Exhibit 10(a)
SUMMARY OF DIRECTOR AND NAMED EXECUTIVE OFFICER COMPENSATION
This summary sets forth the compensation of the Directors of Kimball
International, Inc. (the “Company”). On October 29, 2014, in conjunction with
the completion of the spin-off of Kimball Electronics, Inc. from the Company
(the “Spin-Off”), Douglas A. Habig and James C. Thyen retired from the Board of
Directors of the Company (the “Board”), and Douglas A. Habig resigned as
Chairman of the Board. In addition, on October 29, 2014, Donald D. Charron
resigned from the Board in order to serve as Chairman of the Board of Directors
and Chief Executive Officer at Kimball Electronics, Inc. On October 31, 2014,
Robert F. Schneider assumed the position of Chairman of the Board.
The summary also includes compensation of the Company's current Chief Executive
Officer, President and Chief Operating Officer, and Chief Financial Officer. On
October 31, 2014, in conjunction with the completion of the Spin-Off, James C.
Thyen retired as President, Chief Executive Officer of the Company. On October
31, 2014, Donald D. Charron resigned from his position as Executive Vice
President of Kimball International, President-Kimball Electronics Group to serve
as Chief Executive Officer of Kimball Electronics, Inc. Also on October 31,
2014, John H. Kahle resigned from his position of Executive Vice President,
General Counsel, Secretary of the Company to serve as Vice President, General
Counsel and Secretary of Kimball Electronics, Inc. In addition, as of the
spin-off date, Robert F. Schneider was promoted to Chief Executive Officer of
Kimball International, Inc., Donald W. Van Winkle was promoted to President,
Chief Operating Officer of Kimball International, Inc., and Michelle R.
Schroeder was promoted to Vice President, Chief Financial Officer of Kimball
International, Inc. For purposes of this summary, Robert F. Schneider, Donald W.
Van Winkle, and Michelle R. Schroeder constitute the Company's “Named Executive
Officers.”
For a detailed description of the compensation arrangements that the Directors
and Named Executive Officers participate in, refer to the Company's most recent
Proxy Statement filed with the Securities and Exchange Commission.
Director Compensation
All Outside (non-employee) Directors receive annual compensation of $75,000 for
the year for service as Directors. The Chairperson of the Audit Committee of the
Board of Directors and the Chairperson of the Compensation and Governance
Committee of the Board of Directors each receive an additional $10,000 annual
retainer fee.
The Directors can elect to receive all of their annual retainer fees in shares
of Common Stock under the Company's 2003 Amended and Restated Stock Option and
Incentive Plan. Directors are also reimbursed for travel expenses incurred in
connection with Board and Committee meeting attendance.
An Outside Director is a director who is not an employee of the Company or one
of its subsidiaries. Robert F. Schneider, Chairman of the Board and Chief
Executive Officer, is a Director of the Company but does not receive
compensation for his service as a Director.
Named Executive Officer Compensation
Base Pay
Periodically, the Compensation and Governance Committee of the Board of
Directors reviews and approves the salaries that are paid to the Company's
executive officers. The following are the current annualized base salaries for
the Company's Named Executive Officers:
Robert F. Schneider, Chief Executive Officer
$
550,000

Donald W. Van Winkle, President, Chief Operating Officer
$
401,804

Michelle R. Schroeder, Vice President, Chief Financial Officer
$
320,008

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Cash Incentive Compensation
Each of the Named Executive Officers was eligible to participate in the
Company's 2010 Profit Sharing Incentive Bonus Plan (the “Plan”) for fiscal year
2014. A long-standing component of the Company's profit sharing incentive bonus
plan is that it is linked to the Company's worldwide, group, or business unit
performance which adjusts compensation expense as profits change. Under the
Plan, cash incentives are accrued annually and paid in five installments over
the succeeding fiscal year. Except for provisions relating to retirement, death,
permanent disability, and certain other circumstances described in a
participant's employment agreement, participants must be actively employed on
each payment date to be eligible to receive any unpaid cash incentive
installment. The total amount of cash incentives accrued and authorized to be
paid to the Named Executive Officers based on the Company's fiscal year 2014
results is listed below. The Named Executive Officers received an installment of
50% of the payment in August 2014, 12.5% was paid in both September 2014 and
January 2015, and the remaining portions will be paid in equal installments in
April 2015 and June 2015.
Robert F. Schneider, Chief Executive Officer
$
407,745

