# EDGAR Filing Document

**Accession Number:** 0001606757
**File Stem:** 0001606757-23-000003
**Filing Date:** 2023-1
**Character Count:** 30233
**Document Hash:** 3b303650be98daddb195810213ae600b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001606757-23-000003.hdr.sgml**: 20230110

**ACCESSION NUMBER**: 0001606757-23-000003

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 16

**CONFORMED PERIOD OF REPORT**: 20230104

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230110

**DATE AS OF CHANGE**: 20230110

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Kimball Electronics, Inc.
- **CENTRAL INDEX KEY:** 0001606757
- **STANDARD INDUSTRIAL CLASSIFICATION:** PRINTED CIRCUIT BOARDS [3672]
- **IRS NUMBER:** 352047713
- **STATE OF INCORPORATION:** IN
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36454
- **FILM NUMBER:** 23519759

**BUSINESS ADDRESS:**
- **STREET 1:** 1205 KIMBALL BLVD.
- **CITY:** JASPER
- **STATE:** IN
- **ZIP:** 47546
- **BUSINESS PHONE:** 812-634-4000

**MAIL ADDRESS:**
- **STREET 1:** 1205 KIMBALL BLVD.
- **CITY:** JASPER
- **STATE:** IN
- **ZIP:** 47546

?xml version="1.0" ? ke-20230104

**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) January 4, 2023

![ke-20230104_g1.jpg](ke-20230104_g1.jpg)

**KIMBALL ELECTRONICS, INC.**

**________________________________________________________________________________________________________**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| Indiana | 001-36454 | 35-2047713 |
| (State or other jurisdiction of | (Commission File | (IRS Employer Identification No.) |
| incorporation) | Number) | |

---

---

| | |
|:---|:---|
| 1205 Kimball Boulevard, Jasper, Indiana | 47546 |
| (Address of principal executive offices) | (Zip Code) |

---

Registrant's telephone number, including area code <u>(812) 634-4000</u>

Not Applicable <br> (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):

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

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

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

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

---

| | | |
|:---|:---|:---|
| **Securities registered pursuant to Section 12(b) of the Act:** | **Securities registered pursuant to Section 12(b) of the Act:** | **Securities registered pursuant to Section 12(b) of the Act:** |
| **<u>Title of each Class</u>** | **<u>Trading Symbol</u>** | **<u>Name of each exchange on which registered</u>** |
| Common Stock, no par value | KE | The Nasdaq Stock Market LLC |

---

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

Emerging growth company ☐

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. □

------

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

On January 4, 2023, Donald D. Charron, Chairman and Chief Executive Officer of Kimball Electronics, Inc. ("Kimball Electronics," the "Company," "we," or "us") informed Kimball Electronics of his intention to retire effective February 28, 2023. Mr. Charron has served as our Chairman and Chief Executive Officer since we became a stand-alone public company in October 2014, and his decision to retire as the Chairman and Chief Executive Officer is not the result of any disagreement on any matter relating to our accounting practices, operations, or policies. No new compensation or severance arrangements were entered into with Mr. Charron in connection with his notice to the Company of his intention to retire.

Kimball Electronics has appointed Richard D. Phillips, 52, to the role of Chief Executive Officer and Director, effective March 1, 2023. With more than 20 years of experience in operations and advisory roles, Mr. Phillips was most recently the President and Chief Executive Officer from 2019 until 2022 for Elkay Manufacturing Company, a global manufacturer and distributor of commercial and residential plumbing products and designer and installer of commercial interiors for the foodservice and hospitality sectors. He was also a member of the Board of Directors for the Company. Prior to Elkay, Mr. Phillips served as the President, Chief Executive Officer, and Board member from 2017 through 2019, for Essendant, Inc. (formerly United Stationers, Inc.), a Fortune 500 wholesale distributor of workplace-related products. Before joining Essendant, where he held positions of increasing responsibility from 2013 through 2017, Mr. Phillips held several leadership roles with McKinsey & Company, including co-leading the Pharmaceuticals and Medical Products operations practice. He was elected Partner in 2005. Mr. Phillips is an independent Director of the Greenheck Group, a leader in the HVAC space, and previously served as an independent Director of Follett Corporation. Mr. Phillips holds a Bachelor of Science in Finance from Indiana University and a Master of Management from Northwestern University Kellogg Graduate School of Management.

