KIMBALL INTERNATIONAL INC (Form: 8-K, Received: 10/25/2018 08:34:56)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 25, 2018

KIMBALL INTERNATIONAL, INC.

________________________________________________________________________________________________________

(Exact name of registrant as specified in its charter)




Indiana	0-3279	35-0514506
(State or other jurisdiction of	(Commission File	(IRS Employer Identification No.)
incorporation)	Number)




1600 Royal Street, Jasper, Indiana		47549-1001
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code (812) 482-1600

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

CEO Announcement:

On October 23, 2018, the Board of Directors (“Board”) of Kimball International, Inc. (the “Company”) appointed Kristine L. Juster as the Chief Executive Officer of the Company effective November 1, 2018 to succeed Robert F. Schneider who is retiring as Chief Executive Officer and Chairman of the Board on October 31, 2018, as previously disclosed. Ms. Juster, an independent member of the Board since April 2016, will remain on the Board as a non-independent director but will no longer receive compensation for her service on the Board upon assuming the Chief Executive Officer role. Ms. Juster will no longer serve as a member of the Audit Committee effective upon her appointment as Chief Executive Officer.

Ms. Juster, age 55, served for over 20 years as a Global Executive at Newell Brands, Inc., a leading global consumer goods and commercial products company (“Newell”), until her retirement in April 2018. During her tenure at Newell, Ms. Juster served as President of the Global Writing Segment from May 2014 until her retirement in April 2018, as President of Newell’s Baby and Parent Segment from November 2011 to April 2014, and in other roles of increasing responsibility since joining Newell in 1995, including serving as President of Newell’s Home Décor Segment and President of Newell’s Culinary Lifestyles Segment. Throughout her career, Ms. Juster has driven significant growth for the businesses she has led through brand innovation, distribution channel expansion including e-commerce, and a global mindset. Ms. Juster has a proven track record of scaling growth strategies, while preserving the core values that are critical to the long-term sustainability of a business.

There are no arrangements or understandings between Ms. Juster and any other persons pursuant to which she was appointed Chief Executive Officer. There are no family relationships between Ms. Juster and any director or executive officer of the Company, and Ms. Juster does not have any direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

On October 24, 2018, Ms. Juster accepted a written offer letter from the Company establishing her compensation as Chief Executive Officer. In accordance with the terms of the offer letter, Ms. Juster’s initial compensation will consist of the following:


•	An annual base salary of $800,000.

•

Ms. Juster will be eligible to participate in the Company’s Annual Cash Incentive Plan (the “ACI Plan”), with a target annual incentive of 80% of her base salary. For fiscal year 2019, cash incentive awards will be earned under the ACI Plan based on the Company’s adjusted pre-tax income during fiscal year 2019. For fiscal years 2019 and 2020, Ms. Juster is guaranteed a minimum payout under the ACI Plan of 50% of her base salary. The maximum payout that Ms. Juster may earn under the ACI Plan is 120% of her base salary. Any amounts earned under the ACI Plan are paid during the following fiscal year in two cash installments - 50% in August and 50% in December.

•

Because the first payment under the ACI Plan will not be received by Ms. Juster until August 2019, Ms. Juster will also receive the following payments intended to serve as a transition into the ACI Plan, provided that she is employed by the Company on the applicable payment date: $106,000 payable in December 2018, $320,000 payable in June 2019, and $107,000 payable in both August 2019 and December 2019.


•	The Company will also grant Ms. Juster the following equity awards on November 1, 2018, upon her commencement of employment as the Company’s Chief Executive Officer, which awards will be granted under, and subject to the terms and conditions of, the Kimball International, Inc. 2017 Stock Incentive Plan (the “2017 Stock Plan”):


◦	Annual Performance Share (“APS”) awards with a total target value of $386,667, which will be earned based on the Company’s consolidated return on capital for fiscal year 2019 and will have such other terms as set forth in the form of APS award agreement attached hereto as Exhibit 10.1 and incorporated herein by reference.


◦	A Restricted Stock Unit (“RSU”) award valued at $166,167, which will vest in full on June 30, 2019, an RSU award valued at $250,000, which will vest in full on June 30, 2020, and an RSU

award valued at $250,000, which will vest in full on June 30, 2021. Each of the RSU awards will have such other terms as set forth in the form of RSU award agreement attached hereto as Exhibit 10.2 and incorporated herein by reference.

◦

A Relative Total Shareowner Return (“RTSR”) award with a target value of $500,000, which will be earned based on the Company’s RTSR for a performance cycle ending on June 30, 2020, and an RTSR award with a target value of $500,000, which will be earned based on the Company’s RTSR for a performance cycle ending on June 30, 2021. Each of the RTSR awards will have such other terms as set forth in the form of RTSR award agreement attached hereto as Exhibit 10.3 and incorporated herein by reference.


◦	A one-time sign-on RSU award valued at $1,500,000, which will vest in full on June 30, 2021 and will have such other terms as set forth in the form of RSU award agreement attached hereto as Exhibit 10.2.

The number of shares underlying the RSU awards set forth above and the targeted number of shares underlying the APS awards and the RTSR awards set forth above will be determined based on the closing price of the Company’s common stock on October 31, 2018.


•	For purposes of both the ACI Plan and the equity awards granted to Ms. Juster, “retirement” includes any termination of her employment, other than for cause, occurring at or after she has reached the age of 55 and has a combination of age plus years of continuous service as an executive officer of the Company equal to or greater than 65.


•	Ms. Juster will be eligible to participate in all benefit and retirement plans generally provided to other executive employees of the Company, including the 401(k) Retirement Plan, the Supplemental Retirement Plan (the “SERP”) and the executive preventative healthcare program.


•	Ms. Juster will be reimbursed for realtor and closing costs in connection with her relocation in an aggregate amount not to exceed $250,000, as well as moving expenses. The Company will also pay temporary housing and rental car costs incurred by Ms. Juster during her relocation but until no later than June 30, 2019.

In addition, on October 24, 2018, the Company entered into an Executive Employment Agreement (the “Executive Employment Agreement”) and a Change in Control Agreement (the “Change in Control Agreement”) with Ms. Juster, each of which is effective as of November 1, 2018.

Pursuant to the Executive Employment Agreement, if Ms. Juster’s employment is terminated by the Company without Cause (as defined in the Executive Employment Agreement) or by her for Good Reason (as defined in the Executive Employment Agreement), the Company will provide compensation and benefits as follows: (1) her base salary through the date of termination of employment; (2) any deferred and unpaid cash incentive amounts due to her for the immediately preceding fiscal year; (3) (a) unless her termination occurs during the one-year period before a Change in Control (as defined in the Executive Employment Agreement) or during the two-year period following a Change in Control, severance pay equal to the sum of Ms. Juster’s annual base salary at the highest rate in effect during the three years immediately preceding her last day of employment and the higher of either her target cash incentive for the period in which the last day of employment occurs or her average annual cash incentive award for the three annual cash incentive periods immediately preceding her last day of employment, plus a reimbursement payment of $50,000 (subject to cost-of-living adjustment) in lieu of continued welfare and fringe benefits, or (b) if her termination occurs during the one-year period before a Change in Control or the two-year period following a Change in Control, severance pay is determined by the terms of the Change in Control Agreement; (4) reimbursement for outplacement service costs up to $25,000; (5) payments under the ACI Plan and all performance-based equity awards previously awarded under the applicable stock plans but not yet vested will vest as if Ms. Juster remained employed by the Company and will be paid out in accordance with the terms of the applicable award agreement based on the actual performance results of the Company, while all service-based stock awards will become fully vested as of the date of separation; and (6) payment of all SERP benefit amounts, which will become fully vested.

In addition, the Executive Employment Agreement imposes non-competition and non-solicitation obligations during the term of Ms. Juster’s employment and for a period of 12 months (or a shorter period, if she is employed for fewer than 12 months) following termination of employment for any reason.

Pursuant to the Change in Control Agreement, in the event of a Change in Control (as defined in the Change in Control Agreement), the Company will accelerate payment of an amount in cash, shares or a combination thereof equal to the value at the effective date of the Change in Control or the termination of Ms. Juster’s employment, as applicable, of all options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and ACI Plan payments, all of which will become fully vested with all performance-based awards vesting at 100% of target (except that RTSR awards will vest and ACI Plan awards will be paid on a pro-rata basis) (1) on the later of the date of Ms. Juster’s termination or the effective date of the Change in Control (the “Termination Date”) if Ms. Juster’s employment is terminated by the Company without Cause or by her for Good Reason during the one-year period before, or the two-year period following, the Change in Control; and (2) on the effective date of the Change in Control without a termination of employment if any successor entity has not assumed the obligations with respect to such awards or has not substituted benefit rights that are at least as favorable to Ms. Juster as such awards. She will also become fully vested in the SERP and will receive all benefit amounts under that plan.

In addition, upon a Change in Control Event (as defined in the Change in Control Agreement), as soon as practicable following her Termination Date, Ms. Juster will receive severance pay in a sum equal to two times the sum of her annual base salary at the highest rate in effect during the three years immediately preceding her last day of employment and the higher of either her target annual cash incentive for the period in which her last day of employment occurs or her average annual cash incentive award for the three annual cash incentive periods immediately preceding her last day of employment. Ms. Juster will also receive a reimbursement amount equal to two times the product of $50,000 and a fraction, the numerator of which is the Employment Cost Index and the denominator of which is the Employment Cost Index for the first calendar quarter of 2015 for welfare and fringe benefit plan reimbursements. She will also be eligible for $25,000 in outplacement assistance during the first 12 months after separation from employment.

If any payments under the Executive Employment Agreement or Change in Control Agreement are subject to excise tax (or any interest or penalties incurred due to excise tax) imposed by Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), due to early payment of deferred compensation following separation without Cause or resignation for Good Reason or a Change in Control, Ms. Juster will be entitled to a supplemental payment in an amount sufficient to pay the income tax liability on those payments and the supplemental payment, in the case of the Executive Employment Agreement, and equal to the special liability for interest and additional tax on those payments pursuant to Section 409A plus all income liability on the supplemental payment, in the case of the Change in Control Agreement.

The form of the Change in Control Agreement is substantially the same as the agreements in place with the current executive management team, with updated references to plan names and other immaterial wording changes but with no changes to the substantive terms of the agreement. The foregoing summaries are not intended to be complete and are qualified in their entirety by reference to the form of the Change in Control Agreement disclosed in the Company’s Annual Report on Form 10-K filed on August 28, 2018 and incorporated herein by reference, and the Executive Employment Agreement attached hereto as Exhibit 10.4 and incorporated herein by reference.

Modification to ACI Plan:

On October 23, 2018, the Board and the Compensation and Governance Committee each approved the following amendments to the ACI Plan:


•	Expanded eligibility to the ACI Plan to include employees who are employed in a hybrid leadership role and oversee both employees that are eligible to participate in the ACI Plan and those that are ineligible to participate in the ACI Plan.


•	Increased the maximum payout under the ACI Plan to 120% of base salary for the Chief Executive Officer of the Company.


•	Removed the $1 million limit on a participant’s total cash incentive payout.


•	Provides the Compensation and Governance Committee with the sole authority to approve future changes to the ACI Plan.


•	Added language that allows the ACI Plan’s definition of “retirement” to be overridden by specific language in a written agreement signed by both the employee and an authorized executive officer of the Company or member of the Board.

This summary is not intended to be complete and is qualified in its entirety by reference to the ACI Plan, as amended October 23, 2018, which is attached hereto as Exhibit 10.5 and incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On October 25, 2018, the Company issued a press release announcing Ms. Juster's appointment as

Chief Executive Officer of the Company effective November 1, 2018. A copy of the press release is

attached hereto as Exhibit 99.1.

The information contained in this Item 7.01, including the related information set forth in the press

release attached hereto as Exhibit 99.1, is being “ furnished” and shall not be deemed “ filed” with the

Securities and Exchange Commission for the purposes of Section 18 of the Securities Exchange Act of

1934, as amended (the “ Exchange Act”) or otherwise subject to the liabilities of that section and is not

incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended,

or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set

forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits



Exhibit
Number		Description
10.1		Form of Annual Performance Share Award Agreement between the Company and Ms. Juster to be awarded on November 1, 2018
10.2		Form of Restricted Stock Unit Award Agreement between the Company and Ms. Juster to be awarded on November 1, 2018
10.3		Form of Performance Unit Award Agreement between the Company and Ms. Juster to be awarded on November 1, 2018
10.4		Executive Employment Agreement, executed on October 24, 2018 and effective as of November 1, 2018, by and between the Company and Ms. Juster
10.5		2016 Annual Cash Incentive Plan as amended October 23, 2018
99.1		Press Release dated October 25, 2018

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




	KIMBALL INTERNATIONAL, INC.

