Annual Report (Form 10-K), fiscal year 1993

ITEM 1. BUSINESS. - --------------------------------------------------------------------------------
GENERAL
First Merchants Corporation (the "Corporation") was incorporated under Indiana law on September 20, 1982, as the bank holding company for First Merchants Bank, National Association ("First Merchants"), a national banking association incorporated on February 6, 1893. Prior to December 16, 1991, First Merchants' name was The Merchants National Bank of Muncie. On November 30, 1988, the Corporation acquired Pendleton Banking Company ("Pendleton"), a state chartered commercial bank organized in 1872. On July 31, 1991, the Corporation acquired First United Bank ("First United"), a state chartered commercial bank organized in 1882.
The Corporation is headquartered in Muncie, Indiana, and is presently engaged in conducting commercial banking business through the 21 offices of its three banking subsidiaries. As of December 31, 1993, the Corporation and its subsidiaries had 371 full-time equivalent employees.
COMPETITION
The Corporation's banking subsidiaries are located in Delaware, Madison, and Henry counties, Indiana. In addition to the competition provided by the lending and deposit gathering subsidiaries of national manufacturers, retailers, insurance companies and investment brokers, the banking subsidiaries compete vigorously with other banks, thrift institutions, credit unions and finance companies located within their service areas.
SUPERVISION AND REGULATION
The Corporation is a bank holding company ("BHC") subject to regulation under the Bank Holding Company Act of 1956, as amended (the "Act"). The Act generally requires a BHC to obtain prior approval of the Federal Reserve Board (the "FRB") to acquire or hold more than a 5% voting interest in any bank. The Act restricts the non-banking activities of BHCs to those which are closely related to banking activities. As a result of the provisions in the Financial Institutional Reform, Recovery and Enforcement Act of 1989, BHCs may now own and operate savings and loan associations or savings banks which, in the past, was prohibited. First Merchants is a national bank and is supervised, regulated and examined by the Comptroller of the Currency. Pendleton and First United are state banks and are supervised, regulated and examined by the Indiana Department of Financial Institutions. In addition, First Merchants, as a member of the Federal Reserve System, is supervised and regulated by the Federal Reserve. In addition, Pendleton and First United, which are not members of the Federal Reserve System, are supervised and regulated by the Federal Deposit Insurance Corporation ("FDIC"). The deposits of First Merchants, Pendleton, and First United (the "Banks") are insured by the FDIC. Each regulator has the authority to issue cease-and-desist orders if it determines their activities represent an unsafe and unsound practice or violation of law.
Under the Act and under regulations of the FRB, the Corporation and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with the extension of credit and are subject to limitations as to certain intercompany transactions.
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SUPERVISION AND REGULATION (CONTINUED)
Subject to certain limitations, an Indiana bank may establish branches de novo and may establish branches by acquisition in any location or locations within Indiana. Indiana law permits intrastate bank holding company acquisitions, subject to certain limitations. Effective July 1, 1992, Indiana bank holding companies were permitted to acquire banks, and banks and bank holding companies in Indiana were permitted to be acquired by bank holding companies, located in any state in the United States which permits reciprocal entry by Indiana bank holding companies. Prior to July 1, 1992, such interestate bank holding company acquisitions were permitted only on a regional, as opposed to national, basis. Neither the corporation nor its subsidiaries presently contemplate engaging in any non-banking related business activities.
During 1991, Congress passed the Federal Deposit Insurance Corporation Improvement Act ("FDICIA"). In addition to addressing the insurance fund's financial needs, FDICIA expanded the power of the federal banking regulators. FDICIA introduced a new system of classifying financial institutions with respect to their capitalization. Effective in 1993, FDICIA also requires certain financial institutions to have annual audits and requires management to issue supplemental reports attesting to an institution's compliance with laws and regulations and to the adequacy of its internal controls and procedures.
The Corporation's income is principally derived from dividends paid on the common stock of its subsidiaries. The payment of these dividends are subject to certain regulatory restrictions.
STATISTICAL DATA
The following tables set forth statistical data relating the Corporation and its subsidiaries.
DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY; INTEREST RATES AND INTEREST DIFFERENTIAL
The daily average balance sheet amounts, the related interest income or expense, and average rates earned or paid are presented in the following table.
- -------------------------------------------------------------------------------- STATISTICAL DATA (Continued)
ANALYSIS OF CHANGES IN NET INTEREST INCOME
The following table presents net interest income components on a tax-equivalent basis and reflects changes between periods attributable to movement in either the average balance or average interest rate for both earning assets and interest-bearing liabilities. The volume differences were computed as the difference in volume between the current and prior year times the interest rate of the prior year, while the interest rate changes were computed as the difference in rate between the current and prior year times the volume of the prior year. Volume/rate variances have been allocated on the basis of the absolute relationship between volume variances and rate variances.
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STATISTICAL DATA (Continued)
INVESTMENT PORTFOLIO
The amortized cost, gross unrealized gains, gross unrealized losses and approximate market value of the investment securities portfolio at the dates indicated were:
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STATISTICAL DATA (Continued)
The maturity distribution and average yields for the investment securities portfolio at December 31, 1993 were:
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STATISTICAL DATA (Continued)
LOAN PORTFOLIO
TYPES OF LOANS
The loan portfolio at the dates indicated is presented below:
MATURITIES AND SENSITIVITIES OF LOANS TO CHANGES IN INTEREST RATES
Presented in the table below are the maturities of loans (excluding commercial real estate, farmland, residential real estate and individuals' loans) outstanding as of December 31, 1993. Also presented are the amounts due after one year classified according to the sensitivity to changes in interest rates.
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STATISTICAL DATA (Continued)
RISK ELEMENTS
Nonaccruing loans are loans which are reclassified to a nonaccruing status when in management's judgment the collateral value and financial condition of the borrower do not justify accruing interest. Interest previously recorded but not deemed collectible is reversed and charged against current income. Interest income on these loans is then recognized when collected.
Restructured loans are loans for which the contractual interest rate has been reduced or other concessions are granted to the borrower because of a deterioration in the financial condition of the borrower resulting in the inability of the borrower to meet the original contractual terms of the loans.
Interest income of $13,154 for the year ended December 31, 1993, was recognized on the nonaccruing and restructured loans listed in the table above, whereas interest income of $52,198 would have been recognized under their original loan terms.
Potential problem loans:
Management has identified certain other loans totaling $4,760,200 as of December 31, 1993, not included in the risk element table, which are current as to principal and interest, about which there are doubts as to the to the borrowers' ability to comply with present repayment terms.
- -------------------------------------------------------------------------------- STATISTICAL DATA (Continued)
SUMMARY OF LOAN LOSS EXPERIENCE
The following table summarizes the loan loss experience for the years indicated.
- -------------------------------------------------------------------------------- STATISTICAL DATA (Continued)
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES AT DECEMBER 31:
Presented below is an analysis of the composition of the allowance for loan losses and per cent of loans in each category to total loans:
- -------------------------------------------------------------------------------- STATISTICAL DATA (Continued)
LOAN LOSS CHARGEOFF PROCEDURES
The Banks have weekly meetings at which loan delinquencies, maturities and problems are reviewed. The Board of Directors receive and review reports on loans monthly.
The Executive Committee of First Merchants' Board meets bimonthly to approve or disapprove all new loans in excess of $1,000,000 and the Board reviews all commercial loans in excess of $50,000 which were made or renewed during the preceding month. Pendleton's and First United's loan committees, consisting of all loan officers and the president, meet as required to approve or disapprove any loan which is in excess of an individual loan officer's lending limit.
All chargeoffs are approved by the senior loan officer and are reported to the Banks' Boards. The Banks charge off loans when a determination is made that all or a portion of a loan is uncollectible or as a result of examinations by regulators and the independent auditors.