Mr. Phillips accepted a written offer letter on January 4, 2023. In connection with Mr. Phillips' appointment as Chief Executive Officer and Director and pursuant to the offer letter, the terms of his compensation include: (1) a base salary of $850,000, (2) participation in our profit sharing incentive bonus plan, at the category 0 participant level, with a target cash incentive of 100% of base salary and a potential range of 0% - 200% of base salary, and (3) the following share awards under our 2014 Stock Option and Incentive Plan:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.92,072 Performance Shares, measured on the fiscal year 2023 to fiscal year 2025 performance cycle, with attainment determined as described in our proxy statement for the 2022 Annual Meeting of Share Owners, vesting after fiscal year 2025 ("grant date")

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.23,017 Restricted Shares, vesting 1/3 one year after the grant date, 1/3 two years after the grant date, and 1/3 three years after the grant date

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.42,626 Performance Shares, measured from Mr. Phillips's start date for a period of three years, with attainment determined based on our total shareholder return during the performance cycle as compared to a group of peer companies determined by our Board of Directors, with a potential range of 0% - 100%

For fiscal year 2023 only, Mr. Phillips' profit sharing incentive bonus payout will be the greater of (i) 100% of his base salary or (ii) the bonus for a category 0 participant, in either case prorated based on his start date.

Mr. Phillips will participate in all other employee benefit plans generally available to our executive officers of the Company, including severance terms described in the Company's Executive Severance and Change in Control Plan. Mr. Phillips' employment relationship is at will, meaning either Mr. Phillips or the Company may terminate the relationship at any time for any reason, and with or without notice.

------

The description of Mr. Phillips' offer letter in this Item 5.02 is qualified in its entirety by reference to the full text of the offer letter, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Mr. Phillips is not related to any member of the Board or any executive officer of the Company and is not a party to any transactions listed in Item 404(a) of Regulation S-K. There are no arrangements or understandings between Mr. Phillips and any other persons pursuant to which he was appointed Chief Executive Officer.

Lead Independent Director, Robert J. Phillippy, a member of the Kimball Electronics Board since 2018, was elected by the Board to serve as the Board's non-executive Chairperson upon Mr. Charron's retirement. In accordance with the Company's By-Laws, Mr. Phillips will fill the remainder of Mr. Charron's term as Director through our annual meeting in 2024.

Our press release announcing Mr. Charron's retirement and the appointments of Mr. Phillips and Mr. Phillippy is attached on Exhibit 99.1 and is incorporated into this Item 5.02 by reference.

**Item 9.01 Financial Statements and Exhibits**

**(d) Exhibits**

The following exhibits are filed as part of this report:

---

| | |
|:---|:---|
| Exhibit | |
| <u>Number</u> | <u>Description</u> |
| 10.1 | <u>[Offer Letter Dated January 4, 2023](ke01042023ex101phillipsoff.htm)</u> |
| 99.1 | <u>[Press Release dated January 10, 2023](ke01042023exhibit991.htm)</u> |
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL) |

---

------

**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 ELECTRONICS, INC. |
| By: | /s/ Douglas A. Hass |
|  | DOUGLAS A. HASS<br>Chief Legal and Compliance Officer,<br>Secretary |

---

Date: January 10, 2023

## Exhibit 10.1

**Exhibit 10.1**

January 4, 2023

**<u>VIA ELECTRONIC MAIL</u>**

Mr. Richard D. Phillips

Dear Ric:

It is the Board of Directors' pleasure to extend this employment offer to you on behalf of Kimball Electronics Group LLC ("Kimball") on the terms below:

**Title and Reporting:** During your employment with us, you will serve as Chief Executive Officer of Kimball, reporting directly and solely to the Board of Directors of Kimball, and will serve as a director of Kimball from your start date through the date that you cease to serve as Chief Executive Officer.

