ex10-q





CHANGE IN CONTROL AGREEMENT FOR




MICHAEL A. VOLKEMA




EXHIBIT 10(q)




CHANGE IN CONTROL AGREEMENT FOR MICHAEL A. VOLKEMA




SEVERANCE AGREEMENT

THIS AGREEMENT is entered into as of March 30, 2001, by and between Herman
Miller, Inc., a Michigan corporation, and Michael A. Volkema (the “Executive”).


      WHEREAS, the Executive currently serves as a key employee of the Company
(as defined in Section 1) and his services and knowledge are valuable to the
Company in connection with the management of one or more of the Company’s
principal operating facilities, divisions, departments or subsidiaries; and

      WHEREAS, the Board (as defined in Section 1) has determined that it is in the
best interests of the Company and its stockholders to secure the Executive’s
continued services and to ensure the Executive’s continued dedication and
objectivity in the event of any threat or occurrence of, or negotiation or
other action that could lead to, or create the possibility of, a Change in
Control (as defined in Section 1) of the Company, without concern as to whether
the Executive might be hindered or distracted by personal uncertainties and
risks created by any such possible Change in Control, and to encourage the
Executive’s full attention and dedication to the Company, the Board has
authorized the Company to enter into this Agreement.


      NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained, the Company and the Executive hereby
agree as follows:



	1.	 	Definitions. As used in this Agreement, the following terms shall have
the respective meanings set forth below:




	 	(a)	 	 “Board” means the Board of
Directors of the Company.
	 
	 	(b)	 	“Bonus Reserve Account” has the meaning stated in the Incentive Cash
Bonus Plan.
	 
	 	(c)	 	“Cause” means (1) a material breach by the Executive of those duties and
responsibilities of the Executive which do not differ in any material
respect from the duties and responsibilities of the Executive during the
ninety (90) day period immediately prior to a Change in Control (other than
as a result of incapacity due to physical or mental illness) which is
demonstrably willful and deliberate on the Executive’s part, which is
committed in bad faith or without reasonable belief that such breach is in
the best interests of the Company and which is not remedied in a reasonable
period of time after receipt of written notice from the Company specifying
such breach or (2) the commission by the Executive of a felony involving
moral turpitude.
	 
	 	(d)	 	“Change in Control” means:
	 



	 	(1)	 	the acquisition by any Person of beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act, of 20 percent
or more of either (i) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or (ii) the combined
voting power of the then outstanding securities of the Company entitled
to vote generally in the election of directors (the “Outstanding Company
Voting Securities”); provided, however, that the following acquisitions
shall not constitute a Change in Control: (A) any acquisition directly
from the Company (excluding any acquisition resulting from the exercise
of a conversion or exchange privilege in respect of outstanding
convertible or exchangeable securities unless such outstanding
convertible or exchangeable securities were acquired directly from the
Company), (B) any acquisition by the Company, (C) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the



64











	 	 	 	Company or (D) any acquisition by any corporation pursuant to a
reorganization, merger or consolidation involving the Company, if,
immediately after such reorganization, merger or
consolidation, each of the conditions described in clauses (i), (ii)
and (iii) of subsection (3) of this Section (1)(c) shall be satisfied; and
provided further that, for purposes of clause (B), if any Person (other than
the Company or any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company)
shall become the beneficial owner of 20 percent or more of the Outstanding
Company Common Stock or 20 percent or more of the Outstanding Company Voting
Securities by reason of an acquisition by the Company and such Person shall,
after such acquisition by the Company, become the beneficial owner of any
additional shares of the Outstanding Company Common Stock or any additional
Outstanding Company Voting Securities and such beneficial ownership is
publicly announced, such additional beneficial ownership shall constitute a
Change in Control;
	 
	 	(2)	 	individuals who, as of the date hereof, constitute
the Board (the “Incumbent Board”) cease for any reason to constitute at
least a majority of such Board; provided, however, that any individual who
becomes a director of the Company subsequent to the date hereof whose
election, or nomination for election by the Company’s stockholders, was
approved by the vote of at least a majority of the directors then comprising
the Incumbent Board shall be deemed to have been a member of the Incumbent
Board; and provided further, that no individual who was initially elected as
a director of the Company as a result of an actual or threatened election
contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act, or any other actual or threatened solicitation of
proxies or consents by or on behalf of any Person other than the Board shall
be deemed to have been a member of the Incumbent Board;
	 
