-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OYTwaE7SHqGyUzVd8yO7K8cGS4zgCOPNS0ZKnUQbBnlIFHI5tOOZGtAHTpNaYBz/ rn7cCcRox2FvWfnaY5V3PQ== 0000898822-02-000823.txt : 20020621 0000898822-02-000823.hdr.sgml : 20020621 20020621164849 ACCESSION NUMBER: 0000898822-02-000823 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20020621 GROUP MEMBERS: WARBURG PINCUS LLC GROUP MEMBERS: WARBURG PINCUS PRIVATE EQUITY VIII, L.P. GROUP MEMBERS: WARBURG, PINCUS &CO. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AGERE SYSTEMS INC CENTRAL INDEX KEY: 0001129446 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 223746606 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-77953 FILM NUMBER: 02684581 BUSINESS ADDRESS: STREET 1: 555 UNION BLVD CITY: ALLENTOWN STATE: PA ZIP: 18109 BUSINESS PHONE: 6107124323 MAIL ADDRESS: STREET 1: 555 UNION BLVD CITY: ALLENTOWN STATE: PA ZIP: 18109 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WARBURG PINCUS LLC CENTRAL INDEX KEY: 0001162870 IRS NUMBER: 133536050 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2128780600 MAIL ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 SC 13D 1 june21schedule13d.txt SCHEDULE 13D ================================================================================ 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 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 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. (c) The Investors acquired shares of Class A Common Stock in the open market transactions described below: 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 EX-99 3 june21exhibit1.txt EXHIBIT 1 - JOINT FILING AGREEMENT EXHIBIT 1 --------- JOINT FILING AGREEMENT ---------------------- Pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing of this Statement on Schedule 13D including any amendment or amendments thereto. This Joint Filing Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 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: Member 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 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 SCHEDULE I ---------- Set forth below is the name, position and present principal occupation of each of the general partners of Warburg, Pincus & Co. ("WP") and members of Warburg Pincus LLC ("WP LLC"). The sole general partner of Warburg Pincus Private Equity VIII, L.P. ("WP VIII") is WP. WP VIII, WP, and WP LLC are hereinafter collectively referred to as the "Reporting Persons". Except as otherwise indicated, the business address of each of such persons is 466 Lexington Avenue, New York, New York 10017, and each of such persons is a citizen of the United States. GENERAL PARTNERS OF WP ---------------------- - ----------------------------------- -------------------------------------------------------------------------------------- PRESENT PRINCIPAL OCCUPATION IN ADDITION TO POSITION WITH WP, AND POSITIONS NAME WITH THE REPORTING ENTITIES - ----------------------------------- -------------------------------------------------------------------------------------- Joel Ackerman Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Scott A. Arenare Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Gregory Back Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- David Barr Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Larry Bettino Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Harold Brown Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Sean D. Carney Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Samantha C. Chen Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Mark Colodny Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Timothy J. Curt Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- W. Bowman Cutter Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Cary J. Davis Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Stephen Distler Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Stewart K. P. Gross Partner of WP; Member and Senior Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Patrick T. Hackett Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Jeffrey A. Harris Partner of WP; Member and Senior Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- William H. Janeway Partner of WP; Member and Vice Chairman of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Peter R. Kagan Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Charles R. Kaye Partner of WP; Member, Co-President and Executive Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Henry Kressel Partner of WP; Member and Senior Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Joseph P. Landy Partner of WP; Member, Co-President and Executive Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Sidney Lapidus Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Kewsong Lee Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Jonathan S. Leff Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Reuben S. Leibowitz Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- David E. Libowitz Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Nancy Martin Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Edward J. McKinley Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Rodman W. Moorhead III Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- James Neary Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Howard H. Newman Partner of WP; Member and Vice Chairman of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Gary D. Nusbaum Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Dalip Pathak Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Lionel I. Pincus Managing Partner of WP; Managing Member and Chairman of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Stan Raatz Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- John D. Santoleri Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- --------------------------------------------------------------------------------------
