APPENDIX I HERMAN MILLER BOARD OF DIRECTORS--AUDIT COMMITTEE CHARTER JULY 15, 2003
2003 Audit Charter: MLHR
The primary function of the Audit Committee (the "committee") is to assist the Board of Directors by overseeing (1) the quality and integrity of the company's accounting, auditing and reporting practices, (2) the performance of the company's business risk group, including the internal audit function, and independent auditor, and (3) the company's disclosure controls and system of internal controls regarding finance, accounting, legal compliance, and ethics that management and the Board of Directors have established.
The committee shall provide an open avenue of communication among the independent auditors, financial and senior management, the business risk group and the Board of Directors.
The committee shall be comprised of three or more members of the Board of Directors, each of whom (1) must qualify as an independent director under the listing standards of the NASDAQ and Section 301 of the Sarbanes-Oxley Act, and (2) shall be free from any relationship to the company that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the committee. All members of the committee shall have a working familiarity with basic financial and accounting practices and the Board of Directors shall attempt to appoint at least one member of the committee who is a "financial expert" in compliance with the criteria established by the Securities and Exchange Commission. The members shall be nominated by the Nominating and Governance Committee and appointed annually to one-year terms by the Board. The Nominating and Governance Committee shall recommend, and the Board shall designate, one member of the committee as Chair. A member of the committee shall not simultaneously serve on the audit committee of more than two other public companies.
MEETINGS AND PROCEDURES
Meetings of the committee shall be subject to the committee procedure rules set forth in the company's Bylaws, rules established by the Board, and its own rules of procedure (including the Administrative Guidelines schedule), which shall be consistent with those Bylaws and the following:
1. The committee shall meet at least four (4) times annually and more frequently as circumstances require. At least four (4) scheduled meetings of the committee shall include an executive session of the committee, absent members of management and on such terms and conditions as the committee may elect. In addition, the committee may meet periodically with management, the head of the company's business risk group and the independent auditors in separate executive sessions to discuss any matters that the committee or the business risk department or independent auditors believe should be discussed privately.
RESPONSIBILITIES AND DUTIES
The company's management is responsible for preparing the company's financial statements, and the independent auditors are responsible for auditing the company's financial statements. Consequently, the Audit Committee's role is one of oversight and does not provide any expert assurance or certification as to the company's financial statements or the work of the independent auditors or that of the business risk group. However, the independent auditors and director of business risk are directly accountable to the Audit Committee. The committee shall have the following responsibilities and duties:
1. Review the company's annual financial statements and any financial reports submitted to the SEC or to the public, including any report issued by the independent auditors.
1. Appoint, approve the compensation of, and provide oversight (including regarding the audit scope and audit plan) of the company's independent auditor, including the removal of the company's independent auditors. The independent auditors shall report directly to the committee, and the committee shall oversee the resolution of any disagreements between management and the independent auditors.
FINANCIAL REPORTING PROCESSES
1. Review the integrity of the company's financial reporting process, both internal and external, giving consideration to the disclosure controls, and consultation with management, the independent auditors and the director of business risk.
2. Periodically review any significant difficulties, disagreements with management or scope restrictions encountered in the course of that group's work.
1. Review the audit plan, activities, organizational structure and qualifications of the company's business risk group including a periodic review of the director's performance, and approve the appointment of the director.
1. Review compliance with the company's policies related to legal and ethical practices, including its Code of Business Ethics, approved by the Board of Directors, to ensure that management has maintained a system to comply with expected ethical and legal requirements.
1. Perform an annual self-assessment relative to the Audit Committee's purpose, duties and responsibilities set forth in this Charter.