Donald W. Van Winkle, President, Chief Operating Officer
$
223,431

Michelle R. Schroeder, Vice President, Chief Financial Officer
$
213,860

Donald W. Van Winkle and Michelle R. Schroeder were also awarded discretionary
compensation of $50,000 and $60,000, respectively, in December 2014 in
recognition of their efforts with the spin-off of Kimball Electronics.
Stock Compensation
The Named Executive Officers may also receive a variety of stock incentive
benefits under the Amended and Restated 2003 Stock Option and Incentive Plan
consisting of: restricted stock, restricted share units (“RSU”), unrestricted
share grants, incentive stock options, nonqualified stock options, stock
appreciation rights, performance shares, and performance units. During August
2013 the Named Executive Officers were awarded grants of performance shares.
Performance shares include both an annual performance share (“APS”) award and a
long-term performance share (“LTPS”) award with one-fifth (1/5) of the LTPS
award vesting annually over the succeeding five-year period.
The following table summarizes the performance shares issued in Class A Common
Stock during August 2014 to the Company's Named Executive Officers pursuant to
their August 2013 performance share awards:
 
APS Award
(number of
 shares issued) (1)
 
LTPS Award
(number of
 shares issued) (1)
Robert F. Schneider, Chief Executive Officer
6,375

 
31,500

Donald W. Van Winkle, President, Chief Operating Officer
4,425

 
22,020

Michelle R. Schroeder, Vice President, Chief Financial Officer
2,975

 
7,700

 
 
 
 
(1) Shares have not been reduced by the number of shares withheld to satisfy tax
withholding obligations.

The following table summarizes the maximum number of performance shares awarded
in June 2014 to the Company's Named Executive Officers for fiscal year 2015:
 
APS Award
 (number of
 shares) (1)
 
LTPS Award
 (number of
 shares) (1)
Robert F. Schneider, Chief Executive Officer
8,480

 
27,200

Donald W. Van Winkle, President, Chief Operating Officer
8,480

 
27,200

Michelle R. Schroeder, Vice President, Chief Financial Officer
4,000

 
7,520

 
 
 
 
(1) Shares have been increased due to the Spin-Off by an adjustment factor of
1.60.

The number of shares to be issued will be dependent upon the percentage payout
under the Plan. Refer to the Company's Proxy Statement for further details.

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In December 2014, the Company granted RSUs to each of the Named Executive
Officers. The RSU awards are structured as a retention tool with vesting
occurring at the end of each of the Company's next three fiscal years ending
June 30, 2015, June 30, 2016, and June 30, 2017. The RSUs accumulate dividends
during the vesting periods. With the promotions occurring mid-fiscal year, the
first year tranche was pro-rated.
 
 
 
Shares Vesting On
 
Total RSUs Awarded
 
June 30, 2015
 
June 30, 2016
 
June 30, 2017
Robert F. Schneider
60,675

 
15,169

 
22,753

 
22,753

Donald W. Van Winkle
29,848

 
7,462

 
11,193

 
11,193

Michelle R. Schroeder
7,584

 
1,896

 
2,844

 
2,844

Retirement Plans
The Named Executive Officers participate in a defined contribution,
participant-directed retirement plan that all domestic employees are eligible to
participate in (the “Retirement Plan”). The Retirement Plan provides for
voluntary employee contributions as well as a discretionary Company contribution
which is determined annually by the Compensation and Governance Committee of the
Board of Directors. Each eligible employee's Company contribution is defined as
a percent of eligible compensation, the percent being identical for all eligible
employees, including Named Executive Officers. Participant contributions are
fully vested immediately, and Company contributions are fully vested after five
years of participation. All Named Executive Officers are fully vested. The
Retirement Plan is fully funded. For those eligible employees who, under the
1986 Tax Reform Act, are deemed to be highly compensated, their individual
Company contribution under the Retirement Plan is reduced. For employees who are
eligible, including all Named Executive Officers, there is a nonqualified,
Supplemental Employee Retirement Plan (“SERP”) in which the Company contributes
to the account of each individual an amount equal to the reduction in the
contribution under the Retirement Plan arising from the provisions of the 1986
Tax Reform Act. The SERP investment is primarily composed of employee
contributions.