities Exchange Act of 1934 (Amendment No.   )

Filed by the Registrant [X]
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Check the appropriate box:

[_]  Preliminary Proxy Statement          [_]  Soliciting Material Under Rule
[_]  Confidential, For Use of the              14a-12
     Commission Only (as permitted
     by Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[_]  Definitive Additional Materials




                          First Merchants Corporation
--------------------------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)


                                 Larry R. Helms
--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)


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Common Stock
________________________________________________________________________________
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<PAGE>


                           FIRST MERCHANTS CORPORATION
                             200 EAST JACKSON STREET
                              MUNCIE, INDIANA 47305


                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                            TO BE HELD APRIL 11, 2002



The annual  meeting of the  shareholders  of First  Merchants  Corporation  (the
"Corporation")  will be held at the Horizon  Convention  Center,  401 South High
Street, Muncie, Indiana 47305, on Thursday, April 11, 2002, at 3:30 p.m. for the
following purposes:

(1)  To elect five directors, to hold office for a term of three years and until
     their successors are duly elected and qualified.

(2)  To transact such other business as may properly come before the meeting.

Only those  shareholders of record at the close of business on February 14, 2002
shall be entitled to notice of and to vote at the meeting.


                                      By Order of the Board of Directors



                                      Larry R. Helms
                                      Secretary

Muncie, Indiana
February 26, 2002



                             YOUR VOTE IS IMPORTANT!

      YOU ARE URGED TO SUBMIT YOUR PROXY VIA THE INTERNET OR TO SIGN, DATE
           AND RETURN YOUR PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE
       AS SOON AS POSSIBLE SO THAT YOUR SHARES CAN BE VOTED AT THE MEETING
                     IN ACCORDANCE WITH YOUR INSTRUCTIONS.

<PAGE>


                                                               February 26, 2002

                           FIRST MERCHANTS CORPORATION

                               PROXY STATEMENT FOR
                         ANNUAL MEETING OF SHAREHOLDERS
                            TO BE HELD APRIL 11, 2002

This Proxy  Statement is furnished in connection  with the  solicitation  of the
enclosed  proxy by and on behalf of the Board of  Directors  of First  Merchants
Corporation (the "Corporation") for use at the annual meeting of shareholders of
the  Corporation  to be held April 11,  2002.  The  distribution  of these proxy
materials is expected to commence on February 26, 2002.

Please  sign,  date and  return  your  proxy  card or submit  your proxy via the
Internet  as soon as possible so that your shares can be voted at the meeting in
accordance with your instructions. Internet voting is quick, convenient and your
vote is immediately submitted.  Our Internet voting site is available 24 hours a
day, 7 days a week. To submit your proxy via the Internet, log on to the website
www.proxytrust.com,  click  on  the  "Investors"  tab,  and  follow  the  simple
instructions  on the screen.  You will be required to enter your unique 10-digit
control  number found in the box near the right  margin of your First  Merchants
Corporation  proxy  card in order to vote on the  electronic  equivalent  of the
proxy card.  Similar  instructions are included on the enclosed proxy card. Your
Internet  vote  authorizes  the named  proxies  to vote your  shares to the same
extent as if you marked, signed and returned your proxy card.

Any shareholder  giving a proxy has the right to revoke it any time before it is
exercised by giving written notice of revocation to the Secretary received prior
to the meeting, by voting again in writing or via the Internet,  or by voting in
person at the  meeting.  The  shares  represented  by  proxies  will be voted in
accordance  with the  instructions  on the  proxies.  In the absence of specific
instructions to the contrary,  proxies will be voted in favor of election to the
Board  of  Directors  of all  nominees  listed  in Item 1 of the  proxy.  If any
director  nominee named in this proxy  statement shall become unable or declines
to serve (an event which the Board does not  anticipate),  the persons  named as
proxies will have discretionary authority to vote for a substitute nominee named
by the Board, if the Board determines to fill such nominee's position.

VOTING SECURITIES

Only  shareholders  of record at the close of business on February 14, 2002 will
be entitled to notice of and to vote at the annual meeting. 12,776,415 shares of
common stock were outstanding and entitled to vote as of February 14, 2002.

Each share of the Corporation's  common stock is entitled to one vote. Directors
are elected by a plurality  of the votes cast by the shares  entitled to vote in
the election at a meeting at which a quorum is present. Shareholders do not have
a right to  cumulate  their  votes  for  directors.  The  affirmative  vote of a
majority  of the shares  present and voting at the meeting in person or by proxy
is required for approval of all items  submitted to the  shareholders  for their
consideration other than the election of directors. The Secretary will count the
votes and announce the results of the voting at the meeting. Abstentions will be
counted  for the purpose of  determining  whether a quorum is present but for no
other purpose. Broker non-votes will not be counted.

The Corporation's subsidiaries held 1,188,502 shares of the Corporation's common
stock as of  February  14,  2002 in various  fiduciary  capacities,  in regular,
nominee  or  street  name  accounts,  consisting  of 9.30% of the  Corporation's
outstanding shares.  Beneficial ownership of shares so held is disclaimed by the
Corporation.  It is the  practice of the  respective  subsidiaries  when holding
shares as sole trustee or sole executor to vote the shares but, where shares are
held as co-executor or  co-trustee,  approval is obtained from the  co-fiduciary
prior to voting.

ELECTION OF DIRECTORS

Five directors will be elected at the annual meeting.

The  persons  named  below  have been  nominated  for  election  to the Board of
Directors  (the  "Board"),  with terms expiring as of the 2005 annual meeting of
shareholders. All of the nominees are currently members of the Board.

<PAGE>


Those persons nominated as directors include:

<TABLE>
<CAPTION>
Name and Age                         Present Occupation                                                  Director Since
------------                         ------------------                                                  --------------
<S>                                  <C>                                                                      <C>
Class II (Terms expire 2005):

Stefan S. Anderson                   Chairman of the Board of the Corporation and First                       1982
Age 67                               Merchants Bank, National Association ("First
                                     Merchants"), a wholly-owned subsidiary of the
                                     Corporation

Jerry M. Ault(1)                     Chairman of the Board, President and Chief Executive                     2001
Age 65                               Officer, Frances Slocum Bank ("Frances Slocum"), a
                                     wholly-owned subsidiary of the Corporation

Blaine A. Brownell                   President, Ball State University                                         2001
age 59

Thomas B. Clark                      Retired Chairman of the Board, President and Chief                       1989
age 56                               Executive Officer,  Alltrista Corporation (Alltrista
                                     Corporation manufactures metal and plastic products.)

John E. Worthen                      President Emeritus,  Ball State University                               1987
age 68

Those persons named below continue to serve as directors:

Class I (Terms expire 2004):

Dennis A. Bieberich(2)               President and Chief Executive Officer, Decatur Bank                      2000
age 51                               and Trust Company ("Decatur"), a wholly-owned
                                     subsidiary of the Corporation

Michael L. Cox                       President and Chief Executive Officer of the                             1984
age 57                               Corporation

Norman M. Johnson                    Retired Executive Vice President, Stein Roe &                            1996
age 67                               Farnham, Investment Counsel

George A. Sissel                     Chairman of the Board, Ball Corporation (Ball                            1995
age 65                               Corporation manufactures metal and plastic packaging
                                     products and technology products and services.)

Robert M. Smitson                    Chairman of the Board, Maxon Corporation (Maxon                          1982
age 65                               Corporation designs and manufactures specialty
                                     industrial combustion systems and valves.)

