Exhibit 10(c)

KIMBALL INTERNATIONAL, INC.

1996 STOCK INCENTIVE PROGRAM



    1. PURPOSE. The purpose of the Kimball
International, Inc. 1996 Stock Incentive Program (the "Plan") is (i) to align
the personal interests of Plan participants with those of the Share Owners of
Kimball International, Inc. (the "Company"), (ii) to encourage key individuals
to accept or continue employment with the Company and its subsidiaries, and
(iii) to furnish incentive to such employees to improve operations and increase
profits by providing such employees the opportunity to acquire Class B Common
Stock of the Company ("Common Stock") or to receive monetary payments based on
the value of such stock.



    2. ADMINISTRATION. The Plan will be administered by
a committee (the "Committee") of the Board of Directors of the Company
consisting of three or more Directors as the Board may designate from time to
time. The determinations of the Committee shall be made in accordance with their
judgment as to the best interests of the Company and its Share Owners and in
accordance with the purpose of the Plan. A majority of members of the Committee
shall constitute a quorum, and all determinations of the Committee shall be made
by a majority of its members. Any determination of the Committee under the Plan
may be made without notice or meeting of the Committee, by a writing signed by a
majority of the Committee members.



    3. SHARES RESERVED UNDER THE PLAN. There is hereby
reserved for issuance under the Plan an aggregate of 2,100,000 shares of Common
Stock of the Company, which may be authorized but unissued or treasury shares.
All of such shares may, but need not, be issued pursuant to the exercise of
Incentive Stock Options. The maximum number of option shares which may be
awarded to any participant during the term of the Plan is 200,000 shares. If
there is a lapse, expiration, termination or cancellation of any Incentive Stock
Option, Nonqualified Stock Option, Stock Appreciation Right or Performance Share
award prior to the issuance of shares thereunder, or if shares are issued under
a stock option, Stock Appreciation Right or Performance Share award and
thereafter are reacquired by the Company pursuant to rights reserved upon
issuance thereof, those shares may again be used for new benefits under this
Plan. The shares hereby reserved are in addition to shares previously reserved
under the Company's 1987 Stock Incentive Stock Program. Any shares of Common
Stock reserved for issuance under the 1987 Program in excess of the number of
shares as to which options or other benefits were granted prior to the date of
the approval of this Plan by the Share Owners, plus any shares as to which
options or other benefits granted under the 1987 Program may lapse, expire, or
terminate after such date shall be available for issuance in connection with
benefits under this Plan.



    4. PARTICIPANTS. Participants will consist of such
officers and other key employees of the Company or any subsidiary as the
Committee in its sole discretion determines to have a major impact on the
success and future growth and profitability of the Company (and members of the
Company's Board of Directors who are not employees). Designation of a
participant in any year shall not require the Committee to designate such person
to receive a benefit in any other year or to receive the same type or amount of
benefit as granted to the participant in any other year or as granted to any
other participant in any year. The Committee shall consider such factors as it
deems pertinent in selecting participants and in determining the type and amount
of their respective benefits.



    5. TYPES OF BENEFITS. Benefits under the Plan may
be granted in any one or a combination of (a) Incentive Stock Options; (b)
Nonqualified Stock Options; (c) Stock Appreciation Rights; and (d) Performance
Shares, all as hereinafter described.



    6. INCENTIVE STOCK OPTIONS. Incentive Stock Options
shall consist of stock options to purchase shares of Common Stock at purchase
prices not less than 100% of the fair market value of the shares on the date the
option is granted. Said purchase price may be paid by check or, in the
discretion of the Committee, by the delivery of shares of Common Stock of the
Company then owned by the participant or by certification of such ownership.
Incentive Stock Options shall be exercisable at such time or times and subject
to such terms and conditions as shall be determined by the Committee at grant;
provided, however, that no Incentive Stock Option shall be exercisable later
than ten years after the grant date. The aggregate fair market value (determined
as of the time the option is granted) of the shares of Common Stock with respect
to which Incentive Stock Options are exercisable for the first time by a
participant during any calendar year (under all option plans of the Company and
its parent and subsidiary corporations) shall not exceed $100,000. 