**Location:** TBD

**Start Date:** TBD

**FLSA Status:** Exempt

**Duties and Responsibilities:** You will have the duties and responsibilities that are normally associated with the position described above and such additional ones that we may prescribe from time to time. You will devote substantially all of your business time, energy, business judgment, knowledge, and skill and your best efforts to the performance of your duties. The foregoing will not prevent you from, with prior written notice to the Board, serving on one outside, for-profit board of directors, and managing your passive personal investments, provided such activities do not, individually or collectively, interfere or conflict with the performance of your duties hereunder or create an actual or potential business or fiduciary conflict.

**Base Salary:** In consideration of your services, we will pay you a base salary of **$850,000** per year in accordance with our usual payroll practices and subject to withholdings and deductions. Indirect employees are paid bi-weekly via direct deposit. Your base salary will be reviewed annually.

**Profit Sharing Bonus:** We will pay you a short term incentive bonus with an annual target amount calculated at 100% of base salary. For FY23, which runs July 1, 2022 through June 30, 2023, you will earn the greater of (i) 100% of your base salary or (ii) the Profit Sharing Bonus Plan Category 0 bonus, in either case prorated based on your start date. For example, assuming PSB Plan Category 0 bonus is less than 100%, a start date of January 1, 2023, would result in approximately $425,000 in minimum guaranteed profit sharing bonus (100% of your base salary, prorated for six months of service between January 1 and June 30). It will be paid out in installments of 60% in August, 2023 and 40% in January, 2024.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Effective immediately upon appointment to your position and per our standard practice for program participation, you begin participation in our Profit Sharing Bonus Plan at Category 0. Target payout for PSB Category 0 will be 100% of base salary, and actual payouts are based on performance. The short term incentive bonus payout for Category 0 ranges from 0%-200% of base salary. Our Board of Directors (or one of its committees) determines the Profit Sharing Bonus Plan payments consistent with the bonus or incentive plans, if any, that we establish for Kimball employees.

Below is a three year history of payout for Category 0 of our Profit Sharing Bonus Plan (note that market environment, metrics and/or target levels have adjusted over this time period):

---

| | |
|:---|:---|
|  | **Short Term Incentive Payout**<br>**(As a % of Target)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**FY22** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;88% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**FY21** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;154% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**FY20** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;80% |

---

*Note: Your eligibility for any bonus payment of any type is subject to your continued employment on each payment date. Due to the incentive nature of our bonus plans, any amounts you may earn are directly related to our financial results. As such, no future bonus payment of any type is guaranteed, with the exception of your first short term incentive payment. At all times, all of your bonus opportunities will be governed by the terms of Kimball applicable plan and, if any, award agreement, and nothing contained in this offer letter restricts Kimball rights to alter, amend, or terminate the plans at any time.*

**Equity Incentive Plan:** Effective immediately upon appointment to your position, you begin participation in our 2014 Stock Option and Incentive Plan. Our Long Term Incentive Plan (LTIP) includes performance share units and restricted share units. Your first year LTIP award is valued at approximately $2,700,000 (not prorated) and is comprised of 80% performance share units (cliff vest in three years and payout determined on revenue growth relative to peers and OI% relative to plan), and 20% restricted share units that ratably vest over the next three years. We used the 30 Day volume weighted average stock price immediately prior to the date of this letter to calculate the number of shares awarded.

