CHARTER OF THE COMPENSATION & GOVERNANCE COMMITTEE
OF THE BOARD OF DIRECTORS
OF KIMBALL INTERNATIONAL, INC.

AUTHORITY

The Board of Directors, by resolution dated October 17, 2006, established the Compensation & Governance Committee and approved its Charter.

PURPOSE

The Compensation & Governance Committee is to assist the Board of Directors in the discharge of its fiduciary responsibilities relating to the grant of stock compensation, the fair and competitive compensation of the Chief and other Executive Officers, the Company's contribution to the Retirement Plan, goals and awards under the Profit Sharing Bonus Plan, matters of corporate governance and identification of individuals qualified to be Board members.

The Compensation & Governance Committee will fulfill this purpose by carrying out the duties and responsibilities enumerated in this Charter.

DUTIES AND RESPONSIBILITIES

Stock Compensation:

• Adopts or amends and administers stock-related plans including, but not limited to, approving grant guidelines, general size of overall grants, performance goals, and interpreting the plans; and

CEO and Executive Officer Compensation:

• Annually assesses the CEO's performance against relevant performance criteria.
• Annually reviews market data, general industry information and any other relevant data, to assess the competitiveness of the CEO's compensation; and
• Approves in advance any base salary increase for the CEO.
• Approves awards to CEO under any other compensation arrangements.
• Reviews and approves other Executive Officer compensation.

Retirement Plan Company Contribution:

• Review and approve determination and payment of annual voluntary Company contribution to defined contribution Retirement Plan.

Profit-Sharing Bonus Plan:

• Approval of profit level targets.
• Certification of target achievement.
• Authorization of payment of bonus to eligible employees.

Develop, identify, and/or design for recommendation to the Board of Directors:

Nomination:

• Qualified Board members.
• Board member nominees for annual election.
• Individual Board member development and education.
• Board succession plans.
• Board member orientation process.
• Board self-evaluation process.
• Nominees for Board committee appointments.

Corporate Governance:

• Corporate Governance Principles.
• Code of Ethics.
• "Best Practices" for corporate governance.
• Response to shareholder proposals.

MEMBERSHIP

The Committee shall be comprised of at least three Independent Directors appointed by the Board. "Independent Director" means the director is not a current or former employee of the Company, does not receive significant direct or indirect compensation in any capacity other than as director, has no interest in any significant transactions or business relationships with the Company, and otherwise meets all requirements imposed by Federal or State securities or tax laws, or any rules, regulations, or listing standard of any applicable national securities exchange.

The members of the Committee shall be appointed by the Board. Each member shall serve at the pleasure of the Board.

MEETINGS

The Committee shall meet at least annually, or more frequently as circumstances dictate.