Following is a set of questions and answers about Agere Systems' proposed
reclassification and reverse stock split. These questions and answers are
first being made available to Agere Systems employees on December 13, 2004.

December 13, 2004


Q.: What is a reverse stock split and how does it work?
A.: Shares held by stockholders are combined into a smaller number according
to a ratio. For instance, if the ratio is 1-for-20, each shareholder would
hold one share of stock after the reverse split for every 20 shares held
before the reverse split. The reverse stock split would decrease the number of
outstanding shares in the market.

Q.: What is the ratio Agere is planning to use for the reverse split?
A.: We are asking stockholders to approve four different proposals, each of
which would allow us to do a reverse stock split. The proposals are identical
except for the ratios for the reverse stock split: 1-for-10, 1-for-20,
1-for-30 and 1-for-40. If the proposals are approved, the Board of Directors
may then implement a reverse stock split using any one of the approved ratios,
in which case the board would abandon any other approved proposal. The board
will also have the discretion not to do any reverse stock split at all.

Q: Why did you select these multiples?
A: To provide the Board of Directors with maximum flexibility.

Q.: If the stockholders approve these proposals, when will the board take
A.: If stockholders approve the proposals, the board can take action at any
time prior to our annual meeting in 2006. The board must use one of the
approved ratios or it can choose not to do a reverse stock split at all.

Q.: Why does Agere want to do a reverse split?
A.: We are considering a reverse split in order to raise our stock prices to
levels that may result in investors finding our stock a more attractive
investment, to reduce transaction costs for our investors and to reduce our

Q.: Why would investors find our stock more attractive after a reverse split?
A.: Some institutional investors and investment funds are reluctant to invest
in lower-priced stocks and brokerage firms may be reluctant to recommend
lower-priced stocks to their clients. Through a reverse stock split, we may be
able to raise our stock price to a level where our stock would be viewed more
favorably by potential investors.

Q.: How would a reverse split reduce transaction costs for investors?
A.: When buying or selling stock, many investors pay commissions that are
based on the number of shares bought or sold. Because of our relatively low
stock price, an investor desiring to invest a fixed amount of money in Agere
stock will buy more shares, and thus may pay more in commissions, than if our
stock price were higher. Therefore, if we do a reverse split using any one of
the proposed reverse split ratios, stockholders who pay commissions based on
the number of shares bought or sold would pay significantly lower total
commissions. In addition, lower commissions may also make our stock an
attractive investment to additional investors.

Q.: How would a reverse split reduce Agere's costs?
A.: For each stockholder, we pay annual account servicing costs and the cost
of printing and mailing annual reports and proxy statements. Many stockholders
received their shares as a result of our spin-off from Lucent and have a small
number of shares. Often, these stockholders 

find it uneconomical to sell their shares, because brokerage costs are
significant, in some cases exceeding the value of the shares sold. A reverse
split would reduce the number of stockholders because holders who would own
less than one share of stock after the reverse stock split will receive cash
in lieu of a fractional share. This would reduce our stockholder servicing
costs and should provide some of our stockholders with a more economical way
to dispose of their interest in Agere.

Q.: Didn't the stockholders previously authorize a reverse split? If so, why
is action necessary now? 
A.: In 2003, stockholders gave the board the authority to do a reverse split.
However, the board did not believe it necessary or advisable to do a reverse
split in 2003, and the approval expired on Feb. 19, 2004, the date of our last
annual meeting. We now believe that a reverse stock split may again be

Q.: Do I have to take any action if Agere's stock undergoes a reverse split?
A:. No. When a reverse stock split happens, you do not have to do anything.
After the split is effective, your accounts, as applicable, would be updated
to reflect the appropriate post-split balances. If you have stock
certificates, you will have to get new ones. However, we believe that not many
employees have them.

Q.: Is Agere in danger of being de-listed by the New York Stock Exchange,
making a reverse split necessary.
A.: No. At this time, Agere is not in a position to be de-listed since its
stock is trading above U.S. $1.00 per share.

Q.: Won't my stock options be worth less after a reverse split because I'll
have fewer shares? 
A.: Not necessarily. Keep in mind that the same percentage change in our stock
price before or after a reverse split would result in the same absolute change
in your profit on the option. So, for example, if our stock price increases 2
percent either before or after a reverse split, the overall increase in your
profit (or decrease in your loss) would be the same.

Q.: Isn't it easier for a lower-priced stock to increase in value than a
higher-priced stock? 
A: It's no easier for a lower-priced stock to increase than it is for a
higher-priced stock. The starting price of a stock does not determine its
ability to rise or fall; the overall financial performance of a company and
the market environment are the key factors. Investors often look at revenue
growth, cash flow, and earnings per share when valuing a business. Increasing
these metrics will improve the likelihood that our share price will rise. For
example, take two companies' stock -- one is priced at US$1 per share and the
other is priced at US$10 per share. Assume investors are willing to pay the
same price/earnings ratio (price per share divided by earnings per share) for
the stock of each company. If each company increased its earnings per share by
50 percent, then the share prices for both companies would increase to $1.50
and $15.00, respectively.

More specifically, although the semiconductor industry has encountered an
adverse market in recent months, some of our competitors' stock prices have
made recent significant gains. From Aug. 13 through Dec. 1, 2004, Marvell's
stock rose from $19.77 to $33.13 - a 68 percent increase. Similarly, From Oct.
26 through Dec. 1, 2004, Broadcom's stock jumped 29 percent from $26.01 to
$33.62. Obviously, we cannot guarantee that our stock price will rise.

Q.: What does the reverse split mean to employees owning stock through the
ESPP or 401(k)? What does it mean for stock options?
A.: Adjustments would be made based on the ratio.

Q.: What happens to fractional shares?
A.: No fractional certificates will be issued. Stockholders who otherwise
would be entitled to receive fractional shares will receive cash.

Q.: Why is Agere seeking to combine the Class A common stock and Class B
common stock into one class of common stock?
A.: The board determined that a single class of common stock may provide
improved liquidity, remove any investor confusion over the two classes,
eliminate some corporate governance concerns and save the company costs
associated with administering the two classes of common stock.

Q.: How will the reclassification work?
A.: If approved, each share of our outstanding Class A common stock and Class
B common stock will automatically be reclassified into one share of a new,
single class of common stock.

Q.: What is the difference between the current two classes of common stock?
A.: The Class A common stock and Class B common stock are identical in all
respects except that, in voting for the election and removal of directors, the
Class A common stock has one vote per share and the Class B common stock has
four votes per share.

Q.: What will happen when all shareholders own the same class of common stock?
A.: After adoption of the proposed reclassification, the holders of Class A
common stock and the holders of Class B common stock will be holders of a new,
single class of common stock with one vote per share on all matters, including
the election and removal of directors.

Q.: How would we know if either action is actually taking place?
A.: When the board makes either decision, it will be publicly announced. The
decision and announcement would include a date on which the action takes

This information is being provided before delivery to you of our proxy
statement. You should read the proxy statement when it becomes available
because it contains important information. You can get a copy of the proxy
statement free of charge at the Securities and Exchange Commission's web site
at or by contacting Agere Systems, c/o The Bank of New York,
P.O. Box 11082, Church Street Station, New York, NY 10286, or by calling Agere
Systems at 1-866-AGEREIR and pressing prompt 1.