The applicable Long-Term Performance Share Award Agreements are enclosed. The history of payout achievement of performance share units is listed below (note that market environment, metrics and/or target levels have adjusted over this time period):

---

| | |
|:---|:---|
|  | **Performance Share Payout** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**FY22** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;72% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**FY21** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;96% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**FY20** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100% |

---

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Our Board of Directors (or one of its committees) determines the amount of common stock you may be granted and awarded each year consistent with the 2014 Plan and the applicable Long-Term Performance Share Award Agreements that we establish for LTIP participants.

**Equity Sign-On:** A $1 million sign-on equity award, comprised of 100% PSUs granted and valued at the 30-day VWAP of Kimball's common stock as of the last trading day prior to the date of this offer. The award will be subject to the terms and conditions of the 2014 Plan and the attached equity sign-on award agreement. The sign-on award will vest, if at all, based on the Company's Total Shareholder Return ("TSR") performance over a 3-year period, commencing on the date of hire and ending on the 3rd anniversary relative to the TSR performance of the peer group identified in the award agreement.

The provisions of this sign-on equity award include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Beginning stock price for purposes of calculating TSR will equal the 30-day VWAP preceding the date of hire

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Ending stock price for purposes of calculating TSR will equal the 30-day VWAP ending on the 3rd anniversary date

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Dividends reinvested into shares on the ex-dividend date

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The peer group is a compilation of proxy compensation peers and the 10-K peers

An illustration of the above provisions is below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• $1M grant value divided by $25 (example 30-day VWAP prior to offer date) or 40,000 PSUs

o12.5% vest (5,000 PSUs) if Kimball's TSR is positioned at the 35<sup>th</sup> percentile

o50.0% vest (20,000 PSUs) at the 55<sup>th</sup> percentile

o100.0% vest (40,000 PSUs) at the 75<sup>th</sup> percentile

oAward will be interpolated between discrete performance standards

**Group Benefits Plans:** Beginning your first day of employment, you will be eligible to participate in all health benefits, insurance programs, and other employee welfare benefits plans that we maintain for employees generally, in accordance with the terms of those programs and plans (and subject to any applicable waiting periods or other eligibility requirements), as amended from time to time. In addition, if you present appropriate documentation, we will reimburse you in accordance with our policies for your reasonable business expenses. We reserve the right to amend, modify, or terminate any of our benefit plans or programs at any time and for any reason.

**401K Retirement Plan:** Your 401k Retirement Plan eligibility begins on the first day of employment with an automatic 5% payroll deduction starting around the 45th day of employment if you do not elect to start it sooner. Additionally, we offer a company match of 50% of the first 6% you contribute on your own. Company matches vest immediately and are contributed paycheck-to-paycheck along with your contributions. An annual profitability review provides the opportunity for an employer contribution to your retirement plan as well. In the past few years, this employer contribution has been 3%-4% of base salary.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Paid Time Off:** Paid time off is awarded annually on a calendar year basis and resets every January 1. PTO allotment for you will be 25 days.

**Holidays:** Kimball observes 10 paid holidays each calendar year.

**Relocation:** You will have six months of paid temporary housing, as well as travel to the headquarters location which will be processed on a reimbursement basis through our business expense reporting processes. If you choose to relocate, you will receive relocation support consistent with Kimball's relocation policy and agreement applicable to executive officers.

**Executive Severance:** You will be an eligible Executive under our Executive Severance and Change in Control Plan. The provisions of the Plan control your eligibility and are set forth in our Plan document. They are the same as those terms currently in effect for other covered Executives at Kimball. We have filed the Plan publicly with the SEC and have enclosed a copy of the Plan document for your reference.

**Deferred Compensation Plan:** You will be an Eligible Employee under our Supplemental Employee Retirement Plan (SERP). The provisions of the Plan control your eligibility and are set forth in our Plan document. They are the same as those terms currently in effect for other Eligible Employees at Kimball. We have filed the Plan publicly with the SEC and have enclosed a copy of the Plan document for your reference. SERP is a non-qualified plan with an opportunity to defer up to 50% of your cash compensation to support your retirement goals.