	 	(3)	 	consummation of
a reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation, (i) more
than 60 percent of the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation and
more than 60 percent of the combined voting power of the then outstanding
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals or entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation and in substantially the same
proportions relative to each other as their ownership, immediately prior to
such reorganization, merger or consolidation, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may
be, (ii) no Person (other than the Company, any employee benefit plan [or
related trust] sponsored or maintained by the Company or the corporation
resulting from such reorganization, merger or consolidation [or any
corporation controlled by the Company] and any Person which beneficially
owned, immediately prior to such reorganization, merger or consolidation,
directly or indirectly, 20 percent or more of the Outstanding Company Common
Stock or the Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 20 percent or more of the then
outstanding shares of common stock of such corporation or 20 percent or more
of the combined voting power of the then outstanding securities of such
corporation entitled to vote generally in the election of directors and
(iii) at least a majority of the members of the board of



65











	 	 	 	directors of the corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time of the execution
of the initial agreement or action of the Board providing for such
reorganization, merger or consolidation; or
	 
	 	(4)	 	consummation of (i) a plan of
complete liquidation or dissolution of
the Company or (ii) the sale or other disposition of all or substantially all
of the assets of the Company other than to a corporation with respect to which,
immediately after such sale or other disposition, (A) more than 60 percent of
the then outstanding shares of common stock thereof and more than 60 percent of the combined voting power of the
then outstanding securities thereof entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities immediately prior to
such sale or other disposition and in substantially the same proportions
relative to each other as
their ownership, immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities,
as the case may be, (B) no Person (other than the
Company, any employee benefit plan [or related trust] sponsored or maintained by the Company or such corporation [or any
corporation controlled by the Company] and any Person which beneficially owned,
immediately prior to such sale or other disposition, directly or indirectly, 20
percent or
more of the Outstanding Company Common Stock or the Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 20
percent or more of the then outstanding shares of common stock thereof or 20
percent or more of the combined
voting power of the then outstanding securities thereof entitled to vote
generally in the election of directors and (C) at least a majority of the
members of the board of directors thereof were members of the Incumbent Board
at the time of the execution of the initial
agreement or action of the Board providing for such sale of other disposition.
	 



	 	(e)	 	“Company” means Herman Miller, Inc., a Michigan corporation.
	 
	 	(f)	 	“Date of Termination” means (1) the effective date on which the
Executive’s employment by the Company terminates as specified in a prior
written notice by the Company or the Executive, as the case may be, to the
other, delivered pursuant to Section 11 or (2) if the Executive’s employment
by the Company terminates by reason of death, the date of death of the
Executive.
	 
	 	(g)	 	“Deferred Compensation Plan” means the Herman Miller, Inc. Key Executive
Deferred Compensation Plan.
	 
	 	(h)	 	“Earned Bonus” has the meaning stated in the Incentive
Cash Bonus Plan.
	 
	 	(i)	 	 “Exchange Act” means the Securities
Exchange Act of 1934, as amended.
	 
	 	(j)	 	“Good Reason” means, without the Executive’s express written consent,
the occurrence of any of the following events after a Change in Control:





	 	(1)	 	any of (i) the assignment to the Executive of any duties inconsistent in any
material respect with the Executive’s position(s), duties, responsibilities
or status with the Company immediately prior to such Change in Control, (ii)
a change in the Executive’s reporting responsibilities, titles or offices
with the Company as in effect immediately prior to such Change in Control or
(iii) any removal or involuntary termination of the Executive from the
Company otherwise than as expressly permitted by this Agreement or any
failure to re-elect the Executive to any position with the Company held by
the Executive immediately prior to such Change in Control;



66











	 	(2)	 	a reduction by the Company in the Executive’s rate of annual base salary
or annual Target Bonus as in effect immediately prior to such Change in
Control or as the same may be increased from time to time thereafter;
	 
	 	(3)	 	any
requirement of the Company that the Executive be based at a location in
excess of 50 miles from the facility which is the Executive’s principal
business office at the time of the Change in Control;
	 
	 	(4)	 	the failure of the
Company to (i) continue in effect any employee benefit plan or compensation
plan in which the Executive is participating immediately prior to such Change
in Control, unless the Executive is permitted to participate in other plans
providing the Executive with substantially comparable benefits, or the taking
of any action by the Company which would adversely affect the Executive’s
participation in or materially reduce the Executive’s benefits under any such
plan, or (ii) provide the Executive and the Executive’s dependents welfare
benefits (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death
and travel accident insurance plans and programs) in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive immediately prior to such
Change in Control or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies; or
	 
	 	(5)	 	the failure of the Company to
obtain the assumption agreement from any successor as contemplated in Section
10(b).
	 





