October 01, 2018

Mergers & Acquisitions Code Set Description

The M&A Codes follow a well-recognized pattern familiar to M&A practitioners, regardless of size or complexity of the deal, that aligns with the way work is actually conducted in phases during the course of a transaction.

MA00 Preliminary Matters

Work on Preliminary Matters (Letter of Intent, Confidentiality Agreements, Exclusivity, Inducement, Break Fee Information Memorandum, Auction Process, Service Provider engagement agreements).

Time related to:

- Drafting, negotiating and amending preliminary stage agreements;

- Establishing bidding and auction procedures;

- Drafting, negotiating and amending engagement agreements with service providers (e.g., accountants, environmental consultants, investment bankers, etc.)

-Geopolitical and legal climate analysis for target markets and products, "doing business in" new geographies and markets cultural/standards and business practices advice, deal structure and strategy advice

MB00 Purchase/Merger Agreement

Time related to drafting, negotiating and amending a purchase/merger agreement; soliciting input/guidance from specialists on terms and provisions

MC00 Due Diligence and Disclosure Schedules

Time reviewing documents, attending management presentations, preparing due diligence questionnaire, setting up data room, negotiating due diligence reliance letters, and conducting other due diligence searches (e.g., liens, litigation, background checks, etc.). Also, time related to drafting, reviewing and negotiating disclosure schedules.

MD00 Ancillary Documents

Time related to drafting, negotiating and amending ancillary agreements to the Purchase/Merger Agreement (e.g., agreements among buying/selling parties, employment agreements, non-solicitation and non-competition agreement, transition services agreements, supply agreements, escrow agreements, assignment/novation agreements, etc.) Also, time for inventorying required consents and procuring third-party signatures (execution) of required agreements/consents.

ME00 Financing

Time related to drafting, negotiating and amending any acquisition financing (e.g., bank loans, debentures, equity financing, security agreements, guarantees, etc.)

MF00 Regulatory and Specialty Matters

When the time relates to work done by a subject matter expert without overall responsibility for the transaction, the time should be billed to the specialist codes. The following codes relate to consultation regarding particular areas of expertise. Even if the work might be posted to another code (e.g., Due Diligence and Disclosure Schedules and Purchase/Merger Agreements), the work of a subject matter expert should be reflected in the specialty code. This includes obtaining regulatory clearances if the work is done by the subject matter expert.

MF10 Antitrust / Competition

Time relating to:

- analyzing filing requirements and possible antitrust overlaps;

- preparing competition law filings;

- responding to information requests from regulators;

- meetings and negotiations with regulators;

- implementing any regulatory required actions (e.g., hold separate commitments, asset dispositions).

MF20 Data Security/Privacy/Data Protection/Cyber Security

Time related to data security, privacy, and cybersecurity due diligence, including assessment of risks and maturity of security systems; tactical and strategic fixes to improve security and their related costs; potential or actual data breaches; system vulnerabilities; overall security posture; potential liabilities; and impact on valuations. This code also may be used for industry-specific security issues and requirements (e.g., PCI-DSS for credit card information; NERC-CIP for energy companies; HIPAA for healthcare companies).

MF30 Employment, Labor and Employee Benefits

Time relating to:

- analyzing human resource issues in an acquisition (e.g., WARN Act requirements, relative pay scales and practices, title mapping, etc.)

- employee benefit issues (e.g., 401(k) mergers, health and welfare plan analysis and harmonization, leave policy issues)

- trade union and works council matters (e.g., notices or consultations, renegotiation of union contracts, etc.)

- immigration matters

MF31 Executive Compensation

Analyzing employment agreements, severance arrangements, equity award plans and agreements, change-in-control payments, retention or “Stay” agreements and nonqualified deferred compensation arrangements and other incentive compensation arrangements.

- Preparation of “golden parachute” (Section 280G) vote materials, if applicable.

- Consideration of post-acquisition executive benefits to be provided to senior management.

MF40 Environmental

Time relating to environmental due diligence, transfer of environmental permits, and other environmental matters.

MF50 Intellectual Property and Technology

Time relating to:

- intellectual property and technology due diligence;

- drafting, negotiating and amending licenses of intellectual property and technology assets

MF60 Real Property

Time relating to:

- real property due diligence

- drafting, negotiating and amending real property transfer documents

- assigning leases

- landlord consents

- land use regulations

MF70 Securities Regulatory Matters

Time relating to:

- drafting and filing any required registration statements, proxy statements and Reports/Circulars

- no action requests

MF80 Tax

Time relating to:

- Transaction structuring

- Tax due diligence

- Negotiation of tax allocations, indemnifications and representations

MG00 Shareholder/Board Matters

Time spent on board presentations regarding due diligence findings and the transaction, drafting of minutes and resolutions of the board, review of fairness opinions, advising the board regarding fiduciary duties/shareholder meetings.

MH00 Closing Matters

Time spent on drafting and negotiating closing documents (e.g., certificates, bills of sale, legal opinions, closing agenda, powers of attorney, etc.) and attending the closing.

MI00 Integration Matters

Time spent on post-closing integration matters, including restructuring of subsidiaries and post-closing transfer of assets and liabilities within a party’s corporate structure.

MJ00 Post-Closing Requirements, Disputes & Adjustments

Work on Post-Closing Requirements, Disputes and Adjustments (Working Capital, Indemnification, Earn-Out) Time relating to post-closing working capital, purchase price adjustments, earn-out and other adjustments, negotiating and litigating indemnification claims.

MK00 Deal Management

Time that cannot be coded anywhere else and that relates to project management activities not clerical in nature, i.e., time spent overseeing the management of the matter based on assuring that scope, time and cost are evaluated,

monitored and communicated. Includes adjusting the level of effort and assignment of work, communicating among the team and with the client based on changes in circumstances and evaluation of budget against actual.

MZ00-MZ99 Custom Code Tasks

These codes have been reserved for customization. Any vendor or client who determines that customization is necessary should only use codes within this numbering sequence in order to avoid conflicts with anticipated future expansion of the standard.