Edgar Filing: AGERE SYSTEMS INC

================================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 13D

UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)

AGERE SYSTEMS INC.
----------------------------------------------
(Name of Issuer)

CLASS A COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)

00845V 10 0
-----------------
(CUSIP Number)
----------------------------------------------

SCOTT A. ARENARE
MANAGING DIRECTOR AND GENERAL COUNSEL
WARBURG PINCUS LLC
466 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 878-0600
----------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)

WITH A COPY TO:
ANDREW R. BROWNSTEIN
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000

JUNE 13, 2002
----------------------------------------------
(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box: |_|.

Page 1 of 11 Pages

================================================================================

SCHEDULE 13D

CUSIP NO. 00845V 10 0 PAGE 2 OF 11

-------------------------------------------------------------------------------
1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WARBURG PINCUS PRIVATE EQUITY VIII, L.P.
13-4161869
-------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
-------------------------------------------------------------------------------
3. SEC USE ONLY
-------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
-------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
-------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
-------------------------------------------------------------------------------
Number of 7. SOLE VOTING POWER

Shares -0-
-------------------------------------------------------------------
Beneficially 8. SHARED VOTING POWER

Owned By 52,555,737*
-------------------------------------------------------------------
Each 9. SOLE DISPOSITIVE POWER

Reporting -0-
-------------------------------------------------------------------
Person With 10. SHARED DISPOSITIVE POWER

52,555,737*
-------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
52,555,737*
-------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
-------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.0%**
-------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON REPORTING
PN
-------------------------------------------------------------------------------

---------------------------
* Assumes the full conversion of the Convertible Subordinated Notes beneficially
owned by the Investors in accordance with their terms and the purchase of
10,000,000 shares of Class A Common Stock by the Investors pursuant to the
terms of the Forward Contract.

**Represents the percentage of Class A Common Stock beneficially owned by WP
VIII as of June 21, 2002 assuming full conversion of the Convertible
Subordinated Notes beneficially owned by the Investors in accordance with
their terms and the purchase of 10,000,000 shares of Class A Common Stock by
the Investors pursuant to the terms of the Forward Contract. Based on the same
assumptions, as of June 21, 2002, WP VIII beneficially owned 3.2% of the
outstanding Class A Common Stock and Class B Common Stock, taken as a whole.

SCHEDULE 13D

CUSIP NO. 053499 10 9 PAGE 3 OF 11

-------------------------------------------------------------------------------
1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WARBURG, PINCUS & CO.
13-6358475
-------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
-------------------------------------------------------------------------------
3. SEC USE ONLY
-------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
-------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
-------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
-------------------------------------------------------------------------------
Number of 7. SOLE VOTING POWER

Shares -0-
-------------------------------------------------------------------
Beneficially 8. SHARED VOTING POWER

Owned By 52,555,737*
-------------------------------------------------------------------
Each 9. SOLE DISPOSITIVE POWER

Reporting -0-
-------------------------------------------------------------------
Person With 10. SHARED DISPOSITIVE POWER

---------------------------
* Assumes the full conversion of the Convertible Subordinated Notes beneficially
owned by the Investors in accordance with their terms and the purchase of
10,000,000 shares of Common Stock by the Investors pursuant to the terms of
the Forward Contract.

**Represents the percentage of Class A Common Stock beneficially owned by WP as
of June 21, 2002 assuming full conversion of the Convertible Subordinated
Notes beneficially owned by the Investors in accordance with their terms and
the purchase of 10,000,000 shares of Class A Common Stock by the Investors
pursuant to the terms of the Forward Contract. Based on the same assumptions,
as of June 21, 2002, WP beneficially owned 3.2% of the outstanding Class A
Common Stock and Class B Common Stock, taken as a whole.

