<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to 14a-11(c) or Rule 14a-12
</TABLE>
KIMBALL INTERNATIONAL, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
----------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
----------------------------------------------------------------------
(3) Filing party:
----------------------------------------------------------------------
(4) Date filed:
----------------------------------------------------------------------
<PAGE> 2
KIMBALL INTERNATIONAL, INC
1600 ROYAL STREET
JASPER, INDIANA 47549
(812) 482-1600
------------------
NOTICE OF ANNUAL MEETING OF SHARE OWNERS
TO BE HELD OCTOBER 17, 2000
------------------
To the Share Owners of Kimball International, Inc.:
The annual meeting of Share Owners of KIMBALL INTERNATIONAL, INC., an
Indiana corporation (the "Company"), will be held at the principal offices of
the Company, 1600 Royal Street, Jasper, Indiana on Tuesday, October 17, 2000, at
9:30 a.m., Eastern Standard Time, for the following purposes:
1. To elect twelve Directors of your Company.
2. To consider and transact such other business as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on August 14, 2000,
for determining our Share Owners entitled to notice of and to vote at the
meeting and any adjournments thereof. Only Share Owners of record at the close
of business on that date will be entitled to vote. Voters of the shares of the
Company's Class A Common Stock are entitled to elect eleven Directors and to
vote upon all other matters to be presented at the meeting. Voters of the shares
of the Company's Class B Common Stock are entitled to elect one Director but are
not otherwise entitled to vote.
A proxy, being solicited on behalf of the Board of Directors, is enclosed
along with a return envelope, which requires no postage if mailed in the United
States. If you own both shares of Class A Common Stock and Class B Common Stock,
you will receive a Class A and a Class B proxy in separate mailings.
By Order of the Board of Directors
GARY P. CRITSER, Secretary
September 7, 2000
YOUR VOTE IS IMPORTANT!
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE PROMPTLY BY SIGNING,
DATING, AND MAILING THE ACCOMPANYING PROXY CARD OR BY THE INTERNET BY FOLLOWING
THE INSTRUCTIONS ON THE CARD. THE PROXY IS REVOCABLE AND WILL NOT AFFECT YOUR
RIGHT TO VOTE IF YOU ATTEND THE MEETING IN PERSON.
<PAGE> 3
KIMBALL INTERNATIONAL, INC.
1600 ROYAL STREET
JASPER, INDIANA 47549
(812) 482-1600
------------------
ANNUAL MEETING OF SHARE OWNERS
OCTOBER 17, 2000
------------------
PROXY STATEMENT
This Proxy Statement is being mailed to our Share Owners of KIMBALL
INTERNATIONAL, INC. (the "Company") on or about September 7, 2000, and is
furnished in connection with the Board of Directors' solicitation of proxies to
be used at the Annual Meeting of Share Owners to be held October 17, 2000, at
the time and place and for the purpose of considering and acting upon the
matters specified in the Notice of Annual Meeting of Share Owners accompanying
this Proxy Statement.
Any of our Share Owners who execute and return a proxy may revoke the proxy
at any time prior to the voting thereof by either filing a written revocation
with the Secretary of the Company, submitting another duly executed proxy with a
later date, requesting the return of the proxy from the Secretary prior to the
vote, or attending the meeting and so requesting, although attendance at the
meeting will not by itself revoke a previously granted proxy.
The entire cost of soliciting proxies will be borne by your Company. In
addition to the use of the mails, proxies may be solicited by personal
interview, telephone, and telegram by Directors, Officers, and employees of your
Company without extra compensation. Your Company will also reimburse brokerage
houses, custodians, nominees, and fiduciaries for actual expenses incurred in
forwarding proxy material to beneficial owners.
The Annual Report to our Share Owners for the year ended June 30, 2000,
accompanies this Proxy Statement.
VOTING INFORMATION
Only Share Owners of record at the close of business on August 14, 2000,
will be entitled to vote at the Annual Meeting. On that date, there were
outstanding 14,169,779 shares of Class A Common Stock and 25,088,143 shares of
Class B Common Stock. Each share of Class A Common Stock is entitled to one vote
with respect to the election of the eleven Directors and any other matters
submitted to a vote at the meeting. Each share of Class B Common Stock is
entitled to one vote with respect to the election of one Director but otherwise
is not entitled to vote.
The presence of a quorum requires that a majority of outstanding shares be
present at the meeting by proxy or in person. With a quorum present at the
meeting, Directors will be elected by the plurality of the votes cast by the
shares entitled to vote in the election at the meeting, (i.e., the nominees
receiving the highest number of votes cast in each category will be elected).
Accordingly, the election of Directors will not be affected if you choose to not
vote your shares or if you withhold authority to vote your shares. If you hold
your shares through a broker or other nominee (in "street" name), you should
instruct the broker or nominee as to how you want to vote. Withholding authority
or "broker non-votes" will be counted as present for purposes of determining the
presence or absence of a quorum for the transaction of business. If you are a
registered Share Owner, you can simplify your voting and save your Company
expense by voting via the Internet. Internet voting information is provided on
the proxy card. A control number is designated on the proxy card to verify a
Share Owner's identity, allowing the Share Owner to vote the shares and confirm
that the voting instructions have been recorded properly. If you vote via the
Internet, please do not return a signed proxy card. If your
<PAGE> 4
shares are held in the name of a bank or broker, you may be able to vote on the
Internet by following the instructions on the proxy form you receive from your
bank or broker.
All properly executed proxies received by the Board of Directors will be
voted. In the absence of contrary direction, the Board of Directors proposes to
vote the proxies FOR the election of each of the named nominees to the Board.
The Board of Directors knows of no other matters that may come up for
action at the meeting. However, if any other matter properly comes before the
meeting, the persons named in the proxy form enclosed will vote in accordance
with their judgment on such matter using the discretionary authority granted in
the proxy form.
SHARE OWNER PROPOSALS
Proposals which are desired to be presented at the 2001 Annual Meeting by
Share Owners of record in respect of such a meeting must be received by the
Company at its principal executive offices, 1600 Royal Street, Jasper, Indiana
47549, no later than May 9, 2001. Such proposals, however, must meet certain
requirements of regulations of the Securities and Exchange Commission for
inclusion in the Company's Proxy Statement. A Share Owner wishing to bring a
proposal before the Annual Meeting of Share Owners in 2001 (but not include the
proposal in the Company's Proxy Statement), must cause written notice of the
proposal to be received by the Secretary of the Company at its principal
executive office by no earlier than June 29, 2001, or no later than July 19,
2001. The written notice must also meet additional requirements as stated in the
Company's By-laws.