By:	/s/ Michelle R. Schroeder
	MICHELLE R. SCHROEDER Vice President, Chief Financial Officer

Date: October 25, 2018

Exhibit 10.1

KIMBALL INTERNATIONAL, INC.

ANNUAL PERFORMANCE SHARE AWARD AGREEMENT

FISCAL YEAR 2019

This ANNUAL PERFORMANCE SHARE AWARD AGREEMENT (the “Award Agreement”) dated the day of , 2018 is granted by KIMBALL INTERNATIONAL, INC., an Indiana corporation (“Company”), to (“Employee”) pursuant to the terms of the Company’s 2017 Stock Incentive Plan or any successor plan (“Plan”).

WHEREAS, the Board of Directors and the Compensation & Governance Committee of the Company (“Committee”) believe it to be in the best interests of the Company and its shareowners for officers and other key employees to obtain or increase their stock ownership interest in the Company in order that they will have a greater incentive to work for and manage the Company’s affairs in such a way that its shares may become more valuable, thereby aligning the personal interests of officers and key employees with those of the Company’s shareowners; and

WHEREAS, the Employee is employed by the Company or one of its subsidiaries as an officer or key employee;

NOW THEREFORE, in consideration of these premises and of services to be performed by the Employee, the Company hereby grants this Annual Performance Share Award to the Employee on the terms and conditions hereinafter expressed and subject to the terms of the Plan.


1.	GRANT OF PERFORMANCE SHARES

The Company hereby grants to the Employee Target Performance Shares (“Target Shares”), subject to the eligibility, performance and other terms and conditions set forth in this Award Agreement and the Plan (“Award”).


2.	DETERMINATION OF SHARES ISSUED

Subject to the eligibility conditions described in Section 3 of this Award Agreement, the actual number of Shares issued shall be determined by the Committee as soon as administratively practical following the end of the fiscal year (the date of such determination by the Committee, which is referred to as the “Determination Date”), based on the Company’s consolidated “Return on Capital,” as defined below, for the fiscal year ended June 30, 2019:



Return on Capital	Actual Shares to be Issued for FY 2019
42%	200% of Target Shares
37%	100% of Target Shares
26%	50% of Target Shares
<26%	0

For any Return on Capital between 26% and 37% or between 37% and 42% , the payout percentage of the Target Shares shall be interpolated.

In computing the Shares to be issued to the Employee, the Shares will be rounded down to the number of full shares excluding any fractional shares. The Shares, if any, to be issued to the Employee under the Award Agreement will be delivered, without restriction, to the Employee as soon as administratively practical after the Determination Date, but no later than sixty (60) days after the end of the fiscal year, except as provided in Section 10 below. The Award will be payable in Stock.

For purposes herein, “Return on Capital” shall mean Adjusted Net Income divided by the result of Total Assets (excluding Cash and Investments) less Total Liabilities (excluding Debt) for the Company. Adjusted Net Income is defined as net income adjusted for the following non-operating items: investment in the corporate venture capital fund/growth acceleration fund/innovation fund up to a maximum of $2 million; all costs related to the CEO transition

except the CEO’s base salary as determined by the revised employment agreement through his retirement date plus the newly appointed CEO’s normal cash and stock compensation costs beginning after retirement date (Example of costs to be excluded are, but not in its entirety, retirement-related compensation cost related to CEO’s revised employment agreement, recruiting fees, one-time costs paid to an external hire (buyout of previous stock comp plan, sign-on bonus, relocation costs)); the impact of any non-operating event causing destruction of or damage to Company property; the effects of acquisitions, both capital and earnings/loss, during the fiscal year of the acquisition and the costs associated with due diligence; and any fines/penalties assessed as a result of the GSA matter to the extent they exceed $4 million.


3.	ELIGIBILITY CONDITIONS


A.	To receive Shares earned under this Award Agreement as determined by the Committee, the Employee must have remained in Continuous Service as an executive officer from the date hereof to June 30, 2019 (the “Vesting Date”), except as provided in subsection (C) below.


B.	If the Employee ceases Continuous Service before the Vesting Date for any reason other than Disability, death or CEO Retirement (as defined below), the Employee will forfeit all rights with respect to any Shares under this Award Agreement.


C.	Disability, Death or CEO Retirement. As permitted by Section 6(d)(ii) of the Plan, the following (and not the provisions of Section 6(d)(ii)(A) of the Plan) shall govern if the Employee ceases Continuous Service prior to the Vesting Date by reason of Disability, death or CEO Retirement:

(i)

If the Employee ceases Continuous Service before the Vesting Date because of Disability or CEO Retirement, the number of Shares to which the Employee may be entitled under this Award Agreement, if any, will be determined on the Determination Date based on the Company’s performance for the fiscal year ended June 30, 2019, but shall be prorated to reflect the portion of the fiscal year that the Employee worked prior to such Disability or CEO Retirement. Except as provided in Section 10, the Shares shall be issued no later than sixty (60) days following the end of the fiscal year.

(a)

For purposes of this Award Agreement, “CEO Retirement” shall mean any termination of the Employee’s Continuous Service, other than for Cause, occurring at or after the Employee has attained the minimum retirement age under the governmental retirement system for the applicable country (age 62 in the United States), or at or after the Employee has reached the age of 55 and has a combination of age plus years of Continuous Service as an executive officer of the Company equal to or greater than 65.

(b)

To be considered a CEO Retirement under this Award Agreement, the Employee must comply with the process for approval of CEO Retirement established by the Company and must have incurred a Separation of Service, as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). “Separation from Service” shall mean a ”separation from service” within the meaning of Code Section 409A(a)(2)(A)(i) and Treasury regulation section 1.409A-1(h) and shall mean with respect to an Employee, the complete termination of the employment relationship between the Employee and the Company and/or all affiliated employers within the meaning of Code Section 414(b) or (c), for any reason other than death.


(c)	Shares will be prorated by multiplying the Shares determined to be earned for the fiscal year by a fraction determined by:


•	Numerator = number of months from the Award Date to the end of the fiscal year that the Employee maintained Continuous Service as an executive officer of the Company, including the month in which the Continuous Service ceased, which shall be considered a full month.


•	Denominator = total number of months from the Award Date to the Determination Date.

(ii)

If the Employee ceases Continuous Service before the Vesting Date by reason of the Employee’s death, the number of Shares earned by the Employee shall equal the Target Shares, pro rated to reflect the portion of the fiscal year that the Employee worked prior to her death, using the fraction described in (i)(c) above. Except as provided in Section 10 below, such earned Shares shall be paid within thirty (30) days following the date of the Employee’s death.


D.	Notwithstanding anything to the contrary set forth in the Plan or this Award Agreement, the Employee shall forfeit any Performance Shares awarded hereunder in the event that:

(i)

The Employee is discharged by the Company from her employment with the Company for Cause. For purposes herein, “Cause” shall mean, with respect to termination of the Employee’s employment with the Company, one or more of the following occurrences: (1) Employee’s willful and continued failure to perform substantially the duties or responsibilities of Employee’s position (other than by reason of Disability) or the willful and continued failure to follow lawful instructions of a senior executive or the Board of Directors, if such failure continues for a period of five days after the Company delivers to Employee a written notice identifying such failure; (2) Employee’s conviction of a felony or of another crime that reflects in a materially adverse manner on the Company in its markets or business operations; (3) Employee’s engaging in fraudulent or dishonest conduct, gross misconduct that is injurious to the Company, or any misconduct that involves moral turpitude; or (4) Employee’s failure to uphold a fiduciary duty to the Company or its shareholders; or

(ii)

The Employee breaches any of her employee and ancillary agreements, including without limitation, any confidentiality or non-solicitation obligation documented by agreement (collectively, “Employee Agreement”). In addition, for purposes herein, an Employee shall be deemed to have breached an Employee Agreement if the Employee seeks judicial intervention to limit or nullify the terms of such Employee Agreement.

In the event that Shares are earned by and issued to the Employee under this Award Agreement and within twelve (12) months after the issuance of such Shares to the Employee, (a) the Company identifies facts that result in, or, in the event of issuance of such Shares as a result of CEO Retirement or Disability, would have resulted in, a termination for Cause, or (b) the Employee breaches an Employee Agreement, then, in addition to the forfeiture under Section 3.D. of this Award Agreement, the Employee agrees to repay the value of such Shares received under this Award Agreement within thirty (30) days of the date of written demand by the Company (“Clawback Amount”).

After the Committee approves the final calculation of Shares to be issued, no adjustments will be made to reflect any subsequent change in accounting, the effect of federal, state or municipal taxes later assessed or determined, or otherwise. Notwithstanding the foregoing, the Company reserves the right to and, in appropriate cases, will, seek recovery of all or any portion of the Share distribution if (i) the amount of the Share distribution was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement of all or a portion of the Company’s financial statements; (ii) the Employee engaged in intentional misconduct that caused or partially caused the need for such a restatement; and (iii) the amount of the Share distribution that would have been issued to the Employee had the financial results been properly reported would have been lower than the actual Share distribution. This subsection is not intended to limit the Company’s power to take such other actions as it deems necessary to remedy the misconduct, prevent its recurrence and, if appropriate, based on all relevant facts and circumstances, punish the wrongdoer in a manner it deems appropriate.

Awards and any compensation or benefits associated therewith shall also be subject to repayment or forfeiture as may be required to comply with (i) any applicable listing standards of a national securities exchange adopted in accordance with Section 10D of the Exchange Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations of the U.S. Securities and Exchange Commission adopted thereunder; (ii) similar rules under the laws of any other jurisdiction; and (iii) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to a Participant. This Award Agreement may be unilaterally amended by the Committee to comply with any such compensation recovery policy.


4.	CHANGES IN CAPITALIZATION; CHANGE IN CONTROL

If the Company shall at any time change the number of shares of its Stock without new consideration to the Company (such as by stock dividend or stock split), the total number of Shares subject to the Award Agreement hereunder shall be changed in proportion to the change in issued shares. If, during the term of this Award Agreement, the Stock of the Company shall be changed into another kind of securities of the Company or into cash, securities, or evidences of indebtedness of another corporation, other property, or any combination thereof, whether as a result of reorganization, sale, merger, consolidation, or other similar transaction, the Company shall cause adequate provision to be made whereby the Employee shall thereafter be entitled to receive, under this Award Agreement, the cash, securities, evidences of indebtedness, other property, or any combination thereof, the Employee would have been entitled to receive for Stock acquired through this Award Agreement immediately prior to the effective date of such transaction. If appropriate, the number of Shares of this Award Agreement following such reorganization, sale, merger, consolidation, or other similar transaction, may be adjusted in each case in such equitable manner as the Committee may select.


B.	In the event of a Change in Control that involves a Corporate Transaction, Section 12(b) of the Plan will govern this Award. In the event of a Change in Control that does not involve a Corporate Transaction, Section 12(c) of the Plan will govern this Award.


5.	TRANSFER

Neither this Award nor any right or interest of the Employee in any Award under the Plan may be assigned, encumbered, transferred or exchanged, voluntarily or involuntarily, otherwise than by will or the laws of descent and distribution.


6.	VOTING RIGHTS AND DIVIDENDS

The Employee will not have any voting rights with respect to the Target Shares and shall not be entitled to receive any dividends paid or dividends declared with respect to the Target Shares subject to this Award Agreement. The Employee will obtain voting rights and become entitled to receive any dividends only after any earned Shares are transferred to the Employee.


7.	TAXES AND WITHHOLDING

Issuance of the Award under this Award Agreement, under current applicable laws, will result in various federal and/or state taxes becoming due, including, but not limited to, income and social security. The Employee is responsible for the timely payment of these taxes, and provision will be made by the Company to satisfy these obligations by withholding of Shares having a Fair Market Value on the date the taxes are required to be withheld approximately equal to the amount of federal, state and local taxes required to be withheld (but not to exceed the maximum individual statutory tax rate in each applicable jurisdiction). The value of the Shares withheld will be determined by using the appropriate method under applicable tax regulations.


8.	ADMINISTRATION

This Award Agreement and the Employee’s rights under it are subject to all terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. The parties acknowledge that the Committee or its designee is authorized to administer, construe and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, in its sole discretion, all of which shall be binding on the Employee.


9.	AMENDMENTS

Award Agreement in other respects, without the Employee’s consent, if the amendment will not materially impair the Employee’s rights under this Award Agreement as in effect immediately before the amendment.


10.	CODE SECTION 409A

The parties intend that the payments and benefits under the Plan and this Award Agreement comply with Code Section 409A, to the extent applicable, and accordingly, to the maximum extent permitted, the Plan and this Award Agreement shall be interpreted and administered to be in compliance therewith. Any payments described in this Award Agreement or the Plan that are due within the “short-term deferral period” as defined in Code Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.