PROVISION FOR LOAN LOSSES
In banking, loan losses are one of the costs of doing business. Although the Banks' management emphasize the early detection and chargeoff of loan losses, it is inevitable that at any time certain losses exist in the portfolio which have not been specifically identified. Accordingly, the provision for loan losses is charged to earnings on an anticipatory basis, and recognized loan losses are deducted from the allowance so established. Over time, all net loan losses must be charged to earnings. During the year, an estimate of the loss experience for the year serves as a starting point in determining the appropriate level for the provision. However, the amount actually provided in any period may be greater or less than net loan losses, based on management's judgment as to the appropriate level of the allowance for loan losses. The determination of the provision in any period is based on management's continuing review and evaluation of the loan portfolio, and its judgment as to the impact of current economic conditions on the portfolio. The evaluation by management includes consideration of past loan loss experience, changes in the composition of the loan portfolio, and the current condition and amount of loans outstanding.
- -------------------------------------------------------------------------------- STATISTICAL DATA (Continued)
DEPOSITS
The following table shows the average amount of deposits and average rate of interest paid thereon for the years indicated.
As of December 31, 1993, certificates of deposit and other time deposits of $100,000 or more mature as follows:
RETURN ON EQUITY AND ASSETS
- -------------------------------------------------------------------------------- STATISTICAL DATA (Continued)
SHORT-TERM BORROWINGS
Securities sold under repurchase agreements are borrowings maturing within one year and are secured by U. S. Government securities.
Pertinent information with respect to short-term borrowings is summarized below:
ITEM 2.



ITEM 2. PROPERTIES. - -------------------------------------------------------------------------------
The headquarters of the Corporation and First Merchants are located in a five- story building at 200 East Jackson Street, Muncie, Indiana. This building and seven branch buildings are owned by First Merchants; six remaining branches of First Merchants are located in leased premises. Four automated cash dispensers are located in leased premises; one cash dispenser is located in premises that are provided free of charge. All of the Corporation's and First Merchants' facilities are located in Delaware and Madison Counties of Indiana. The principal offices of Pendleton are located at 100 West State Street, Pendleton, Indiana. Pendleton also operates three branches. All of Pendleton's properties are owned by Pendleton and are located in Madison County, Indiana. The principal offices of First United are located at 790 West Mill Street, Middletown, Indiana. First United also operates two branches. All of First United's properties are owned by First United and are
- -------------------------------------------------------------------------------- ITEM 2. PROPERTIES (Continued)
located in Henry County, Indiana. None of the properties owned by the banks are subject to any major encumbrances. The net investment of the Corporation and subsidiaries in real estate and equipment at December 31, 1993 was $9,441,000.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS. - ------------------------------------------------------------------------------- There is no pending legal proceeding, other than ordinary routine litigation incidental to the business of the Corporation or its subsidiaries, of a material nature to which the Corporation or its subsidiaries is a party or of which any of their properties are subject. Further, there is no material legal proceeding in which any director, officer, principal shareholder, or affiliate of the Corporation, or any associate of any such director, officer or principal shareholder, is a party, or has a material interest, adverse to the Corporation.
None of the routine legal proceedings, individually or in the aggregate, in which the Corporation or its affiliates are involved are expected to have a material adverse impact on the financial position or the results of operations of the Corporation.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. - ------------------------------------------------------------------------------- No matters were submitted during the fourth quarter of 1993 to a vote of security holders, through the solicitation of proxies or otherwise.
SUPPLEMENTAL INFORMATION - EXECUTIVE OFFICERS OF THE REGISTRANT. - -------------------------------------------------------------------------------
The names, ages, and positions with the Corporation and subsidiary banks of all executive officers of the Corporation are listed below.
Offices with the Corporation Principal Occupation Name and Age And Subsidiary Banks During Past Five Years ------------ ---------------------------- ----------------------
Stefan S. Anderson Chairman of the Board and Chairman of the Board of 59 President, Corporation and the Corporation and First Merchants First Merchants since 1987; President of First Merchants since 1979 and of the Corporation since
Roger W. Gilcrest Executive Vice President Executive Vice President 56 and Director, First Merchants First Merchants since July, 1988; Senior Vice President, First Source Bank prior to July, 1988; Director of First Merchants since July 1992.