    7. NONQUALIFIED STOCK OPTIONS. Nonqualified Stock
Options shall consist of stock options to purchase shares of Common Stock at
purchase prices not less than 100% of the fair market value of the shares on the
date the option is granted. Said purchase price may be paid by check or, in the
discretion of the Committee, by the delivery of shares of Common Stock of the
Company then owned by the participant or by certification of such ownership.
Nonqualified Stock Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Committee at
grant; provided, however, that no Nonqualified Stock Option shall be exercisable
later than ten years after the grant date.

    8. STOCK APPRECIATION RIGHTS. The Committee may, in
its discretion, grant a Stock Appreciation Right in connection with any stock
option granted hereunder. Each Stock Appreciation Right shall be subject to such
terms and conditions consistent with the Plan as the Committee shall determine
from time to time, including the following: 

        (i) A Stock Appreciation Right may
be made part of an option at the time of its grant or at any time

        thereafter during the option term.



        (ii) Each Stock Appreciation Right
will entitle the holder to elect to receive, in lieu of exercising the option


        to which it relates, an amount (in
cash or in Common Stock, or a combination thereof, all in the sole

        discretion of the Committee) equal to
100% of the excess of:



            (A) the
fair market value per share of the Company's Common Stock on the date of
exercise of such

             right,
multiplied by the number of shares with respect to which the right is being
exercised, over 



            (B) the
aggregate option price for such number of shares.



        (iii) Each Stock Appreciation
Right will be exercisable at the time and to the extent the option to which it

        relates is exercisable.



        (iv) Upon exercise of a Stock
Appreciation Right, the option (or portion thereof) with respect to which

        such right is exercised shall be
surrendered and shall not thereafter be exercisable.



        (v) Exercise of a Stock
Appreciation Right will reduce the number of shares purchasable pursuant to the

        related option and available for
issuance under the Plan to the extent of the number of shares with respect

        to which the right is exercised,
whether or not any portion of the payment made upon exercise of such right

        is made in Common Stock of the
Company.



    9. PERFORMANCE SHARES. Performance Shares shall
consist of shares of Common Stock which may be earned in whole or in part if
certain goals established by the Committee are achieved over a period of time
established by the Committee, but not in any event more than five years. The
goals established by the Committee may be based on net income, return on equity
or assets, earnings per share, cash flow, cost control and such other corporate,
divisional, personal or other goals as may be established by the Committee in
its discretion. In the event the minimum goal is not achieved at the conclusion
of the period, no delivery of shares shall be made to the participant. In the
event the maximum goal is achieved, 100% of the Performance Shares shall be
delivered to the participant. Partial achievement of the maximum goal shall
result in a delivery corresponding to the degree of achievement as determined by
the Committee. The Committee shall have the discretion to satisfy a
participant's Performance Shares by delivery of cash or stock or any combination
thereof. The number of shares reserved for issuance hereunder shall be reduced
by the number of Performance Shares earned even though a portion of the award is
paid in cash.



    10. FAIR MARKET VALUE. The fair market value of the
Company's Common Stock at any time shall be determined in such manner as the
Committee may deem appropriate, or as required by applicable law or regulation.



    11. ADJUSTMENT PROVISIONS.



                
(a) If the Company shall at any time change the number of issued shares of
Common Stock without

                
new consideration to the Company (such as by stock dividends or stock splits),
the total number of

                
shares reserved for issuance under this Plan and the number of shares covered by
each outstanding

                
benefit shall be adjusted so that the aggregate consideration payable to the
Company, if any, shall

                
not be changed.



                
(b) Notwithstanding any other provision of this Plan, and without affecting the
number of shares

                
reserved or available hereunder, the Board of Directors may authorize the
issuance or assumption of

                
benefits in connection with any merger, consolidation, acquisition of property
or stock, or

                
reorganization upon such terms and conditions as it may deem appropriate.



                
(c) In the case of any merger, consolidation or combination of the Company with
or into another

                
corporation, other than a merger, consolidation or combination in which the
Company is the

                
continuing corporation and which does not result in the outstanding Common Stock
being converted

                
into or exchanged for different securities, cash or other property, or any
combination thereof (an

                
"Acquisition"):



                     
(i) any participant to whom a stock option has been granted under the  Plan
shall have the right

                     
(subject to the provisions of the Plan and any limitation applicable to such
option) thereafter and

                     
during the term of such option, to receive upon exercise thereof the Acquisition
Consideration

                     
receivable upon such Acquisition by a holder of the number of shares of Common
Stock which

                     
might have been obtained upon exercise of such option or portion thereof, as the
case may be,

                     
immediately prior to such Acquisition;