SHARE OWNERSHIP INFORMATION
Under regulations of the Securities and Exchange Commission, persons who
have power to vote or dispose of shares of the Company, either alone or jointly
with others, are deemed to be beneficial holders of such shares. Because the
voting or dispositive power of certain shares listed in the following table is
shared, the same securities in such cases are listed opposite more than one name
in the table. The total number of shares of the Company listed in the table for
the Executive Officers and Directors shown, after elimination of such
duplication, is 4,868,309 shares of Class A Common Stock (34.4% of the
outstanding) and 3,912,372 shares of Class B Common Stock (15.4% of the
outstanding), as of the date noted below.
Set forth in the following table are the beneficial holdings as of August
7, 2000, of the Company's Class A Common Stock and Class B Common Stock on the
basis described above for each person, including nominees for election as
Directors, known to your Company who may be deemed to own more than 5% of either
class of
2
<PAGE> 5
your Company's outstanding shares, of all other nominees for election as
Directors, and of all Directors and Executive Officers as a group:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(A)(B)
------------------------------------
SOLE SHARED
VOTING AND VOTING AND
DISPOSITIVE DISPOSITIVE PERCENT
NAME POWER POWER OF CLASS
---- ----------- ----------- --------
<S> <C> <C> <C> <C>
HOLDERS, INCLUDING NOMINEES FOR ELECTION AS A
DIRECTOR, OF MORE THAN 5% OF THE OUTSTANDING
SHARES OF EITHER CLASS
NOMINEES FOR ELECTION AS A DIRECTOR:
Thomas L. Habig (d)............................ Class A 68,112 2,033,267 14.8%
1600 Royal Street Class B 145,593 573,820 2.9%
Jasper, Indiana 47549
Douglas A. Habig (c)(d)........................ Class A 959,209 1,986,343 20.8%
1600 Royal Street Class B 367,839 2,098,940 9.8%
Jasper, Indiana 47549
John B. Habig.................................. Class A 624,746 2,020,451 18.7%
1500 Main Street Class B 255,720 528,186 3.1%
Jasper, Indiana 47546
James C. Thyen (c)(d).......................... Class A 258,430 146,656 2.9%
1600 Royal Street Class B 157,668 1,868,578 8.1%
Jasper, Indiana 47549
OTHERS:
Trust Agreements of Arnold F. Habig Estate Class A 741,051 None 5.2%
(f)..........................................
C/O Thomas L. Habig, Trustee Class B 495,984 None 2.0%
1600 Royal Street
Jasper, Indiana 47549
The Kimball International, Inc. Retirement Plan Class A None None None
(f)..........................................
Springs Valley Bank & Trust Co. -- Trustee Class B 1,544,592 None 6.2%
1500 Main Street
Jasper, Indiana 47546
A. C. Sermersheim Family Limited Partnership Class A 811,000 None 5.7%
(g)..........................................
1113 West 14th Street Class B 373,576 None 1.5%
Jasper, Indiana 47546
Barbara J. Habig (f)........................... Class A 724,815 None 5.1%
4949 Lampkins Ridge Road Class B 135,200 None (e)
Bloomington, IN 47401
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(A)(B)
------------------------------------
SOLE SHARED
VOTING AND VOTING AND
DISPOSITIVE DISPOSITIVE PERCENT
NAME POWER POWER OF CLASS
---- ----------- ----------- --------
<S> <C> <C> <C> <C>
OTHER NOMINEES:
Ronald J. Thyen (d)............................ Class A 236,634 133,840 2.6%
Class B 183,126 278,352 1.8%
Dr. Jack R. Wentworth (d)...................... Class A None None None
Class B 6,466 None (e)
John T. Thyen (d).............................. Class A 292,270 133,840 3.0%
Class B 130,074 278,352 1.6%
Brian K. Habig (d)............................. Class A 259,101 None 1.8%
Class B 74,818 None (e)
Christine M. (Tina) Vujovich (d)............... Class A None None None
Class B 4,232 None (e)
Alan B. Graf, Jr. (d).......................... Class A None None None
Class B 16,973 None (e)
Polly B. Kawalek (d)........................... Class A None None None
Class B 5,461 None (e)
Harry W. (Hank) Bowman......................... Class A None None None
Class B None None None
All Executive Officers and Directors as a
Group (16 persons)(c)(d)....................... Class A 2,701,202 2,167,107 34.4%
Class B 1,491,518 2,420,854 15.4%
</TABLE>
---------------
(a) Includes shares owned by spouse and children living in the household of the
individuals listed. Beneficial ownership is disclaimed as to such shares and
as to all other shares over which the named person does not have full
beneficial rights.
(b) Class A Common Stock is convertible at the option of the holder to Class B
Common Stock on a share-for-share basis. Amounts are reported and
percentages are calculated on an unconverted basis.
(c) Douglas A. Habig and James C. Thyen are members of a seven-member Advisory
Committee of your Company's Retirement Plan. The Plan owns 1,544,592 shares
of Class B Common Stock. The Committee has the power to instruct the Trustee
as to the voting and disposition of these shares. The shares held by the
Plan are included in shares shown in the above table.
(d) Class B shares include the following shares, including stock appreciation
rights, subject to acquisition by exercise of stock options within sixty
days after August 7, 2000: Thomas L. Habig 63,000 shares; Douglas A. Habig
39,000 shares; James C. Thyen 39,819 shares; Ronald J. Thyen 44,155 shares;
John T. Thyen 53,435 shares; Brian K. Habig 22,500 shares; Alan B. Graf,
Jr. 1,285 shares; Christine M. Vujovich 722 shares; Jack R. Wentworth 834
shares; Polly B. Kawalek 448 shares; and all Executive Officers and
Directors as a group 336,255 shares. The percentage of Class B Share Owners
by each person, or group, are determined by including in the number of
Class B shares outstanding those Class B shares issuable to such person or
group, assuming exercise of stock options within sixty days after August 7,
2000.
(e) Totals are under one percent of the outstanding class of stock.
(f) This information is derived from notification received by the Company on
Schedule 13G or other communications.
(g) This information is derived from notification received by the Company on
Schedule 13D and other communications. As disclosed in the Schedule 13D,
Jane M. Hackman, Shirley A. Lewis, and Ronald J. Sermersheim each have
joint voting and dispositive power of the shares listed. In addition, Ms.