Class III (Term expires 2003):

Roger M. Arwood                      Executive Vice President of the Corporation and                          2000
age 50                               President and Chief Executive Officer,  First Merchants

James F. Ault(3)                     Chairman of the Board, The Madison Community Bank                        1999
age 66                               ("Madison"), a wholly-owned subsidiary of the
                                     Corporation, and retired executive of General Motors
                                     Corporation
</TABLE>


                                      - 2 -
<PAGE>

<TABLE>
<CAPTION>
Name and Age                         Present Occupation                                                  Director Since
------------                         ------------------                                                  --------------
<S>                                  <C>                                                                      <C>
Frank A. Bracken                     Retired Attorney, Bingham McHale LLP                                     1994
age 67

Barry J. Hudson(3)                   Chairman of the Board, First National Bank of Portland                   1999
age 61                               ("First National"), a wholly-owned subsidiary of the
                                     Corporation
</TABLE>

(1)  Under an Agreement of Reorganization and Merger between the Corporation and
     Francor Financial,  Inc., the Board appointed Mr. J. M. Ault as a member of
     the Board on August 14, 2001 and agreed to nominate  him for election for a
     full 3-year term as a director at the 2002 annual meeting of shareholders.

(2)  Under an Agreement of Reorganization and Merger between the Corporation and
     Decatur  Financial,  Inc., the Board appointed Mr. Bieberich as a member of
     the Board on August 8, 2000 and agreed to  nominate  him for  election to a
     full 3-year term as a director at the 2001 annual meeting of shareholders.

(3)  Under Agreements of  Reorganization  and Merger between the Corporation and
     Jay Financial  Corporation,  and among the Corporation,  Pendleton  Banking
     Company ("Pendleton"),  and Anderson Community Bank ("Anderson"), the Board
     appointed Messrs.  Hudson and J. F. Ault as members of the Board on May 11,
     1999 and agreed to  nominate  them for  election  to full  3-year  terms as
     directors at the 2000 annual meeting of shareholders.

The  occupations  set forth  above have been the  principal  occupations  of the
director-nominees  and  continuing  directors  during the past 5 years except as
follows:

Mr.  Anderson was also  President of the  Corporation  from 1982 to 1998 and CEO
from 1982 to 1999, and he was President of First Merchants from 1979 to 1996 and
CEO from 1979 to 1999.  Mr.  Arwood was the Executive  Vice  President and Chief
Credit Officer of Boatmen's Bank from 1988 until 1997, when he became  Executive
Vice President,  Credit Risk  Management,  of  NationsBank/Bank  of America.  He
joined the Corporation and First Merchants in 2000 and became  President and CEO
of First Merchants later in the same year. Mr. J. F. Ault became Chairman of the
Board of  Anderson  when it was formed in 1995,  and he became  Chairman  of the
Board of  Madison  in 1999 when  Anderson  was  merged  into  Pendleton  to form
Madison. Mr. Bracken was Of Counsel with the Bingham Summers Welsh & Spilman LLP
law firm until his  retirement on January 1, 2001.  The firm changed its name to
Bingham McHale LLP, effective January 1, 2002. Dr. Brownell was Provost and Vice
President  for Academic  Affairs at the  University  of North Texas from 1990 to
1998 and  Executive  Director  of the  Center  for  International  Programs  and
Services at the University of Memphis from 1998 to 2000. He became  President of
Ball  State  University  in 2000.  Mr.  Clark  served  as  President  and CEO of
Alltrista  Corporation from 1995 to 2001, and as Chairman of the Board from 2000
to 2001. Mr. Cox became  President of First Merchants in 1996,  President of the
Corporation  in 1998, and CEO of both in 1999. He was succeeded by Mr. Arwood as
President and CEO of First  Merchants in 2000. Mr. Hudson has served as Chairman
of the Board of First  National  since 1982,  and he was also President of First
National  from 1982 to 1998 and CEO from 1982 until 2000.  Mr. Sissel has served
as Chairman  of the Board of Ball  Corporation  since  1996.  He was CEO of Ball
Corporation from 1994 until his retirement in 2001. Mr. Smitson was President of
Maxon Corporation from 1979 to 1997, CEO from 1985 to 1998, and Vice Chairman of
the Board from 1989 to 1998. Dr. Worthen was President of Ball State  University
from 1984 to 2000.

Messrs.  Bracken and Sissel are also directors of Ball Corporation.  Dr. Worthen
is also a director of Crossmann Communities, Inc.


                                      - 3 -
<PAGE>


CERTAIN COMMITTEES OF THE BOARD

Executive Committee

The Corporation's  Executive Committee functions as a nominating  committee.  It
recommends to the Board:  (a) candidates to fill any vacancies on the Board, and
(b) a slate of  directors  to be  elected  each year at the  annual  meeting  of
shareholders.  The Committee will consider nominees recommended by shareholders.
Any such  recommendation  should be in writing and  addressed to the  Secretary,
First Merchants Corporation, 200 East Jackson Street, Muncie, Indiana 47305. The
members of the Executive  Committee are Messrs.  Smitson  (Chairman),  Anderson,
Arwood,  Bracken,  Clark,  Cox, Hudson and Sissel.  John W. Hartmeyer,  who is a
director of First  Merchants,  serves as a non- voting member of the  Committee.
The Committee did not meet during 2001. Its functions as a nominating  committee
were carried out by the Board.

Compensation and Human Resources Committee

The Corporation has a Compensation and Human Resources Committee whose functions
are: (a) to review and approve the  compensation  and benefits to be paid to the
executive  officers and senior  management  employees of the Corporation and the
chief executive officers of its subsidiaries,  and (b) to review and approve the
compensation  and  benefits  to be paid to the  executive  officers  and  senior
management employees and the compensation ranges and benefits for other officers
and employees of the Corporation's  subsidiaries.  The authority to periodically
adjust the compensation and benefits of employees, other than executive officers
and senior management of the Corporation and the chief executive officers of its
subsidiaries,  has  been  delegated  by the  Committee  to the  chief  executive
officers  of  the   subsidiaries.   The   Committee  is   responsible   for  the
administration of the Corporation's  incentive compensation and stock plans. The
members of the  Committee are Messrs.  Smitson  (Chairman),  Anderson,  Bracken,
Clark and Johnson. Mr. Hartmeyer serves as a non-voting member of the Committee.
The Committee met 3 times during 2001.

