2003 Committee Charter : FBF

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FLEETBOSTON FINANCIAL CORPORATION
Audit Committee Charter
PURPOSE
The Audit Committee shall assist the Board of Directors with its oversight of (i) the integrity of the
Corporation's financial statements, (ii) the Corporation's compliance with legal and regulatory
requirements, (iii) the independent auditor's qualifications and independence, and (iv) the performance of
the Corporation's internal audit function and independent auditors.
The Audit Committee shall be directly responsible for the appointment, compensation and oversight of
the work of the independent auditor (including the resolution of disagreements between management and
the independent auditor regarding financial reporting) in connection with the preparation or issuance of
any independent audit report or related work.
COMPOSITION
The Audit Committee shall be appointed by a resolution passed by a majority of the Board of Directors.
A minimum of three members of the Board shall be selected to serve on the Audit Committee. The
Committee shall satisfy the independence and experience requirements established by the Securities and
Exchange Commission (SEC) and the New York Stock Exchange (NYSE). At least one member of the
Committee shall qualify as a "financial expert" within the meaning of the definition set forth in rules of
the SEC.
DUTIES AND RESPONSIBILITIES
In carrying out its purposes, the Committee shall have the following duties, responsibilities and authority.
Financial Reporting
  • Review with management and the independent auditor the Corporation's Form 10-K prior to filing
    with the SEC, including the annual financial statements and disclosures contained therein, as well as
    any certification, report, opinion or review rendered by management or the independent auditor in
    connection with the foregoing.
  • Review with management and the independent auditor the Corporation's quarterly report on Form 10-
    Q, including the financial statements and disclosures contained therein, as well as any certification,
    report, opinion or review rendered by management or the independent auditor in connection with the
    preparation and certification of the foregoing.
  • Prepare the report required by the rules of the SEC that is required to be included in the Corporation's
    annual proxy statement.
  • Review with management and the independent auditor financial statements and other reports of a
    financial nature, discuss with the independent auditor its views or judgments on the integrity of such
    statements and reports, and resolve any disputes between management and the independent auditor
    that may have arisen in connection with the preparation of such statements and reports.
  • Periodically discuss earnings press releases as well as the nature of financial information and earnings
    guidance provided to analysts and rating agencies.
  • Review certifications signed by the Chief Executive Officer and the Chief Financial Officer in
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    connection with any periodic reports filed by the Corporation with the SEC and discuss with such
    individuals significant deficiencies, if any, in the design or operation of the internal control system
    and any fraud or potential fraud, if any, involving management or employees in connection with any
    internal control function as required by the Sarbanes-Oxley Act of 2002.
    The Independent Auditor
  • Appoint, compensate and oversee the work of the independent auditor for the Corporation in
    connection with the preparation and issuance of any audit report or related work. The independent
    auditor shall report directly to the Audit Committee.
  • Serve as the channel of communication between the independent auditor and the Board.
  • Review any proposed replacement of the independent auditor, and terminate the engagement of any
    independent auditor as the Committee deems necessary or appropriate.
  • Review the qualifications and independence of the independent auditor, and any potential conflicts of
    interest that may exist between management and the independent auditor by obtaining a written
    statement from the independent auditor and management of all relationships with, and services
    provided to, the Corporation by the independent auditor and/or its affiliates (including discussing
    such relationships with the independent auditor and taking actions where needed).
  • Review the independent auditor's compensation and the proposed terms of its engagement.
  • Review with the independent auditor the proposed scope of services and plan for the annual audit.
  • Evaluate the performance of the independent auditor and make inquiries to determine that no
    improper influence was exerted on the conduct of the audit by directors, management or employees of
    the Corporation.
  • Review any significant written communications between the management of the Corporation and the
    independent auditor including, without limitation, the independent auditor's observations on internal
    control matters, management letters and schedule of unadjusted differences, if any, or any other audit
    problems or difficulties as well as management's response.
  • Ensure appropriate audit partner rotations and any independent auditor rotations that may be required
    by law or as otherwise appropriate.
  • At least annually, obtain and review reports from the independent auditor describing (i) the
    independent auditor's internal control procedures, (ii) any material issues concerning the independent
    auditor's internal control matters raised in the most recent independent peer review report, and (iii)
    issues concerning audits conducted by the independent auditor within the past five years raised by a
    governmental or professional authority.
  • Pre-approve any non-audit services performed on behalf of the Corporation by the independent
    auditor that are not prohibited by law or regulation and ensure that the retention of such services are
    properly disclosed by the Corporation. (The Committee may delegate pre-approval authority for any
    non-audit services to one or more members of the Committee, provided that any pre-approval granted
    by such member or members is reviewed by the Committee at its next scheduled meeting.)
  • Review any non-audit services performed on behalf of the Corporation by the independent auditor
    that meet the de minimis exception under applicable law.
  • Establish hiring policies for any employee or former employee of the independent auditor.