SCHEDULE 13D

CUSIP NO. 053499 10 9 PAGE 4 OF 11

-------------------------------------------------------------------------------
1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WARBURG PINCUS LLC
13-3536050
-------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
-------------------------------------------------------------------------------
3. SEC USE ONLY
-------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
-------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
-------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
NEW YORK
-------------------------------------------------------------------------------
Number of 7. SOLE VOTING POWER

Shares -0-
-------------------------------------------------------------------
Beneficially 8. SHARED VOTING POWER

Owned By 52,555,737*
-------------------------------------------------------------------
Each 9. SOLE DISPOSITIVE POWER

Reporting -0-
-------------------------------------------------------------------
Person With 10. SHARED DISPOSITIVE POWER

52,555,737*
-------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
52,555,737*
-------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
-------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.0%**
-------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON REPORTING
OO
-------------------------------------------------------------------------------

---------------------------
* Assumes the full conversion of the Convertible Subordinated Notes beneficially
owned by the Investors in accordance with their terms and the purchase of
10,000,000 shares of Common Stock by the Investors pursuant to the terms of
the Forward Contract.

**Represents the percentage of Class A Common Stock beneficially owned by WP LLC
as of June 21, 2002 assuming full conversion of the Convertible Subordinated
Notes beneficially owned by the Investors in accordance with their terms and
the purchase of 10,000,000 shares of Class A Common Stock by the Investors
pursuant to the terms of the Forward Contract. Based on the same assumptions,
as of June 21, 2002, WP LLC beneficially owned 3.2% of the outstanding Class A
Common Stock and Class B Common Stock, taken as a whole.

CUSIP NO. 053499 10 9 SCHEDULE 13D PAGE 5 OF 11

This statement on Schedule 13D (this "Schedule 13D") is being
filed on behalf of Warburg Pincus Private Equity VIII, L.P., a limited
partnership organized under the laws of Delaware ("WP VIII"), Warburg, Pincus &
Co., a general partnership organized under the laws of New York ("WP"), and
Warburg Pincus LLC, a limited liability company organized under the laws of New
York ("WP LLC", and together with WP VIII and WP, the "Reporting Persons"). The
holdings of the Reporting Persons indicated in this Schedule 13D include the
holdings of Warburg Pincus Netherlands Private Equity VIII C.V. I, ("WPNPE VIII
I"), Warburg Pincus Netherlands Private Equity VIII C.V. II ("WPNPE VIII II"),
and Warburg Pincus Germany Private Equity VIII KG ("WPGPE VIII", and together
with WP VIII, WPNPE VIII I and WPNPE VIII II, the "Investors"). WP, WP LLC and
the Investors are referred to in this Schedule 13D as the "Group Members".

ITEM 1. SECURITY AND ISSUER.
-------------------

This Schedule 13D relates to the Class A Common Stock, par value
$0.01 per share (the "Class A Common Stock"), of Agere Systems Inc., a
corporation organized under the laws of Delaware (the "Issuer"), and is being
filed pursuant to Rule 13d-1 under the Securities Exchange Act of 1934, as
amended (together with the regulations promulgated thereunder, the "Exchange
Act"). The address of the principal executive offices of the Issuer is 555 Union
Boulevard, Allentown, Pennsylvania 18109.

ITEM 2. IDENTITY AND BACKGROUND.
-----------------------

(a) This Schedule 13D is being filed by the Group Members. The Group Members
may be deemed to be a "group" within the meaning of Rule 13d-5 of the
Exchange Act. The sole general partner of each Investor is WP. WP LLC
manages each Investor. The general partners of WP and the members of WP LLC
are described on Schedule I, which is attached hereto as part of Exhibit 1
and is incorporated herein by reference

(b) The address and principal place of business of each of the Group Members is
c/o 466 Lexington Avenue, New York, New York 10017.

(c) The principal business of each Investor is that of a limited partnership
engaged in making private equity and related investments. The principal
business of WP is acting as general partner of each of the Investors and
various other investment funds. The principal business of WP LLC is acting
as manager of each of the Investors and various other investment funds.

(d) None of the Group Members, nor, to the best of their knowledge, any of the
directors, executive officers, general partners or members of WP and WP LLC
set forth on Schedule I has, during the five years preceding the date of
this Schedule 13D, been convicted in a criminal proceeding (excluding
traffic violations and similar misdemeanors).