- ----------------------------------- -------------------------------------------------------------------------------------- PRESENT PRINCIPAL OCCUPATION IN ADDITION TO POSITION WITH WP, AND POSITIONS NAME WITH THE REPORTING ENTITIES - ----------------------------------- -------------------------------------------------------------------------------------- Henry B. Schacht Partner of WP; Member and Managing Director of WP LLC (on leave of absence since October 2000) - ----------------------------------- -------------------------------------------------------------------------------------- Steven G. Schneider Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Barry Taylor Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Wayne W. Tsou Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- John L. Vogelstein Partner of WP; Member and Vice Chairman of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Elizabeth H. Weatherman Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- David Wenstrup Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Rosanne Zimmerman Partner of WP; Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Pincus & Co.* - ----------------------------------- -------------------------------------------------------------------------------------- NL & Co.** - ----------------------------------- --------------------------------------------------------------------------------------
- --------------------- * New York limited partnership; primary activity is ownership interest in WP and WP LLC. ** New York limited partnership; primary activity is ownership interest in WP. MEMBERS OF WP LLC ----------------- - ----------------------------------- -------------------------------------------------------------------------------------- PRESENT PRINCIPAL OCCUPATION IN ADDITION TO POSITION WITH WP LLC, AND POSITIONS NAME WITH THE REPORTING ENTITIES - ----------------------------------- -------------------------------------------------------------------------------------- Joel Ackerman Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Scott A. Arenare Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Gregory Back Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- David Barr Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Larry Bettino Member and Managing Director of WP LLC, Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Frank M. Brochin (1) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Harold Brown Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Sean D. Carney Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Samantha C. Chen Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Mark Colodny Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Timothy J. Curt Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- W. Bowman Cutter Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Cary J. Davis Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Stephen Distler Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Tetsuya Fukagawa (2) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Makoto Fukuhara (2) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Stewart K. P. Gross Member and Senior Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Alf Grunwald (3) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Patrick T. Hackett Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Jeffrey A. Harris Member and Senior Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Sung-Jin Hwang (4) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Roberto Italia (5) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- William H. Janeway Member and Vice Chairman of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Peter R. Kagan Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Charles R. Kaye Member, Co-President and Executive Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Rajesh Khanna (6) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Henry Kressel Member and Senior Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Rajiv B. Lall (6) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Joseph P. Landy Member, Co-President and Executive Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Sidney Lapidus Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Kewsong Lee Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Jonathan S. Leff Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Reuben S. Leibowitz Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- David E. Libowitz Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Nicholas J. Lowcock (7) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- John W. MacIntosh (8) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Nancy Martin Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Edward J. McKinley Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Rodman W. Moorhead III Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- James Neary Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Howard H. Newman Member and Vice Chairman of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Gary D. Nusbaum Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Dalip Pathak Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Lionel I. Pincus Managing Member and Chairman of WP LLC; Managing Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Pulak Chandan Prasad (6) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Stan Raatz Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- --------------------------------------------------------------------------------------