	 	 	 	For purposes of this Agreement, an isolated, insubstantial and inadvertent
action taken in good faith
and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive shall not constitute Good Reason.
	 


	 	(k)	 	“Incentive Cash Bonus Plan” means the Herman Miller, Inc. Incentive Cash
Bonus Plan which became effective September 29, 1998.
	 
	 	(l)	 	“Nonqualifying Termination” means a termination of the Executive’s
employment (1) by the Company for Cause, (2) as a result of the Executive’s
death or (3) by the Company due to the Executive’s absence from his duties with
the Company on a full-time basis for at least 180 consecutive days as a result
of the Executive’s incapacity due to physical or mental illness. The term
“Nonqualifying Termination” does not include a termination of the Executive’s
employment by the Executive for any reason or no reason following a Change of Control.
	 
	 	(m)	 	“Person” means any individual, entity or group including any “person”
within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.
	 
	 	(n)	 	“Silver Parachute Plan” means the Herman Miller, Inc. Plan for Severance
Compensation After Hostile Takeover.
	 
	 	(o)	 	“Target Bonus” has the meaning stated in the Incentive Cash Bonus Plan.
	 
	 	(p)	 	“Termination Period” means the period of time beginning with a Change in
Control and ending on the earlier to occur of (1) 24 months following such
Change in Control and (2) the Executive’s death.



67








	2.	 	Obligations of the Executive.




	 	(a)	 	The Executive agrees that in the event any Person attempts a Change in
Control, he shall not voluntarily leave the employ of the Company without
the Good Reason specified in Section 1(j)(2) until (1) such attempted Change
in Control terminates or (2) if a Change in Control shall occur, 180 days
following such Change in Control. For purposes of clause (1) of the
preceding sentence, Good Reason shall be determined as if a Change in
Control had occurred when such attempted Change in Control became known to
the Board.
	 
	 	(b)	 	The following definitions apply to the remainder of this Section 2:
	 




	 	(1)	 	“Affiliate” means and includes any person or entity which controls a
party, which such party controls or which is under common control with
such party.
	 
	 	(2)	 	“Competing Business” means a business which engages or is making
plans to engage, in whole or in part, in the manufacturing, marketing,
distribution or sale of products which are competitive with any products
manufactured, distributed, marketed or sold by the Company during the
Restricted Period.
	 
	 	(3)	 	“Competing Products” means products manufactured by a Competing
Business.
	 
	 	(4)	 	“Control” means the power, direct or indirect, to direct or cause the
direction of the management and policies of a person or entity through
voting securities, contract or otherwise.
	 
	 	(5)	 	“Restricted Period” means the period of the Executive’s employment
with the Company and a period of three years after the Date of
Termination.
	 



	 	(c)	 	Executive acknowledges and agrees that (i) through his continuing
services to the Company, he will learn valuable trade secrets and other
proprietary information relating to the Company’s business, (ii) the
Executive’s services to the Company are unique in nature, (iii) the
Company’s business is international in scope and (iv) the Company would be
irreparably damaged if the Executive were to provide services to any person
or entity in violation of the restrictions contained in this Section 2(c).
Accordingly, as an inducement to the Company to enter into this
Agreement, Executive agrees that if the Executive is entitled to and does
receive a payment pursuant to Section 3(a)(2) of this Agreement, neither
Executive nor any Affiliate of the Executive shall during the Restricted
Period, directly or indirectly, either for himself or for any other
person or entity:




	 
	 	(1)	 	anywhere in the world in which the Company is then
doing business, engage or participate in, or assist, advise or be
connected with (including as an employee, owner, partner,
shareholder, officer, director, advisor, consultant, agent or [without
limitation by the specific enumeration of the foregoing] otherwise), or
permit his name to be used by or render services for, any person or
entity engaged in a Competing Business; provided, however, that nothing
in this Agreement shall prevent Executive from acquiring or owning, as a
passive investment, up to two percent (2%) of the outstanding voting
securities of an entity engaged in a Competing Business which are
publicly traded in any recognized national securities market;
	 