Audit Committee

The Corporation has an Audit Committee which assists the Board in monitoring the
integrity  of  the  Corporation's   financial   statements,   the  Corporation's
compliance  with legal and  regulatory  requirements,  and the  performance  and
independence of the Corporation's internal and external auditors. In discharging
its duties, the Committee:  (a) meets with the independent auditor to review the
scope and results of the annual audits; (b) meets with the internal audit staff,
the  independent  auditor and  management to consider and review the adequacy of
the  Corporation's  internal  controls,  and meets separately with each of these
groups to discuss any other matters that the  Committee or these groups  believe
should  be  discussed  privately;  and  (c)  recommends  the  selection  of  the
independent  auditor for approval by the Board,  and  approves  the  independent
auditor's compensation. The Board of Directors has adopted a written charter for
the Audit Committee.  The members of the Audit Committee are Messrs.  J. F. Ault
(Chairman),  Anderson, Clark and Worthen. Philip H. Barger, who is a director of
Decatur,  Daniel Eichhorn,  who is a director of the Corporation's  wholly-owned
subsidiary, First United Bank ("First United"), Suzanne L. Gresham and Nelson W.
Heinrichs,  who are  directors of First  Merchants,  George R. Likens,  who is a
director of Madison, Greg Moser, who is a director of First National,  Gerald S.
Paul, who is a director of the Corporation's  wholly-owned subsidiary, The Union
County National Bank of Liberty ("Union County"), and Thomas E. Chalfant, who is
a director of the Corporation's  wholly-owned  subsidiary,  Randolph County Bank
("Randolph  County"),  serve as non-voting members of the Committee.  All of the
members of the Audit Committee are  "independent  directors," as defined in Rule
4200(a)(15) of the NASD's listing  standards,  except for Mr. Anderson,  who has
been  employed  by the  Corporation  and First  Merchants  within the past three
years.  Mr. Anderson  retired as the Chief Executive  Officer of the Corporation
and First Merchants on April 16, 1999. The Board has  determined,  in accordance
with Rule  4460(d)(2)  of the  NASD's  listing  standards,  that Mr.  Anderson's
membership on the Committee is required by the best interests of the Corporation
and its  shareholders  due to his  unique  understanding  of  financial  matters
acquired during his many years of service to the banking  industry,  including 6
years as a member of the Federal  Reserve Board of Chicago.  The Audit Committee
met 4 times during 2001.


                                      - 4 -
<PAGE>


MEETINGS OF THE BOARD

The Board of Directors of the Corporation  held 7 meetings during 2001. The only
director  who  attended  fewer than 75% of the total  number of  meetings of the
Board and the  committees on which he served was Mr. J. M. Ault,  who attended 2
of the 3 meetings (67%) held during the period for which he has been a director.

COMPENSATION OF DIRECTORS

The directors of the  Corporation who are employees of the Corporation or one of
its  subsidiaries  received  no  separate  compensation  for their  services  as
directors  in 2001,  except as  follows:  For his  services  as a  director  and
Chairman of the Board of Directors of Frances Slocum,  Mr. J. M. Ault was paid a
retainer of $3,600 and $300 for each Board meeting he attended.

The  directors  of the  Corporation  who are not  employees  were paid an annual
retainer of $5,000 in 2001, except that Mr. Anderson was paid an annual retainer
of  $12,000  for his  services  as  Chairman  of the Board of  Directors  of the
Corporation.  The directors  who are not  employees  also received $400 for each
Board meeting and $250 for each committee meeting they attended, except that the
Board and committee  chairmen were paid 150% of the regular meeting fee. Messrs.
Anderson and Smitson also serve as directors of First  Merchants,  for which Mr.
Smitson  received  an annual  retainer  of $3,400 in 2001 and Mr.  Anderson,  as
Chairman of the First  Merchants  Board,  received an annual retainer of $8,000.
They also received $400 for each First  Merchants  Board meeting they  attended,
except that Mr. Anderson,  as Board Chairman,  received $600. Messrs.  Anderson,
Smitson and Worthen serve on  committees  of First  Merchants and were paid $250
for each committee meeting they attended,  except that Mr. Smitson,  as Chairman
of the First Merchants Executive  Committee,  received $375 per meeting. For his
services as a director and Chairman of the Board of Directors of Madison, Mr. J.
F. Ault was paid $250 for each Board meeting and $50 for each committee  meeting
he  attended.  For his services as a director and Chairman of the Board of First
National,  Mr. Hudson was paid $5,832, of which $4,356 was deferred compensation
under  an  insurance-funded  deferred  compensation  plan  maintained  by  First
National. For his services as a director and Chairman of the Executive Committee
of Union  County,  Mr.  Johnson  was paid a retainer of $4,200 and $350 for each
Board and Executive Committee meeting he attended.  Union County also paid him a
bonus of $770 and provided him life insurance  coverage in the amount of $40,000
for these services.

On July 1, 2001,  options were granted under the provisions of the Corporation's
1999 Long-term Equity  Incentive Plan to each of the  non-employee  directors to
purchase shares of the  Corporation's  common stock.  Taking into account the 5%
common stock dividend that was distributed on September 24, 2001 to shareholders
of record at the close of  business  on  September  3, 2001,  each option is for
1,050 shares at an option  price of $21.7524 per share,  the market price on the
date of the grants.

The Corporation  maintains an unfunded  deferred  compensation  plan which gives
each director an annual  election to defer the receipt of director's  fees.  Any
amounts  reflected in a  director's  account  under the plan are  credited  with
interest at a rate equal to First Merchants'  18-month variable rate IRA account
rate.  Payments  commence  when the  participant  is no longer a director of the
Corporation or First Merchants.  During 2001, one of the Corporation's directors
participated in the plan, deferring fees totaling $8,000.

COMPENSATION OF EXECUTIVE OFFICERS

The tables in this section of the Proxy Statement contain information concerning
the  compensation of the  Corporation's  Chief Executive  Officer and its 4 most
highly compensated  executive officers other than the Chief Executive Officer as
of the  Corporation's  most recent  fiscal  year-end,  December  31,  2001.  The
information in these tables  concerning  stock options has been adjusted to give
retroactive  effect to the 5% common  stock  dividend  that was  distributed  on
September  24,  2001 to  shareholders  of  record at the  close of  business  on
September 3, 2001.


                                      - 5 -
<PAGE>


Summary Compensation Table

The following table contains information concerning the compensation paid by the
Corporation  and its  subsidiaries  for the  years  1999,  2000  and 2001 to the
Corporation's  Chief  Executive  Officer  and  its  4  most  highly  compensated
executive officers other than the Chief Executive Officer.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                           Annual Compensation           Long Term
                                                                                         Compensation
                                                     ---------------------------------------------------
                                                                                            Awards
                                                                                      ------------------
Name and                                                                                  Securities
Principal                                                                                 Underlying        All Other
Position                                     Year        Salary         Bonus(1)           Options       Compensation(2)
                                                           ($)             ($)                (#)               ($)
------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>         <C>             <C>                <C>                <C>
Michael L. Cox                               2001        255,359         63,450             10,500             3,125
   President and Chief Executive             2000        234,969         70,732             10,500             2,625
   Officer, Corporation                      1999        194,105         56,772             10,500             2,375

Roger M. Arwood                              2001        188,834         35,201              8,400                 0
   Executive Vice President,                 2000        133,883         13,750              8,400                 0
   Corporation; President and Chief
   Executive Officer, First
   Merchants(3)

Roy A. Eon                                   2001        147,328         23,049              4,200                 0
   Senior Vice President,
   Corporation and First Merchants(4)

Larry R. Helms                               2001        115,422         16,690              4,830             1,404
   Senior Vice President, General            2000        111,014         10,325              4,830             1,350
   Counsel and Secretary, Corporation;       1999        106,654         19,898              5,250             1,298
   Executive Vice President, First
   Merchants

James L. Thrash,                             2001        108,516         12,503              4,830             1,060
   Senior Vice President, Corporation        2000        104,353          8,679              4,830             1,020
   and First Merchants; Chief Financial      1999        100,421         18,787              5,250               980
   Officer, Corporation
------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  The Corporation  restructured its incentive compensation program for senior
     management in 2000. Under the restructured  program,  the bonuses earned by
     each executive  officer for 2000 and 2001was paid 2/3 in cash following the
     end of the fiscal year and 1/3 in "deferred  stock units" which are payable
     in cash two years after the date of grant,  unless the units are  forfeited
     due to  termination  of the  executive  officer's  employment  for cause or
     because the executive officer voluntarily  terminated employment (except on
     account of retirement,  death or disability) prior to payment.  The portion
     of the bonus paid in deferred  stock units is not reportable in the Summary
     Compensation Table, but is disclosed in the Long-term Incentive Plan Awards
     Table below.