Notwithstanding any provisions in the Plan to the contrary, to the extent that the Company has any stock which is publicly traded on an established securities market or otherwise, if the Employee is a Specified Employee and a Separation from Service occurs, any payment of deferred compensation, within the meaning of Code Section 409A, otherwise payable under this Award Agreement because of employment termination will be suspended until, and will be paid to the Employee on, the first day of the seventh month following the month in which Separation from Service occurs. Payments delayed by the preceding sentence shall be accumulated and paid on the earliest administratively feasible date permitted by such sentence. “Specified Employee” shall mean an individual who, at the time of her Separation from Service, is a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i) and Treasury regulation section 1.409A-1(i). For purposes of the preceding sentence, the “specified employee identification date” shall be December 31 (of the prior Plan year) and the “specified employee effective date” shall be the following April 1.


11.	PLAN CONTROLLING

The Award is subject to all of the terms and conditions of the Plan except to the extent that those terms and conditions are supplemented or modified by this Award Agreement, as authorized by the Plan. Capitalized terms used in this Award Agreement and not otherwise defined herein shall have the meanings assigned to them in the Plan. All determinations and interpretations of the Committee shall be binding and conclusive upon the Employee and her legal representatives.


12.	QUALIFICATION OF RIGHTS

Neither this Award Agreement nor the existence of the Award shall be construed as giving the Employee any right (a) to be retained as an employee of the Company; or (b) as a shareholder with respect to the Shares of Stock earned pursuant to the Award until the certificates for the Stock have been issued and delivered to the Employee or a book entry has been recorded in the name of the Employee with the Company’s transfer agent.


13.	GOVERNING LAW

This Award Agreement shall be governed by and construed in accordance with the laws of the State of Indiana, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Award Agreement to the substantive law of another jurisdiction. Any action or proceeding seeking to enforce the terms of this Award Agreement or based on any right arising out of this Award Agreement must be brought in the appropriate court located in Dubois County, Indiana, or if jurisdiction will so permit, in the Federal District Court for the Southern District of Indiana located in Evansville, Indiana. The parties hereto consent to the jurisdiction and venue of said courts.


14.	REPRESENTATIONS AND WARRANTIES


A.	The Employee represents and warrants that she has received and reviewed a Plan Memorandum, which summarizes the provisions of the Plan.


B.	The Company makes no representations or warranties as to the tax consequences of and benefits vested or payable under this Award, and in no event shall the Company be responsible or liable for any taxes, penalties or interest assessed against the Employee for any benefit or payment provided under this Award.

The Employee represents and warrants her understanding that the grant of the Performance Shares by the Company is voluntary and does not create in the Employee any contractual or other right to receive future grants of Performance Shares or benefits in lieu of Performance Shares in any circumstance. All decisions with respect to any future awards will be made in the sole discretion of the Company.


15.	SUCCESSORS AND ASSIGNS

This Award Agreement shall be binding upon and inure to the benefit of the successors, assigns and heirs of the respective parties, subject to the other provisions hereof.


16.	WAIVER

The failure of a party to insist upon strict adherence to any term of this Award Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Award Agreement.


17.	TITLES

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Award Agreement.


18.	COUNTERPARTS/ COPIES

This Award Agreement may be signed in one or more counterparts, each of which will be deemed to be an original and all of which when taken together will constitute the same agreement. Any copy of this Award Agreement made by reliable means (for example, photocopy, scanned copy or facsimile), is considered an original.

IN WITNESS WHEREOF, the Company has caused the execution hereof by its duly authorized officer and Employee has agreed to the terms and conditions of this Award Agreement, all as of the day and date first above written.

Kimball International, Inc.



By:
	[Name]
	[Title]
	Kimball International, Inc.

The undersigned employee has read, acknowledged and accepts the terms of the Award, the Award Agreement, and the Plan.




Employee Signature		Date

Exhibit 10.2

KIMBALL INTERNATIONAL, INC.

RESTRICTED STOCK UNIT AWARD AGREEMENT

FISCAL YEAR 2019

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (“Award Agreement”), dated the day of , 2018 (“Award Date”), is granted by KIMBALL INTERNATIONAL, INC., an Indiana corporation (“Company”) to (“Employee”) pursuant to the terms of the Company’s 2017 Stock Incentive Plan or any successor plan (“Plan”).

WHEREAS, the Board of Directors and the Compensation and Governance Committee of the Company (“Committee”) believe it to be in the best interests of the Company and its shareowners for its officers and other key employees to obtain or increase their stock ownership interest in the Company in order that they will have a greater incentive to work for and manage the Company's affairs in such a way that its shares may become more valuable, thereby aligning the personal interests of officers and key employees with those of the Company's shareowners; and

WHEREAS, the Employee is employed by the Company or one of its subsidiaries as an officer or key employee;

NOW THEREFORE, in consideration of these premises and of services to be performed by the Employee, the Company hereby grants this Restricted Stock Unit Award to the Employee on the terms and conditions hereinafter expressed and subject to the terms of the Plan.


1.	GRANT OF RESTRICTED STOCK UNITS

The Company hereby grants to the Employee the right to receive a total of ( ) Shares of Stock of the Company subject to the terms and conditions set forth in this Award Agreement and the Plan (“Award”).


2.	VESTING


A.	The Award shall vest in full on , 20 (“Vesting Date”), if the Employee remains in Continuous Service as an executive officer through the Vesting Date.


B.	If the Employee ceases Continuous Service before the Vesting Date for any reason other than Disability, death or CEO Retirement (as defined below), the Employee will forfeit all rights with respect to any unvested portion of this Award.


C.	Disability, Death or CEO Retirement. As permitted by Section 6(d)(ii) of the Plan, the following (and not the provisions of Section 6(d)(ii)(A) of the Plan) shall govern if the Employee ceases Continuous Service prior to the Vesting Date by reason of Disability, death or CEO Retirement:


(i)	If the Employee ceases Continuous Service before the Vesting Date by reason of Disability, death or CEO Retirement, a prorated portion of this Award will vest on the date such Continuous Service ceases, calculated by multiplying the total number of Shares of Stock set forth in Section 1 by a fraction determined by:

• Numerator = number of months between the Award Date and the Vesting Date that the Employee maintained Continuous Service as an executive officer prior to such Disability, death or CEO Retirement, including the month in which the Continuous Service ceases, which shall be considered a full month.

• Denominator = total number of months between the Award Date and the Vesting Date.

(ii)

(iii)

To be considered a CEO Retirement under this Award Agreement, the Employee must comply with the process for approval of CEO Retirement established by the Company and must have incurred a Separation of Service, as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). “Separation from Service” shall mean a “separation from service” within the meaning of Code Section 409A(a)(2)(A)(i) and Treasury regulation section 1.409A-1(h) and shall mean with respect to an Employee, the complete termination of the employment relationship between the Employee and the Company and/or all affiliated employers within the meaning of Code Section 414(b) or (c), for any reason other than death.


D.	Notwithstanding anything to the contrary set forth in the Plan or this Award Agreement, the Employee shall forfeit any unvested Restricted Stock Units awarded hereunder in the event that:

(i)

The Employee is discharged by the Company from her employment with the Company for Cause. For purposes herein, “Cause” shall mean, with respect to termination of the Employee’s employment with the Company, one or more of the following occurrences: (1) Employee’s willful and continued failure to perform substantially the duties or responsibilities of Employee’s position (other than by reason of Disability) or the willful and continued failure to follow lawful instructions of a senior executive or the Board of Directors, if such failure continues for a period of five days after the Company delivers to Employee a written notice identifying such failure; (2) Employee’s conviction of a felony or of another crime that reflects in a materially adverse manner on the Company or its markets or business operations; (3) Employee’s engaging in fraudulent or dishonest conduct, gross misconduct that is injurious to the Company, or any misconduct that involves moral turpitude; or (4) Employee’s failure to uphold a fiduciary duty to the Company or its shareholders; or

(ii)

In the event that Restricted Stock Units vest and Shares are issued to the Employee under this Award Agreement and within twelve (12) months after the issuance of such Shares to the Employee, (a) the Company identifies facts that result in, or, in the event of issuance of such Shares as a result of CEO Retirement or Disability, would have resulted in, a termination for Cause, or (b) the Employee breaches an Employee Agreement, then, in addition to the forfeiture under Section 2.D. of this Award Agreement, the Employee agrees to repay the value of such Shares received under this Award Agreement within thirty (30) days of the date of written demand by the Company (“Clawback Amount”).


3.	PHANTOM DIVIDENDS

For any dividends declared and paid by the Company on its outstanding Stock, the same amount of dividends shall be credited to the Award (“Phantom Dividends”), which Phantom Dividends shall be subject to the same restrictions and risk of forfeiture as the Award as set forth in Section 2 above. The amount of such Phantom Dividends shall be accumulated (“Accumulated Phantom Dividends”) during the period commencing on the date of the Award and

ending on the Vesting Date. Upon the delivery of Shares in accordance with Section 4 below, such amount of Accumulated Phantom Dividends shall be granted to the Employee in shares of Stock. The number of such shares to be granted shall be determined by dividing the Accumulated Phantom Dividends by the Fair Market Value of a Share of Stock on the Vesting Date, rounded down to the nearest whole share.


4.	DELIVERY OF SHARES

The Shares issued to the Employee upon vesting will be delivered, without restriction, to the Employee as soon as practical after the Vesting Date, but no later than sixty (60) days after the Vesting Date, except as provided under Section 11 below. The Award will be payable in Stock.


5.	CHANGES IN CAPITALIZATION; CHANGE IN CONTROL

If the Company shall at any time change the number of shares of its Stock without new consideration to the Company (such as by stock dividend or stock split), the total number of Shares subject to the Award Agreement hereunder shall be changed in proportion to the change in issued shares. If, during the term of this Award Agreement, the Stock of the Company shall be changed into another kind of securities of the Company or into cash, securities or evidences of indebtedness of another corporation, other property or any combination thereof, whether as a result of reorganization, sale, merger, consolidation, or other similar transaction, the Company shall cause adequate provision to be made whereby the Employee shall thereafter be entitled to receive, under this Award Agreement, the cash, securities, evidences of indebtedness, other property or any combination thereof, the Employee would have been entitled to receive for Stock acquired through this Award Agreement immediately prior to the effective date of such transaction. If appropriate, the number of Shares of this Award Agreement following such reorganization, sale, merger, consolidation or other similar transaction may be adjusted, in each case in such equitable manner as the Committee may select.


B.	In the event of a Change in Control that involves a Corporate Transaction, Section 12(b) of the Plan will govern this Award. In the event of a Change in Control that does not involve a Corporate Transaction, Section 12(c) of the Plan will govern this Award.


6.	TRANSFER


7.	VOTING RIGHTS

The Employee will not have any voting rights with respect to the Restricted Stock Units subject to this Award Agreement. The Employee will obtain voting rights only after any vested Shares are transferred to the Employee.


8.	TAXES AND WITHHOLDING


9.	ADMINISTRATION

construe and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, in its sole discretion, all of which shall be binding on the Employee.


10.	AMENDMENTS

In the event any new modifications or changes are made to existing laws or applicable stock exchange rules that render any or all of this Award Agreement illegal or unenforceable, this Award Agreement may be amended to the extent necessary in order to carry out the intention of the Award to the Employee. The Committee may amend this Award Agreement in other respects, without the Employee’s consent, if the amendment will not materially impair the Employee’s rights under this Award Agreement as in effect immediately before the amendment.


11.	CODE SECTION 409A


12.	PLAN CONTROLLING


13.	QUALIFICATION OF RIGHTS

Neither this Award Agreement nor the existence of the Award shall be construed as giving the Employee any right (a) to be retained as an employee of the Company; or (b) as a shareholder with respect to the Shares of Stock underlying the Award until the certificates for the Stock have been issued and delivered to the Employee or a book entry has been recorded in the name of the Employee with the Company’s transfer agent.


14.	GOVERNING LAW


15.	REPRESENTATIONS AND WARRANTIES


A.	The Employee represents and warrants that she has received and reviewed a Plan Memorandum, which summarizes the provisions of the Plan.


B.	The Company makes no representations or warranties as to the tax consequences of and benefits vested or payable under this Award, and in no event shall Company be responsible or liable for any taxes, penalties or interest assessed against the Employee for any benefit or payment provided under this Award.

The Employee represents and warrants her understanding that the grant of the Restricted Stock Units by the Company is voluntary and does not create in the Employee any contractual or other right to receive future grants of Restricted Stock Units, or benefits in lieu of Restricted Stock Units in any circumstance. All decisions with respect to any future awards will be made in the sole discretion of the Company.


16.	SUCCESSORS AND ASSIGNS

This Award Agreement shall be binding upon and inure to the benefit of the successors, assigns and heirs of the respective parties.