Hackman, Ms. Lewis, and Mr. Sermersheim each vote individually and own on a
direct basis, or through additional
4
<PAGE> 7
family partnerships, a total of 401,456 shares of Class A Common Stock and
1,128,150 shares of Class B Common Stock.
ELECTION OF DIRECTORS
At the Annual Meeting, twelve Directors, constituting the full Board, are
to be elected to hold office until the next Annual Meeting of our Share Owners
or until their successors are duly elected and qualified. Holders of shares of
the Company's Class A Common Stock are entitled to elect eleven Directors, and
holders of shares of the Company's Class B Common Stock are entitled to elect
one Director. Each nominee is now a Director of the Company. If any such nominee
shall be unable to serve, the proxies will be voted to fill any vacancy so
arising in accordance with the discretionary authority of the persons named in
the proxies. The Board of Directors has no reason to believe that any such
nominee will be unable to serve. The nominees are:
NOMINEES FOR ELECTION AS DIRECTORS
BY HOLDERS OF CLASS A COMMON STOCK
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION SINCE
---- -------------------- --------
<S> <C> <C>
Douglas A. Habig (a)..................... Chairman of the Board of Directors and 1973
Chief Executive Officer of your Company;
age 53
Thomas L. Habig (a)(c)................... Vice Chairman of the Board of Directors 1950
of your Company; age 72
James C. Thyen (b)....................... President of your Company; age 56 1982
John B. Habig (a)........................ Chairman of the Board of Directors of 1956
SVB&T Corporation (a bank holding
company); formerly Senior Executive Vice
President, Operations Officer,
Electronics Segment of your Company; age
67
Ronald J. Thyen (b)...................... Senior Executive Vice President, 1973
Operations Officer, Furniture and
Cabinets Segment of your Company; age 63
Brian K. Habig (c)....................... Manager, Proposal Center of the Kimball 1992
Electronics Group of your Company; age 43
John T. Thyen (b)........................ Senior Executive Vice President, 1990
Strategic Marketing; age 61
Christine M. (Tina) Vujovich............. Vice President, Environmental Policy and 1994
Product Strategy, Cummins Engine Co.,
Inc.; age 48
Alan B. Graf, Jr......................... Executive Vice President and Chief 1996
Financial Officer, FedEx Corporation;
also Director of Storage USA, Inc.; age
46
Polly B. Kawalek......................... Vice President of The Quaker Oats Company 1997
and President, Hot Breakfast Division,
The Quaker Oats Company; age 45
Harry W. (Hank) Bowman................... Former President and Chief Executive 2000
Officer of The Stiffel Company; age 57
</TABLE>
5
<PAGE> 8
NOMINEE FOR ELECTION AS DIRECTOR
BY HOLDERS OF CLASS B COMMON STOCK
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION SINCE
---- -------------------- --------
<S> <C> <C>
Dr. Jack R. Wentworth.................... Arthur M. Weimer Professor Emeritus of 1984
Business Administration, Indiana
University; former Dean of the Kelley
School of Business, Indiana University;
age 72
</TABLE>
---------------
(a) Thomas L. Habig, Douglas A. Habig and John B. Habig are brothers.
(b) Ronald J. Thyen, James C. Thyen and John T. Thyen are brothers.
(c) Brian K. Habig is the son of Thomas L. Habig.
Each of the nominees is currently a Director of the Company and has been
employed for more than the past five years by the same employer in the capacity
shown above, or some other executive capacity, except for Polly B. Kawalek, Alan
B. Graf, Jr., Christine M. Vujovich, and Harry W. Bowman. Ms. Kawalek has been
an employee of The Quaker Oats Company since 1979 and since 1982 has held
various management positions with the Company. Beginning in 1992, Ms. Kawalek
was Vice President of the Wholesome Variety Unit of the Company. During 1994,
Ms. Kawalek's responsibilities changed to President of The Quaker Snacks Group.
Ms. Kawalek became President of The Hot Breakfast Division in 1996. In 1998, Ms.
Kawalek was appointed Vice President of The Quaker Oats Company in addition to
her duties as President of The Hot Breakfast Division.
Mr. Graf has been an employee of FedEx Corporation through the Federal
Express Corporation since 1980. In 1987, Mr. Graf was appointed Vice President
and Treasurer; in 1991, Senior Vice President and Chief Financial Officer; and
in 1996, to the position of Executive Vice President and Chief Financial Officer
of Federal Express Corporation. During 1998, Mr. Graf was named Executive Vice
President and Chief Financial Officer of FedEx Corporation, the corporate
holding company for the corporation's current six independent operating
companies: FedEx Express, FedEx Ground, FedEx Custom Critical, FedEx Logistics,
FedEx Trade Networks, and Viking Freight. Mr. Graf currently serves as Chairman
of the Board of FedEx Custom Critical, and on the board of directors for Storage
USA.
Ms. Vujovich has been an employee of Cummins Engine Co., Inc., of Columbus,
Indiana, since 1978. Ms. Vujovich has held various management positions with
Cummins since 1983. From 1985 to 1989, Ms. Vujovich was Vice President -
Customer Engineering and was named Vice President, Product Planning and
Environmental Management in 1989. In 1996, Ms. Vujovich was appointed Vice
President of Worldwide Marketing, Bus and Light Commercial Automotive and
Environmental Management of Cummins. In 1999, Ms. Vujovich was named Vice
President - Environmental Policy and Product Strategy.
In August 2000, your Board of Directors amended the By-laws of the Company
to increase the number of directors from twelve to thirteen. At the August 2000
meeting, the Board appointed Harry W. ("Hank") Bowman as a director to be
elected by Class A Common Stock Share Owners. From January 1999 until March
2000, Mr. Bowman was the President and Chief Executive Officer of The Stiffel
Company, an electric lighting equipment manufacturer in Chicago, Illinois, a
position he resigned in March 2000, due to a proposed sale of the company. From
September 1997 to January 1999, Mr. Bowman served as an independent consultant.
From February 1995 to September 1997, Mr. Bowman was Chairman, President, and
Chief Executive Officer of the Outboard Marine Corporation of Waukegon,
Illinois. From 1971 to 1995, Mr. Bowman held various marketing and executive
positions with Whirlpool Corporation, including positions as President of the
Whirlpool and Kenmore appliance groups and Whirlpool Europe.