(2)  Represents  employer  matching  contributions  for  fiscal  year  to  First
     Merchants Corporation Retirement Savings Plan (a ss.401(k) plan).

(3)  Mr. Arwood was employed as Executive Vice President of the  Corporation and
     First  Merchants  on March 1, 2000.  He became  President  and CEO of First
     Merchants on September 19, 2000.

(4)  Mr. Eon was employed as Senior Vice President of the  Corporation and First
     Merchants on January 8, 2001.


                                      - 6 -
<PAGE>


Option Grants Table

The 1999 Long-term  Equity  Incentive Plan, which became effective as of July 1,
1999,  authorizes  the  Compensation  Committee to grant  stock-based  incentive
awards, including stock options, to eligible employees of the Corporation or any
subsidiary.  The following  table  contains  information  concerning  individual
grants of stock options under the plan made during 2001 to each of the executive
officers  named in the  Summary  Compensation  Table  above.  Each option was to
purchase  the  Corporation's  common  stock at a price not less than the  market
price of the stock on the date of grant.

                      OPTION GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                              Individual Grants
                                                                                              Potential Realizable
------------------------------------------------------------------------------------------    Value at Assumed
                          Number of        Percent of                                         Annual Rates of Stock
                       Securities Under-   Total Options                                      Price Appreciation for
                        lying Options      Granted to         Exercise                        Option Term
                           Granted         Employees in        Price                         -----------------------
Name                         (#)           Fiscal Year         ($/Sh)      Expiration Date       5%($)      10%($)
--------------------------------------------------------------------------------------------------------------------
<S>                        <C>                  <C>           <C>          <C>                 <C>         <C>
Michael L. Cox             10,500               9.59          21.7524         July 1, 2011     143,892     363,156

Roger M. Arwood             8,400               7.67          21.7524         July 1, 2011     115,114     290,525

Roy A. Eon                  2,100               1.92          20.0893      January 8, 2011      26,578      67,078
                            2,100               1.92          21.7524         July 1, 2011      28,778      72,631

Larry R. Helms              4,830               4.41          21.7524         July 1, 2011      66,190     167,052

James L. Thrash             4,830               4.41          21.7524         July 1, 2011      66,190     167,052
--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Mr. Eon was granted an option for 2,100 shares on January 8, 2001, which is
     exercisable  on or after  January 8, 2003.  This option is not  exercisable
     after  January 8, 2011.  The other options were granted on July 1, 2001 and
     are exercisable on or after July 1, 2003. These options are not exercisable
     after July 1, 2011.

Aggregated Option Exercises and Fiscal Year-End Option Value Table

The following table contains  information  concerning (1) each exercise of stock
options  during 2001 under the 1989 Stock  Option  Plan,  the 1994 Stock  Option
Plan,  or the 1999  Long-term  Equity  Incentive  Plan by each of the  executive
officers named in the Summary  Compensation Table above, and (2) the value as of
December 31, 2001 of each of the named executive  officer's  unexercised options
on an aggregated basis.

                   AGGREGATED OPTION EXERCISES IN LAST FISCAL
                     YEAR AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                Shares                       Number of Securities          Value of Unexercised
                               Acquired                     Underlying Unexercised         In-the-Money Options
                                  on          Value       Options at Fiscal Year-End        at Fiscal Year-End
                               Exercise      Realized                 (#)                           ($)
Name                             (#)           ($)         Exercisable/Unexercisable     Exercisable/Unexercisable
------------------------------------------------------------------------------------------------------------------
<S>                               <C>           <C>             <C>                          <C>
Michael L. Cox                    0             0               50,037 / 26,547              389,771 / 77,500

Roger M. Arwood                   0             0                5,250 / 11,550                2,668 / 31,242

Roy A. Eon                        0             0                    0 / 4,200                     0 / 13,016

Larry R. Helms                    0             0               27,215 / 9,665               180,259 / 29,649

James L. Thrash                   0             0                8,395 / 9,665                12,353 / 29,649
------------------------------------------------------------------------------------------------------------------
</TABLE>


                                     - 7 -
<PAGE>


Long-term Incentive Plan Awards Table

Under the restructured Senior Management Incentive  Compensation Program,  which
became effective in 2000, the annual bonuses earned by  participating  employees
are  payable  2/3 in  cash  following  the  end of the  fiscal  year  and 1/3 in
"deferred  stock units" two years after the bonus is earned.  When payable,  the
units  are  valued  at  an  amount  equal  to  the  fair  market  value  of  the
Corporation's common stock on the date of payment,  plus accumulated  dividends.
Payments  for the  units  are  made in cash,  not  stock.  If the  participant's
employment  is  terminated  for  cause  or  is  voluntarily  terminated  by  the
participant (except on account of retirement,  death or disability) prior to the
date  of  payment,  the  units  are  forfeited.  The  following  table  contains
information  concerning  deferred  stock  unit  awards for 2001 under the Senior
Management  Incentive  Compensation  Program to each of the  executive  officers
named in the  Summary  Compensation  Table  above.  The  section  of this  Proxy
Statement  entitled  "Compensation  and  Human  Resources  Committee  Report  on
Executive   Compensation   --  Incentive   Compensation"   contains   additional
information about the Senior Management Incentive Compensation Program.

             LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
--------------------------------------------------------------------------------
Name                     Number of Shares,          Performance or Other Period
                         Units or Other Rights      Until Maturation or Payout
--------------------------------------------------------------------------------
Michael L. Cox                  1,321                    1/29/02 - 1/29/04

Roger M. Arwood                   733                    1/29/02 - 1/29/04

Roy A. Eon                        480                    1/29/02 - 1/29/04

Larry R. Helms                    348                    1/29/02 - 1/29/04

James L. Thrash                   260                    1/29/02 - 1/29/04
--------------------------------------------------------------------------------

Pension Plans

The  Corporation  has a  qualified  defined  benefit  pension  plan , the  First
Merchants  Corporation  Retirement  Pension  Plan,  covering,  in  general,  all
full-time  employees of the  Corporation and its  subsidiaries.  The Corporation
also has a  nonqualified  plan,  the First  Merchants  Corporation  Supplemental
Executive  Retirement  Plan , which provides  benefits to designated  executives
that  would   otherwise  be  payable  under  the  qualified  plan  if  incentive
compensation  were included in  compensation  and Internal  Revenue Code Section
401(a)(17) did not limit the amount of  compensation  that can be considered for
purposes of calculating  pension benefits accruing under the qualified plan. For
plan years beginning on or after January 1, 2000, $170,000 is the maximum amount
of  compensation  that can be  considered  for purposes of  calculating  pension
benefits  accruing under the qualified  plan.  This maximum amount  increases to
$200,000 for plan years beginning on or after January 1, 2002.

The following table shows the estimated  annual benefits payable upon retirement
at age 65 to  persons  born in 1947  (the  average  of the  birth  years  of the
executive  officers named in the Summary  Compensation Table above) in specified
compensation and years of service  classifications  under the plans. The benefit
amounts shown in the table include  amounts payable under both the qualified and
the nonqualified plans, for those executives who participate in both.