Paul R. Hoover Senior Vice President, Senior Vice President, 52 First Merchants First Merchants since
Larry R. Helms Senior Vice President and Senior Vice President 53 General Counsel, Corporation; Corporation since 1982 Senior Vice President, First and First Merchants Merchants; Director of First since 1979; Director United; Director of Pendleton of First United and Pendleton since 1992
Lowell E. Williams Senior Vice President, First Senior Vice President 62 Merchants First Merchants since
James L. Thrash Senior Vice President and Chief Senior Vice President 44 Financial Officer, Corporation; and Chief Financial Senior Vice President, Officer of the First Merchants Corporation since 1990; Chief Financial Officer, Corporation prior to May 1990; Senior Vice President, First Merchants since 1990; Vice President, First Merchants prior to April
Jack L. Demaree Senior Vice President and Senior Vice President, 45 Senior Commercial Loan Officer, First Merchants Bank First Merchants since March 1992, Senior Commercial Loan Officer, First Merchants since 1987; Vice President, First Merchants prior to March 1992
PART II
TEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS - -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to page 2 and 3 of the Corporation's 1993 Annual Report to Stockholders, "The Spirit of Community Banking," under the caption "Stockholder Information," Exhibit 13.
ITEM 6. SELECTED FINANCIAL DATA. - -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to page 1 of the Corporation's 1993 Annual Report to Stockholders, "Financial Review," under the caption "Five-Year Summary of Selected Financial Data," Exhibit 13.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. - -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to page 2 through 6 of the Corporation's 1993 Annual Report to Stockholders, "Financial Review," under the caption "Management's Discussion and Analysis," Exhibit 13.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. - -------------------------------------------------------------------------------
The financial statements and supplementary data required under this item are incorporated herein by reference to inside cover and pages 7 through 22 of the Corporation's 1993 Annual Report to Stockholders, "Financial Review," Exhibit 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. - -------------------------------------------------------------------------------
In connection with its audits for the two most recent fiscal years ended December 31, 1993, there have been no disagreements with the Corporation's independent certified public accountants on any matter of accounting principles or practices, financial statement disclosure or audit scope or procedure, nor have there been any changes in accountants.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. - -------------------------------------------------------------------------------
The information required under this item relating to directors is incorporated by reference to the Corporation's 1994 Proxy Statement furnished to its stockholders in connection with an annual meeting to be held March 31, 1994 (the "1994 Proxy Statement"), under the caption "Election of Directors," which Proxy Statement has been filed with the Commission. The information required under this item relating to executive officers is set forth in Part I, "Supplemental Information - Executive Officers of the Registrant" of this annual report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION. - -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to the Corporation's 1994 Proxy Statement, under the captions, "Compensation of Directors" and "Compensation of Executive Officers," which Proxy Statement has been filed with the Commission.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. - -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to the Corporation's 1994 Proxy Statement, under the caption, "Security Ownership of Certain Beneficial Owners and Management," which Proxy Statement has been filed with the Commission.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. - -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to the Corporation's 1994 Proxy Statement, under the caption "Interest of Management in Certain Transactions," which Proxy Statement has been filed with the Commission.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. - -------------------------------------------------------------------------------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (Continued) - -------------------------------------------------------------------------------
(b) Reports on Form 8-K:
No reports on Form 8-K were filed for the three months ended December 31, 1993.
- -------------------------------------------------------------------------------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 15th day of March, 1994.