	 	(2)	 	take any action, in connection with a Competing Business, which might divert
from the Company or an Affiliate of the Company any opportunity which
would be within the scope of the Company’s or such Affiliate’s then
business;



68












	 	(3)	 	solicit or attempt to solicit any person or entity who is or has been
(A) a customer of the Company at any time during the Restricted Period to
purchase Competing Products from any person or entity (other than the
Company) or (B) a customer, supplier, licensor, licensee or other
business relation of the Company at any time during the Restricted Period
to cease doing business with the Company; or 
	 
	 	(4)	 	solicit or hire any
person or entity who is a director, officer, employee or agent of the
Company or any Affiliate of the Company to perform services for any
entity other than the Company and its Affiliates.
	 


	 	(d)	 	Executive agrees that any violation by the Executive of Section 2(c) of
this Agreement would be highly injurious to the Company and would cause
irreparable harm to the Company. By reason of the foregoing, Executive
consents and agrees that if the Executive violates any provision of Section
2(c) of this Agreement, the Company shall be entitled, in addition to any
other rights and remedies that it may have, to apply to any court of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce, or prevent any continuing violation of, the
provisions of such section. In the event Executive breaches a covenant contained in Section 2(c) of
this Agreement, the Restricted Period applicable to Executive with
respect to such breached covenant shall be extended for the period of
such breach. Executive also recognizes that the territorial, time and
scope limitations set forth in Sections 2(c), are reasonable and are
properly required for the protection of the Company and in the event that
any such territorial, time or scope limitation is deemed to be
unreasonable, by a court of competent jurisdiction, the Company and
Executive agree, and Executive submits, to the reduction of any or all of
said territorial, time or scope limitations to such an area, period or
scope as said court shall deem reasonable under the circumstances.
	 
	 	(e)	 	Termination of the Executive’s employment shall have no effect on the
continuing operation and enforceability of Sections 2(b), 2(c) or 2(d) and
each such section shall continue to be fully effective and enforceable after
any such termination.




	3.	 	Obligations of the Company Upon Termination of Employment.




	 	(a)	 	If during the Termination Period the employment of the Executive shall
terminate, other than by reason of a Nonqualifying Termination, then the
Company shall pay to the Executive (or the Executive’s beneficiary or
estate) within thirty (30) days following the Date of Termination, as
compensation for services to the Company;
	 


	 	(1)	 	a cash amount equal to the sum
of (i) the Executive’s base salary from the Company and its affiliated
companies through the Date of Termination, to the extent not theretofore
paid, (ii) the Executive’s Target Bonus for the Company’s fiscal year in
which the Date of Termination occurs multiplied by a fraction, the numerator
of which is the number of days in that fiscal year through the Date of
Termination and the denominator of which is 365 or 366, as applicable, (iii)
any positive balance in the Executive’s Bonus Reserve Account; and (iv) any
compensation previously deferred by the Executive other than pursuant to the
Deferred Compensation Plan or any tax qualified plan (together with any
interest and earnings thereon) and any accrued vacation pay, in each case to
the extent not theretofore paid; plus
	 
	 	(2)	 	a lump-sum cash amount (subject to
any applicable payroll or other taxes required to be withheld pursuant to
Section 5) in an amount equal to (i) three times the Executive’s highest
annual base salary from the Company and its affiliated
companies in effect during the twelve (12) month period




69







		
	 	prior to the Date of Termination, plus (ii) three
times the higher of (a) the average of the Executive’s Earned Bonus for the three fiscal years of the Company
preceding the fiscal year in which the Change in Control occurs, or (b) the Executive’s Target Bonus for the fiscal year of the Company in which the Change in Control occurs; provided, however, that any amount to be paid
pursuant to this Section 3(a)(2) shall be reduced by any other amount of severance relating to salary or bonus
continuation to be received by the Executive upon termination
of employment of the Executive under the Silver Parachute Plan or any other severance plan, policy or
arrangement of the Company and any severance payments the Company
is required to make pursuant to the requirements of any
U.S. or foreign law or regulation.