17.	WAIVER


18.	TITLES

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Award Agreement.


19.	COUNTERPARTS/ COPIES

Kimball International, Inc.



By:
	[Name]
	[Title]
	Kimball International, Inc.

The undersigned employee has read, acknowledged and accepts the terms of the Award, the Award Agreement, and the Plan.




Employee Signature		Date

Exhibit 10.3

KIMBALL INTERNATIONAL, INC.

PERFORMANCE UNIT AWARD AGREEMENT

FISCAL YEAR 2019

THIS PERFORMANCE UNIT AWARD AGREEMENT (“Award Agreement”), dated the day of , 2018 (“Award Date”), is granted by KIMBALL INTERNATIONAL, INC., an Indiana corporation (“Company”), to (“Employee”) pursuant to the terms of the Company’s 2017 Stock Incentive Plan or any successor plan (“Plan”).

WHEREAS, the Employee is employed by the Company or one of its subsidiaries as an officer or key employee;

NOW THEREFORE, in consideration of these premises and of services to be performed by the Employee, the Company hereby grants this Performance Unit Award to the Employee on the terms and conditions hereinafter expressed and subject to the terms of the Plan.


1.	GRANT OF PERFORMANCE UNITS

The Company hereby grants to the Employee a total of ( ) Performance Units under this Award Agreement, subject to the terms and conditions set forth in this Award Agreement and the Plan (“Award”). Each Performance Unit represents the right to receive one (1) share (a “Share”) of Stock of the Company, subject to the eligibility, performance and other terms and conditions set forth in this Award Agreement and the Plan. The number of Performance Units granted above will function as a target (the “Target”), with the number of actual Performance Units, if any, ultimately earned under this Award Agreement to be determined in accordance with the terms of this Award Agreement and the Plan.


2.	PERFORMANCE CYCLE

For purposes of this Award, the “Performance Cycle” is the -month period commencing , 2018 and ending June 30, .


3.	SATISFACTION OF PERFORMANCE-BASED CONDITIONS

Subject to the eligibility conditions described in Section 4 of this Award Agreement, and the satisfaction of the performance conditions set forth in Section 5 of this Award Agreement, the Company intends to award Shares hereunder to the Employee as soon as administratively practical following the end of the Performance Cycle, but in no event later than sixty (60) days following the end of the Performance Cycle. Except as set forth in Section 4.C.(ii) and Section 7 of this Award Agreement, no Shares in settlement of the Performance Units shall be issued to the Employee prior to the end of the Performance Cycle.


4.	ELIGIBILITY CONDITIONS

As soon as practical following the end of the Performance Cycle, the Committee shall determine whether and the extent to which the performance conditions set forth in Section 5 of this Award Agreement have been satisfied and the number of Performance Units, if any, earned by the Employee (the date of such determination by the Committee hereinafter referred to as the “Determination Date”), provided, however, that to receive Shares in settlement of the Performance Units determined by the Committee to have been earned, the Employee must have remained in Continuous Service from the date hereof through the last day of the Performance Cycle (the “Settlement Date”), except as provided in subsection (C) below.


B.	If the Employee ceases Continuous Service before the end of the Performance Cycle for any reason other than Disability, death or CEO Retirement (as defined below), the Employee will forfeit all rights with respect to any Performance Units under this Award Agreement.


C.	Disability, Death or CEO Retirement. As permitted by Section 6(d)(ii) of the Plan, the following (and not the provisions of Section 6(d)(ii)(A) of the Plan) shall govern if the Employee ceases Continuous Service prior to the Vesting Date by reason of Disability, death or CEO Retirement:

(i)

If the Employee ceases Continuous Service before the end of the Performance Cycle by reason of Disability or CEO Retirement, the number of Performance Units to which the Employee may be entitled under this Award Agreement, if any, will be determined on the Determination Date based on the Company’s performance through the last day of the Performance Cycle, but shall be prorated to reflect the portion of the Performance Cycle that the Employee worked prior to such Disability or CEO Retirement. Except as provided in Section 15 below, the Shares corresponding to such earned Performance Units shall be paid within sixty (60) days following the end of the Performance Cycle.

To be considered a CEO Retirement under this Award Agreement, the Employee must comply with the process for approval of CEO Retirement established by the Company and must have incurred a Separation of Service, as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). “Separation from Service” shall mean a “separation from service” within the meaning of Code Section 409A(a)(2)(A)(i) and Treasury regulation section 1.409A-1(h) and shall mean with respect to an Employee, the complete termination of the employment relationship between the Employee and the Company and/or all affiliated employers within the meaning of Code Section 414(b) or (c), for any reason other than death.


c.	Performance Units will be prorated by multiplying the Performance Units determined to be earned for the Performance Cycle by a fraction determined by:


•	Numerator = number of months during the Performance Cycle that the Employee maintained Continuous Service [as an executive officer of the Company] prior to such Disability or CEO Retirement, including the month in which the Continuous Service ceases, which shall be considered a full month.


•	Denominator = number of months in the Performance Cycle.

(ii)

If the Employee ceases Continuous Service before the end of the Performance Cycle by reason of the Employee’s death, the Performance Cycle for purposes of this Award Agreement shall be treated as ending on the date of the Employee’s death. In the event of the Employee’s death, the number of Performance Units earned by the Employee shall equal the Target number of Performance Units, pro rated to reflect the portion of the Performance Cycle, as set forth in Section 2, that the Employee worked prior to her death, using the fraction described in (i)(c) above. Except as provided in Section 15 below, the Shares corresponding to such earned Performance Units shall be paid within thirty (30) days following the date of the Employee’s death.


D.	Notwithstanding anything to the contrary set forth in the Plan or this Award Agreement, the Employee shall forfeit any Performance Units awarded hereunder in the event that:

(i)

The Employee is discharged by the Company from her employment with the Company for Cause. For purposes herein, “Cause” shall mean, with respect to termination of the Employee’s employment with the Company, one or more of the following occurrences: (1) Employee’s willful and continued failure to perform substantially the duties or responsibilities of Employee’s position (other than by reason of Disability), or the willful and continued failure to follow lawful instructions of a senior executive or the Board of Directors, if such failure continues for a period of five days after the Company delivers to Employee a written notice identifying such failure; (2) Employee’s conviction of a felony or of another crime that reflects in a materially adverse manner on the Company or its markets or business operations; (3) Employee’s engaging in fraudulent or dishonest conduct, gross misconduct that is injurious to the Company, or any misconduct that involves moral turpitude; or (4) Employee’s failure to uphold a fiduciary duty to the Company or its shareholders; or

(ii)

In the event that Performance Units are earned by, and Shares are paid to, the Employee under this Award Agreement and within twelve (12) months after the payment of such Shares to the Employee, (a) the Company identifies facts that result in, or, in the event of payment of such Shares as a result of CEO Retirement or Disability, would have resulted in, a termination for Cause, or (b) the Employee breaches an Employee Agreement, then, in addition to the forfeiture under Section 4.D. of this Award Agreement, the Employee agrees to repay the value of such Shares received under this Award Agreement within thirty (30) days of the date of written demand by the Company (“Clawback Amount”).


5.	PERFORMANCE CONDITIONS - DETERMINATION OF TOTAL NUMBER OF PERFORMANCE UNITS EARNED AND VESTED

Subject to the eligibility conditions in Section 4 of this Award Agreement, after completion of the Performance Cycle, the total number of Performance Units determined to be earned will be based entirely on the Company’s Relative Total Shareholder Return (“Relative TSR”), as determined in this Section 5.A., as of the last day of the Performance Cycle. For purposes of this Award, Total Shareholder Return (“TSR”) shall be expressed as a compound annual growth rate as calculated in the following example, with the ##-month period representing the number of months of the award:



TSR =	(	Ending stock price + dividends paid	)	12 ##	– 1
		Beginning stock price

(i)

“Beginning Stock Price” shall mean the average closing price as reported on the Nasdaq National Market (or such other principal exchange on which the Company’s Stock is then listed for trading), of one (1) Share of the Company’s Stock for the thirty (30) trading days immediately prior to the first day of the Performance Cycle. Should the Company enter into a stock split or reverse stock split during the Performance Cycle, the Beginning Stock Price will be equitably adjusted in the calculation to address this change in shares outstanding.


(ii)	“Ending Stock Price” shall mean the average closing price as reported on the Nasdaq National Market (or such other principal exchange on which the Company’s Stock is then listed for trading) of one (1) Share of the Company’s Stock for the last thirty (30) trading days of the Performance Cycle.


(iii)	“Dividends Paid” shall include all dividends declared, with an ex-dividend date within the Performance Cycle, if any, with respect to the Shares underlying the Performance Units that are the subject of this Award Agreement.

To determine Relative TSR, a peer group of companies approved by the Committee will be used. The peer group shall consist of those companies set forth on Exhibit 1 to this Award Agreement. If any company in the then-applicable peer group declares bankruptcy, the company shall remain in the peer group. However, if a company in the peer group undergoes a corporate transaction or other reorganization, such as a spin, split, or delisting, that company shall be removed from the beginning and ending calculations.

Each peer group company’s TSR expressed as a compound annual growth rate (“CAGR”) will be determined at the end of the Performance Cycle. The 80 ^th , 50 ^th and 30 ^th percentile TSRs of the peer group will then be computed to determine the Performance Unit Payout as a Percent of Target in accordance with the following chart. The TSR for companies included in the peer group shall be calculated using the same formula as for the Company, but using each peer group company’s own stock prices and dividends.



Relative TSR	Performance Unit Payout as a Percent of Target
80 ^th Percentile and above	200%
50 ^th Percentile	100%
30 ^th Percentile	50%
Less than 30 ^th Percentile	0%

For any Relative TSR between the 80 ^th and 50 ^th percentiles, or between the 50 ^th and 30 ^th percentiles, the payout percentage of the Target shall be interpolated. Notwithstanding any other provision of this Award Agreement and in accordance with the terms of the Plan, the maximum aggregate payout under this Award Agreement shall not exceed 200% of the Target.

Example: An Employee is granted a target of 10 Performance Units for a Performance Cycle. If the Company’s Relative TSR for the Performance Cycle positions the Company at the 65 ^th Percentile of the peer group, the Employee would be entitled to receive 15 Shares (based on interpolating from the chart to a 150% Award payout).

Notwithstanding the provisions and chart above for determination of the Performance Unit payout percentage, if the Company’s TSR for the Performance Cycle is less than zero, the payout as a percentage of the Target shall not exceed 100%.


6.	SETTLEMENT OF THE AWARD AND DELIVERY OF SHARES

The number of earned Performance Units shall be determined by multiplying the number of Performance Units granted in Section 1 of this Award Agreement by the applicable percentage from the chart in Section 5 of this Award Agreement corresponding to the Company’s Relative TSR for the Performance Cycle. Earned Performance Units shall be paid in Shares, as soon as administratively practicable after the Determination Date but in no event more than sixty (60) days following the last day of the Performance Cycle. In determining the number of Shares to be paid to the Employee, the Shares will be rounded down to the number of full shares, excluding any fractional shares.


7.	CHANGE IN CONTROL

Notwithstanding the foregoing provisions of this Award Agreement or the provisions of Section 12 of the Plan, in the event of a Change in Control during the Performance Cycle, the Performance Cycle for purposes of this Award Agreement shall be treated as ending on the earlier of the last date of the original Performance Cycle in Section 2 of this Award Agreement or the effective date of the Change in Control. In the event of a Change in Control, the number of Performance Units earned by the Employee shall equal the Target number of Performance Units, pro rated to reflect the portion of the Performance Cycle, as set forth in Section 2, that the Employee worked prior to the effective date of such Change in Control. Except as provided in Section 15 below, the Shares corresponding to such earned Performance Units shall be paid within thirty (30) days following the effective date of the Change in Control.


8.	SHARE CHANGES

If the Company shall at any time change the number of shares of its Stock without new consideration to the Company (such as by stock dividend or stock split), the total number of Shares subject to the Award Agreement hereunder shall be changed in proportion to the change in issued shares. If during the term of this Award Agreement the Stock of the Company shall be changed into another kind of securities of the Company or into cash, securities or evidences of indebtedness of another corporation, other property or any combination thereof, whether as a result of reorganization, sale, merger, consolidation, or other similar transaction, the Company shall cause adequate provision to be made whereby the Employee shall thereafter be entitled to receive under this Award Agreement, the cash, securities, evidences of indebtedness, other property or any combination thereof, the Employee would have been entitled to receive for Stock acquired through this Award Agreement immediately prior to the effective date of such transaction. If appropriate, the number of Shares of this Award Agreement following such reorganization, sale, merger, consolidation or other similar transaction may be adjusted, in each case in such equitable manner as the Committee may select.