    Internal Audit
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  • Oversee the selection of the Chief Auditor and review his/her performance and compensation
    annually. The Chief Auditor shall report functionally to the Committee and administratively to the
    Chief Risk Officer.
  • Serve as the channel of communication between the Chief Auditor and the Board.
  • Oversee the internal audit department's staffing, training and budget.
  • Annually review and approve the internal audit plan and any material changes to audit methodology.
  • Review significant findings of the internal auditing department, management's responses to those
    findings including the risk attributed to unresolved issues.
    Financial Reporting Principles and Policies
  • Review with the independent auditor and management critical accounting and financial reporting
    policies, practices and procedures used by the Corporation.
  • Review with the independent auditor alternative treatments of financial information as permitted by
    GAAP that have been discussed with the management of the Corporation including the ramifications
    of such alternative treatments and the proper disclosure thereof, as well as any treatment of such
    financial information that may have been preferred by the independent auditors.
  • Review major changes and other major questions of choice respecting the appropriate auditing and
    accounting principles, policies and practices used in the preparation of the Corporation's financial
    statements when presented by the independent auditor, management, or otherwise.
    Internal Controls and Procedures
  • Annually review with management and the independent auditor (i) the basis for disclosures made in
    the annual report to stockholders regarding the control environment of the Corporation, and (ii) the
    reports required under the Federal Deposit Insurance Corporation Improvement Act of 1991.
  • At least annually consider, in consultation with management, the independent auditor, and the Chief
    Auditor, the adequacy of the Corporation's internal controls including the resolution of identified
    material weaknesses and reportable conditions, if any.
  • Review deficiencies, if any, identified by management in the design and operation of internal controls
    which may be contained in the CEO/CFO certifications required by the Sarbanes-Oxley Act of 2002.
  • Review policies and procedures with respect to risk assessment and risk management.
    Compliance with Laws and Regulations
  • Review periodic reports prepared by the Chief Compliance Officer and such other sources of
    information as the Committee deems appropriate regarding the Corporation's program for complying
    with laws and regulations.
  • Review summaries of examination reports, supervisory letters and other regulatory communications
    addressed to the Board and monitor any needed corrective action; be primarily responsible for Board
    level communication with regulatory agencies.
  • Annually review and report to the Board (within 15 months of the previous report) on the Bank's
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    fiduciary activities and the effectiveness of its policies, practices and controls. The report shall
    include a specific statement of the Committee's conclusion as to whether fiduciary activities are being
    administered in accordance with law, 12 CFR 9 and sound fiduciary principles and be accompanied
    by reports prepared by internal and/or external auditors.
  • Periodically review programs for compliance with the Bank Secrecy Act and designate an individual
    responsible for coordinating and monitoring day-to-day compliance with the program.
  • Receive periodic summaries regarding the filing of Suspicious Activity Reports regarding known or
    suspected crimes.
    Other Duties
  • The Committee shall establish and ensure that procedures are in place for (i) the receipt, retention and
    treatment of complaints received by the Corporation from any source, either internally or externally,
    in connection with any accounting, internal accounting controls, or auditing matters, and (ii) the
    submission by employees of the Corporation, on a confidential and anonymous basis, of
    communications involving any employee concerns regarding questionable accounting or auditing
    matters.
  • At least annually, review with the Corporation's General Counsel significant pending litigation that
    may have a material impact on the Corporation's financial statements. Notwithstanding, the
    Committee shall be informed of any significant litigation on a timely basis.
  • Annually, review and approve management's assessment of the Corporation's vulnerability to
    interruption in providing information, the impact of such disruption on the Corporation's operations,
    and the methods employed to reduce or eliminate such risk and/or impact.
  • Approve a security program and, at least annually, receive a report from the Security Officer on the
    implementation, administration and effectiveness of the security program.
    Administrative
  • Maintain minutes of its meetings and report its activities to the Board on a regular basis, making any
    recommendations that the Committee deems appropriate.
  • Meet separately, at least quarterly, with management, internal auditors, and external auditors.
  • Annually review the adequacy of this charter and recommend any proposed changes to the Board for
    approval.
  • Annually evaluate the performance of the Committee.
  • Perform any other activities consistent with this charter, the Corporation's bylaws, and governing
    law, as the Committee or the Board deems necessary or appropriate.
    DELEGATION TO SUBCOMMITTEE
    The Committee may, in its discretion, delegate any portion of its duties and responsibilities to a
    subcommittee of the Committee or a member of the Committee as permitted by law or the rules of the
    NYSE.
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    RESOURCES AND AUTHORITY
    The Committee shall also have the authority to direct an investigation into any matter related to the
    Corporation's business and affairs. The Committee may also retain without approval from the Board or
    management its own outside counsel and any other advisors that the Committee deems necessary in
    connection with carrying out its duties. This does not preclude advice from internal counsel or the
    Corporation's outside counsel. The Committee shall determine, in its sole discretion, the level of funding
    to compensate the independent auditor and any counsel or advisor employed by the Committee and the
    Corporation shall be obligated to make such funding available.