**Employment At-Will:** Employment with Kimball is "at-will." This means that your employment is not for any specified period of time and can be terminated by you or by Kimball at any time, with or without advance notice, and for any or no particular reason or cause. It also means that your job duties, title, responsibilities, reporting level, compensation, and any benefits, as well as our personnel policies and procedures, may be changed at any time, with or without notice at our sole discretion. This "at-will" nature of your employment shall remain unchanged during your tenure as an employee and can only be changed by an express written agreement that is signed by our Board of Directors.

This offer letter shall be governed by the laws of Indiana, without regard to conflict of law principles. It represents the entire agreement between you and Kimball. No oral or written agreements, promises or representations that are not specifically stated in this offer are or will be binding on Kimball.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

We look forward to you joining the Kimball Electronics Team and to your ongoing contributions. Please confirm your acceptance of the terms of this offer by dating and signing below and returning one copy of this letter to me **no later than the close of business on Friday, January 6, 2023.** Feel free to contact either of us if you have questions about this offer.

Best regards,

---

| | |
|:---|:---|
| /s/ Robert J. Phillippy | /s/ Holly A. Van Deursen |
| Robert J. Phillippy | Holly A. Van Deursen |
| Lead Independent Director | Chairperson, Talent, Culture, and |
| | Compensation Committee |

---

**<u>Acceptance of Offer</u>**

The above terms and conditions accurately reflect our understanding regarding the terms and conditions of my at-will employment with Kimball Electronics and I hereby confirm my acceptance of them.

---

| | | | |
|:---|:---|:---|:---|
| Dated: | January 4, 2023 | Employee's Signature: | /s/ Richard D. Phillips |

---

## Exhibit 99.1

**EXHIBIT 99.1**

**KIMBALL ELECTRONICS ANNOUNCES RETIREMENT OF DON CHARRON, CHAIRMAN AND CEO**

**COMPANY APPOINTS RIC PHILLIPS AS CHIEF EXECUTIVE OFFICER**

 **LEAD INDEPENDENT DIRECTOR, BOB PHILLIPPY, TO SERVE AS NON-EXECUTIVE CHAIRPERSON**

JASPER, Ind., January 10, 2023 --(BUSINESS WIRE)-- Kimball Electronics, Inc. (Nasdaq: KE) today announced that Donald D. Charron, Chairman and Chief Executive Officer, will retire on February 28, 2023. Mr. Charron, who has been in the role for nearly a quarter century, including since the Company's spin-off from Kimball International in 2014, will depart with an impressive legacy of contributions not only to the Company, but the Electronics Manufacturing Services (EMS) industry. Richard D. Phillips, an accomplished executive and transformational leader across manufacturing, distribution, industrial, consumer, and healthcare, will join Kimball Electronics on March 1, 2023, as Chief Executive Officer and a Director. Lead Independent Director, Robert J. Phillippy, a member of the Kimball Electronics Board since 2018, will become the Company's non-executive Chairperson.

Commenting on the announcement, Mr. Phillippy stated, "Today marks the end of an era at Kimball Electronics. It is hard to put into words the profound impact Don has had on each of us, and the Company. Under his leadership spanning 24 years, Kimball Electronics has grown from a division of its parent company to a publicly-traded, global enterprise with annual revenues rapidly approaching the $2 billion threshold. Don's achievements are countless, highlighted by decades of consistent performance and profitable growth, award-winning customer service levels, and a strong corporate culture that is routinely recognized in the industry as Kimball Electronics' competitive advantage. That culture starts with Don, and his passion to always do the right thing. He consistently treats others with respect and dignity, and creates an environment where we all can be a better version of ourselves. On behalf of the Board of Directors, and the entire Kimball family worldwide, I want to thank Don for his dedication and service to our Company throughout an illustrious career. We wish him the very best."