9.	TRANSFER


10.	VOTING RIGHTS AND DIVIDENDS

The Employee will not have any voting rights with respect to the Performance Units and shall not be entitled to receive any dividends paid or dividends declared with respect to the Performance Units subject to this Award Agreement. The Employee will obtain voting rights and become entitled to receive any dividends only after any earned Shares are transferred to the Employee.


11.	TAXES AND WITHHOLDING

Issuance of the Award under this Award Agreement, under current applicable laws, will result in various federal and/or state taxes becoming due, including, but not limited to, income and social security. The Employee is responsible for the timely payment of these taxes, and provision will be made by the Company to satisfy these obligations by withholding of Shares having a Fair Market Value on the date the taxes are required to be withheld approximately equal to the minimum amount of federal, state and local taxes required to be withheld (but not to exceed the maximum individual statutory tax rate in each applicable jurisdiction). The value of the Shares withheld will be determined by using the appropriate method under applicable tax regulations.


12.	ADMINISTRATION


13.	AMENDMENTS


14.	RESTRICTIONS ON SHARES

There will be no restrictions on the Shares of Stock paid to the Employee under this Award Agreement.


15.	CODE SECTION 409A


16.	PLAN CONTROLLING


17.	QUALIFICATION OF RIGHTS

Neither this Award Agreement nor the existence of the Award shall be construed as giving the Employee any right (a) to be retained as an employee of the Company; or (b) as a shareholder with respect to the Shares of Stock earned pursuant to the Award until certificates for the Stock have been issued and delivered to the Employee or a book entry has been recorded in the name of the Employee with the Company’s transfer agent.


18.	GOVERNING LAW


19.	REPRESENTATIONS AND WARRANTIES


A.	The Employee represents and warrants that she has received and reviewed a Plan Memorandum, which summarizes the provisions of the Plan.


B.	The Company makes no representations or warranties as to the tax consequences of and benefits vested or payable under this Award, and in no event shall the Company be responsible or liable for any taxes, penalties or interest assessed against the Employee for any benefit or payment provided under this Award.


C.	The Employee represents and warrants her understanding that the grant of the Performance Units by the Company is voluntary and does not create in the Employee any contractual or other right to receive future grants of Performance Units, or benefits in lieu of Performance Units in any circumstance. All decisions with respect to any future awards will be made in the sole discretion of the Company.


20.	SUCCESSORS AND ASSIGNS

This Award Agreement shall be binding upon and inure to the benefit of the successors, assigns and heirs of the respective parties.


21.	WAIVER


22.	TITLES

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.

23. COUNTERPARTS/ COPIES

Kimball International, Inc.



By:
	[Name]
	[Title]
	Kimball International, Inc.

The undersigned employee has read, acknowledged and accepts the terms of the Award, the Award Agreement, and the Plan.




Employee Signature		Date

Exhibit 1

Peer Group Companies

Exhibit 10.4

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”), effective as of the day of , 2018 by and between Kimball International, Inc., an Indiana corporation, 1600 Royal Street, Jasper, Indiana 47549 (hereinafter “Kimball”), and (hereinafter “Executive”).

Recitals

A. Executive has been selected for a key executive position working for Kimball and offers knowledge and services that are expected to be valuable to Kimball in connection with its business and operations and the markets in which Kimball competes.

B. Kimball recognizes that Executive’s expected contribution to the growth and success of Kimball is likely to be substantial and therefore Kimball wishes to assure Executive’s provision of services for the benefit of Kimball.

C. Given that Executive is accepting or has accepted a key role at Kimball and does or will have access to Kimball’s Trade Secrets and Confidential Information, as defined herein, Kimball will suffer great loss and irreparable harm if Executive were to participate, directly or indirectly, as an owner, consultant, employee, manager, officer, director or in any other capacity in any business or venture in competition with Kimball or if she were to disclose Kimball’s Trade Secrets and Confidential Information.

D. To induce Executive to commence employment and other valuable consideration with Kimball, Kimball is willing to provide to Executive the compensation and benefits set forth in this Agreement.

E. To receive the benefits of Kimball employment for an indefinite period and the benefits provided under this Agreement, Executive is willing to enter into the restrictive covenants and to undertake the other obligations contained in this Agreement.

Agreement

In consideration of the foregoing and the following mutual terms and conditions, Kimball and Executive agree as follows:


1.	DEFINITIONS

The following definitions shall be applicable to and govern the interpretation of this Agreement. Capitalized terms not defined in this Agreement shall have the meanings set forth in the Executive’s Change in Control Agreement:


a)	“2017 Stock Plan” means the Kimball International, Inc. 2017 Stock Incentive Plan or any replacement thereof.


b)	“Affiliate” means any entity that is a member, along with Kimball International, Inc., of a controlled group of corporations or a group of other trades or businesses under common control, within the meaning of Code Section 414(b) or (c).


c)	“Award Agreement” means any agreement or other instrument evidencing a grant or award of Options, Stock Appreciation Rights, Restricted Stock, Stock Units, Other Stock-Based Awards (each as defined in the 2017 Stock Plan), or any other rights awarded under the 2017 Stock Plan.


d)	“Board of Directors” means the Board of Directors of Kimball.

“Cause” means, with respect to termination of Executive’s employment by Kimball, one or more of the following occurrences, as determined by the Board of Directors: (i) Executive’s willful and continued failure to perform substantially the duties or responsibilities of Executive’s position or the willful and continued failure to follow lawful instructions of a senior executive or the Board of Directors, if such failure continues for a period of five days after Kimball delivers to Executive a written notice identifying such failure; (ii) Executive’s conviction of a felony or of another crime that reflects in a materially adverse manner on Kimball in its markets or business operations; (iii) Executive’s engaging in fraudulent or dishonest conduct, gross misconduct that is injurious to Kimball, or any misconduct that involves moral turpitude; (iv) Executive’s material breach of her obligations under this Agreement or a fiduciary duty to Kimball or its shareowners; or (v) Executive’s engaging in activity as an employee of Kimball that constitutes gross negligence. For any of the stated occurrences to constitute “Cause” under this Agreement, the Board of Directors must find that the stated act or omission occurred, by a resolution duly adopted by the affirmative vote of at least three-quarters of the entire membership of the Board of Directors, after giving reasonable notice to Executive and an opportunity for Executive, together with Executive’s counsel, to be heard before the Board of Directors.

“Change in Control” means the consummation of any of the following that is not an Excluded Transaction: (i) the acquisition, by any one person or more than one person acting as a Group, of Majority Ownership of a Relevant Company through merger, consolidation, or stock transfer; (ii) the acquisition during any 12-month period, by any one person or more than one person acting as a Group, of ownership interests in a Relevant Company possessing 35 percent or more of the total voting power of all ownership interests in the Relevant Company; (iii) the acquisition of ownership during any 24-month period, by any one person or more than one person acting as a Group, of 40 percent or more of the total gross fair market value of the assets of a Relevant Company; or (iv) the replacement of a majority of members of the Board of Directors during any 12-month period, by members whose appointment or election is not endorsed by a majority of the members of the Board of Directors prior to the date of the appointment or election. For purposes of this definition: “Relevant Company” means, with respect to Executive, Kimball International, Inc., any Affiliate that employs Executive, any entity that has Majority Ownership of either Kimball International, Inc. or that Affiliate, or any entity in an uninterrupted chain of Majority Ownership culminating in the ownership of Kimball International, Inc. or that Affiliate; “Excluded Transaction” means any occurrence that does not constitute a change in the ownership or effective control, or in the ownership of a substantial portion of the assets of, a Relevant Entity within the meaning of Code Section 409A(a)(2)(A)( v) and its interpretive regulations; “Majority Ownership” of an entity means ownership interests representing more than fifty percent (50%) of the total fair market value or of the total voting power of all ownership interests in the entity; “Group” has the meaning provided in Code Section 409A and its interpretive regulations with respect to changes in ownership, effective control, and ownership of assets; and an individual who owns a vested option to purchase either stock or another ownership interest is deemed to own that stock or other ownership interest.


g)	“Change in Control Agreement” means the Change in Control Agreement, if any, entered into by and between Kimball and Executive on its effective date, the terms and conditions of which are incorporated herein by reference.


h)	“Code” means the Internal Revenue Code of 1986, as amended.


i)	“Compensation Payment” means a payment by Kimball to or for the benefit of Executive in the nature of compensation, whether paid or payable pursuant to this Agreement or otherwise.

“Continuous Service” means the absence of any interruption or termination in the provision of service by Executive to Kimball or an Affiliate. Continuous Service will not be considered interrupted in the case of (i) sick leave, military leave or any other leave of absence approved by Kimball; (ii) transfer between Kimball and an Affiliate or any successor to Kimball; or (iii) any change in status so long as the individual remains in the Continuous Service of Kimball or any Affiliate. Executive’s Continuous Service shall be deemed to have terminated either upon an actual cessation of providing services to Kimball or any Affiliate or upon the entity to which Kimball provides services ceasing to be an Affiliate.


k)	“Control Termination Period” means the time period beginning one year before a Change in Control and ending on the earlier of (i) two years following that Change in Control or (ii) Executive’s death.


l)	“Customer” means any person or entity who, in the twelve (12) month period immediately preceding Executive’s termination from Kimball, purchased or arranged for the purchase or initiated an order for the purchase of Kimball products or services, including, but not limited to, dealers, brokers, distributors, end-users, and retailers.


m)	“Deferred Compensation” means compensation provided under a nonqualified deferred compensation plan as defined in, and subject to, Code Section 409A.


n)	“Disability” means, with respect to Executive, a physical or mental impairment that would entitle Executive to benefits under Kimball’s long-term disability plan.


o)	“Effective Date” means the date first stated above.

“Good Reason” means, with respect to the termination of employment by Executive, one or more of the following occurrences: (i) a material adverse change in the nature or scope of Executive’s duties and responsibilities; (ii) a reduction in Executive’s base salary rate or reduction in incentive category; (iii) a reduction of 5 percent or more in value of the aggregate benefits provided to Executive and her dependents under Kimball’s employee benefit plans; (iv) a significant diminution in Executive’s position, authority, job title, duties, or responsibilities; (v) a relocation of Executive’s principal site of employment to a location more than fifty (50) miles from the principal employment site; (vi) a material breach by Kimball of its obligations to Executive under this Agreement or the Change in Control Agreement; or (vii) failure by Kimball to obtain the assumption agreement from any successor as contemplated in Section 21. None of the identified events, however, will constitute “Good Reason” unless each of the following procedural conditions is satisfied: within 90 days of the initial occurrence of the event, Executive must give written notice to Kimball of such occurrence; Kimball must have failed to remedy that occurrence within thirty 30 days after receiving such notice, and Executive must resign no later than 12 months after the initial occurrence of the event.


q)	“Kimball” means Kimball International, Inc., any Affiliate, and any successor to the business or assets of Kimball International, Inc. that executes and delivers the agreement provided for in Section 11 of the Change in Control Agreement or which otherwise becomes bound by all of the terms and provisions of this Agreement by the operation of law.


r)	“Notice of Termination” means a written notice, from the party initiating Executive’s employment termination to the other party, specifying the facts and circumstances claimed to provide the basis for termination.


s)	“Parachute Payment” means a “parachute payment” as defined in Code Section 280G(b)(2) that would subject any Compensation Payment to the excise tax imposed by Code Section 4999 or the denial of deduction imposed by Code Section 280G.


t)	“Professional Services Firm” means a nationally recognized certified public accounting firm or compensation consulting firm mutually selected by Kimball and Executive.


u)	“Profit Sharing Incentive” means the compensation paid to Executive pursuant to the 2016 Annual Cash Incentive Plan, as amended, or any replacement thereof.


v)	“Rule of 65” means any termination of Executive’s Continuous Service, other than for Cause, occurring at or after Executive has reached the age of 55 and has a combination of age plus years of Continuous Service as an executive officer of Kimball equal to or greater than 65.


w)	“Shares” means unrestricted shares of common stock of Kimball, NASDAQ symbol KBAL, formerly referred to as Class B, awarded pursuant to the 2017 Stock Plan.


x)	“Termination Date” means the date on which Executive’s employment with Kimball is terminated pursuant to Executive’s Notice of Termination to Kimball, Kimball’s Notice of Termination to Executive, or by reason of Executive’s death or Disability.