                                     - 8 -
<PAGE>


                               PENSION PLAN TABLE
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
Compensation                                   Years of Service
-----------------------------------------------------------------------------------------------
                      15              20               25                30                35
-----------------------------------------------------------------------------------------------
<S>              <C>             <C>              <C>               <C>               <C>
$ 125,000        $  34,805       $  46,406        $  58,008         $  58,008         $  58,008
  150,000           42,680          56,906           71,133            71,133            71,133
  200,000           58,430          77,906           97,383            97,383            97,383
  250,000           74,180          98,906          123,633           123,633           123,633
  300,000           89,930         119,906          149,883           149,883           149,883
  350,000          105,680         140,906          176,133           176,133           176,133
  400,000          121,430         161,906          202,383           202,383           202,383
  450,000          137,180         182,906          228,633           228,633           228,633
-----------------------------------------------------------------------------------------------
</TABLE>

Participants in the qualified plan who had at least 15 credited years of service
and whose combined age and years of service totaled at least 65 as of January 1,
1991,  including Mr. Helms,  are entitled to a pension benefit  calculated under
the  formula  that was in effect  prior to 1990 if that  will  produce a greater
benefit.  The following table shows the estimated  annual benefits  payable upon
retirement  at age 65 under  the  formula  that was in  effect  prior to 1990 in
specified compensation and years of service classifications under the plans. The
benefit  amounts  shown in the table  include  amounts  payable  under  both the
qualified and the  nonqualified  plans,  for those executives who participate in
both.

                      PENSION PLAN TABLE (Pre-1990 Formula)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
Compensation                                   Years of Service
-----------------------------------------------------------------------------------------------
                      15              20               25                30                35
-----------------------------------------------------------------------------------------------
<S>              <C>             <C>              <C>               <C>               <C>
$ 125,000        $  37,500       $  50,000        $  62,500         $  62,500         $  62,500
  150,000           45,000          60,000           75,000            75,000            75,000
  200,000           60,000          80,000          100,000           100,000           100,000
  250,000           75,000         100,000          125,000           125,000           125,000
  300,000           90,000         120,000          150,000           150,000           150,000
  350,000          105,000         140,000          175,000           175,000           175,000
  400,000          120,000         160,000          200,000           200,000           200,000
  450,000          135,000         180,000          225,000           225,000           225,000
-----------------------------------------------------------------------------------------------
</TABLE>

Benefits under the plans are determined  primarily by average final compensation
and years of service (to a maximum of 25 years) and are computed on the basis of
straight-life  annuity amounts. They are not subject to any deduction for Social
Security or other offset amounts.

Compensation  for purposes of the qualified plan consists of the base salary and
service  award  components  of  the  salary  amounts  reported  in  the  Summary
Compensation  Table above.  Compensation for purposes of the  nonqualified  plan
also  includes  the bonus  amounts  reported in the Summary  Compensation  Table
above.  All of the executive  officers named in the Summary  Compensation  Table
above are  participants  in the  qualified  plan,  except for Mr. Eon, who isn't
eligible yet. Mr. Cox and Mr. Arwood are also  participants in the  nonqualified
plan. The 2001  compensation  used for purposes of calculating  pension benefits
under the plans, and the credited years of service as of January 1, 2002, of the
executive officers named in the Summary  Compensation Table who are participants
in either or both of the plans are: Mr. Cox,  $345,210 (7.7 years),  Mr. Arwood,
$237,801 (1.8 years), Mr. Helms, $112,470 (30.3 years), and Mr. Thrash, $106,200
(24.0 years).

Termination of Employment and Change of Control Arrangements

The  Corporation  and First  Merchants  have change of control  agreements  with
Messrs.  Cox, Arwood,  Eon, Helms and Thrash which provide severance benefits in
the event of both a change of control of the  Corporation or First Merchants and
a termination  or  constructive  termination  of the employment of the executive
within 24 months after the change of



                                     - 9 -
<PAGE>


control, unless such termination was for cause, because of the executive's death
or  disability,  or by the  executive  other  than on  account  of  constructive
termination.  In general,  a "change of  control"  means an  acquisition  by any
person of 25% or more of the  Corporation's or First Merchants' voting shares, a
change in the  makeup of a majority  of the  Corporation's  or First  Merchants'
Board of Directors over a 24-month  period, a merger of the Corporation or First
Merchants  in which the  shareholders  before  the merger own 50% or less of the
Corporation's or First Merchants' voting shares after the merger, or approval by
the  Corporation's  shareholders  of a  plan  of  complete  liquidation  of  the
Corporation  or  First   Merchants  or  an  agreement  to  sell  or  dispose  of
substantially   all  of  the   Corporation's  or  First  Merchants'   assets.  A
"constructive  termination" means, generally, a significant reduction in duties,
compensation  or benefits or a relocation of the  executive's  office outside of
Muncie,  Indiana  unless  agreed to by the  executive.  The  severance  benefits
payable to Messrs.  Cox and Arwood,  in  addition  to base salary and  incentive
compensation  accrued  through  the  date of  termination  would  be: a lump sum
payment  equal to 299% of the sum of (1) their  annual base salary and (2) their
largest bonus under the Corporation's Senior Management  Incentive  Compensation
Program  during  the 2 years  preceding  termination.  The  benefits  payable to
Messrs.  Eon, Helms and Thrash would be determined in a similar  manner,  except
that the percentage  would be 200% for Messrs.  Eon and Helms,  and 150% for Mr.
Thrash,  instead of 299%. The  executives  would also be paid an amount equal to
any excise tax imposed  under  Section 4999 of the Internal  Revenue Code on any
"excess  parachute  payment,"and  they  would  be  entitled  to 2 years of life,
disability, accident and health insurance benefits, the bargain element value of
then outstanding stock options, outplacement services, and reasonable legal fees
and expenses  incurred as a result of the  termination.  The agreements were not
entered into in response to any effort to acquire  control of the Corporation or
First Merchants, and the Board of Directors is not aware of any such effort.

COMPENSATION AND HUMAN RESOURCES COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The  following  non-employee  directors  comprise  the  Compensation  and  Human
Resources Committee of the Corporation:  Robert M. Smitson (Chairman), Stefan S.
Anderson,  Frank A. Bracken,  Thomas B. Clark,  and Norman M.  Johnson.  John W.
Hartmeyer,  who is a director of First Merchants,  serves as a non-voting member
of the  Compensation and Human Resources  Committee.  Mr. Anderson was the Chief
Executive Officer of the Corporation and First Merchants until his retirement on
April 16, 1999.

COMPENSATION AND HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation and Human Resources  Committee is responsible for administering
the Corporation's  executive  compensation program, which includes its incentive
compensation  and  equity-based   plans.  The  manner  in  which  the  Committee
establishes the compensation of the Corporation's  chief executive officer,  Mr.
Cox,  as  well  as the  compensation  of the  other  executive  officers  of the
Corporation,  is  described  below.  The  compensation  of the  other  executive
officers is determined  after  consideration  of the chief  executive  officer's
recommendations.

General Policy on Executive Compensation.  The executive compensation program is
intended to provide incentives to executive officers to achieve both current and
long-term  strategic  management  goals of the  Corporation,  with the  ultimate
objective of obtaining a superior  return on the  shareholders'  investment.  To
this end, the compensation  program for executive  officers is comprised of cash
and equity-based  components which recognize performance as measured against the
Corporation's  annual and long-term  goals, as well as performance  evaluated in
comparison to industry peers.