(e) None of the Group Members, nor, to the best of their knowledge, any of the
directors, executive officers, general partners or members of WP and WP LLC
set forth on

CUSIP NO. 053499 10 9 SCHEDULE 13D PAGE 6 OF 11

Schedule I has, during the five years preceding the date of this Schedule
13D, been a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding was or is
subject to a 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.

(f) WP VIII is organized under the laws of Delaware. Each of WPNPE VIII I and
WPNPE VIII II is organized under the laws of the Netherlands. WPGPE VIII is
organized under the laws of Germany. Each of WP and WP LLC is organized
under the laws of New York. Except as otherwise indicated on Schedule I,
each of the individuals referred to in paragraph (a) above are citizens of
the United States.

ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
-------------------------------------------------

The total amount of funds required by each Investor to purchase
the shares of Class A Common Stock and Convertible Subordinated Notes (as
defined below) as described herein was, or, in the case of those shares of Class
A Common Stock subject to the Forward Contract (as defined below), will be,
furnished from the working capital of such Investor. The total amount of funds
used by the Investors to purchase shares of Class A Common Stock was
$55,506,941, net of brokerage commissions. The total amount of funds used by the
Investors to purchase Convertible Subordinated Notes was $75,000,000. The total
amount of funds that may be used by the Investors to purchase shares of Class A
Common Stock pursuant to the Forward Contract may be up to $25,000,000, but is
presently expected to be $23,131,700, net of brokerage commissions and other
transaction costs.

ITEM 4. PURPOSE OF TRANSACTION.
----------------------

The purchase by the Investors of beneficial ownership of the
shares of Class A Common Stock as described herein was effected because of the
Reporting Persons' belief that the Issuer represents an attractive investment
based on the Issuer's business prospects and strategy. Depending on prevailing
market, economic and other conditions, the Reporting Persons may from time to
time acquire additional securities (including without limitation Class A Common
Stock or Class B Common Stock or, if issued, convertible debt securities or
other debt or equity securities) of the Issuer, convert or exchange securities
that they hold, engage in discussions with the Issuer concerning further
acquisitions of securities of the Issuer or otherwise invest in the Issuer or
one or more of its subsidiaries. The Reporting Persons intend to review their
investment in the Issuer on a continuing basis and, depending upon the price and
availability of the Issuer's securities, subsequent developments concerning the
Issuer, the Issuer's business and prospects, other investment and business
opportunities available to the Reporting Persons, general stock market and
economic conditions, tax considerations and other factors considered relevant,
may decide at any time to increase or decrease the size of their investment in
the Issuer or to sell any or all of the securities of the Issuer that they hold.

Each of the Investors is a partnership engaged in making private
equity and related investments. In connection with that business, the Reporting
Persons frequently seek to make significant investments in the entities in which
they invest, engage in discussions with the management of the entities in which
they invest and/or seek and often obtain representation on the board of
directors of the entities in which they invest. The Reporting Persons may in the

CUSIP NO. 053499 10 9 SCHEDULE 13D PAGE 7 OF 11

future seek to engage in discussions with management of the Issuer concerning
the business, strategy and/or operations of the Issuer, concerning the
possibility of a representative of the Reporting Persons becoming a member of
the board of directors of the Issuer and/or concerning potential investments by
the Reporting Persons in securities of the Issuer and/or its subsidiaries. Such
discussions may relate to one or more of the transactions specified in clauses
(a) through (j) of Item 4 of Schedule 13D.

Other than as set forth above, none of the Reporting Persons has
any present plans or proposals which relate to or would result in any
transaction, change or event specified in clause (a) through (j) of Item 4 of
Schedule 13D.

ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
------------------------------------

(a) The Reporting Persons beneficially own shares of Class A Common Stock by
virtue of the Investors' beneficial ownership of shares of Class A Common
Stock and of the Issuer's 6.5% Convertible Subordinated Notes due 2009 (the
"Convertible Subordinated Notes"), which are convertible at the option of
the holder into shares of Class A Common Stock, and the Investors' rights
under the Forward Contract as described below. As of June 21, 2002, the
Reporting Persons estimate that they each beneficially owned an aggregate
of 52,555,737 shares of Class A Common Stock, representing 19,880,000
shares of Class A Common Stock beneficially owned by the Investors,
22,675,737 shares of Class A Common Stock that may be acquired by the
Investors upon full conversion of the Convertible Subordinated Notes
beneficially owned by the Investors, and 10,000,000 shares of Class A
Common Stock that are presently expected to be purchased by the Investors
pursuant to the terms of the Forward Contract. Of the aggregate of
52,555,737 shares of Class A Common Stock beneficially owned by WP and WP
LLC, 1,623,972 shares represent shares of Class A Common Stock owned of
record by WPNPE VIII I, WPNPE VIII II and WPGPE VIII. By reason of WP's and
WP LLC's respective relationships with the Investors, under Rule 13d-3 of
the Exchange Act, WP and WP LLC may be deemed to beneficially own all of
the shares of Class A Common Stock that are beneficially owned by the
Investors.

Assuming full conversion of the Convertible Subordinated Notes beneficially
owned by the Investors and the purchase by the Investors of 10,000,000
shares of Class A Common Stock under the Forward Contract, as of June 21,
2002, the 52,555,737 shares of Class A Common Stock beneficially owned by
each Reporting Person represented approximately 7.0% of the outstanding
shares of Class A Common Stock, and 3.2% of the Issuer's outstanding shares
of Class A Common Stock and Class B Common Stock, par value $0.01 per share
(the "Class B Common Stock"), taken as a whole, in each case, after giving
effect to the issuance of the Class A Common Stock upon full conversion of
the Convertible Subordinated Notes beneficially owned by the Investors
(based on 727,456,519 shares of Class A Common Stock and 908,100,000 shares
of Class B Common Stock outstanding as of April 30, 2002, as set forth in
the Issuer's Form 10-Q, for the quarterly period ended March 31, 2002).

(b) As described in paragraph (a) above, the Group Members have beneficial
ownership over an aggregate of 52,555,737 shares of Class A Common Stock.
Of this aggregate of

CUSIP NO. 053499 10 9 SCHEDULE 13D PAGE 8 OF 11

52,555,737 shares of Class A Common Stock, 19,880,000 shares are
represented by the shares of Class A Common Stock beneficially owned by the
Investors, 22,675,737 are represented by shares of Class A Common Stock
that are issuable to the Investors upon full conversion of the Convertible
Subordinated Notes beneficially owned by the Investors and the balance of
10,000,000 are represented by shares of Class A Common Stock that are
presently expected to be purchased by the Investors under the Forward
Contract. Each of the Investors shares voting power and dispositive power
over the shares of Class A Common Stock that such Investor beneficially
owns with WP LLC and WP.

Date # of Shares Per Share Price Total Cost (net of brokerage
commissions)
------------------ ------------------ ------------------ ----------------------------
1/31/02 270,000 $5.08 $1,371,789
2/1/02 730,000 $5.10 $3,723,000
2/4/02 1,000,000 $5.06 $5,062,500
2/5/02 1,460,000 $4.10 $5,982,204
6/11/02 1,000,000 $2.65 $2,647,100
6/12/02 9,720,000 $2.37 $23,059,728
6/13/02 5,700,000 $2.40 $13,660,620

On June 13, 2002, the Investors agreed to purchase $75,000,000 of aggregate
principal amount of the Convertible Subordinated Notes. On June 17, 2002,
the Investors entered into the Forward Contract.

Except as described herein, during the last sixty days there were no
transactions in shares of Class A Common Stock effected by the Reporting
Persons or, to the best of their knowledge, by any of the persons set forth
on Schedule I.

(d) Except as set forth in this Item 5, no person other than each respective
record owner referred to herein of the shares of Class A Common Stock is
known to have the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, such shares of Class A
Common Stock.

(e) Not applicable.

ITEM 6. INTEREST IN SECURITIES OF THE ISSUER.
------------------------------------

Pursuant to Rule 13d-1(k) of the Exchange Act, the Reporting
Persons have entered into a joint filing agreement, dated as of June 21, 2002,
with respect to the joint filing of this Schedule 13D and any amendment or
amendments hereto (the "Joint Filing Agreement"). The Joint Filing Agreement is
attached hereto as Exhibit I and is incorporated herein by reference.