“Trade Secrets and Confidential Information” means formulas, patterns, designs, compilations, programs, devices, methods, techniques, processes or general know-how that derive independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, which is the subject of efforts that are reasonable under the circumstances to maintain its secrecy for products utilized in the manufacture, distribution and sale of electronics, office and health care furniture, and other manufacturing industries. It also includes Kimball’s valuable information, including information about customers, dealers and suppliers, and among other things, about their technical problems and needs, purchasing habits, and procedures, all resulting in a great deal of customer goodwill, as well as financial records, contracts, patents, manufacturing technology, marketing and strategic plans, and other valuable information.


z)	“Value” means, with respect to Executive and a determination date, the following amounts, computed without regard to any termination of rights that would otherwise occur under the applicable plan because of Executive’s cessation of continuous service as of that determination date:

(i) for Executive’s Options and related Stock Appreciation Rights awarded under the 2017 Stock Plan, the excess, if any, of (A) the market value as of the determination date of all Shares subject to Executive’s option awards over (B) the aggregate exercise price for those Shares under those option awards;

(ii) for Executive’s Restricted Stock awarded under the 2017 Stock Plan, the market value of those Shares as of the determination date;

(iii) for Executive’s Stock Units awarded under the 2017 Stock Plan, the product of (A) the number of Executive’s Stock Units and (B) the sum of the market value of a Share as of the determination date and the dividends, if any, credited on a Share as of that date under the applicable award agreement;

(iv) for Executive’s Other Stock-Based Awards awarded under the 2017 Stock Plan, the market value of the Shares as of the determination date; and

(v) for Executive’s benefits under the 2016 Annual Cash Incentive Plan, as amended, the cash value of those benefits. For purposes of this definition, the term “market value” has the same meaning as the term “Fair Market Value” as defined in the 2017 Stock Plan.


2.	Employment at Will

Executive is employed by Kimball as an employee at will. Executive may terminate her employment voluntarily at any time, with or without Good Reason, and Kimball may terminate Executive’s employment at any time, with or without Cause, by providing the other party a Notice of Termination except to the extent this right is overridden by the terms of the Change in Control Agreement.


3.	Restrictive Covenants

In consideration of Executive’s employment with Kimball, the wide access Kimball grants to Executive to review and become familiar with Kimball’s business, including certain valuable Trade Secrets and Confidential Information, and other valuable consideration, Executive shall comply with the following obligations:


a)	Non-Competition During At-Will Employment By Kimball

As a condition of at-will employment with Kimball, Executive agrees that, during Executive’s employment by Kimball, Executive shall not directly or indirectly have any ownership interest in, work for, advise, or have any business connection or business relationship with any person or entity that competes with or that is planning to compete with Kimball, without the prior written approval of the Board of Directors of Kimball.


b)	Non-Competition During Twelve-Month Post-Employment

As a condition of at-will employment with Kimball, Executive agrees that for a period of twelve (12) months after separation from Kimball (regardless of the reason for separation), Executive shall not directly or indirectly:


i.	Have an ownership interest in any entity or person that competes with Kimball;


ii.	Work for, act as an agent for, act in an administrative or financial capacity for, act as a sales or marketing representative for, advise, consult with or manage any entity or person that competes with Kimball; or


iii.	Compete with Kimball for customers of Kimball.


c)	Restrictive Covenant Conditions

For purposes of Section 3, the following definitions apply:

The terms “compete” or “competes” or “competition” mean the actual or planned business activities of an entity or person whereby the entity or person sells, solicits, or markets products or services similar or analogous to those which Executive sold, worked on, or provided services on for Kimball during the twelve (12) month period immediately prior to Executive’s separation from Kimball.

ii.

In the event that Executive worked for Kimball less than a total of twelve (12) months prior to separation, the non-competition provisions in Section (3) above shall remain in effect the longer of (a) six (6) months, or (b) the term of Executive’s employment with Kimball (e.g., if Executive worked for Kimball for ten (10) months, the non-competition provisions apply for ten (10) months post-separation).


iii.	Nothing in Sections 3(a) or (b) prohibit Executive from purchasing, for investment purposes only, any stock or corporate security traded or quoted on a national securities

exchange or a national market system, so long as such ownership does not violate Kimball’s Business Ethics, Insider Trading or other applicable policies. The parties expressly agree that the terms of the non-competition provisions in Sections 3(a) and (b) are reasonable and necessary to protect Kimball’s interests. In the unlikely event, however, that a court were to determine that any portion of the non-competition provisions in Sections 3(a) or (b) is unenforceable, then the parties agree that the remainder of the non-competition provisions shall remain valid and enforceable to the maximum extent possible.


iv.	This provision shall be construed as independent of any other provision of this Agreement and shall survive the termination of this Agreement. The existence of any claim or cause of action of Executive against Kimball, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Kimball of this Restrictive Covenant.


d)	Other Limited Prohibitions

During Executive’s employment by Kimball and for twelve (12) months post-separation (for whatever reason) or the length of Executive’s employment, whichever is less (but in no event less than six (6) months), Executive shall not:


i.	Request or advise any customer or client of Kimball with whom Executive had personal contact in the course of Executive’s employment by Kimball, or any person or entity having business dealings with Kimball with whom Executive had personal contact in the course of Executive’s employment by Kimball, to withdraw, curtail, alter, or cease such business with Kimball.


ii.	Disclose to any person or entity the identities of any customers, clients, or any persons having business dealings with Kimball or the division(s)/subsidiary(s) of Kimball to which Executive was assigned at the time of separation from Kimball and for the preceding twelve (12) months.


iii.	Directly or indirectly solicit, influence, or attempt to influence any other employee of Kimball to separate from Kimball.


e)	Trade Secrets and Confidential Information

Executive shall not disclose any Trade Secrets or Confidential Information, directly or indirectly, nor use them in any way, either during the term of this Agreement or at any time thereafter, except as required in the course of Executive’s employment with Kimball. All files, records, documents, computer data (including passwords, access codes, electronic and voice mail, etc.), drawings, specifications, equipment, and similar items relating to the business of Kimball, whether prepared by Executive or otherwise coming into Executive’s possession, shall remain the exclusive property of Kimball, and shall not be removed from the premises of Kimball except as required in the course of Executive’s employment with Kimball. Upon separation of employment, Executive agrees to return to Kimball any Trade Secrets and Confidential Information in Executive’s possession or control, including, without limitation, all lists of customers, samples, price lists, literature, documents, data, computer and financial records and any other property belonging to Kimball or relating to the business of Kimball or in any way referring or relating to any Trade Secrets and Confidential Information.


f)	Conflict of Interest

Executive shall take no action or obtain any direct or indirect interests in or relationships with any organization that might affect the objectivity and independence of Executive’s judgment or

conduct in carrying out duties and responsibilities to Kimball under this Agreement. Any such actions or interests which may even create the appearance of a conflict of interest shall be promptly brought to the attention of Kimball.


g)	Notification of Prospective or Subsequent Employers

Executive agrees to notify any prospective employer of the existence and terms of the Restrictive Covenants of this Agreement, prior to acceptance of employment. Kimball may inform any person or entity subsequently employing Executive, or evidencing an intention to employ Executive, of the nature of the information Kimball asserts to be Trade Secrets and Confidential Information and may inform that person or entity of the existence of this Agreement and the terms hereof, and provide to that person or entity a copy of this Agreement.


4.	Inventions and Patents

Executive agrees that Executive will promptly, from time to time, fully inform and disclose to Kimball all inventions, designs, improvements, and discoveries which Executive now has or may discover during the term of this Agreement which pertain or relate to the business of Kimball or to any experimental work carried on by Kimball, whether conceived by Executive alone or with others and whether or not conceived during regular working hours. All such inventions, designs, improvements, and discoveries shall be the exclusive property of Kimball. Executive shall assist Kimball at Kimball’s sole expense, to obtain patents on all such inventions, designs, improvements, and discoveries deemed patentable by Kimball, and shall execute all documents and do all things necessary to obtain patents, vest Kimball with full and exclusive title thereto, and protect the same against infringement by others. Executive shall be entitled to no additional compensation for any and all inventions or designs made during the course of this Agreement.

Executive submits as “ Exhibit A ” to this Agreement a complete list (with a brief description) of all inventions, patented or unpatented, which Executive made or conceived prior to the date of this Agreement. The inventions described on Exhibit A are excluded from this Agreement.


5.	Compensation upon Termination of Employment Relationship without Cause or For Good Reason

Except as otherwise provided in an applicable Change in Control Agreement, if Executive’s employment is terminated by Kimball without Cause or by the Executive for Good Reason, the Executive shall be entitled to the benefits described in this Section 5.


a)	Base Salary As soon as practicable following the Termination Date, Kimball will pay Executive’s full base salary due and owing through the Termination Date at the rate in effect on the date Notice of Termination is given.


b)	Enhanced Severance Pay

As soon as practicable following the Termination Date, Kimball will pay Executive, in lieu of benefits otherwise described in the Kimball Severance Benefits Plan, the following:

Severance pay equal to the sum of (1) Executive’s annual base salary at the highest rate in effect during the three (3) years immediately preceding the last day of employment and (2) the higher of either Executive’s target incentive for the period in which the last day of employment occurs or Executive’s average annual incentive award for the three annual incentive periods immediately preceding the last day of employment.


ii.	If Executive’s last day of employment occurs during a Control Termination Period and Executive is a party to a Change in Control Agreement, section (i) shall not apply and the severance pay amount will be determined under the Change in Control Agreement.


c)	Welfare and Related Benefits

As soon as practicable following the Termination Date, Kimball will pay Executive, in lieu of coverage for Executive and her dependents under Kimball’s welfare and fringe benefit plans, the following:

Reimbursement for welfare and related benefits equal to the product of (i) fifty thousand dollars ($50,000) and (ii) a fraction, the numerator of which is the Employment Cost Index, as published by the U.S. Bureau of Labor Statistics, for the completed calendar quarter immediately preceding Executive’s Termination Date, and the denominator of which is the Employment Cost Index for the first calendar quarter of 2015.


ii.	If Executive’s last day of employment occurs during a Control Termination Period and Executive is a party to a Change in Control Agreement, the reimbursement amount will be determined under the Change in Control Agreement.


d)	Outplacement Assistance To assist Executive in obtaining replacement employment, Kimball will reimburse Executive for up to $25,000 of the costs of outplacement services during the first twelve months following the Termination Date.


e)	Timing of Certain Rights and Payments

Service-Based Incentive Plan Rights . As of the Termination Date, (i) Executive’s Options and related Stock Appreciation Rights awarded under the 2017 Stock Plan will become fully vested and exercisable; (ii) all restrictions will lapse for Executive’s service-based Restricted Stock awarded under the 2017 Stock Plan; and (iii) Executive’s service-based Stock Units awarded under the 2017 Stock Plan will become fully vested and payable. As soon as practicable following the Termination Date, Kimball will make a single payment to Executive, equal to the aggregate Value of all benefits under the plans identified in this subsection (i), in the form of cash, Shares, or a combination of cash and Shares, as determined by the Compensation Committee of the Board of Directors, in its sole discretion. That single payment will constitute payment in full and complete satisfaction of Executive’s rights and benefits under all of Executive’s award agreements and the applicable plans.

ii.

Performance-Based Incentive Plan Rights . After the Termination Date, Executive will continue to be a participant in these performance-based incentive plans, to the same extent as immediately before the Termination Date: (i) performance-based Stock Units under the Relative Total Shareholder Return program of the 2017 Stock Plan with payout to occur in accordance with section 4.C.(i) of the Executive’s Performance Unit Award Agreement; (ii) other performance-based Restricted Stock or performance-based Stock Units awarded under the 2017 Stock Plan; and (iii) the 2016 Annual Cash Incentive Plan, as amended, or any subsequent replacement plan, with respect to any incentive payments due for the fiscal year immediately preceding the Termination Date. Executive will become vested in and receive payment of benefits under those performance-based plans in the same amounts and at the same times as if Executive had continued in active employment through the end of the applicable performance periods and vesting dates. In addition, Executive will receive an incentive payment under the 2016 Annual Cash Incentive Plan, as amended, or any subsequent replacement plan, for the fiscal year in which the Termination Date occurs, and

that share will be paid at the same time as if Executive had continued in active employment through the end of the performance period and vesting date.


iii.	SERP Rights . As of the Termination Date, Executive will become fully vested in the Makeup Contributions Account in the Supplemental Employee Retirement Plan and, without regard to Executive’s payment elections previously made under that plan, will receive all benefit amounts under that plan in a single, lump-sum cash payment as soon as practicable following the Termination Date.


iv.	Amendment of Award Agreements . To the extent that the provisions of this subsection are inconsistent with the provisions of Executive’s Award Agreements, Executive and Kimball hereby amend those Award Agreements to include the provisions of this subsection, which supersede any inconsistent provisions of the Award Agreements.


v.	Restrictive Covenants . The Executive shall not be entitled to receive any payments or benefits under this Agreement unless the Executive complies in full with the restrictive covenants contained in Section 3 of this Agreement.


