SECURITIES AND EXCHANGE COMMISION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d)
OF THE SECURITIES EXCANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM
____ TO ____
FIRST MERCHANTS CORPORATION
RETIREMENT SAVINGS PLAN
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Full title of the plan and the address of the plan,
if different from that of the issuer named below:
FIRST MERCHANTS CORPORATION
200 EAST JACKSON
MUNCIE, IN 47305
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Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office
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FIRST MERCHANTS CORPORATION
RETIREMENT SAVINGS PLAN
Table of Contents
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Page
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Independent Auditor's Report 1
Financial Statements
Statement of net assets available for benefits 2
Statement of changes in net assets available for benefits 3
Notes to financial statements 4
Supplemental Schedule
Schedule H, line 4i--Schedule of assets held for investment purposes at end of year 8
</TABLE>
<PAGE>
Independent Auditor's Report
Administrative Committee
First Merchants Corporation
Retirement Savings Plan
Indianapolis, Indiana
We have audited the accompanying statement of net assets
available for benefits of First Merchants Corporation
Retirement Savings Plan as of December 31, 1999 and 1998, and
the related statement of changes in net assets available for
benefits for the years then ended. These financial statements
are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits of First Merchants Corporation
Retirement Savings Plan at December 31, 1999 and 1998, and the
changes in its net assets available for benefits for the years
then ended, in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an
opinion on the basic financial statements taken as a whole.
The supplemental schedule of assets held for investment
purposes at end of year referred to as "supplemental
information," is presented for the purpose of additional
analysis and is not a required part of the basic financial
statements but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act
of 1974. This supplemental information is the responsibility
of the Plan's management. The supplemental information has
been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
[OBJECT OMITTED]
Indianapolis, Indiana
August 18, 2000
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FIRST MERCHANTS CORPORATION
RETIREMENT SAVINGS PLAN
Statement of Net Assets Available for Benefits
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December 31 1999 1998
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Assets
Investments, at fair value
Temporary deposit funds $ 482,379 $ 268,503
Collective investment funds 9,606,458 6,666,408
Mutual funds 662,901 346,918
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Total investments 10,751,738 7,281,829
Employer contributions receivable 28,143 24,386
Accrued income receivable 19,550 6,404
Cash 2,762
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Net Assets Available for Benefits $10,802,193 $7,312,619
=======================================
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See notes to financial statements.
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FIRST MERCHANTS CORPORATION
RETIREMENT SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
<TABLE>
Year Ended December 31 1999 1998
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Additions
Investment income
Net appreciation in fair value of investments $ 1,219,064 $1,028,892
Interest and dividends 63,825 43,614
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1,282,889 1,072,506
Employee contributions 1,032,407 1,266,330
Employer contributions 109,837 96,609
Transfers from other plans 1,374,720
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Total additions 3,799,853 2,435,445
Deductions--benefits paid to participants 310,279 340,032
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Net Increase 3,489,574 2,095,413
Net Assets Available for Benefits, Beginning of Year 7,312,619 5,217,206
--------------------------------------
Net Assets Available for Benefits, End of Year $10,802,193 $7,312,619
======================================
</TABLE>
See notes to financial statements.
<PAGE>
FIRST MERCHANTS CORPORATION
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
Note 1 -- Description of Plan
The following description of First Merchants Corporation Retirement Savings Plan
(Plan) provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
General
The Plan is a defined-contribution plan sponsored by First Merchants Corporation
(Corporation) for the benefit of all employees who have completed one year of
service, worked at least 1000 hours, and are age twenty-one or older. It is
subject to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA). First Merchants Bank, N.A. (Bank) is the trustee of the Plan.
Contributions
The Plan permits eligible employees through a salary deferral election to have
the Corporation make annual contributions of up to 15% of eligible compensation.
Employee rollover contributions are also permitted. The Corporation makes
matching contributions of its employees' salary deferral amounts of 25% of the
first 5% of employees' eligible compensation. Forfeitures are used to reduce the
Corporation's contributions.