CUSIP NO. 053499 10 9 SCHEDULE 13D PAGE 9 OF 11

On June 17, 2002, the Investors entered into a forward purchase
contract with Citibank, N.A. ("Citibank"), in respect of shares of Class A
Common Stock having an aggregate value of up to $25,000,000 on July 29, 2002
(the "Forward Contract"). The actual number of shares of Class A Common Stock
that the Investors will purchase, and the per share price thereof, cannot be
determined with certainty at this time; however, it is presently estimated that
the Investors will purchase up to aggregate of 10,000,000 shares of Class A
Common Stock, at an estimated price of $2.31 per share (the "Initial Price"),
net of brokerage and other transaction costs. The Investors' acquisition of
shares of Class A Common Stock under the Forward Contract is subject to
clearance under, or a valid exemption from, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder. Pursuant to the terms of the Forward Contract, if the Investors do
not elect to purchase any shares of Class A Common Stock on July 29, 2002, (1)
if the Initial Price is greater than the trading price of the shares of Class A
Common Stock on July 29, 2002 (the "July 29 Price"), the Investors must (a) make
a cash payment to Citibank of an amount equal to, or (b) deliver shares of Class
A Common Stock having a value (based on the July 29 Price) equal to, the excess
of the Initial Price over the July 29 Price, or (2) if the July 29 Price is
greater than the Initial Price, Citibank must (a) make a cash payment to the
Investors of an amount equal to, or (b) deliver shares of Class A Common Stock
having a value (based on the July 29 Price) equal to, the excess of the July 29
Price over the Initial Price. The term sheet setting forth the terms of the
Forward Contract is attached hereto as Exhibit 2, and is incorporated herein by
reference.

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
--------------------------------

1. Joint Filing Agreement, dated as of June 21, 2002, by and among Warburg
Pincus Private Equity VIII, L.P., Warburg, Pincus & Co., Warburg Pincus
LLC, Warburg Pincus Netherlands Private Equity VIII C.V. I, Warburg Pincus
Netherlands Private Equity VIII C.V. II and Warburg Pincus Germany Private
Equity VIII KG

2. Forward Purchase Term Sheet, dated June 17, 2002, by and between Warburg
Pincus Private Equity VIII, L.P. and Citibank, N.A.

CUSIP NO. 053499 10 9 SCHEDULE 13D PAGE 10 OF 11

SIGNATURES

After reasonable inquiry and to the best of our knowledge and
belief, the undersigned certify that the information set forth in this statement
is true, complete and correct.

Dated: June 21, 2002

WARBURG PINCUS PRIVATE EQUITY VIII, L.P.

By: Warburg, Pincus & Co.,
General Partner

By: /s/ Scott A. Arenare
-------------------------------------
Name: Scott A. Arenare
Title: Partner

WARBURG, PINCUS & CO.

By: /s/ Scott A. Arenare
------------------------------------------
Name: Scott A. Arenare
Title: Partner

WARBURG PINCUS LLC

By: /s/ Scott A. Arenare
------------------------------------------
Name: Scott A. Arenare
Title: Partner

WARBURG PINCUS NETHERLANDS PRIVATE
EQUITY VIII C.V.I

By: Warburg, Pincus & Co.,
General Partner

By: /s/ Scott A. Arenare
-------------------------------------
Name: Scott A. Arenare
Title: Partner

CUSIP NO. 053499 10 9 SCHEDULE 13D PAGE 11 OF 11

WARBURG PINCUS NETHERLANDS PRIVATE
EQUITY VIII C.V. II

By: Warburg, Pincus & Co.,
General Partner

By: /s/ Scott A. Arenare
-------------------------------------
Name: Scott A. Arenare
Title: Partner

WARBURG PINCUS GERMANY PRIVATE EQUITY VIII KG

By: Warburg, Pincus & Co.,
General Partner

By: /s/ Scott A. Arenare
-------------------------------------
Name: Scott A. Arenare
Title: Partner