The  Corporation's  executive  compensation  program is  designed  to assist the
Corporation in achieving its business  objectives by:  maintaining a competitive
compensation  program to  attract  and retain  qualified  executives;  providing
performance-based  incentive  compensation  that  is  directly  related  to  the
Corporation's  financial  performance  and  individual   contributions  to  that
performance;  and linking  compensation  to factors which affect  short-term and
long-term stock  performance.  The  Compensation  and Human Resources  Committee
believes that the executive compensation program is a significant contributor to
the  Corporation's   excellent  performance  compared  to  industry  peers.  The
Corporation's earnings have increased every year since it was formed in 1982.

In general,  the Committee tries to set the total  compensation of the executive
officers of the Corporation - comprised of salary,  incentive compensation,  and
equity-based  compensation - at or near the median of the  compensation  paid to


                                     - 10 -
<PAGE>

executive officers with similar responsibilities at Indiana and Midwestern banks
and bank holding companies of similar size.

Salaries. The salaries paid to the Corporation's  executive officers,  including
the  chief  executive  officer,  for 2001  were  subjectively  determined  after
consideration   of  the   executive   officer's   individual   responsibilities,
performance,  and experience,  the evaluation by the chief executive  officer of
the  executive  officers  other than the chief  executive  officer,  a review of
several  measurements of the  Corporation's  short-term and long-term  financial
results compared with industry peers, various industry salary surveys, and other
factors such as budgetary considerations and inflation rates.

Incentive Compensation. The Committee believes that performance-based pay should
be a  significant  component  of  the  executive  officers'  total  compensation
package.   Therefore,   under  the  Corporation's  Senior  Management  Incentive
Compensation  Program, each of the executive officers is covered by an incentive
plan whose purpose is to provide  incentive  compensation  which will reward the
executive   based  on   performance,   link   compensation   to  achievement  of
organizational  and individual  goals,  motivate and retain key  personnel,  and
attract qualified talent to the Corporation.

Under the  Program,  each  executive  officer,  including  the  chief  executive
officer,  is assigned a target bonus for the following  calendar year which is a
percentage  of salary.  If actual  performance  for the year is higher  than the
target performance  level, then the actual incentive  compensation for such year
will be higher than the target.  The  executive  officers,  other than the chief
executive  officer,  will earn a bonus by meeting or  exceeding  pre-established
performance  levels  for the  year  with  respect  to the  Corporation's  and/or
relevant  subsidiary  bank's  operating  earnings  and,  except  for  the  chief
executive  officers  of  the  Corporation  and  First  Merchants,  by  achieving
pre-established  individual  benchmarks.  The bonus of the  Corporation's  chief
executive  officer  is based on whether  he meets or  exceeds  pre-  established
performance  levels  for the year with  respect to the  Corporation's  operating
earnings  per share,  diluted GAAP  earnings per share and return on equity.  To
further the purpose of executive retention,  2/3 of the bonus is payable in cash
following  the  end of the  calendar  year,  and the  other  1/3 is  payable  in
"deferred  stock units" two years after the bonus is earned  (unless the portion
payable in deferred  stock units is less than  $1,000,  in which case the entire
bonus is payable in cash). When payable,  the deferred stock units are valued at
an amount  equal to the fair market value of the  Corporation's  common stock on
the  date  of  payment,  plus  accumulated  dividends.  Payment  is  made to the
executive in cash rather than stock.  The deferred  stock units are forfeited if
the executive's  employment is terminated for cause or is voluntarily terminated
by the executive (except on account of retirement, death or disability) prior to
the date of payment.  The executive may elect to defer payment of all or part of
the cash  portion  of the  bonus by filing an  election  to do so in the  manner
described  in the  Program.  Deferred  amounts  will be credited  with  interest
quarterly based on the current 5-year U.S. Treasury Bond rate. In order to avoid
wide swings in payouts and to better focus the Program participants on long-term
results,  the  Program  provides  that 60% of any  bonus  paid to the  executive
officers  will be based on  current  year  performance  and 40% will be based on
performance for the prior year.

The cash portion of the bonuses for 2001 for the executive officers named in the
Summary Compensation Table is set forth in the "Bonus" column of that Table, and
the  deferred  stock unit  portion of the bonuses is set forth in the Long- Term
Incentive  Plan Awards Table.  Mr. Cox's target bonus for 2001 under the Program
was 45% of annual base salary.  His actual bonus,  based 60% on 2001 performance
and 40% on 2000  performance,  was  38.07% of annual  base  salary.  The  target
bonuses of Messrs.  Arwood,  Eon,  Helms and Thrash were 40%,  25%, 30% and 25%,
respectively,  of annual base salary.  Their actual  bonuses,  based 60% on 2001
performance and 40% on 2000  performance  (100% on 2001 performance for Mr. Eon,
since he wasn't an employee in 2000),  were 28.54%,  23.05%,  22.29% and 17.68%,
respectively, of annual based salary.

Equity-based  Compensation.  Equity-based  compensation,  including compensation
under the  Corporation's  Long-term  Equity  Incentive  Plan and Employee  Stock
Purchase  Plan,  is  intended  to  encourage  ownership  and  retention  of  the
Corporation's  common stock by key  employees,  thereby giving them a meaningful
stake in the  Corporation's  continued success and aligning their interests with
those of other shareholders.

The Long-term Equity Incentive Plan is briefly  described in the paragraph above
the Option  Grants  Table.  During  2001 the  Compensation  and Human  Resources
Committee  awarded options under the plan for the following  number of shares to
the executive  officers named in the Summary  Compensation Table (as adjusted to
give retroactive effect to the 5%


                                     - 11 -
<PAGE>

common stock dividend that was distributed on September 24, 2001 to shareholders
of record at the close of business on September 3, 2001):  10,500  shares to Mr.
Cox, 8,400 shares to Mr.  Arwood,  4,200 shares to Mr. Eon, and for 4,830 shares
each to Messrs. Helms and Thrash.

The Employee Stock Purchase Plan generally provides that full-time  employees of
the Corporation or a participating subsidiary with more than 6 months of service
may elect,  prior to the offering period (July 1 to June 30), to purchase common
shares of the  Corporation  at a price  equal to 85% of the lesser of the market
price of the stock at the  beginning  of the period and the market  price at the
end of the period. For the offering period ending June 30, 2001, Mr. Eon was not
eligible to participate  in the Employee  Stock Purchase Plan; and Messrs.  Cox,
Arwood,  Helms and Thrash,  the other  executive  officers  named in the Summary
Compensation Table,  purchased 827, 0, 150 and 451 shares,  respectively,  under
the 1999 Employee  Stock  Purchase  Plan.  The 1999 Employee Stock Purchase Plan
covers 5 offering periods expiring on June 30, 2004.

Other  Compensation.  The  executive  officers  are also  covered by medical and
retirement  plans which are generally  applicable to full-time  employees of the
Corporation  and its  subsidiaries.  The  retirement  plans covering each of the
executive officers are the First Merchants Corporation  Retirement Pension Plan,
a defined benefit pension plan (described in the "Pension Plans"  section),  and
the First Merchants  Corporation  Retirement  Savings Plan, an Internal  Revenue
Code Section  401(k) plan  (referred to in note (1) to the Summary  Compensation
Table).  Mr.  Cox and  Mr.  Arwood  are  also  covered  by the  First  Merchants
Corporation  Supplemental  Executive  Retirement Plan, a nonqualified  SERP plan
(described  in the section of this Proxy  Statement  entitled  "Compensation  of
Executive Officers -- Pension Plans").