Mr. Phillippy continued, "With every end comes a beginning, and today also represents a new and exciting chapter for the Company. We welcome Ric to Kimball Electronics, and congratulate him on his new role. We are honored to have an executive with Ric's pedigree and depth of experience join the Company, and look forward to his leadership in evolving our strategy and continuing our passion for execution in a dynamic and highly competitive environment, as we strive to be the world's preferred multifaceted manufacturing solutions provider."

With more than 20 years of experience in executive and advisory roles, Mr. Phillips was most recently the President and Chief Executive Officer from 2019 until 2022 for Elkay Manufacturing Company, a global manufacturer and distributor of commercial and residential plumbing products and designer and installer of commercial interiors for the foodservice and hospitality sectors. He was also a member of the Board of Directors for the Company. Prior to Elkay, Mr. Phillips served as the President, Chief Executive Officer, and Board member from 2017 through 2019, for Essendant, Inc. (formerly United Stationers, Inc.), a Fortune 500 wholesale distributor of workplace-related products. Before joining Essendant, where he held positions of increasing responsibility beginning in 2013, Mr. Phillips held several leadership roles with McKinsey & Company, including co-leading McKinsey's Pharmaceuticals and Medical Products Operations practice. He was elected Partner in 2005. Mr. Phillips is an independent Director of the Greenheck Group, a leader in the HVAC space, and previously served as an independent Director of Follett Corporation. Mr. Phillips holds a Bachelor of Science in Finance from Indiana University, and a Master of Management from Northwestern University Kellogg Graduate School of Management.

------

In response to his appointment, Mr. Phillips said, "I am thrilled to join the Kimball Electronics family. The Company has a rich history of excellence, and is positioned for growth with near record levels of open order backlog, new program wins, and increased capacity resulting from the recent facility expansions. I'd like to thank Don, his leadership team, and the Board of Directors for the opportunity, and I look forward to working with our global organization, our customers, our vendor partners, and our Share Owners to continue to build on the company's successes."

Mr. Charron joined Kimball International in 1999 to lead the Kimball Electronics Group. During his tenure, he has strategically positioned Kimball Electronics for success with geographic expansions in Thailand, China, Poland, and Romania, and led its portfolio diversification with applications supporting the automotive, medical, and industrial vertical end markets. In 2014, Kimball Electronics spun-off from its parent company, Kimball International, and became an independent, publicly-traded company listed on Nasdaq, and Mr. Charron was appointed Chairman and Chief Executive Officer. In fiscal 2018, Kimball Electronics exceeded $1 billion in annual revenue for the first time in its history. Under Mr. Charron's leadership, Kimball Electronics has been honored with numerous awards and distinctions for operational excellence and the highest levels of customer service, including special recognitions throughout the COVID-19 pandemic. In fiscal 2021, the Company reported record revenue, profitability, and Return on Invested Capital.

In response to his retirement announcement, Mr. Charron stated, "It is with immense gratitude and pride that I say farewell to the Kimball family. Thank you for a journey of a lifetime. I am so proud of what we have accomplished together, and grateful for the support and partnership I received along the way. It has been a team effort, and I'm leaving with friendships and memories that will last forever. I have been very fortunate to serve the Company during my career, and I've never been more excited about the future of Kimball Electronics."

**<u>About Kimball Electronics, Inc.</u>**

Kimball Electronics is a multifaceted manufacturing solutions provider of electronics and diversified contract manufacturing services to customers around the world. From our operations in the United States, China, India, Japan, Mexico, Poland, Romania, Thailand, and Vietnam, our teams are proud to provide manufacturing services for a variety of industries. Recognized for a reputation of excellence, we are committed to a high-performance culture that values personal and organizational commitment to quality, reliability, value, speed, and ethical behavior. Kimball Electronics, Inc. (Nasdaq: KE) is headquartered in Jasper, Indiana.

To learn more about Kimball Electronics, visit: www.kimballelectronics.com.

**Lasting relationships. Global success.** 

<br>