Participant Investment Account Options
Investment account options available include a managed, fixed value, bond,
stock, international equity and small cap fund. Each participant has the option
of directing his contributions into any of the separate investment accounts and
may change the allocation quarterly.
Participant Accounts
Each participant's account is credited with the participant's contribution,
allocation of the Corporation contribution and Plan earnings. Allocations of
Plan earnings are based on participant account balances, as defined. The benefit
to which a participant is entitled is the benefit that can be provided from the
participant's account.
Vesting
Participants are immediately vested in their salary deferral and rollover
contribution accounts plus actual earnings thereon. Vesting in the remainder of
their accounts is based on years of continuous service. A participant is 100%
vested after five years of credited service.
Payment of Benefits
Upon termination of service, participants may elect to receive a lump-sum amount
or installments equal to the value of their accounts. Withdrawals other than for
termination are permitted under circumstances provided by the Plan.
Plan Termination
Although it has not expressed any intent to do so, the Corporation has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
<PAGE>
FIRST MERCHANTS CORPORATION
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
Note 2 -- Summary of Significant Accounting Policies
Method of Accounting
The accompanying financial statements are prepared on the accrual method of
accounting.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of net assets and changes in net assets available
for benefits. Actual results could differ from those estimates.
Investments
Investments are valued at estimated fair value. Temporary deposit funds are
valued at cost, which approximates market. Purchases and sales of securities are
recorded on a trade-date basis.
Payment of Benefits Benefits are recorded when paid.
Administrative Expenses
Administrative expenses may be paid by the Corporation or the Plan, at the
Corporation's discretion.
Note 3 -- Investments
The Plan's investments are held by a bank-administered trust fund. The Plan's
investments (including investments bought, sold, and held during the year)
appreciated in fair value as follows:
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1999
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Net
Appreciation Fair Value
in Fair Value at End
Year Ended December 31 During Year of Year
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Investments at estimated fair value as determined by quoted prices in an active
market
Mutual funds $ 136,012 $ 662,901
Investments at estimated fair value and cost which approximates market and
contract value
Temporary deposit funds 482,379
Collective investment funds 1,083,052 9,606,458
------------------------------------------
$1,219,064 $10,751,738
==========================================
</TABLE>
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FIRST MERCHANTS CORPORATION
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
<TABLE>
1998
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Net
Appreciation
(Depreciation) Fair Value
in Fair Value at End
Year Ended December 31 During Year of Year
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Investments at estimated fair value as determined by quoted prices in an active
market
Mutual funds $ (32,670) $ 346,918
Investments at estimated fair value and cost which approximates market and
contract value
Temporary deposit funds 268,503
Collective investment funds 1,061,562 6,666,408
------------------------------------------
$1,028,892 $7,281,829
==========================================
</TABLE>
The fair values of individual investments that represented 5% or more of the
Plan's assets were as follows:
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December 31 1999 1998
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First Merchants Bank, N.A. Intermediate Growth Fund for Tax Exempt Accounts
$7,816,447 $5,337,817
First Merchants Bank, N.A. Intermediate Term Income Fund for Tax Exempt Accounts
1,790,011 1,328,591
</TABLE>
Note 4 -- Net Assets of Withdrawing Participants
Net assets available for benefits includes $19,812 and $129,304 at December 31,
1999 and 1998, allocated to participants who have elected to withdraw from the
Plan.
Note 5 -- Differences Between Financial Statements and Form 5500 Information
Differences between the Annual Return/Report of Employee Benefit Plan (Form
5500) filed with the Internal Revenue Service and the accompanying financial
statements include reporting realized gains and losses on Form 5500 based on the
beginning of the year current value of the assets sold or the cost of assets
acquired during the year and in the accompanying statement of changes in net
assets available for benefits based on the original cost.