FIRST MERCHANTS CORPORATION
By /s/ Stefan S. Anderson --------------------------------- Stefan S. Anderson, Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934, this report on Form 10-K has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Capacity Date - --------------------------- --------------------------- ------------------
/s/ Stefan S. Anderson Director and Chairman, March 15, 1994 - -------------------------- Principal Executive Officer Stefan S. Anderson
/s/ Thomas B. Clark Director March 15, 1994 - --------------------------- Thomas B. Clark
/s/ Michael L. Cox Director March 15, 1994 - --------------------------- Michael L. Cox
/s/ Clell W. Douglass Director March 15, 1994 - --------------------------- Clell W. Douglass
/s/ David A. Galliher Director March 15, 1994 - --------------------------- David A. Galliher
/s/ Thomas K. Gardiner Director March 15, 1994 - --------------------------- Thomas K. Gardiner
/s/ Hurley C. Goodall Director March 15, 1994 - --------------------------- Hurley C. Goodall
/s/ John W. Hartmeyer Director March 15, 1994 - --------------------------- John W. Hartmeyer
/s/ Nelson W. Heinrichs Director March 15, 1994 - --------------------------- Nelson W. Heinrichs
- -------------------------------------------------------------------------------- Signature Capacity Date - --------------------------- --------------------------- ----------------
/s/ Jon H. Moll Director March 15, 1994 - --------------------------- Jon H. Moll
/s/ Robert M. Smitson Director March 15, 1994 - -------------------------- Robert M. Smitson
Director March 15, 1994 - -------------------------- Joseph E. Wilson
Director March 15, 1994 - -------------------------- Robert F. Wisehart
/s/ John E. Worthen Director March 15, 1994 - -------------------------- John E. Worthen
/s/ James L. Thrash Principal Financial and March 15, 1994 - -------------------------- Principal Accounting James L. Thrash Officer
INDEX TO EXHIBITS - --------------------------------------------------------------------------------
Form 10-K Page Exhibit No: Description of Exhibit: Number ----------- ----------------------- ---------
3.1 Articles of Incorporation, dated September 20, 1982 and the Articles of Amendment thereto dated March 13, 1985 and March 14, 1988 . . . . . . . . 27-49 3.2 Bylaws and amendments thereto dated February 12, 1985, February 20, 1987, July 14, 1987, December 8, 1987, December 13, 1988, November 14, 1989, August 13, 1991, April 14, 1992, and February 15, 1994 . . . . . . . . . . . 50-69 10.1 First Merchants Bank, National Association Management Incentive Plan . . . . . . . . . . . . (A) 10.2 Unfunded Deferred Compensation Plan, as Amended . . . . . . . . . . . . . . . . . . . . (D) 10.3 Employee Stock Purchase Plan (1989) . . . . . . . . (B) 1989 Stock Option Plan . . . . . . . . . . . . . . (C) 10.5 Employee Stock Purchase Plan (1994) . . . . . . . . 70-73 10.6 1994 Stock Option Plan . . . . . . . . . . . . . . 74-78 13 1993 Annual Report to Stockholders (except for the Pages and information thereof expressly incorporated by reference in this Form 10-K, the Annual Report to Stockholders is provided solely for the information of the Securities and Exchange Commission and is not deemed "filed" as part of this Form 10-K) . . . . . . . . . . . . . . . . . . . . . . 79-124 22 Subsidiaries of Registrant . . . . . . . . . . . . 24 23 Consent of Independent Auditors . . . . . . . . . . 25 99.1 Financial statements and independent auditor's report for First Merchants Corporation Employee Stock Purchase Plan . . . . . 26
(A) Incorporated by reference to Registrant's Registration Statement on Form S-4 (SEC File No. 33-110) ordered effective on September 30, 1988. (B) Incorporated by reference to Registrant's Registration Statement on Form S-8 (SEC File No. 33-28900) effective on May 24, 1989. (C) Incorporated by reference to Registrant's Registration Statement on Form S-8 (SEC File No. 33-28901) effective on May 24, 1989. (D) Incorporated by reference to Registrant's Form 10-K for year ended December 31, 1990.
- -------------------------------------------------------------------------------- EXHIBIT 22--SUBSIDIARIES OF THE REGISTRANT - -------------------------------------------------------------------------------
State of Name Incorporation ---- -------------
First Merchants Bank, National Association. . . . . . . . . . U.S.
Pendleton Banking Company . . . . . . . . . . . . . . . . . . Indiana
First United Bank . . . . . . . . . . . . . . . . . . . . . . Indiana
- -------------------------------------------------------------------------------- EXHIBIT 23--CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS - --------------------------------------------------------------------------------
We hereby consent to the incorporation by reference to Registration Statements on Form S-8, File Numbers 33-28900 and 33-28901, of our report dated January 21, 1994 on the consolidated financial statements of First Merchants Corporation, which report is incorporated by reference in the Annual Report on Form 10-K of First Merchants Corporation.
/s/ GEO S. OLIVE & CO.