	 	(b)	 	If during the Termination Period the employment of the Executive shall
terminate, other than by reason of a Nonqualifying Termination:
	 


	 	(1)	 	In addition to the payments to be made pursuant to Section 3(a), for a period
of three years commencing on the Date of Termination, the Company shall
continue
to keep in full force and effect all policies of medical, accident,
disability and life insurance with respect to the Executive and his
dependents with the same level of coverage, upon the same terms and
otherwise to the same extent as such policies shall have been in effect
immediately prior to the Date of Termination or, if more favorable to the
Executive, as provided generally with respect to other peer executives of
the Company and its affiliated companies, and the Company and the Executive
shall share the costs of the continuation of such insurance coverage in the
same proportion as such costs were shared immediately prior to the Date of
Termination; provided that, if the Executive cannot continue to participate
in the Company plans providing such benefits, the Company shall otherwise
provide such benefits on the same after-tax basis as if continued
participation had been permitted. Notwithstanding the foregoing, in the
event the Executive becomes reemployed with another employer and becomes
eligible to receive welfare benefits from such employer, the welfare
benefits described herein shall be secondary to such benefits during the
period of the Executive’s eligibility, but only to the extent that the
Company reimburses the Executive for any increased cost and provides
additional benefits necessary to give the Executive the benefits provided
hereunder.
	 
	 	(2)	 	All stock options, restricted awards, other equity based awards and
all stock units credited to the Executive’s account under the Deferred
Compensation Plan shall be fully vested. All stock options shall remain
exercisable for a period of ninety days from the Date of Termination or
the earlier expiration of their initial term; provided, that, if the
Executive would be prohibited from exercising any stock option due to
pooling of interests or other restraints imposed under applicable
accounting rules or securities laws, such option shall remain exercisable
for thirty days after such restriction ceases to apply.
	 
	 	(3)	 	To the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to
receive under any plan, program, policy or practice or contract or
agreement of the Company and its affiliated companies through the Date of
Termination (such other amounts and benefits shall be hereinafter
referred to as the “Other Benefits”).



70











	 	(c)	 	If during the Termination Period the employment of the Executive shall
terminate by reason of a Nonqualifying Termination, then the Company shall
pay to the Executive within thirty (30) days following the Date of
Termination, a cash amount equal to the sum of (1) the Executive’s full
annual base salary from the Company through the Date of Termination, to the
extent not theretofore paid, and (2) the Other Benefits.




	4.	 	Certain Additional Payments by the Company.




	 	(a)	 	Anything in this Agreement to the contrary notwithstanding, in the event
it shall be determined that any payment or distribution by the Company or
its affiliated companies to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of
this Agreement of otherwise, but determined without regard to any additional
payments required under this Section 4) (a “Payment”) would be subject to
the excise tax imposed by Section 4999 of the Code, or any interest or
penalties are incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount such that after
payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments.
	 
	 	(b)	 	Subject to the provisions of Section 4(c), all determinations required
to be made under this Section 4, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made
by the Company’s public accounting firm (the “Accounting Firm”) which shall
provide detailed supporting calculations both to the Company and the
Executive within fifteen (15) business days of the receipt of
notice from the Executive that there has been a Payment, or such earlier
time as is requested by the Company. In the event that the Accounting Firm
is serving as accountant or auditor for the Person effecting the Change in
Control, the Executive shall appoint another nationally recognized public
accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder).
All fees and expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant to this Section 4,
shall be paid by the Company to the Executive within five (5) days of the
receipt of the Accounting Firm’s determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish
the Executive with a written opinion that failure to report the Excise Tax
on the Executive’s applicable federal income tax return would not result in
the imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm hereunder, it
is possible that Gross-Up Payments which will not have been made by the
Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 4(c) and the Executive thereafter
is required to make a



71











		
	 	payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by
the Company to or for the benefit of the Executive.




	 	(c)	 	The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten (10) business days after the
Executive is informed in writing of such claim and shall apprise the Company
of the nature of such claim and the date on which such claim is requested to
be paid. The Executive shall not pay such claim prior to the expiration of
the thirty (30) days period following the date on which the Executive gives
such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company
notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
	 


	 	(1)	 	give the
Company any information reasonably requested by the Company relating to such
claim,
	 
	 	(2)	 	take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
	 
	 	(3)	 	cooperate with
the Company in good faith in order effectively to contest such claim, and
	 
	 	(4)	 	permit the Company to participate in any proceedings relating to such
claim; provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 4(c), the Company shall control all
proceedings taken in connection with such contest and, at its sole option,
may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim
and may, at its sole option, either direct the Executive to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner,
and the Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one
or more appellate courts, as the Company shall determine; provided, however,
that if the Company directs the Executive to pay such claim and sue for a
refund, the Company shall advance the amount of such payment to the
Executive on an interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and provided further, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due
is limited solely to such contested amount.
Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service
or any other taxing authority.



