ValueAct gains representation on board of Sara Lee

By Lisa Kerner

Charlotte, N.C., Sept. 2 - Sara Lee Corp. announced an agreement with ValueAct Capital Master Fund, LP, ValueAct Capital Master Fund III, LP and their affiliates that expands the company's board to 11 directors from 10.

The resulting vacancy will be filled by Jeffrey W. Ubben, who is the chief executive officer, chief investment officer and a founder of ValueAct Capital, it was reported in a schedule 13D filed with the Securities and Exchange Commission.

Ubben will remain on the board until the 2008 annual meeting. He also will be nominated for election at the meeting as part of the agreement.

Sara Lee has no obligation to appoint a replacement nominee if Ubben is unable to serve and is not obligated to nominate any ValueAct designee for election at the 2009 annual meeting, the filing said.

In addition, if ValueAct ceases to own more than 4.5% of the outstanding voting power of Sara Lee, Ubben must resign from the board.

ValueAct, for its part, agreed to vote for each of Sara Lee's nominees for election to the board and in favor of any matters proposed by stockholders and recommended by the board.

In the filing, ValueAct reported beneficial ownership of 5.4% of the Downers Grove, Ill., food producer.

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