The above report is submitted by:

FIRST MERCHANTS CORPORATION COMPENSATION
AND HUMAN RESOURCES COMMITTEE

Robert M. Smitson, Chairman       Thomas B. Clark
Stefan S. Anderson                John W. Hartmeyer
Frank A. Bracken                  Norman M. Johnson

AUDIT COMMITTEE REPORT

The Audit  Committee  reports as follows:  (a) the  Committee  has  reviewed and
discussed the audited financial  statements of the Corporation for 2001 with the
Corporation's  management;  (b) the Committee  has discussed  with BKD, LLP, the
Corporation's independent auditor for 2001, the matters required to be discussed
by SAS 61  (Codification  of Statements on Auditing  Standards,  AU ss.380),  as
modified or  supplemented  from time to time; and (c) the Committee has received
the  written  disclosures  and the  letter  from the  Corporation's  independent
auditor  required by  Independence  Standards Board Standard No. 1 (Independence
Standards Board Standard No. 1, Independent  Discussions with Audit Committees),
as  modified  or  supplemented  from time to time,  and has  discussed  with the
independent auditor the independent auditor's independence.  Based on the review
and discussions referred to in clauses (a) - (c) of the preceding sentence,  the
Audit Committee  recommended to the Board, and the Board has approved,  that the
audited financial statements of the Corporation be included in the Corporation's
Annual  Report on Form 10-K (17 CFR  ss.249.310)  for the 2001  fiscal  year for
filing with the Securities and Exchange Commission.

The above report is submitted by:

FIRST MERCHANTS CORPORATION AUDIT COMMITTEE

James F. Ault, Chairman         Suzanne L. Gresham
Stefan S. Anderson              Nelson W. Heinrichs
Philip H. Barger                George R. Likens
Thomas E. Chalfant              Greg A. Moser
Thomas B. Clark                 Gerald S. Paul
Daniel Eichhorn                 John E. Worthen



                                     - 12 -
<PAGE>


PERFORMANCE GRAPH

The following graph compares the yearly change in the  Corporation's  cumulative
total  shareholder  return on its common  stock during the last 5 years with (1)
the  cumulative  total return of the Russell 2000 Index,  and (2) the cumulative
total return of the Russell 2000  Financial  Services  Sector  Index.  The graph
assumes $100 was invested on January 1, 1997 in the Corporation's  common stock,
and in each of the two indexes shown, and all dividends were reinvested.

                 COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
                 AMONG FIRST MERCHANTS CORPORATION, RUSSELL 2000
                   AND RUSSELL 2000 FINANCIAL SERVICES SECTOR

                              [LINE GRAPH OMITTED]

<TABLE>
<CAPTION>
                           12/31/96         12/31/97         12/31/98          12/31/99         12/31/00         12/31/01
<S>                          <C>             <C>              <C>               <C>              <C>              <C>
FMC                          100 ............145.32...........157.40............165.21...........148.47...........171.65
Russell 2000                 100 ............122.36...........119.24............144.59...........140.22...........143.71
Russell 2000 Finl Serv       100 ............136.03...........126.24............118.83...........143.84...........166.34
</TABLE>



                                     - 13 -
<PAGE>


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  Corporation is not aware of any person who is the beneficial  owner of more
than 5% of the  Corporation's  outstanding  common  stock.  The  following  is a
summary of the amount and percent of the Corporation's common stock beneficially
owned on February  14,  2002 by each  director  and  director  nominee,  by each
executive  officer  named in the Summary  Compensation  Table above,  and by all
directors  and  executive  officers  as a group.  Unless  otherwise  noted,  the
beneficial owner has sole voting and investment power.

                                             Amount and Nature          Percent
Beneficial Owner                        of Beneficial Ownership(1)      of Class
----------------                        --------------------------      --------

Stefan S. Anderson (14)                        103,507 (2)                  *
Roger M. Arwood                                  5,355                      *
James F. Ault                                   22,702 (3)                  *
Jerry M. Ault                                   49,247 (4)                  *
Dennis A. Bieberich                             80,510 (5)                  *
Frank A. Bracken (14)                           86,002 (6)                  *
Blaine A. Brownell                               1,050 (7)                  *
Thomas B. Clark                                  9,257                      *
Michael L. Cox                                  65,655 (8)                  *
Barry J. Hudson                                547,431 (9)               4.28%
Norman M. Johnson                              388,377 (10)              3.04%
George A. Sissel                                 7,283 (11)                 *
Robert M. Smitson (14)                          17,652 (12)                 *
John E. Worthen                                  9,186                      *
Roy A. Eon                                           0                      *
Larry R. Helms                                  43,266 (13)                 *
James L. Thrash                                 23,717                      *

Directors and Executive
Officers as a Group (17 persons) (14)        1,460,197                  11.27%

(1)  The  information  contained  in  this  column  is  based  upon  information
     furnished to the  Corporation  by the persons and entities  named above and
     shareholder  records of the  Corporation.  The  shares  shown  include  the
     following  shares  which may be  acquired  during  the next 60 days under a
     stock option plan by the executive officers named above: Mr. Arwood,  5,250
     shares; Mr. Cox, 54,651 shares;  Mr. Helms,  27,215 shares; and Mr. Thrash,
     8,395  shares;  and the following  shares which may be acquired  during the
     next 60 days under a stock option plan by the  directors  named above:  Mr.
     Anderson,  31,185  shares;  Messrs.  Clark and Worthen,  7,875 shares each;
     Messrs.  Bracken, Sissel and Smitson, 6,930 shares each; Mr. Johnson, 5,040
     shares;  Mr. Hudson,  4,200 shares;  Mr. J. F. Ault, 3,150 shares;  and Dr.
     Brownell, 950 shares. The shares shown for directors and executive officers
     as a group include  176,576 shares which may be acquired during the next 60
     days under a stock option plan.

(2)  Includes  1,968  shares  held by his  spouse,  Joan  Anderson,  in which he
     disclaims any beneficial interest.

(3)  Includes  12,684  shares  held by his  spouse,  Marilyn  Ault,  in which he
     disclaims any beneficial interest.

(4)  Includes  509  shares  held by his  spouse,  Christina  Ault,  in  which he
     disclaims any beneficial interest.

(5)  Includes 30,522 shares held by his spouse,  Melanie Bieberich,  in which he
     disclaims any beneficial interest.


                                     - 14 -
<PAGE>


(6)  Includes  4,378  shares  held by his  spouse,  Judy  Bracken,  in  which he
     disclaims any beneficial interest.

(7)  Includes  100  shares  held by his  spouse,  Mardi  Brownell,  in  which he
     disclaims any beneficial interest.

(8)  Includes 4,505 shares held jointly with his spouse, Sharon Cox.

(9)  Includes 297,286 shares owned by Mutual Security, Inc.; 187,749 shares held
     jointly with his spouse,  Elizabeth  Hudson;  and 10,910 shares held by his
     spouse as custodian for his children,  in which he disclaims any beneficial
     interest.

(10) Includes  25,717  shares held by his  spouse,  Julia  Johnson,  in which he
     disclaims  any  beneficial  interest;  and 77,931  shares held in trust for
     family members for which Mr, Johnson, as co-trustee,  has shared voting and
     investment power.

(11) Includes 353 shares held jointly with his spouse, Mary Sissel.

(12) Includes  5,315  shares held by his spouse,  Marilyn  Smitson,  in which he
     disclaims any beneficial interest.

(13) Includes 16,051 shares held jointly with his spouse, Sandra Helms.