72











	 	(d)	 	If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 4(c), the Executive becomes entitled to receive,
and receives, any refund with respect to such claim, the Executive shall
(subject to the Company’s complying with the requirements of Section 4(c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by the Executive of an amount advanced by the Company pursuant
to Section 4(c), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial of
refund prior to the expiration of thirty (30) days after such determination,
then such advance shall be forgiven and shall not be required to be repaid
and the amount of such advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.




	5.	 	Withholding Taxes. The Company may withhold from all payments due to the
Executive (or his beneficiary or estate) hereunder all taxes which, by
applicable federal, state, local or other law, the Company is required to
withhold therefrom.
	 
	6.	 	Reimbursement of Expenses. If any contest or dispute shall arise under
this Agreement involving termination of the Executive’s employment with
the Company or involving the failure or refusal of the Company to perform
fully in accordance with the terms hereof, the Company shall reimburse the
Executive, on a current basis, for all legal fees and expenses, if any,
incurred by the Executive in connection with such contest or dispute,
together with interest thereon at a rate equal to the prime rate, as
published under “Money Rates” in The Wall Street Journal from time to
time, but in no event higher
than the maximum legal rate permissible under applicable law, such interest
to accrue from the date the Company receives the Executive’s statement for
such fees and expenses through the date of payment thereof; provided,
however, that in the event the resolution of any such contest or dispute
includes a finding denying, in total, the Executive’s claims in such contest
or dispute, the Executive shall be required to reimburse the Company, over a
period of twelve (12) months from the date of such resolution, for all sums
advanced to the Executive pursuant to this Section 6.
	 
	7.	 	Operative Event. Notwithstanding any provision herein to the contrary, no
amounts shall be payable hereunder unless and until there is a Change in
Control at a time when the Executive is employed by the Company.
	 
	8.	 	Termination of Agreement.




	 	(a)	 	This Agreement shall be effective on the date hereof and shall continue
until terminated by the Company as provided in Section 8(b); provided,
however, that this Agreement shall terminate in any event upon the earlier
to occur of (i) termination of the Executive’s employment with the Company
prior to a Change in Control and (ii) the Executive’s death.
	 
	 	(b)	 	The Company shall have the right prior to a Change in Control, in its
sole discretion, pursuant to action by the Board, to approve the termination
of this Agreement, which termination shall not become effective until the
date fixed by the Board for such termination, which date shall be at least
120 days after notice thereof is given by the Company to the Executive in
accordance with Section 11; provided, however, that no such action shall be
taken by the Board during any period of time when the Board has knowledge
that any Person has taken steps reasonably calculated to effect a Change in



73











		
	 	Control until, in the opinion of the Board, such Person has abandoned or
terminated its efforts to effect a Change in Control; and provided
further, that in no event shall this Agreement be terminated in the event
of a Change in Control.




	9.	 	Scope of Agreement. Nothing in this Agreement shall be deemed to entitle
the Executive to continued employment with the Company or its subsidiaries
and, if the Executive’s employment with the Company shall terminate prior
to a Change in Control, then the Executive shall have no further rights
under this Agreement; provided, however, that any termination of the
Executive’s employment following a Change in Control shall be subject to
all of the provisions of this Agreement.
	 
	10.	 	Successors; Binding Agreement.




	 	(a)	 	This Agreement shall not be terminated by any merger or consolidation of
the Company whether the Company is or is not the surviving or resulting
corporation or as a result of any transfer of all or substantially all of
the assets of the Company. In the event of any such merger, consolidation or
transfer of assets, the provisions of this Agreement shall be binding upon
the surviving or resulting corporation or the person or entity to which such
assets are transferred.
	 
	 	(b)	 	The Company agrees that concurrently with any merger, consolidation or
transfer of assets referred to in Section 10(a), it will cause any successor
or transferee unconditionally to assume, by written instrument delivered to
the Executive (or his beneficiary or estate), all of the obligations of the
Company hereunder. Failure of the Company to obtain such assumption prior to
the effectiveness of any such merger, consolidation or transfer of assets
shall be a breach of this Agreement and shall entitle the Executive to
compensation and other benefits from the Company in the same amount and on
the same terms as the Executive would be entitled hereunder if the
Executive’s employment were terminated following a Change in Control other
than by reason of a Nonqualifying Termination. For purposes of implementing
the foregoing, the date on which any such merger, consolidation or transfer
becomes effective shall be deemed the Date of Termination.
	 