- ----------------------------------- -------------------------------------------------------------------------------------- PRESENT PRINCIPAL OCCUPATION IN ADDITION TO POSITION WITH WP LLC, AND POSITIONS NAME WITH THE REPORTING ENTITIES - ----------------------------------- -------------------------------------------------------------------------------------- John D. Santoleri Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Henry B. Schacht Member and Managing Director of WP LLC; Partner of WP (on leave of absence since October 2000) - ----------------------------------- -------------------------------------------------------------------------------------- Steven G. Schneider Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Joseph C. Schull (8) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Melchior Stahl (3) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Chang Q. Sun (9) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Barry Taylor Member and Managing Director of WP LLC, Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Wayne W. Tsou Member and Managing Director of WP LLC, Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- John L. Vogelstein Member and Vice Chairman of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Elizabeth H. Weatherman Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- David Wenstrup Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Jeremy S. Young (7) Member and Managing Director of WP LLC - ----------------------------------- -------------------------------------------------------------------------------------- Rosanne Zimmerman Member and Managing Director of WP LLC; Partner of WP - ----------------------------------- -------------------------------------------------------------------------------------- Pincus & Co.* - ----------------------------------- --------------------------------------------------------------------------------------
(1) Citizen of France (2) Citizen of Japan (3) Citizen of Germany (4) Citizen of Korea (5) Citizen of Italy (6) Citizen of India (7) Citizen of United Kingdom (8) Citizen of Canada (9) Citizen of China * New York limited partnership; primary activity is ownership interest in WP and WP LLC EX-99 4 june21exhibit2.txt EXHIBIT 2 - FORWARD PURCHASE TERM SHEET EXHIBIT 2 --------- EXECUTION COPY FORWARD PURCHASE TERM SHEET --------------------------- TRANSACTION: Forward Purchase Transaction TRADE DATE: June 17th, 2002 EFFECTIVE DATE June 17th, 2002 FORWARD SELLER: Citibank, N.A. ("Citibank"). FORWARD BUYER: Warburg Pincus Private Equity VIII, L.P. (the "Company"). COMMON STOCK: The Common Stock of Agere Systems Inc ("AGR/A"). MAXIMUM AMOUNT: $25 million. MATURITY: 6 weeks STRUCTURING FEE: None AGGREGATE AMOUNT: Initial Price times Transaction Shares. In no event shall the Aggregate Amount exceed the Maximum Amount. INITIAL PRICE: The average price of Common Stock acquired by Citibank under this Transaction plus brokerage of 5 cents per share TRANSACTION SHARES: The number of shares of Common Stock acquired by Citibank to hedge its position under this Transaction. FORWARD PRICE: Initial Price plus Carrying Cost less Actual Dividends. CARRYING COST: The Carrying Rate, calculated on Actual/360 daycount basis times the Initial Price. CARRYING RATE: 1-month LIBOR + Carrying Spread compounded monthly, or swapped to fixed. CARRYING SPREAD: 75 basis points ACTUAL DIVIDENDS: Actual dividends paid on the Common Stock. DETERMINATION DATE: Maturity. DETERMINATION PRICE: The closing price of the Common Stock on the Determination Date minus 5 cents per share. SETTLEMENT AMOUNT: Transaction Shares times the difference between the Determination Price and the Forward Price. If this amount is positive, Citibank shall pay to the Company the Settlement Amount; if negative, the Company shall pay to Citibank the absolute value of the Settlement Amount. NET CASH SETTLEMENT: Cash equal to the Settlement Amount paid to the appropriate party. NET SHARE SETTLEMENT: A number of Shares of the Common Stock equal to the Settlement Amount divided by the Determination Price delivered to the appropriate party. Provided that if Company is required to deliver Common Stock to Citibank under Net Share Settlement then the Determination Price shall be the price at which Citibank sells shares of Common Stock received from Company. PHYSICAL SETTLEMENT: The Company receives Transaction Shares in exchange for cash equal to the Forward Price times Transaction Shares subject to the Condition to Physical Settlement. CONDITION TO PHYSICAL SETTLEMENT: As a condition to electing physical settlement, the Company must deliver to Citibank on or prior to the second Business Day prior to the Termination Date (i) reasonable evidence of the FTC's clearance under the HSR Act of the purchase of the Shares or (ii) a written certification from the Company that it has concluded in good