Gary P. Critser has announced his plans to retire as a Board member
effective October 17, 2000 (the date of the Share Owners Meeting), at which time
the Board will be reduced from thirteen members to twelve. At the end of
October, Mr. Critser will retire as an officer and employee of your Company,
after 34 years of
6
<PAGE> 9
faithful and dedicated service. On behalf of all the Share Owners, your Board
wishes to express its gratitude and best wishes to Mr. Critser.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND COMMITTEES
Your Board has four standing Committees: the Executive Committee, the Audit
Committee, the Compensation Committee, and the Stock Option Committee. The
Executive Committee currently consists of: Thomas L. Habig, Douglas A. Habig,
James C. Thyen, Ronald J. Thyen, John T. Thyen and Gary P. Critser. The By-laws
of the Company provide, except to the extent limited by Indiana law, that the
Executive Committee may exercise all powers of the Board of Directors with
reference to the conduct of the business of your Company during the intervals
between the meetings of the Board. During the 2000 fiscal year, the Board of
Directors met six times while the Executive Committee met seven times.
The Audit Committee, as of June 30, 2000, consisted of four members of the
Board: Alan B. Graf, Jr. (Chairperson), Christine M. Vujovich, Dr. Jack R.
Wentworth, and Polly B. Kawalek. Harry W. Bowman was appointed as a member in
August 2000. Audit Committee members are not salaried employees of the Company
and are, in the opinion of the Board of Directors, free from any relationship
that would interfere with the exercise of independent judgment as a Committee
member. The Audit Committee's primary duties and responsibilities are to serve
as an independent and objective party to review and appraise the audit efforts
of Kimball's outside auditor and internal audit group and to provide an open
avenue of communication among the outside auditor, financial and senior
management, the internal audit group, and the Board of Directors. The Committee,
which met three times during the 2000 fiscal year, annually recommends to the
Board of Directors the appointment of a firm of independent auditors, reviews
with the independent auditors and approves the plan and scope of their audit for
each fiscal year. The Committee also reviews with the independent auditors the
adequacy of internal accounting and financial controls and reviews directly with
your Company's Audit and Management Services Department the activities of the
department and the results of their internal control reviews and tests. In
addition, the Committee reviews all fees paid to the independent auditors and,
with the exception of fees related to taxes, approves all fees paid to the
independent auditors for non-audit services if the fees exceed a limit set by
the Committee. Finally, during fiscal year 2000, the Committee developed an
Audit Committee Charter under the guidance of the pronouncements of various
regulatory agencies. The Charter was approved by your Board of Directors in
February 2000.
The members of the Compensation Committee are: James C. Thyen
(Chairperson), Dr. Jack R. Wentworth, Christine M. Vujovich, Alan B. Graf, Jr.,
Robert F. Schneider, and Gary P. Critser. The Committee's responsibilities
consist of making all determinations with respect to the compensation of the
Chief Executive Officer and to establish and maintain general compensation
policies with respect to all other Executive Officers of your Company. With the
exception of Mr. Schneider, members of the Committee also serve as the Stock
Option Committee of your Company's 1987 and 1996 Stock Incentive Programs. The
Compensation and Stock Option Committees each met once during fiscal year 2000.
All Directors receive compensation of $16,000 per year. Directors who are
not Company employees receive an additional $2,000 for each meeting attended.
Directors who are Company employees receive an additional $1,500 for each
meeting attended. The Chairperson of the Audit Committee of the Board of
Directors receives $3,500 per meeting, and other Audit Committee members receive
$2,500 per meeting. Members of the Compensation Committee who are not Company
employees receive $1,000 per meeting. Members of the Executive Committee and the
Stock Option Committee receive no additional compensation for their service on
these Committees.
Your Company maintains the 1996 Director Stock Compensation and Option
Plan, which allows Directors to elect to receive all or part of their annual
retainer and meeting fees in shares of Class B Common Stock and to receive
grants of nonqualified stock options in connection with that election.
In 1997, the Board of Directors adopted a plan where all members of your
Board of Directors must own at a minimum your Company's stock equal in value to
three times the total annual fees earned as a Director, with a phase-in period
to attain the ownership requirement.
7
<PAGE> 10
All Directors during fiscal year 2000 attended in excess of 75% of the
aggregate of the total number of meetings of the Board of Directors and the
total number of meetings held by all Committees of the Board on which the
Directors serve.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that certain
Company Directors, Executive Officers and Share Owners file with the Securities
and Exchange Commission and the Company an initial statement of beneficial
ownership and certain statements of changes in beneficial ownership of Common
Stock of the Company. Based solely on its review of such forms received by the
Company and written representation from the Directors and Executive Officers
that no other reports were required, the Company is unaware of any instances of
noncompliance or late compliance with such filings during the fiscal year ended
June 30, 2000.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows, for the fiscal years indicated, the aggregate
cash compensation, including incentive compensation, paid by your Company to the
Chief Executive Officer and each of the four other most highly compensated
Executive Officers of your Company during the years ended June 30, 2000, 1999,
and 1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION ------------
---------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
SALARY BONUS COMPENSATION OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(1) (#) ($)(2)
--------------------------- ---- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Douglas A. Habig.............. 2000 $338,000 $252,900 $45,935 13,000 $41,111
Chairman of the Board and 635(3)
Chief Executive Officer 1999 306,800 308,372 39,882 13,000 42,704
1998 304,800 289,200 35,872 13,000 39,535
James C. Thyen................ 2000 $312,000 $229,600 $43,035 13,000 $37,994
President 763(3)
1999 270,400 274,536 43,267 13,000 37,745
741(3)
1998 268,400 242,988 43,119 13,000 34,888
557(3)
Thomas L. Habig............... 2000 $270,000 $197,660 $38,750 13,000 $48,699
Vice Chairman of the Board 1999 260,000 250,760 48,743 13,000 48,928
1998 259,400 236,322 43,227 13,000 46,208
Ronald J. Thyen............... 2000 $276,000 $194,800 $43,405 11,000 $36,131
Senior Executive Vice 763(3)
President, Operations
Officer, 1999 251,600 253,444 48,855 11,000 36,928
Furniture and Cabinets 741(3)
Segment 1998 248,000 222,360 52,919 11,000 35,288
629(3)
John T. Thyen................. 2000 $260,400 $188,320 $44,887 11,000 $33,648
Senior Executive 635(3)
Vice President, 1999 250,400 227,736 47,834 11,000 36,508
Strategic Marketing 65(3)
1998 248,000 213,360 41,532 11,000 34,653
435(3)
</TABLE>
8
<PAGE> 11
---------------
(1) Includes Director fees, and, along with other Officers and certain
employees, executive financial services programs, supplemental group medical
and life insurance, automotive allowances, and other miscellaneous items.
