Kimball International, Inc. Announces Additional Enhancement to Corporate Governance Practices

Kimball International, Inc. (NASDAQ: KBAL), today announced that the Compensation and Governance Committee of the Board of Directors of Kimball International, Inc., approved amendments to the Company’s current change-in-control agreement, with the intent of modernizing the terms of the Agreement to align the interests of management with shareholders.

Kimball International CEO and Chairman, Bob Schneider stated, “The modernization of the change-in-control agreement for our key executives is another example of the proactive approach by our Board of Directors to ensure that Kimball is following good corporate governance practices. This change, along with the other corporate governance practices adopted in February, was implemented to improve shareholder value.”

On June 26, 2015, the Company entered into the Agreement with each of the following officers: Bob Schneider, Chief Executive Officer and Chairman of the Board; Don Van Winkle, President and Chief Operating Officer; Michelle Schroeder, Vice President and Chief Financial Officer; Lonnie Nicholson, Vice President and Chief Administrative Officer; Mike Wagner, President, Kimball Office; Kevin McCoy, President, National Office Furniture; Julie Heitz-Cassidy, Vice President, General Counsel and Secretary; and Greg Kincer, Vice President, Corporate Development.

The Agreement contains three significant modifications, including:

• Tightening the requirements for a payout to the executive officer by adding a “double trigger” requirement such that accelerated payout to the executive for future incentive awards does not occur unless the executive is separated from employment during a change-in-control event;
• Limiting the amount of payout upon a change-in-control to avoid excise taxes under parachute payment regulations and eliminating the tax gross-up element in the previous agreement which provided a supplemental payment to the executive officer to cover the cost of any excise tax liability incurred by the executive officer on certain payouts; and
• Reducing the Chief Executive Officer’s (CEO) severance payout under a change-in-control event from three times salary and bonus to two times salary and bonus, which equalizes the CEO’s payout with the other executive officers.

The modernization of these executive agreements is another element in a series of key events for Kimball International beginning on October 31, 2014 with the spin-off of the Company's electronic manufacturing services segment, the concurrent retirement of the Company’s former CEO/President and Chairman, and the equalization of rights of the two classes of shares. All shares now have equal voting and dividend rights. In addition, the adoption of best practice governance policies by the Company's Board of Directors in February, 2015 included the establishment of a Lead Independent Director role on the Board, the implementation of a resignation policy for Board members not receiving majority vote in an uncontested election, the implementation of restrictions on hedging/pledging of Company shares held by Board members and executives, and the approval of the use of a Relative Total Shareholder Return metric as a measure for the award of performance shares to key senior-level executives.

About Kimball International:

Kimball International, Inc. is a leading manufacturer of design driven, technology savvy, high quality furnishings sold under the Company’s family of brands, National Office Furniture, Kimball Office and Kimball Hospitality. Our diverse portfolio provides solutions for the workplace, learning, healing and hospitality environments. Customers can access our products globally through a variety of distribution channels. Recognized with a reputation for excellence as a trustworthy company, Kimball International is committed to a high performance culture that is committed to sound ethics, continuous improvement and social responsibility. To learn more about Kimball International, Inc. (NASDAQ: KBAL) visit www.kimball.com.

“Kimball International … We Build Success!”

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