Indianapolis, Indiana March 18, 1994
- -------------------------------------------------------------------------------- EXHIBIT 99.1--FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT FOR FIRST MERCHANTS CORPORATION EMPLOYEE STOCK PURCHASE PLAN - --------------------------------------------------------------------------------
The annual financial statements and independent auditor's report thereon for First Merchants Corporation Employee Stock Purchase Plan for the year ending June 30, 1994, will be filed as an amendment to the 1993 Annual Report on Form 10-K no later than October 28, 1994.


ITEM 6. SELECTED FINANCIAL DATA. - -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to page 1 of the Corporation's 1993 Annual Report to Stockholders, "Financial Review," under the caption "Five-Year Summary of Selected Financial Data," Exhibit 13.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. - -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to page 2 through 6 of the Corporation's 1993 Annual Report to Stockholders, "Financial Review," under the caption "Management's Discussion and Analysis," Exhibit 13.
ITEM 8.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. - -------------------------------------------------------------------------------
The financial statements and supplementary data required under this item are incorporated herein by reference to inside cover and pages 7 through 22 of the Corporation's 1993 Annual Report to Stockholders, "Financial Review," Exhibit 13.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. - -------------------------------------------------------------------------------
In connection with its audits for the two most recent fiscal years ended December 31, 1993, there have been no disagreements with the Corporation's independent certified public accountants on any matter of accounting principles or practices, financial statement disclosure or audit scope or procedure, nor have there been any changes in accountants.
PART III
ITEM 10.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. - -------------------------------------------------------------------------------
The information required under this item relating to directors is incorporated by reference to the Corporation's 1994 Proxy Statement furnished to its stockholders in connection with an annual meeting to be held March 31, 1994 (the "1994 Proxy Statement"), under the caption "Election of Directors," which Proxy Statement has been filed with the Commission. The information required under this item relating to executive officers is set forth in Part I, "Supplemental Information - Executive Officers of the Registrant" of this annual report on Form 10-K.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION. - -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to the Corporation's 1994 Proxy Statement, under the captions, "Compensation of Directors" and "Compensation of Executive Officers," which Proxy Statement has been filed with the Commission.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. - -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to the Corporation's 1994 Proxy Statement, under the caption, "Security Ownership of Certain Beneficial Owners and Management," which Proxy Statement has been filed with the Commission.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. - -------------------------------------------------------------------------------
The information required under this item is incorporated by reference to the Corporation's 1994 Proxy Statement, under the caption "Interest of Management in Certain Transactions," which Proxy Statement has been filed with the Commission.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. - -------------------------------------------------------------------------------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (Continued) - -------------------------------------------------------------------------------
(b) Reports on Form 8-K:
No reports on Form 8-K were filed for the three months ended December 31, 1993.
- -------------------------------------------------------------------------------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 15th day of March, 1994.
FIRST MERCHANTS CORPORATION
By /s/ Stefan S. Anderson --------------------------------- Stefan S. Anderson, Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934, this report on Form 10-K has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Capacity Date - --------------------------- --------------------------- ------------------
/s/ Stefan S. Anderson Director and Chairman, March 15, 1994 - -------------------------- Principal Executive Officer Stefan S. Anderson
/s/ Thomas B. Clark Director March 15, 1994 - --------------------------- Thomas B. Clark
/s/ Michael L. Cox Director March 15, 1994 - --------------------------- Michael L. Cox
/s/ Clell W. Douglass Director March 15, 1994 - --------------------------- Clell W. Douglass