(2) For 2000 includes, on behalf of the named individuals, all other
compensation as follows:
<TABLE>
<CAPTION>
COMPANY PAYMENTS SPLIT-DOLLAR
TO RETIREMENT AND INSURANCE
SUPPLEMENTAL EMPLOYEE PREMIUM
RETIREMENT PLANS VALUE
--------------------- ------------
<S> <C> <C>
Douglas A. Habig...................................... $32,997 $ 8,114
James C. Thyen........................................ $29,669 $ 8,325
Thomas L. Habig....................................... $23,550 $25,149
Ronald J. Thyen....................................... $24,008 $12,123
John T. Thyen......................................... $22,335 $11,313
</TABLE>
(3) The first number represents options granted under the Company's 1996 Stock
Incentive Program, and the second number represents options granted under
the Company's 1996 Director Stock Compensation and Option Plan.
CASH BONUS PLANS
Your Company has a Profit Sharing Bonus Plan in which all Executive
Officers and eligible salaried employees participate. The Plan is based on an
"Economic Value Added" or "EVA" philosophy whereby the Company's cost of capital
is deducted from income to arrive at an Economic Profit. (EVA is a registered
trademark of Stern Stewart & Co.) The Compensation Committee believes that
changes in Economic Profit correlate with long-term Share Owner value. The
amount of bonus earned during a fiscal year is based upon achieving
predetermined Economic Profit levels. The Economic Profit levels required to
achieve bonus are based in part on external benchmarks.
Capital from which the cost of capital is computed includes all assets
deployed, less cash and investments (with certain adjustments to reflect current
economic costs), less current liabilities. Cash and investments are excluded to
motivate the business units to generate cash.
The plan is structured whereby eligible employees with increasingly higher
levels of responsibility to impact profitability have a greater percentage of
their total compensation at risk, allowing for a greater incentive to increase
Economic Profit. The Plan is also designed so that whenever a higher Economic
Profit is achieved, bonus is paid at an increasing percent of base salary.
Therefore, higher levels of Economic Profit result in a greater amount of each
dollar of profit being paid out in bonus than at lower profit levels, again
providing a greater incentive to increase Economic Profit. Once a minimum
threshold of Economic Profit is attained, eligible employees at the highest
responsibility levels may earn bonuses up to 100% of base salary, with lesser
percentages for eligible employees with lower levels of responsibility.
Because no single incentive plan is perfect and special situations occur
where an individual achievement may not be adequately recognized by the Profit
Sharing Bonus Plan, there is a Supplemental Bonus Plan reviewed and approved on
an annual basis by your Board of Directors where a maximum of 2.4% of the
Company's overall annual net income (before bonuses paid pursuant to the
Company's Profit Sharing Bonus Plan) may be designated as supplemental bonuses
to those eligible employees, at the discretion of the Chairman of the Board,
Vice Chairman of the Board, and President. The 2.4% is an effective 1.5% on a
comparative pre-tax basis. Any award to the Chief Executive Officer under this
Supplemental Bonus Plan must be approved and awarded by the Compensation
Committee of the Board of Directors.
Under your Company's bonus plans, with certain exceptions, bonuses are
accrued annually and paid in five installments over the succeeding fiscal year.
Except for provisions relating to retirement, death, and permanent disability,
participants must be actively employed on each payment date to be eligible to
receive the bonus.
9
<PAGE> 12
RETIREMENT PLANS
Your Company maintains a defined contribution retirement plan with a 401(k)
provision for all eligible domestic employees. The Plan provides for voluntary
employee contributions as well as a discretionary annual Company contribution as
determined by the Board of Directors based on income of the Company as defined
in the Plan. Each eligible employee's Company contribution is defined as a
percent of eligible compensation, the percent being identical for all eligible
employees, including Executive Officers. Participant accounts are fully vested
after seven years of participation. All Executive Officers were fully vested at
June 30, 2000, except for one individual. The Retirement Trust account is fully
funded and fully vested. 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, there is a nonqualified, unfunded Supplemental Employee Retirement
Plan (SERP) in which your Company contributes to the account of each individual
an amount equal to the reduction in the contribution under the defined
contribution retirement plan arising from the provisions of the 1986 Tax Reform
Act. Non-U.S. employees are covered by various retirement programs, many
mandated by the laws of each particular country.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS IN 2000
--------------------------------------- POTENTIAL REALIZED
% OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES TERM OF THE OPTION (1)
OPTIONS IN FISCAL EXERCISE EXPIRATION ----------------------------
NAME GRANTED (#) YEAR PRICE ($) DATE 5% ($) 10% ($)
---- ----------- ---------- --------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Douglas A. Habig........ 13,000 2.5% $19.81 8/17/09 $161,903 $410,262
456 .1% $17.53 10/18/04 $2,209 $4,880
179 -- $12.52 4/17/05 $619 $1,367
James C. Thyen.......... 13,000 2.5% $19.81 8/17/09 $161,903 $410,262
584 .1% $17.53 10/18/04 $2,828 $6,250
179 -- $12.52 4/17/05 $619 $1,367
Thomas L. Habig......... 13,000 2.5% $19.81 8/17/09 $161,903 $410,262
Ronald J. Thyen......... 11,000 2.1% $19.81 8/17/09 $136,995 $347,145
584 .1% $17.53 10/18/04 $2,828 $6,250
179 -- $12.52 4/17/05 $619 $1,367
John T. Thyen........... 11,000 2.1% $19.81 8/17/09 $136,995 $347,145
456 .1% $17.53 10/18/04 $2,209 $4,880
179 -- $12.52 4/17/05 $619 $1,367
All Optionees........... 517,418 100% $19.66(2) 7/18/04 $4,200,000 $9,900,000
through
8/17/09
All Share Owners (3).... N/A N/A N/A N/A $313,900,000 $731,700,000
All Optionees' potential
gain as a percent of
all Share Owners
gain.................. 1.3% 1.4%
</TABLE>
---------------
(1) Potential realizable values are based upon assumed rates of appreciation
prescribed by the Securities and Exchange Commission. Under these rules it
is assumed the Company's Class B Common Stock will appreciate in value from
the date of grant to the end of the award term at annualized rates of 5% and
10%. The 5% and 10% rates prescribed by the Securities and Exchange
Commission are not intended to forecast possible future appreciation of the
Company's stock.
(2) Weighted average per share exercise price of all options issued in fiscal
year ended June 30, 2000.