6.	Compensation On Other Termination Of Employment

If Executive’s employment is terminated by Kimball for Cause, by Executive without Good Reason, or because of death or Disability, Kimball will provide compensation and benefits to Executive, or to Executive’s estate in the event of death, on the following terms:


a)	Termination by Kimball for Cause or by Executive without Good Reason . If Kimball terminates Executive’s employment for Cause, or if Executive terminates employment without Good Reason, Kimball will pay the amount then due and owing of Executive’s full base salary through the last day of employment at the rate in effect at the date that Notice of Termination is given.

Death or Disability . In the event of Executive’s death or Disability, Kimball will pay the amount then due and owing of Executive’s full base salary through the date of death or Disability at the rate in effect at the date of the event. Kimball agrees that all awards under any cash incentive plans and any equity awards granted to Executive on or after the Effective Date shall contain provisions which provide for pro-rated vesting upon Executive’s death or Disability.

Other Benefit Programs . Executive shall also be entitled to: (i) benefits under Kimball’s generally applicable welfare and retirement plans, in accordance with the respective terms of such plans; and (ii) Executive’s rights under the 2016 Annual Cash Incentive Plan, as amended, or any subsequent replacement plan, the Supplemental Employee Retirement Plan, the 2017 Stock Plan and award agreements granted thereunder, and any other equity or incentive plan, in accordance with the respective terms of those plans and agreements. For purposes of determining whether Executive is eligible for the classification of retirement, if applicable, under the 2016 Annual Cash Incentive Plan, as amended, or any subsequent replacement plan, the Supplemental Employee Retirement Plan, as amended, or any subsequent replacement plan, or the 2017 Stock Plan, as amended, or any subsequent replacement plan, the Rule of 65 shall be used.


7.	Release of Claims

Notwithstanding anything in this Agreement to the contrary, the Executive shall not be entitled to receive the payments and benefits described in Section 5(b)-(e) of this Agreement unless (i) the Executive executes and delivers to Kimball a general release of claims agreement in a form substantially similar to that attached hereto as “ Exhibit B ” and reasonably satisfactory to Kimball (the “Release Agreement”) and (ii) the Executive does not revoke the Release Agreement during the period of time specified in the

Release Agreement during which the Executive may revoke it (“Revocation Period”). The Release Agreement shall not require the Executive to release any rights the Executive may have to be indemnified by Kimball or that are otherwise provided under this Agreement. If the permissible period for the execution and delivery of a Release Agreement extends beyond the end of a calendar year, and if the Executive executes and delivers the Release Agreement at any time during that period, the Release Agreement will be deemed delivered on the last day of that permissible period.


8.	Code Section 409A

Despite any other provisions of the Agreement to the contrary, any Deferred Compensation payments otherwise due under this Agreement will be paid in accordance with this Section.


a)	Post-Termination Payment Suspension

If as of the date her employment terminates, Executive is a “specified employee” within the meaning of Code Section 409A, without regard to paragraph 416(i)(5), and Kimball has stock that is publicly traded on an established securities market or otherwise, any Deferred Compensation payments otherwise payable because of employment termination will be suspended until the first day of the seventh month following the month in which the Executive’s last day of employment occurs, and the Deferred Compensation payments in the seventh month will include all previously suspended amounts.


b)	Interpretation.

This Agreement shall be interpreted and applied in a manner consistent with the standards for nonqualified deferred compensation plans established by Code Section 409A and its interpretive regulations and other regulatory guidance. To the extent that any terms of the Agreement would subject Executive to gross income inclusion, interest, or additional tax pursuant to Code Section 409A, those terms are to that extent superseded by, and shall be adjusted to the minimum extent necessary to satisfy, the applicable Code Section 409A standards.


c)	Supplemental Payment.

If Executive incurs gross income inclusion, interest, or additional tax on Deferred Compensation payments pursuant to Code Section 409A, Kimball will make a supplemental payment to Executive in an amount sufficient to pay the income tax liability on the sum of those Deferred Compensation payments and the supplemental payment.


9.	Parachute Payments

Despite any other provisions of this Agreement to the contrary, no Compensation Payments otherwise payable to Executive will be paid that would constitute a Parachute Payment. In the event that Kimball determines that any Compensation Payment may constitute a Parachute Payment, Kimball shall take the following steps:


a)	Determination By Professional Services Firm

At Kimball’s expense, engage a Professional Services Firm to make an initial determination whether any Compensation Payment proposed to be made to the Executive would, more likely than not, constitute a Parachute Payment. The Professional Services Firm shall provide its determination, together with detailed supporting calculations and documentation to Kimball and Executive within thirty (30) days of the Termination Date. If the Professional Services Firm determines that no Compensation Payment will constitute a Parachute Payment, it shall furnish Kimball and Executive with a written opinion to that effect. The determination shall be binding, final and conclusive upon Kimball and Executive.


b)	Adjustment of Compensation Payments

If the Professional Services Firm determines that any Compensation Payment proposed to be made to the Executive would constitute a Parachute Payment, Professional Services Firm will provide Kimball and Executive a written opinion to that effect, setting forth with particularity the smallest amount by which total Compensation Payments must be reduced to avoid the denial of any deduction pursuant to Code Section 280G or the imposition of any excise tax pursuant to Code Section 4999. The Compensation Payments shall be reduced, in the order of priority designated by Executive in written instructions, to the minimum extent necessary so that none of the Compensation Payments, in the opinion of the Professional Services Firm, would constitute a Parachute Payment. If the Executive does not provide such written instructions within thirty (30) days following receipt of the Professional Services Firm’s written opinion, the reduction shall apply in the order determined by Kimball in its discretion. Any determination by the Professional Services Firm under this paragraph shall be binding, final and conclusive upon Kimball and Executive.


10.	Return of Property

All documents or other tangible materials (whether originals, copies or abstracts and including, without limitation, financial records, contracts, patents, manufacturing technology, marketing and strategic plans, price lists, quotation guides, outstanding quotations, books, records, manuals, files, sales literature, training materials, calling or business cards, credit cards, customer records, correspondence, computer printout documents, orders, messages, phone and address lists, memoranda, notes, agreements, invoices, and receipts) which in any way relate to Kimball’s business, whether furnished to Executive by Kimball or prepared, compiled, used, or acquired by Executive while employed by Kimball, shall not be copied, lent, or duplicated at any time, nor used in any manner other than in the course of Executive ’ s employment by Kimball and shall be returned to Kimball on request or upon the termination of Executive ’ s employment relationship, whichever occurs first.


11.	Security of Property

All keys, combinations, and access codes to Kimball’s premises, facilities, and equipment (including, without limitation, to offices, desks, storage cabinets, safes, data processing systems, and communications equipment), whether furnished to Executive by Kimball or prepared, used, or acquired by Executive while employed by Kimball shall be and remain the exclusive property of Kimball and shall not be copied, lent, or communicated to any other person or entity at any time nor used in any manner other than in the course of Executive ’ s employment by Kimball, except as authorized by Kimball, and shall be returned to Kimball on request or upon termination of Executive ’ s employment relationship, whichever occurs first.


12.	Injunctive Relief

Executive agrees that Kimball will be irreparably harmed by, and money damages alone are inadequate as a remedy to Kimball for, any breach or threatened breach by Executive of Section 3, 4, 10 or 11 of this

Agreement, or any statute protecting trade secrets, confidential information or intellectual property. Therefore, Executive agrees that, notwithstanding Section 13 below, Kimball shall be entitled to institute and maintain any appropriate legal proceedings to enforce this Agreement in a court of law having appropriate subject matter jurisdiction, including but not limited to an action for specific performance and/or injunctive relief. In addition to all other relief to which it shall be entitled, Kimball shall be entitled to recover from Executive all attorney’s fees and costs incurred by Kimball in any action or proceeding seeking or relating to equitable or injunctive relief in which Kimball prevails in any respect.


13.	Alternative Dispute Resolution

Except for any claim seeking equitable or injunctive relief or as otherwise provided herein, the parties agree that either party may submit any other dispute, complaint, controversy, claim or grievance (a “Dispute”) arising out of or related to this Agreement or Executive’s employment with Kimball to binding arbitration. The arbitration of any Dispute properly submitted to arbitration pursuant to this Section 13 shall be governed by the following procedural requirements: The arbitration proceeding shall be conducted in Indianapolis, Indiana, by a single arbitrator utilizing the Commercial Arbitration Rules of the American Arbitration Association (“AAA”). The AAA arbitrator selection procedures shall apply only in the event the parties do not agree on an arbitrator within thirty (30) days after the Dispute is properly submitted to arbitration. The arbitrator shall not have the authority to add, subtract from, ignore, change, or alter any terms or provisions of this Agreement, or to award Executive re-instatement or monetary damages in excess of the compensation and benefits specifically required by this Agreement; provided, however, nothing herein shall be construed to waive or limit any rights or remedies Executive may have under any applicable federal, state or local law relating to her employment relationship with Kimball. The arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the arbitrator's award or decision is based. The award rendered by the arbitrator shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. The parties shall bear equally the costs of the arbitration, including, without limitation, the fees of the arbitrator and the AAA; provided, however, each party shall bear its own attorney’s fees. Notwithstanding the above, a Dispute may not be submitted to arbitration (and arbitration may not be compelled) by either party if such Dispute is the subject of any legal proceeding pending in any court of law. Except for a claim seeking equitable or injunctive relief, neither party shall institute any lawsuit or arbitration proceeding relating to any Dispute before that party has attempted to engage in a good faith discussion with the other party to resolve the Dispute, and failing the resolution of such Dispute, the parties shall engage in a good faith discussion to determine whether the Dispute shall be submitted to arbitration or whether a lawsuit shall be instituted in a court of law.


14.	Assignment

This Agreement may be freely assigned by Kimball to any of its successors, subsidiaries, or related companies.


15.	Choice of Forum and Law

Executive and Kimball agree that, except for any Dispute that is properly submitted to arbitration in accordance with Section 13, any legal action arising out of or relating to this Agreement or Executive’s employment with Kimball, shall be commenced and maintained exclusively before any state or federal court having appropriate subject matter jurisdiction located in or encompassing Dubois County, Indiana; further, with respect to any such legal action, Kimball and Executive hereby irrevocably consent and submit to the personal jurisdiction and venue of such courts located in or encompassing Dubois County, Indiana, and waive any right to challenge or otherwise object to personal jurisdiction or venue (including, without limitation, any objection based on inconvenient forum grounds) in any action commenced or maintained in such courts located in or encompassing Dubois County, Indiana. This Agreement shall be governed by the laws of the State of Indiana excluding any conflicts or choice of law rule or principle that

might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.


16.	Non-Waiver

No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions at the same or at any subsequent time. No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter of this Agreement have been made by either party which are not set forth expressly in this Agreement.


17.	Mitigation of Damages

In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not the Executive obtains other employment.


18.	Amendment and Termination

This Agreement becomes effective as of the Effective Date and shall continue in effect until the Termination Date; provided, however, any provision of this Agreement which, by its terms, is intended to survive the Termination Date shall survive the termination of this Agreement. This Agreement may not be amended or modified, except by a written instrument executed by both Executive and a duly authorized representative of the Board of Directors.


19.	Interpretation of Agreement

It is the intention of Executive and Kimball to make the promises contained in this Agreement reasonable and binding only to the extent that it may be lawfully done under applicable laws. In the event any part of this Agreement is determined by a court to be overly broad or otherwise unenforceable, it is the desire of Kimball and Executive that the court shall substitute a reasonable judicially enforceable limitation in place of the unenforceable portion of the Agreement. Except with respect to any Change in Control Agreement to which Executive is a party, this Agreement constitutes the entire and exclusive agreement between Executive and Kimball, and it supersedes all prior agreements, whether written or oral.


20.	Notices

For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, mailed by United States certified mail, return receipt requested, postage prepaid, or sent by prepaid express mail, addressed as follows:

If to Kimball:

Kimball International, Inc.

1600 Royal Street

Jasper, Indiana 47549

Attn.: Secretary to the Board

If to Executive:

To the address set forth on the signature page of this Agreement.

Either party may change the address to which notices are to be sent by written notice to the other party. Notice of change in notice address shall be effective only upon receipt by the other party.


21.	Successors

Kimball will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Kimball expressly to assume and agree to perform this Agreement in the same manner and to the same extent that Kimball would be required to perform it if no such succession had taken place. Failure of Kimball to obtain such agreement prior to or upon the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Executive to compensation from Kimball in the same amount and on the same terms as Executive would be entitled under this Agreement if such succession had not occurred, except that for the purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Termination Date.


22.	Counterparts

This Agreement may be executed in one (1) or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. Signatures transmitted by facsimile or other electronic means shall be effective the same as original signatures for execution of this Agreement.


23.	Binding Agreement

This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

Kimball, by its duly authorized Officer, and Executive have each respectively caused this Agreement to be executed as of the Effective Date.