                     
(ii) any participant to whom a Stock Appreciation Right has been granted under
the Plan shall

                     
have the right (subject to the provisions of the Plan and any limitation
applicable to such right)

                     
thereafter and during the term of such right to receive upon exercise thereof
the difference

                     
between the aggregate fair market value on the applicable date (as set forth in
such right) of the

                     
Acquisition Consideration receivable upon such Acquisition by a holder of the
number of shares

                     
of Common Stock which might have been obtained upon exercise of the option
related thereto or

                     
any portion thereof, as the case may be, immediately prior to such Acquisition
and the aggregate

                     
option price of such option or portion thereof; and 

                     
(iii) any participant to whom a Performance Share award has been granted under
the Plan shall

                     
have the right (subject to the provisions of the Plan and any limitations
applicable to such award)

                     
thereafter and during the term of such award to receive on the date set forth in
such award, the

                     
Acquisition Consideration receivable upon such Acquisition by a holder of the
number of shares

                     
of Common Stock which are covered by such award.



               
The term "Acquisition Consideration" shall mean the kind and amount of shares of
the surviving or

               
new corporation, cash, securities, evidence of  indebtedness, other
property or any combination 

               
thereof receivable in respect of one share of Common Stock of the Company upon
consummation of 

               
an Acquisition.



    12. NONTRANSFERABILITY. Each benefit granted under
the Plan to an employee shall not be transferable otherwise than by will or the
laws of descent and distribution, and shall be exercisable, during the
participant's lifetime, only by the participant. In the event of the death of a
participant exercise or payment shall be made only:



                     
(i) by or to the executor or administrator of the estate of the deceased
participant or the person or

                     
persons to whom the deceased participant's rights under the benefit shall pass
by will or the laws

                     
of descent and distribution; and 

                     
(ii) to the extent that the deceased participant was entitled thereto at the
date of his death.



Notwithstanding the foregoing, at the discretion of the Committee, a grant of
a benefit may permit the transfer of the benefit by the participant solely to
members of the participant's immediate family or trusts or family partnerships
for the benefit of such persons, subject to such terms and conditions as may be
established by the Committee.



    13. TAXES. The Company shall be entitled to
withhold the amount of any tax attributable to any amounts payable or shares
deliverable under the Plan after giving the person entitled to receive such
payment or delivery notice as far in advance as practicable, and the Company may
defer making payment or delivery as to any benefit if any such tax is payable
until indemnified to its satisfaction. The Committee may, in its discretion and
subject to such rules as it may adopt, permit a participant to pay all or a
portion of the federal, state and local withholding taxes arising in connection
with the exercise of a Nonqualified Stock Option or Stock Appreciation Right or
receipt of Performance Shares, by electing to have the Company withhold shares
of Common Stock having a fair market value equal to the amount to be withheld.



    14. TENURE. A participant's right, if any, to
continue to serve the Company and its subsidiaries as an officer, employee, or
otherwise, shall not be enlarged or otherwise affected by his or her designation
as a participant under the Plan.



    15. DURATION, AMENDMENT AND TERMINATION. No stock
option or other benefit shall be granted after December 31, 2005; provided,
however, that the terms and conditions applicable to any option or benefit
granted on or before such date may thereafter be amended or modified by mutual
agreement between the Company and the participant or such other persons as may
then have an interest therein. Also, by mutual agreement between the Company and
a participant hereunder or under any other stock option plan of the Company,
options or rights may be granted to such participant in substitution and
exchange for, and in cancellation of, any benefits previously granted such
participant under this Plan or any other stock option plan of the Company. The
Board of Directors may amend the Plan from time to time or terminate the Plan at
any time. However, no action authorized by this paragraph shall reduce the
amount of any existing benefit or change the terms and conditions thereof
without the participant's consent. No amendment of the Plan to increase the
number of reserved shares shall be effective unless approved within twelve
months after the date of its adoption by the affirmative vote of the
shareholders entitled to vote.



    16. SHARE OWNER APPROVAL. The Plan was adopted by
the Board on June 11, 1996, subject to Share Owner approval. The Plan and any
benefits granted thereunder shall be null and void if Share Owner approval is
not obtained within twelve months of the adoption of the Plan by the Board. 

 

This exhibit has not been adjusted for the 1997 stock split.

Exhibit 10(c)