(3) The amounts shown represent a hypothetical return to all holders of your
Company's Common Stock, assuming that all Share Owners purchased their
shares at a per share purchase price of $19.66, the
10
<PAGE> 13
weighted average of the exercise prices for all options granted during the
period, and that all Share Owners hold the shares continuously for the
average term of the options. The amounts were computed based upon 39,231,730
shares outstanding at June 30, 2000. The computed increase in market value
to Share Owners is shown for comparative purposes only. It is not a
prediction of future stock appreciation.
Your Company's 1996 Stock Incentive Program (1996 Plan) was approved by
Share Owners at the October 1996 Annual Meeting replacing the 1987 Stock
Incentive Program. The 1996 Plan permits a variety of benefits consisting of:
Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, and Performance Shares. All Incentive Stock and
Nonqualified Stock Options issued were granted at 100% of fair market value on
date of grant. Options generally are exercisable from six months to two years
after the date of grant and expire five to ten years after the date of grant.
All options issued have certain provisions relating to termination of employment
by reason of disability or retirement and provisions regarding death of the
option's holder. Under certain circumstances the options may be forfeited.
During 2000, a total of 517,418 shares of Class B Common Stock were granted
in stock options, including 510,750 shares under the 1996 Stock Incentive
Program and 6,668 shares under the 1996 Director Stock Compensation and Option
Plan. Of the 510,750 shares granted under the 1996 Stock Incentive Program,
433,750 shares were Incentive Stock Options and 77,000 shares were Nonqualified
Stock Options. All 6,668 shares granted under the Director's Plan were
Nonqualified Stock Options. Options granted to the five named Executive Officers
were Nonqualified Stock Options, including options granted to Douglas A. Habig,
James C. Thyen, John T. Thyen, and Ronald J. Thyen under the 1996 Director's
Plan.
Stock options and stock ownership equivalent awards only produce value to
Executives if the price of your Company stock appreciates, thereby increasing
the link of interest of Executives with those of Share Owners.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table sets forth information with respect to the named
Executive Officers concerning the exercise of options during the last fiscal
year and unexercised options held as of the end of this fiscal year:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES YEAR ENDED 2000(#) YEAR END 2000 ($)(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Douglas A. Habig......... 12,000(2) $90,360(4) 39,000 24,635(3) None $35,919
James C. Thyen........... 10,000(2) $75,300(4) 39,819 21,504(3) None $29,999
Thomas L. Habig.......... None None 63,000 None $35,520 None
Ronald J. Thyen.......... 10,000 $50,430 44,155 1,504 $9,800 $399
John T. Thyen............ 5,000 $35,775 53,435 700 $29,600 $399
</TABLE>
---------------
(1) Based on the NASDAQ quoted closing price as published in the Wall Street
Journal for the last business day of the fiscal year ($14.75 per share).
(2) Securities are stock ownership equivalents.
(3) 24,000 shares for Douglas A. Habig and 20,000 shares for James C. Thyen are
stock ownership equivalents.
(4) Gains arise from stock ownership equivalents granted August 25, 1994, and
maturing August 24, 1999.
11
<PAGE> 14
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW
Your Company applies a consistent philosophy to compensation for all
employees, including senior management. The goal of the Compensation Program is
to align compensation with business objectives and performance as a key link in
increasing Share Owner value. The Committee's responsibility as delegated by the
Board of Directors is to establish the general compensation policies with
respect to your Company's Executive Officers and to make all determinations with
respect to the compensation of your Company's Chief Executive Officer. The
members of the Committee, with the exception of Robert F. Schneider, are also
members of the Stock Option Committee of the Company's 1996 Stock Incentive
Program.
COMPENSATION PHILOSOPHY
Since its founding, Kimball International has linked all employees'
compensation to the financial success of your Company. Through the use of
incentives, including commissions, profit sharing bonuses, a defined
contribution retirement plan (funded in part through a percentage share of
corporate profits), a retirement plan trust investment in Company stock, and a
stock option plan, all employees are linked in a common interest with Share
Owners in the Company's short and long-term performance. Total compensation is
viewed as more than cash payments and unrelated pieces. The total compensation
package is planned and managed to keep various elements of compensation in
balance to help maintain the link of a common interest with Share Owners.
This basic philosophy is acknowledged in your Company's Guiding Principles,
communicated to all employees, which states in part:
"Profits are the ultimate measure of how efficiently and effectively
we serve our customers and are the only true source of long-term job
security. Profitability and financial resources give us the freedom to
shape our future and achieve our vision."
and
"We want employees to share in their Company's success, both
financially and through personal growth and fulfillment."
Our philosophies are translated into practice through specific compensation
plans. In this regard, every Kimball International employee has a portion of his
or her compensation linked to Company performance.
- Most production employees are paid, either on an individual basis or
through team participation, incentives based upon units of production.
Certain production facilities have "gain sharing" programs allowing
production employees to share in the financial gains of improved
productivity. Compensation rises and falls with success in improving
productivity and production processes. Holiday and vacation compensation
is tied directly to incentive compensation.
- Field sales personnel compensation generally includes commissions related
to sales. Compensation rises and falls with success in making sales.
- All salaried employees participate in a common Profit Sharing Bonus Plan.
This Plan links to Economic Profit. It is believed the link to Economic
Profit will help focus our decision-makers on the most effective use of
capital and will improve the focus of providing excellent returns on the
investments of you, our Share Owners. Under our Profit Sharing Bonus
Plan, bonuses are generally paid only if we create Share Owner value
through Economic Profit. Economic Profit is defined in the Cash Bonus
Plans section of this Proxy Statement. The Profit Sharing Bonus Plan
goals are based in part on external benchmarks as guidelines which help
to assure a consistent focus and reasonable benchmark on providing these
returns. Further, the Plan places a proportionately higher share of
compensation at risk at each level of management.
12
<PAGE> 15
- Key personnel participated in the 1987 Stock Incentive Program and are
now participating in the 1996 Stock Incentive Program, strengthening the
link to a common interest with Share Owners.
- The Retirement Plan for all employees is funded in part through Company
contributions directly related to Company profitability. In addition, all
employees who are eligible to participate in the Plan are indirectly
Share Owners through the 1,544,592 shares of your Company stock held in
the Retirement Trust.
The Cash Bonus Plans, Stock Incentive Programs, and Retirement Plans are
described elsewhere in this Proxy Statement.
Combining the Profit Sharing and Supplemental Bonus Plans for short-term
incentive and the 1996 Stock Incentive Plan for long-term incentive, over 100
managers, including senior management, have in excess of 50% of their total
potential compensation tied to Company performance related to profitability and
Share Owners' returns.