	 	(c)	 	This Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive
shall die while any amounts would be payable to the Executive hereunder had
the Executive continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to such
person or persons appointed in writing by the Executive to receive
such amounts or, if no person is so appointed, to the Executive’s estate.




	11.	 	Notices.




	 	(a)	 	For purposes of this Agreement, all notices and other communications
required or permitted hereunder shall be in writing and shall be deemed to
have been duly given when delivered or five days after deposit in the United
States mail, certified and return receipt requested, postage prepaid,
addressed (1) if to the Executive, to _______________ and if to the Company,
to 855 East Main Avenue, Zeeland, MI 49464, attention General Counsel, with
a copy to the Secretary, or (2) to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.
	 
	 	(b)	 	A written notice of the Executive’s Date of Termination by the Company
or the Executive, as the case may be, to the other shall (i) indicate the
specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated and



74











		
	 	(iii) specify the termination date (which date shall be not less than
fifteen (15) days after the giving of such notice). The failure by the
Executive or the Company to set forth in such notice any fact or
circumstance which contributes to a showing of Good Reason or Cause shall
not waive any right of the Executive or the Company hereunder or preclude
the Executive or the Company from asserting such fact or circumstance in
enforcing the Executive’s or the Company’s rights hereunder.




	12.	 	Full Settlement; Resolution of Disputes.




	 	(a)	 	The Company’s obligation to make any payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the Executive or others.
In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other
employment except to the extent provided in Section 3(b)(1).
	 
	 	(b)	 	If there shall be any dispute between the Company and the Executive in
the event of any termination of the Executive’s employment, then, unless and
until there is a final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause, that the
Executive terminated his employment without Good Reason, or that the Company
is not otherwise obligated to pay any amount or provide any benefit to the
Executive and his dependents or other beneficiaries, as the case may be,
under Sections 3(a), 3(b) and 4, the Company shall pay all amounts, and
provide all benefits, to the Executive and his dependents or other
beneficiaries, as the case may be, that the Company would be required to pay
or provide pursuant to Sections 3(a), 3(b) and 4 as though such termination
were by the Company without Cause or by the Executive with Good Reason;
provided, however, that the Company shall not be required to pay any
disputed amounts pursuant to this Section 12(b) except upon receipt of an
undertaking by or on behalf of the Executive to repay all such amounts to
which the Executive is ultimately adjudged by such court not to be entitled.
	 


	13.	 	Employment with Subsidiaries. Employment with the Company for purposes of
this Agreement shall include employment with any corporation or other entity in
which the Company has a direct or indirect ownership interest of 50 percent or
more of the total combined voting power of the then outstanding securities of
such corporation or other entity entitled to vote generally in the election of
directors.
	 
	14.	 	Governing Law; Validity. The interpretation, construction and performance
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of Michigan without regard to the principle
of conflicts of laws. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which other provisions shall remain in full force
and effect.
	 
	15.	 	Counterparts. This Agreement may be executed in two counterparts, each of
which shall be deemed to be an original and both of which together shall
constitute one and the same instrument.
	 
	16.	 	Miscellaneous. No provision of this Agreement may be modified or waived
unless such modification or waiver is agreed to in writing and signed by the
Executive and by a duly authorized officer of the
Company. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. Failure by the Executive or the Company to insist upon strict
compliance with any



75











		
	 	provisions of this Agreement or to assert any right the Executive or the Company
may have hereunder, including, without limitation, the right of the Executive
to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any ot
her provision or right of this Agreement. Except as otherwise expressly set forth in this Agreement, the rights
of, and benefits payable to, the Executive, his estate or his beneficiaries pursuant to this Agreement are in
addition to any rights of, or benefits payable to, the Executive, his estate or his beneficiaries under any other
employee benefit plan or compensation plan, policy practice or program of the Company or any other contract or
agreement with the Company.



IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by a
duly authorized officer of the Company and the Executive has executed this
Agreement as of the day and year first above written.



HERMAN MILLER, INC.

By:
 EXECUTIVE
Executive’s Name Michael A. Volkema




76