<PAGE>
FIRST MERCHANTS CORPORATION
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
Note 6 -- Party-in-Interest Transactions
Party-in-interest transactions include those with fiduciaries or employees of
the Plan, any person who provides services to the Plan, an employer whose
employees are covered by the Plan, an employee organization whose members are
covered by the Plan, a person who owns 50 percent or more of such an employer or
employee association, or relatives of such persons.
The Plan invests in First Merchants Bank, N.A. Temporary Fund II, Intermediate
Growth Fund for Tax Exempt Accounts and Intermediate Term Income Fund for Tax
Exempt Accounts.
Activity at fair value was as follows:
<TABLE>
First Merchants
First Merchants Bank, N.A.
First Merchants Bank, N.A. Intermediate Term
Bank, N.A. Intermediate Growth Income Fund for
Temporary Fund for Tax Exempt Tax Exempt
Deposit Fund Accounts Accounts
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Balance, January 1, 1998 $412,774 $3,677,651 $1,081,441
Changes (154,579) 1,660,166 247,150
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Balance, December 31, 1998 258,195 5,337,817 1,328,591
Changes 219,774 2,478,630 461,420
--------------------------------------------------------------------------------
Balance, December 31, 1999 $477,969 $7,816,447 $1,790,011
================================================================================
The Corporation provides certain administrative services at no cost to the Plan.
</TABLE>
Note 7 -- Tax Status
The Internal Revenue Service has advised that the Plan constitutes a qualified
plan under Section 401 of the Internal Revenue Code and that the trust
established under the Plan is therefore exempt from federal income taxes. The
Plan has been amended since receiving the determination letter. However, the
Plan administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal Revenue
Code and that the Plan was qualified and the related trust was tax exempt as of
the financial statement date.
Note 8 -- Plan Amendment
During 1999, the Plan was amended to allow First National Bank of Portland
(First National) to participate in the Plan. Assets of First National's previous
plan are included in the total assets of $1,374,720 that were transferred into
the Plan in 1999.
<PAGE>
Supplemental Schedule
FIRST MERCHANTS CORPORATION
RETIREMENT SAVINGS PLAN
Schedule H, line 4i--Schedule of Assets Held for Investment Purposes
at End of Year
December 31, 1999
Employer Identification Number: 35-1544218 Plan Number: 002
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<CAPTION>
(a) (b) (c) (d) (e)
Description of Investment
Identity of Issue, Including Par or
Borrower, Lessor, or Maturity Value Current
Similar Party Cost Value
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Temporary Deposit Funds
*First Merchants Bank, N.A. Temporary Fund II $470,873 $ 470,873 $ 470,873
*First Merchants Bank, N.A. Temporary Fund 7,096 7,096 7,096
Federated Prime Cash Obligation 4,410 4,410 4,410
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482,379 482,379
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Collective Investment Funds
*First Merchants Bank, N.A. Intermediate Growth Fund
for Tax Exempt Accounts 329,351 shares 4,705,120 7,816,447
*First Merchants Bank, N.A. Intermediate Term Income
Fund for Tax Exempt Accounts 248,700 shares 1,677,946 1,790,011
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6,383,066 9,606,458
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Mutual Funds
T. Rowe Price International Fund 4,207 shares 63,548 80,058
Scudder International Fund 1,199 shares 65,025 84,798
Franklin Templeton Foreign Fund 6,609 shares 66,775 74,148
Vanguard International Fund 3,280 shares 61,435 73,758
Franklin Small Cap Growth Fund 3,121 shares 79,196 138,397
Managers Special Equity Fund 1,245 shares 81,507 113,840
T. Rowe Price Small Cap Value Fund 5,477 shares 115,005 96,508
Franklin Templeton Developing Markets 89 shares 1,500 1,394
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533,991 662,901
-----------------------------------
$7,399,436 $10,751,738
===================================
</TABLE>
*Party-in-interest
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrator has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date: 11/22/00 By: /s/ Kimberly J. Ellington
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Kimberly J. Ellington
First Merchants Corporation
Retirement Savings Plan