The Committee believes that your Company's historical and ongoing strategy
of strongly linking compensation of all employees to Company financial
performance serves in the best interests of Share Owners by enabling employees
to share in Company risk and success. It is the Committee's intent to continue
this strategy, refining programs consistent with changing business needs, to
assure a continuing commitment to financial success.
To further link the interests of your Company's key decision makers to the
interests of Share Owners, the Board of Directors, in 1997, adopted an Executive
Stock Ownership policy based on the belief that key decision makers who have the
greatest influences on the success of your Company should own significant
amounts of your Company's stock. The amount of stock to be owned increases at
each level of responsibility and allows a number of years for each individual to
attain the required level of stock ownership.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
In the context of historical practice, the annual salary of the Chief
Executive Officer is based upon numerous subjective factors, including
responsibility level, overall conduct of corporate affairs, and leadership in
progress towards achieving strategic objectives. The Committee does not target
any specific quartile of public survey data for any component of the Chief
Executive Officer's total compensation, nor does it utilize any specific target
or formula. While the Committee does review compensation of the Chief Executive
Officers of other manufacturing companies of similar size in sales, there is no
special attempt to set Mr. Habig's compensation in any particular relationship
to the comparative data. At the June 1999 meeting, it was determined, based on
the subjective factors listed above, that a salary increase was warranted for
the CEO. With Douglas A. Habig absent from this portion of the 1999 meeting, the
Committee unanimously approved a salary increase from the annualized base of
$306,000 in effect for approximately two years to $338,000 for the fiscal year
ended June 30, 2000. Prior to the June 2000 meeting, the CEO indicated to the
Chairman of the Committee that with the Company's strong focus on rewarding for
performance and because the Company's income goal was not attained in fiscal
year 2000, the CEO believed his salary should not be increased and the bonus
payment under the Supplemental Bonus Plan should be decreased. The Committee
reluctantly accepted the request of the CEO. In addition, the Chairman of the
Committee indicated the Vice Chairman and the President also requested their
salaries not be increased for fiscal year 2001 and that payments under the
Supplemental Bonus Plan be reduced. Also, under the Company's Profit Sharing
Bonus Plan predetermined formula approved by the Committee at its June 1999
meeting, the bonus payments under this plan for fiscal year 2000 are lower.
Under your Company's Profit Sharing Bonus Plan described elsewhere in this
Proxy Statement, the Chief Executive Officer's bonus for fiscal year 2000
amounted to 40% of salary, while under this Plan the percent earned was 59% and
57% in 1999 and 1998 respectively. Under the Supplemental Bonus Plan, also
described elsewhere in this Proxy Statement, for fiscal year 2000, the Committee
unanimously awarded Douglas A. Habig a bonus of $112,500. Under this Plan, Mr.
Douglas A. Habig was awarded $125,000 in 1999 and $112,500 in 1998. These awards
were based upon the Committee's subjective evaluations of Mr. Habig's job
13
<PAGE> 16
performance, leadership in the planning and implementation of the Company's
strategic objectives, and profitability trends, which are both short and
long-term measures. The Committee, in the fiscal year 2000 award, took into
consideration the CEO's request mentioned above. The Company's Chairman and
Chief Executive Officer, Vice Chairman, and President establish the salaries and
supplemental bonuses of the Company's other Executive Officers.
As described elsewhere within this Proxy Statement, during your Company's
2000 fiscal year, the Stock Option Committee granted options under the 1996
Stock Incentive Program to key Executives and other key employees. The Committee
(with Mr. Habig not voting) unanimously recommended to the Board of Directors
that Mr. Habig be awarded 13,000 shares in the form of a Nonqualified Stock
Option described elsewhere in this Proxy Statement. The Board of Directors
unanimously concurred with the recommendation and the stock option was granted
during August 1999. The stock option granted to Mr. Habig was made in
coordination with stock options issued to other Executives and key employees.
Options issued to the Executives and other Company employees by the Stock Option
Committee are generally based on level of individual responsibility. Thus,
taking into consideration the cash bonus which can be earned under the Company's
Profit Sharing and Supplemental Bonus Plans and stock options, over one-half of
the total potential compensation of the Chief Executive Officer, as well as the
other four named Executive Officers, are tied directly into performance related
to profitability and your Company's stock price.
OTHER
The Committee has also considered the potential effect of Section 162(m) of
the Internal Revenue Code on Executive compensation. The Committee believes that
in the foreseeable future, none of the Company's Officers covered under the law
will have annual compensation in excess of $1 million. Thus, all compensation
will be deductible for tax purposes. The Committee will continue to monitor your
Company's compensation program in relation to Section 162(m).
The Committee is also cognizant of the significant amount of shares of your
Company stock presently owned by the Chief Executive Officer and the other four
reporting Executive Officers and the fact that these five Senior Executives'
shareholdings exceed the stock ownership requirement set by the Board of
Directors. The policy regarding share ownership and the present significant
shareholdings of the Chief Executive Officer and other four reporting Executive
Officers helps assure a strong link with the common interest of Share Owners in
the Company's long-term success.
The Committee, in its June 2000 meeting, unanimously approved the Economic
Profit targets under the Company's 2001 fiscal year Profit Sharing Bonus Plan.
COMPENSATION COMMITTEE
<TABLE>
<S> <C>
James C. Thyen (Chairperson) Robert F. Schneider
Dr. Jack R. Wentworth Gary P. Critser
Christine M. (Tina) Vujovich Alan B. Graf, Jr.
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
James C. Thyen, President, is a brother of John T. Thyen and Ronald J.
Thyen, Senior Executive Vice Presidents of your Company. Gary P. Critser is a
Senior Executive Vice President, Secretary, and Treasurer of your Company.
Robert F. Schneider is Executive Vice President, Chief Financial Officer, and
Assistant Treasurer of your Company. Alan B. Graf, Jr., Dr. Jack R. Wentworth,
and Christine M. (Tina) Vujovich are Directors of your Company and are not
employees.
