Jeffrey Ubben & ValueAct Capital Go Activist On Alliance Data Systems (ADS)

Page 8 of 13 – SEC Filing

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CUSIP NO. 018581108 Page 8 of 14
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Item 1. Security and Issuer

This Schedule 13D relates to the Common Stock (the “Common Stock”) of
Alliance Data Systems Corporation, a Delaware Corporation (the “Issuer”). The
address of the principal executive offices of the Issuer is 7500 Dallas
Parkway, Suite 700, Plano, Texas 75024.

Item 2. Identity and Background

This statement is filed jointly by (a) ValueAct Capital Master Fund,
L.P. (“ValueAct Master Fund”), (b) VA Partners I, LLC (“VA Partners I”), (c)
ValueAct Capital Management, L.P. (“ValueAct Management L.P.”), (d) ValueAct
Capital Management, LLC (“ValueAct Management LLC”), (e) ValueAct Holdings,
L.P. (“ValueAct Holdings”) and (f) ValueAct Holdings GP, LLC (“ValueAct
Holdings GP”)(collectively, the “Reporting Persons”).

ValueAct Master Fund is a limited partnership organized under the laws
of the British Virgin Islands. It has a principal business address of One
Letterman Drive, Building D, Fourth Floor, San Francisco, CA 94129.

VA Partners I is a Delaware limited liability company, the principal
business of which is to serve as the General Partner to ValueAct Master Fund.
It has a principal business address of One Letterman Drive, Building D,
Fourth Floor, San Francisco, CA 94129.

ValueAct Management L.P. is a Delaware limited partnership which
renders management services to ValueAct Master Fund. ValueAct Management LLC
is a Delaware limited liability company, the principal business of which is
to serve as the General Partner to ValueAct Management L.P. Each has a
principal business address of One Letterman Drive, Building D, Fourth Floor,
San Francisco, CA 94129.

ValueAct Holdings is a Delaware limited partnership and is the sole
owner of the limited partnership interests of ValueAct Management L.P. and
the membership interests of ValueAct Management LLC and is the majority owner
of the membership interests of VA Partners I. ValueAct Holdings GP is a
Delaware limited liability company, the principal business of which is to
serve as the General Partner to ValueAct Holdings. Each has a principal
business address of One Letterman Drive, Building D, Fourth Floor, San
Francisco, CA 94129.

(d) and (e). None of the entities or persons identified in this Item 2
has during the past five years been convicted of any criminal proceeding
(excluding traffic violations or similar misdemeanors), nor been a party to a
civil proceeding of a judicial or administrative body of competent judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration

The source of funds used for the purchase of the Issuer’s securities
was the working capital of ValueAct Master Fund. The aggregate funds used by
these Reporting Persons to make the purchases were $537,118,351.88.