	KIMBALL INTERNATIONAL, INC.	EXECUTIVE

By:
	[Name]	[Name]
	[Title]

		[address]

EXHIBIT A

List of Inventions

EXHIBIT B

[Form of General Release Agreement attached.]

Exhibit 10.5

KIMBALL INTERNATIONAL, INC.

2016 ANNUAL CASH INCENTIVE PLAN

(as amended October 23, 2018)

Your Board believes that the long-term success of your Company depends, in part, on its ability to recruit and retain outstanding individuals as employees and to furnish these employees maximum incentive to improve operations and increase profits. Your Board also believes it is important to align compensation of officers and eligible employees with the interests of Shareowners. In 2016, in accordance with this belief, your Board, upon recommendation of the Compensation and Governance Committee (“Committee”) of the Board (comprised of independent outside directors), unanimously adopted, and Shareowners approved, the Kimball International, Inc. 2016 Annual Cash Incentive Plan (the “Plan”). Your Board, upon recommendation of the Committee, unanimously adopted and approved amendments to this Plan in May 2018 and in October 2018. This Plan is effective for fiscal year 2017 and forward, as amended, and replaces, in full, the Amended and Restated 2010 Profit Sharing Bonus Plan.

The profit-sharing framework of this Plan has been in place since prior to the Company becoming publicly traded in 1976. The Plan measures performance at two levels within the Company: (1) at the consolidated level (“Company”); and (2) at a business unit level for the performance of designated operations within the Company (“Business Unit”). All executive officers and other eligible employees participate at the Company level or a combination of the Company and Business Unit levels.

Goal. The goal of the Plan is to link an employee’s compensation to the financial success of the Company. The intent is to encourage participants to think, act and be rewarded like owners, and to seek out and undertake initiatives that continuously improve the performance of the Company.

Eligibility. Executive officers and employees not engaged directly in manufacturing or delivery of product or compensated on a sales commission plan are eligible to participate in the Plan. In addition, employees employed in hybrid leadership roles (defined as those who oversee both employees that are eligible under this Plan and those that are ineligible under this Plan) for the Company, who might otherwise be excluded from the Plan, may also participate in this Plan with approval of the Chief Administrative Officer, in addition to participating in a specific and more direct incentive component as part of their total compensation. The level of participation by employees in hybrid leadership roles may vary from the terms of this Plan and such terms shall be documented and approved by the Chief Administrative Officer. All employees identified as eligible shall be referred to as “Participants”. Persons excluded from participation in this Plan include temporary employees, employees who engage directly in manufacturing or delivery of product, employees who participate in a sales commission plan, person(s) joining the Company as employees as a result of acquisition, as determined by the terms and conditions of the acquisition.

Incentive Criteria. The Committee sets the performance measure and performance targets at the beginning of the fiscal year to incent desired results. The performance measure can vary from year to year and may be based on any one or any combination of the following business criteria: (i) operating income; (ii) earnings per share; (iii) return on capital; (iv) return on assets; (v) economic profit; (vi) market value per share; (vii) EBITDA; (viii) cash flow; (ix) net income (before or after taxes); (x) revenues; (xi) cost reduction goals; (xii) market share; and (xiii) total return to shareholders. The Committee must approve the performance targets (“Targets”) within the first 25% of the period of service to which the Targets relate, but not later than 90 days after the commencement of that period (“Relevant Time Period”). The Committee, within the Relevant Time Period, may make adjustments for non-operating income and loss and other performance measure computation elements as it deems appropriate to provide optimal incentives for eligible employees. If other adjustments are necessary beyond the Relevant Time Period, the NEOs will not be eligible to receive any cash incentive resulting from such adjustments.

Cash Incentive Amounts. The Plan establishes potential cash incentive amounts as a range of percentages of the Participant’s salary, with the cash incentive percentage increasing with higher levels of performance. The Plan also establishes different cash incentive percentage ranges across several Participant categories, setting higher

incentive-percentage ranges for Participants who, by virtue of their responsibilities, are expected to have a greater effect on the Company’s financial success. Within the Relevant Time Period, the Committee has the discretion to increase Executive Officer potential cash incentive payout percentages under the Plan with a payout cap of 120 percent of base salary for the Company’s Chief Executive Officer and a payout cap of 100 percent of base salary for all other Participants. The Committee may use this discretion to achieve a desired mix of short-term cash incentives as a percentage of total target compensation for a particular Executive Officer. The Plan is designed so that Participants will achieve maximum cash incentives only if the Company achieves maximum targeted performance levels, considering various economic indicators and improvement goals as determined by the Committee. Awards under the Plan will be determined based on actual fiscal year performance, which is determined following the end of the relevant fiscal year.

Administration. For a particular fiscal year, the Committee must approve the Targets, performance measure computation adjustments, and any other conditions within the Relevant Time Period. At the end of each fiscal year, but before Plan incentives may be paid, the Committee must certify in writing that Targets and other conditions have been satisfied. The Compensation and Governance Committee of the Board is authorized to amend or terminate the Plan effective for future fiscal years. The Board or the Compensation and Governance Committee will not, however, amend the Plan without Shareowner approval if such approval is required to comply with applicable law or to comply with applicable stock exchange requirements.

Cash Incentive Payments. Cash incentives will be paid during the following fiscal year in two cash installments - 50% in August and 50% in December. If a Participant’s employment is terminated before a scheduled payment date, the former employee will not be entitled to receive that cash incentive payment or any subsequent cash incentive payment, unless the Participant’s termination was caused by R etirement, death, or permanent disability, in which case, that Participant (or estate, in the event of the Participant’s death) will be entitled to receive all cash incentive payments for the previous fiscal year on the scheduled payment date(s), and a pro- rata share for the current fiscal year cash incentive if any which will be paid in full within 2½ months after the end of the Company’s fiscal year.

“Retirement” means what the term is expressly defined to mean for purposes of the Plan in a then-effective written agreement signed by both a Participant and an authorized executive officer or member of the Board of Directors of the Company on behalf of the Company, or, in the absence of any such then-effective agreement or definition, means any termination of a Participant’s employment, other than for Cause, occurring at or after the Participant has attained the minimum retirement age under the governmental retirement system for the applicable country (age 62 in the United States), or at or after the Participant has reached the age of 55 and has a combination of age plus years of Continuous Service equal to or greater than 75 and the Participant complies with the process for approval of Retirement established by the Company. “Continuous Service” means the absence of any interruption or termination in the provision of service to the Company by a Participant. Continuous Service will not be considered interrupted in the case of (i) sick leave, military leave or any other leave of absence approved by the Company; (ii) transfer between the Company and an Affiliate or any successor to the Company; or (iii) any change in status so long as the individual remains in the Continuous Service of the Company or any Affiliate. A Participant’s Continuous Service shall be deemed to have terminated either upon an actual cessation of providing services to the Company or any Affiliate or upon the entity to which the Participant provides services ceasing to be an Affiliate.

“Cause” means one or more of the following occurrences: (i) Participant's willful and continued failure to perform substantially the duties or responsibilities of Participant's position (other than by reason of Disability), or the willful and continued failure to follow lawful instructions of a senior executive or the Board of Directors, if such failure continues for a period of five days after the Company delivers to Participant a written notice identifying such failure; (ii) Participant's conviction of a felony or of another crime that reflects in a materially adverse manner on the Company in its markets or business operations; (iii) Participant's engaging in fraudulent or dishonest conduct, gross misconduct that is injurious to the Company or any misconduct that involves moral turpitude; or (iv) Participant’s failure to uphold a fiduciary duty to the Company or its shareholders. “Affiliate” means any entity that is a member, along with the Company, of a controlled group of corporations or a group of other trades or businesses under common control, within the meaning of Internal Revenue Code Section 414(b) or (c).

Repayment, Forfeiture . After the Committee certifies that Targets and other conditions have been satisfied as described above, no adjustments will be made to reflect any subsequent change in accounting, the effect of federal, state or municipal taxes later assessed or determined, or otherwise. Notwithstanding the foregoing, the Company reserves the right to, and in appropriate cases, will, seek recovery of all or any portion of cash incentive payments made if (i) the amount of the cash incentive payment was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement of all or a portion of the Company’s financial statements; (ii) the Participant engaged in intentional misconduct that caused or partially caused the need for such a restatement; and (iii) the amount of the cash incentive payment that would have been awarded to a Participant would have been lower than the amount actually awarded had the financial results been properly reported. Further, the Company is not limited in its power to take other actions as it deems necessary to remedy the misconduct, prevent its recurrence and, if appropriate, based on all relevant facts and circumstances, punish the wrongdoer in a manner it deems appropriate.

The foregoing policy may be amended as required to comply with (i) any applicable listing standards of a national securities exchange adopted in accordance with Section 10D of the Exchange Act (regarding recovering of erroneously awarded compensation) and any implementing rules and regulations of the U.S. Securities and Exchange Commission adopted thereunder; (ii) similar rules under the laws of any other governing jurisdiction; and (iii) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to a Participant.

Exhibit 99.1

Kimball International Appoints Kristine L. Juster as Chief Executive Officer

JASPER, Ind., October 25, 2018 - Kimball International, Inc. (NASDAQ:KBAL) today announced that Kristine (Kristie) L. Juster, a member of the Kimball International Board of Directors since 2016, has been appointed Chief Executive Officer, effective November 1, 2018. Ms. Juster succeeds Bob Schneider, who previously announced his intent to retire as CEO and Chairman effective October 31, 2018.

Ms. Juster comes to Kimball International with over 20 years of experience as a Global Executive at Newell Brands. During her tenure at Newell Brands she held the role of CEO/President of the Home Décor Segment with the design driven brands, Levelor and Kirsh; the Culinary Lifestyle Segment with Calphalon, a premier brand known for design innovation; and, the Global Writing Segment with a wide variety of market leading brands such as Sharpie and Expo. Throughout her career, Ms. Juster has driven significant growth for the businesses she has led through brand innovation, distribution channel expansion including e-commerce, and a global mindset. She has a proven track record of scaling growth strategies, while preserving the core values that are critical to the long-term sustainability of a business.

“Kristie is a proven, visionary leader with significant experience in areas important to Kimball International’s future, including strategic growth initiatives and diverse distribution channels. While bringing an outside perspective, she also already has a strong understanding of our business and has contributed to the Company’s strategic planning as a member of our Board the last two and a half years,” said Pat Connolly, Lead Independent Director of the Board. “Kristie is a seasoned executive with extensive experience successfully transforming commercial and consumer brands. Her proven strategic, financial, and operational capabilities, combined with her strong commitment to growth, will position Kimball International for long-term success. The Board is confident Kristie will lead Kimball International to the next level and we look forward to continuing to work closely with her as we enter an exciting new chapter.”

Kristie added, “I am honored and excited to lead Kimball International, which has such a rich history and compelling opportunities for strategic growth. Over the past several years, Kimball International has transformed into a world-class design company with market-leading brands and a higher level of return on capital than any of our public competitors. Our next chapter will leverage our entrepreneurial background, our love of design and creativity, and a passion for customer service and employee empowerment. I look forward to working with the experienced leadership team, talented employees, and our board of directors, as we search for ways to accelerate growth and to drive strategic differentiation in the marketplace.”

Regarding Mr. Schneider’s retirement, Mr. Connolly stated, “We are deeply grateful for Bob’s leadership of the Board and Kimball International the last four years and the many accomplishments during his long career at the Company. He is an excellent leader who led Kimball International’s remarkable turnaround and he leaves the Company with a healthy balance sheet, strategic business plans, and strong brands with attractive market opportunities.”

Mr. Schneider said, “With Kimball International’s turnaround complete, the Company can now focus on reaching its full potential. When combined with the rest of our passionate leadership team, Kristie’s experience on Kimball International’s Board and deep expertise in successfully growing commercial, consumer, and e-commerce brands will take Kimball International to the next level while maintaining existing customer relationships and our unique culture of caring that shape everything we do.”

Mr. Schneider announced on May 7 ^th his intent to step down as Chairman of the Board with his retirement, in the spirit of good governance. The Board also today announced that it is separating the roles of Chairman and CEO. The Board will elect and appoint a new Chair following its Annual Meeting of

Shareowners on October 30, 2018. In connection with the separation of Chairman and CEO and the appointment of an independent Chairman, the Board will discontinue the role of Lead Independent Director.

About Kimball International, Inc.

Kimball International creates design driven, innovative furnishings sold through our family of brands: Kimball, National, and Kimball Hospitality. Our diverse portfolio offers solutions for the workplace, learning, healing, and hospitality environments. Our values and integrity are demonstrated daily by living our Guiding Principles and creating a culture of caring that establishes us as an employer of choice. “We Build Success” by establishing long-term relationships with customers, employees, suppliers, shareowners and the communities in which we operate. For more information, visit us online at www.kimballinternational.com.