14
<PAGE> 17
PERFORMANCE GRAPH
The graph below compares the cumulative total return to Share Owners on the
Common Stock of your Company from June 30, 1995, through June 30, 2000, the last
business day in the respective fiscal years, to the cumulative total return of
the S&P Midcap 400 Index and the NASDAQ U.S. Composite Index for the same period
of time. Your Board of Directors does not believe that any published specific
industry or line-of-business index adequately represents the current operations
of your Company or that it can identify a peer group that merits comparison. The
graph assumes $100 is invested in your Company stock and each of the two indexes
at the closing market quotations on June 30, 1995, and that dividends are
reinvested. The performances shown on the graph are not necessarily indicative
of future price performance.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kimball International, Inc. 100.0 104.9 157.2 145.7 140.8 128.1
----------------------------------------------------------------------------------------------------------------
S&P Midcap 400 Index 100.0 121.6 150.0 190.7 223.4 261.3
----------------------------------------------------------------------------------------------------------------
NASDAQ U.S. Composite Index 100.0 128.4 156.2 205.6 296.0 437.3
----------------------------------------------------------------------------------------------------------------
</TABLE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, independent certified public accountants, examined the
Company's financial statements for the year ended June 30, 2000, and also for
the prior twenty fiscal years. Representatives of Arthur Andersen LLP will be
present at the Annual Meeting and will have the opportunity to make a statement
and will be available to respond to appropriate questions. Arthur Andersen LLP
has been selected as the Company's independent auditors for the 2001 fiscal
year.
By Order of the Board of Directors
GARY P. CRITSER, Secretary
September 7, 2000
15
<PAGE> 18
----------------------------
CONTROL NUMBER:
ACCOUNT NUMBER:
----------------------------
KIMBALL INTERNATIONAL, INC.
PROXY
(FOR CLASS A STOCK)
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I appoint Thomas L. Habig, James C. Thyen, and Douglas A. Habig, and each of
them, each with full power of substitution, as Proxies to vote all shares of
CLASS A COMMON STOCK of Kimball International, Inc. standing in my name on its
books at the close of business on August 14, 2000, at the annual meeting of its
share owners to be held at the principal offices of the Company located at 1600
Royal Street, Jasper, Indiana, at 9:30 A.M., Eastern Standard Time, on Tuesday,
October 17, 2000, and at any adjournments thereof, with respect to the following
matters:
This Proxy when properly executed will be voted in the manner directed by the
undersigned share owner. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSAL 1. PLEASE MARK BOX [ ] OR [X]
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS [_] FOR all nominees listed [_] WITHHOLD AUTHORITY
below (except as marked to vote for all
to the contrary below) the nominees
listed below
</TABLE>
Thomas L. Habig, Douglas A. Habig, James C. Thyen, John B. Habig, Ronald
J. Thyen, Christine M. "Tina" Vujovich, Brian K. Habig, John T. Thyen,
Alan B. Graf, Jr., Polly B. Kawalek, and Harry W. "Hank" Bowman
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
---------------------------------------------------
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(PLEASE DATE AND SIGN BELOW.)
THE UNDERSIGNED HEREBY REVOKES ANY PROXY HERETOFORE GIVEN AND ACKNOWLEDGES
RECEIPT OF THE NOTICE AND PROXY STATEMENT FOR THE ANNUAL MEETING.
Date: , 2000
---------------------------------
-------------------------------------------
(Signature)
-------------------------------------------
(Signature)
(If stock is registered in the name of more than
one person, the Proxy should be signed by all
named owners. If signing as attorney, executor,
administrator, trustee, guardian, corporate
official, etc., please give full title as such.)
-------------------------------------------------------------------------
See reverse for instructions for voting your proxy by Internet or by mail.
-------------------------------------------------------------------------
<PAGE> 19
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF TWO WAYS
================================================================================
VOTE BY INTERNET
http://www.kimball.com/proxyvote
Go to the Web site address listed above to vote your Proxy 24 hours a day, 7
days a week and select "Vote Class A Proxy". You will be prompted to enter the
10-digit control number and 10-digit account number, which are located in the
upper right-hand corner on the front side of this proxy form. Then follow the
simple online instructions.
================================================================================
or
================================================================================
VOTE BY MAIL
Postage-paid envelope provided
Mark, sign and date your Proxy Card and return it in the postage-paid envelope
provided. IF YOU VOTE BY INTERNET, PLEASE DO NOT MAIL YOUR PROXY FORM.
================================================================================
PLEASE VOTE!
<PAGE> 20
<TABLE>
<S> <C>
This Proxy when properly executed will be voted in the manner directed by the undersigned share Please mark [ X ]
owner. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1. your vote as
indicated in
this example
1. Election of Director DR. JACK R. WENTWORTH 2. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
FOR WITHHOLD
the nominee AUTHORITY
listed to vote for the
nominee listed
[ ] [ ]
THE UNDERSIGNED HEREBY REVOKES ANY PROXY
HERETOFORE GIVEN AND ACKNOWLEDGES RECEIPT OF
THE NOTICE AND PROXY STATEMENT FOR THE ANNUAL
MEETING.
-------
| Date:__________________________________, 2000
|
|
_____________________________________________
(Signature)
_____________________________________________
(Signature)
(If the stock is registered in the name of
more than one person, the Proxy should be
signed by all named owners. If signing as
attorney, executor, administrator, trustee,
guardian, corporate official, etc., please
give full title as such.)
--------------------------------------------------------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
YOUR VOTE IS IMPORTANT!
[ENVELOPE] [COMPUTER]
YOU CAN VOTE IN ONE OF TWO WAYS:
============================================================================================================================
VOTE BY INTERNET
http://www.kimball.com/proxyvote
Go to the Web site address listed above to vote your Proxy 24 hours a day, 7 days a week and select "Vote Class B Proxy."
You will be prompted to enter the control number, which is located in the lower right corner of this proxy card. Then
follow the simple online instructions.
============================================================================================================================
OR
============================================================================================================================
VOTE BY MAIL
Postage-paid envelope provided
Mark, sign and date your Proxy Card and return it in the postage-paid envelope provided. IF YOU VOTE BY INTERNET, PLEASE
DO NOT MAIL YOUR PROXY CARD.
============================================================================================================================
PLEASE VOTE!
</TABLE>
<PAGE> 21
KIMBALL INTERNATIONAL, INC.
PROXY
(FOR CLASS B STOCK)
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I appoint Thomas L. Habig, James C. Thyen, and Douglas A. Habig, or any one or
more of them, each with full power of substitution, as Proxies to vote all
shares of CLASS B COMMON STOCK of Kimball International, Inc., standing in my
name on its books at the close of business on August 14, 2000, at the annual
meeting of its share owners to be held at the principal offices of the Company
located at 1600 Royal Street, Jasper, Indiana, at 9:30 A.M., Eastern Standard
Time, on Tuesday, October 17, 2000, and at any adjournments thereof, with
respect to the following matters:
(Please date and sign on reverse side)
--------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