(14) Messrs. Anderson,  Bracken and Smitson serve as directors of the George and
     Frances Ball Foundation, Muncie, Indiana, which owns 217,569 shares (1.70%)
     of the Corporation's  outstanding  common stock. The Foundation's  Board of
     Directors,  which has 6 members,  has the voting and investment  power over
     the shares held by the Foundation. The Foundation's shares are not included
     in the totals of the shares beneficially owned by Messrs. Anderson, Bracken
     and Smitson or by directors and executive officers as a group.

*    Percentage beneficially owned is less than 1% of the outstanding shares.

INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

Certain directors and executive officers of the Corporation and its subsidiaries
and their  associates  are customers  of, and have had  transactions  with,  the
Corporation's  subsidiary  banks  from  time to time in the  ordinary  course of
business.  Additional transactions may be expected to take place in the ordinary
course of  business in the future.  All loans and  commitments  included in such
transactions were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
other persons and did not involve more than the normal risk of collectibility or
present other unfavorable features.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities  Exchange Act of 1934, as amended,  requires the
Corporation's  directors and executive officers to file reports of ownership and
changes in ownership of the Corporation's stock with the Securities and Exchange
Commission.  Based  on  its  records  and  the  written  representations  of its
directors and executive officers,  the Corporation believes that during 2001 its
directors  and  executive  officers  complied  with  all  Section  16(a)  filing
requirements.

INDEPENDENT PUBLIC ACCOUNTANTS

Selection of Independent Public Accountants

The  Board  has  selected  BKD,  LLP as  the  Corporation's  independent  public
accountants for 2002.  Representatives of the firm are expected to be present at
the  annual  shareholders'  meeting.  They  will have an  opportunity  to make a
statement,  if they desire to do so, and are expected to be available to respond
to appropriate questions.


                                     - 15 -
<PAGE>


Audit Fees

BKD, LLP billed the  Corporation  and its  affiliates  aggregate  fees  totaling
$158,650 for professional  services  rendered for the audit of the Corporation's
annual financial statements for 2001 and the reviews of the financial statements
included in the Corporation's Forms 10-Q for 2001.

Financial Information Systems Design and Implementation Fees

BKD,  LLP  did  not  perform  any  financial   information   systems  design  or
implementation services for the Corporation in 2001.

All Other Fees

The aggregate fees for all services  rendered by BKD, LLP to the Corporation for
2001,  other than those described in the two immediately  preceding  paragraphs,
totaled $72,128.

The Audit  Committee  has  considered  whether the  provision by BKD, LLP of the
services  covered  by the fees  other  than the audit  fees is  compatible  with
maintaining BKD, LLP's independence and believes that it is compatible.

SHAREHOLDER PROPOSALS

Proposals of shareholders intended to be presented at the 2003 annual meeting of
the  shareholders  must be received by the Secretary of the  Corporation  at the
Corporation's  principal  office by  October  29,  2002,  for  inclusion  in the
Corporation's 2003 proxy statement and form of proxy relating to that meeting.

Shareholder  proposals,  if any,  intended  to be  presented  at the 2002 annual
meeting that were not submitted for  inclusion in this proxy  statement  will be
considered   untimely  unless  they  were  received  by  the  Secretary  of  the
Corporation at the Corporation's principal office by January 9, 2002.

OTHER MATTERS

The cost of soliciting proxies will be borne by the Corporation.  In addition to
solicitations  by mail,  proxies may be solicited  personally or by telephone or
other electronic  means, but no solicitation  will be made by specially  engaged
employees or paid solicitors.

The Board and  management  are not aware of any matters to be  presented  at the
annual  meeting of the  shareholders  other than the election of the  directors.
However,  if  any  other  matters  properly  come  before  such  meeting  or any
adjournment  thereof,  the holders of the proxies are authorized to vote thereon
at their  discretion,  provided the  Corporation did not have notice of any such
matter on or before January 9, 2002.

                                         By Order of the Board of Directors



Muncie, Indiana                          Larry R. Helms
February 26, 2002                        Secretary



                                     - 16 -

<PAGE>

FIRST MERCHANTS BANK, N.A.    PROXY SOLICITED ON BEHALF OF THE
Transfer Agent                BOARD OF DIRECTORS OF FIRST MERCHANTS CORPORATION
75 Oser Avenue                MUNCIE, INDIANA
Hauppauge, NY 11788           The undersigned  hereby appoints Clell W. Douglass
                              and Hamer D. Shafer,  and each of them, as proxies
                              with power of  substitution,  to represent  and to
                              vote all shares of common stock of First Merchants
                              Corporation   which  the   undersigned   would  be
                              entitled   to  vote  at  the  Annual   Meeting  of
                              Shareholders of First Merchants  Corporation to be
                              held at the Horizon  Convention  Center, 401 South
                              High Street, Muncie, Indiana 47305, at 3:30 PM EST
                              on April 11, 2002, and at any adjournment thereof,
                              with  all  of the  powers  the  undersigned  would
                              possess  if  personally  present.  If  any  of the
                              nominees  for  election as  Directors is unable or
                              declines  to serve  for any  reason,  the  persons
                              listed  above have the  authority  to vote for any
                              substitute nominee named by the Board of Directors
                              of First Merchants Corporation.

INTERNET VOTING OPTION: Available 24 hours a day, 7 days a week, Internet voting
is quick,  convenient and your vote is immediately  submitted.  Simply log on to
www.proxytrust.com,  click on the INVESTORS tab and follow the  instructions  on
the screen. You will be asked to enter your 10-digit control number (found below
right) in order to vote on the  electronic  equivalent of this proxy card.  Your
Internet  vote  authorizes  the named  proxies  to vote your  shares to the same
extent as if you marked,  signed and  returned  your proxy card.  If you vote by
Internet, please do not return your proxy by mail.

                                                                      ----------
                                                 Your Control Number: 1234567890
                                                                      ----------

           FIRST MERCHANTS CORPORATION ANNUAL MEETING OF SHAREHOLDERS
                                 APRIL 11, 2002

THE BOARD OF DIRECTORS AND MANAGEMENT OF FIRST MERCHANTS CORPORATION RECOMMEND A
VOTE "FOR" THE PROPOSALS LISTED.

TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' AND MANAGEMENT'S
RECOMMENDATIONS, JUST SIGN BELOW; NO BOXES NEED TO BE CHECKED.

1.   Election of Directors:          FOR all nominees listed to the left (except
     Stefan S. Anderson                as specified in the space below)
     Jerry M. Ault                   WITHHOLD VOTE (do not vote for any
     Blaine A. Brownell                of the nominees listed to the left)
     Thomas B. Clark
     John E. Worthen

     (Instruction:  To withhold authority to vote for
     any individual nominee, write that nominee's
     name in the space provided to the right.) _________________________________

2.   In their  discretion,  the  proxies  are  authorized  to vote on such other
     matters as may properly come before the meeting,  provided the  Corporation
     did not have notice of any such matter on or before January 9, 2002.

                              This proxy will be voted as  directed,  but if not
                              otherwise  directed this proxy will be voted "FOR"
                              election to the Board of Directors of all nominees
                              listed in item 1 above.

                                        ___________________________Dated________
                                        (Signature of Shareholder)

                                        ___________________________Dated________
                                        (Signature of Shareholder)

                              (Joint   owners   should  each  sign   personally.
                              Trustees  and others  signing in a  representative
                              capacity  should  indicate  the  capacity in which
                              they sign).

Please check this box if you plan to attend the Annual Meeting. Number
attending: _______