/s/ David A. Galliher Director March 15, 1994 - --------------------------- David A. Galliher
/s/ Thomas K. Gardiner Director March 15, 1994 - --------------------------- Thomas K. Gardiner
/s/ Hurley C. Goodall Director March 15, 1994 - --------------------------- Hurley C. Goodall
/s/ John W. Hartmeyer Director March 15, 1994 - --------------------------- John W. Hartmeyer
/s/ Nelson W. Heinrichs Director March 15, 1994 - --------------------------- Nelson W. Heinrichs
- -------------------------------------------------------------------------------- Signature Capacity Date - --------------------------- --------------------------- ----------------
/s/ Jon H. Moll Director March 15, 1994 - --------------------------- Jon H. Moll
/s/ Robert M. Smitson Director March 15, 1994 - -------------------------- Robert M. Smitson
Director March 15, 1994 - -------------------------- Joseph E. Wilson
Director March 15, 1994 - -------------------------- Robert F. Wisehart
/s/ John E. Worthen Director March 15, 1994 - -------------------------- John E. Worthen
/s/ James L. Thrash Principal Financial and March 15, 1994 - -------------------------- Principal Accounting James L. Thrash Officer
INDEX TO EXHIBITS - --------------------------------------------------------------------------------
Form 10-K Page Exhibit No: Description of Exhibit: Number ----------- ----------------------- ---------
3.1 Articles of Incorporation, dated September 20, 1982 and the Articles of Amendment thereto dated March 13, 1985 and March 14, 1988 . . . . . . . . 27-49 3.2 Bylaws and amendments thereto dated February 12, 1985, February 20, 1987, July 14, 1987, December 8, 1987, December 13, 1988, November 14, 1989, August 13, 1991, April 14, 1992, and February 15, 1994 . . . . . . . . . . . 50-69 10.1 First Merchants Bank, National Association Management Incentive Plan . . . . . . . . . . . . (A) 10.2 Unfunded Deferred Compensation Plan, as Amended . . . . . . . . . . . . . . . . . . . . (D) 10.3 Employee Stock Purchase Plan (1989) . . . . . . . . (B) 1989 Stock Option Plan . . . . . . . . . . . . . . (C) 10.5 Employee Stock Purchase Plan (1994) . . . . . . . . 70-73 10.6 1994 Stock Option Plan . . . . . . . . . . . . . . 74-78 13 1993 Annual Report to Stockholders (except for the Pages and information thereof expressly incorporated by reference in this Form 10-K, the Annual Report to Stockholders is provided solely for the information of the Securities and Exchange Commission and is not deemed "filed" as part of this Form 10-K) . . . . . . . . . . . . . . . . . . . . . . 79-124 22 Subsidiaries of Registrant . . . . . . . . . . . . 24 23 Consent of Independent Auditors . . . . . . . . . . 25 99.1 Financial statements and independent auditor's report for First Merchants Corporation Employee Stock Purchase Plan . . . . . 26
(A) Incorporated by reference to Registrant's Registration Statement on Form S-4 (SEC File No. 33-110) ordered effective on September 30, 1988. (B) Incorporated by reference to Registrant's Registration Statement on Form S-8 (SEC File No. 33-28900) effective on May 24, 1989. (C) Incorporated by reference to Registrant's Registration Statement on Form S-8 (SEC File No. 33-28901) effective on May 24, 1989. (D) Incorporated by reference to Registrant's Form 10-K for year ended December 31, 1990.
- -------------------------------------------------------------------------------- EXHIBIT 22--SUBSIDIARIES OF THE REGISTRANT - -------------------------------------------------------------------------------
State of Name Incorporation ---- -------------
First Merchants Bank, National Association. . . . . . . . . . U.S.
Pendleton Banking Company . . . . . . . . . . . . . . . . . . Indiana
First United Bank . . . . . . . . . . . . . . . . . . . . . . Indiana
- -------------------------------------------------------------------------------- EXHIBIT 23--CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS - --------------------------------------------------------------------------------
We hereby consent to the incorporation by reference to Registration Statements on Form S-8, File Numbers 33-28900 and 33-28901, of our report dated January 21, 1994 on the consolidated financial statements of First Merchants Corporation, which report is incorporated by reference in the Annual Report on Form 10-K of First Merchants Corporation.
/s/ GEO S. OLIVE & CO.
Indianapolis, Indiana March 18, 1994
- -------------------------------------------------------------------------------- EXHIBIT 99.1--FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT FOR FIRST MERCHANTS CORPORATION EMPLOYEE STOCK PURCHASE PLAN - --------------------------------------------------------------------------------
The annual financial statements and independent auditor's report thereon for First Merchants Corporation Employee Stock Purchase Plan for the year ending June 30, 1994, will be filed as an amendment to the 1993 Annual Report on Form 10-K no later than October 28, 1994.