faith and based on the advice of counsel reasonably acceptable to Citibank that HSR clearance is not necessary because the Company qualifies for an exemption to the filing requirements of the HSR Act. With respect to clause (ii), the Company will permit Citibank (and its external counsel) upon request to discuss the basis of their advice to the Company prior to the Termination Date. TERMINATION EVENT: A "Termination Event" shall occur if (i) the price of AGR/A common shares falls to 60% of the Initial Price AND (ii) Company fails to post additional cash collateral on terms mutually acceptable to the parties. Upon the occurrence of a Termination Event, Citibank shall be entitled to unwind the entire outstanding Aggregate Amount. ADJUSTMENTS: Method of Adjustment: In the event of the occurrence of a Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has a material effect on the theoretical value of the Shares or the Transaction and, if so, will (i) make the corresponding adjustment(s), if any, to the Number of Shares, the Number of Shares to be Delivered, the Initial Price and, in any case, any other variable relevant to the valuation, settlement or payment terms of the Transaction as the Calculation Agent determines appropriate to account for that material effect and (ii) determine the effective date(s) of the adjustment(s). CREDIT TERMS: On the Trade Date or the following business day, Company will deliver to Citibank cash collateral equal to 50% of the Aggregate Amount or other collateral acceptable to Citibank (collectively the "Collateral"), having a value at least equal to $250,000. (as determined by the Calculation Agent) Company hereby grants Citibank a continuing first priority, perfected security interest in and right of setoff against the Collateral, all distributions thereon and rights relating thereto, and any other collateral acceptable to Citibank in its sole discretion that may be delivered by or on behalf of Company in connection with this Transaction, and all proceeds of any of the foregoing, as security for the prompt and complete payment and performance when due (whether on an Early Termination Date or otherwise) of all of Company's payment and performance obligations under the Transaction hereunder and the ISDA Master Agreement. If Company defaults on any obligation to Citibank under this Confirmation or otherwise, Citibank may exercise all rights with respect to the Collateral, sell or liquidate the Collateral to satisfy any of Company's obligations to Citibank and set off any amounts payable by Company with respect to any obligations against any Collateral held by Citibank or the cash equivalent of any Collateral (or any obligation of Citibank to deliver any Collateral to Company). Company will not permit any lien, security interest, charge, adverse claim, restriction on transfer or other encumbrance, other than the lien and security interest Company created hereby in favor of Citibank to exist upon any of the Collateral. Company will not take any action that could in any way limit or adversely affect the ability of Citibank to realize upon its rights in the Collateral. Company represents, on each date on which Company delivers or Citibank otherwise receives Collateral, that (i) Company is the owner of all Collateral free of any lien, security interest, charge, adverse claim, restriction on transfer or other encumbrance, (ii) Company has the power and authority and has obtained all of the necessary consents and approvals to grant a first priority security interest to Citibank in the Collateral, (iii) upon the delivery of the Collateral Shares as described above and any other Collateral in a manner acceptable to Citibank, Citibank will have a valid and perfected first priority security interest in the other Collateral. EXTRAORDINARY EVENTS: - -------------------- Merger Event Means, in respect of any relevant Shares, any (i) reclassification or change of such Shares that results in a transfer of or an irrevocable commitment to transfer outstanding Shares, (ii) consolidation, amalgamation or merger of the Issuer with or into another entity (whether or not the Issuer is the continuing entity), (iii) tender or exchange offer for such Shares that results in a transfer of or an irrevocable commitment to transfer outstanding Shares, (iv) sale, transfer, lease or conveyance of a material portion of the Issuer's assets to another entity or entities in a single transaction or series of related transactions, (v) purchase or other acquisition of an entity, division, business or any material portion thereof in a single transaction or series of related transactions that results in a material increase or change in the Issuer's assets, and (vi) any other corporate event or action affecting the Issuer that may have a material effect on the theoretical value of the Shares or a Transaction, in each case if the Merger Date occurs on or before the Valuation Date. Consequences of Merger Events: (a) Share-for-Share: Subject to the provisions for Negotiated Resolution set forth below, Cancellation and Payment. (b) Share-for-Other: Cancellation and Payment. (c) Share-for-Combined and any other Merger Event: Subject to the provisions for Negotiated Resolution set forth below, Cancellation and Payment. Notwithstanding Section 9.2(b) of the Definitions, "MERGER DATE" means, in respect of a Merger Event, the date of the first public announcement of a firm intention to enter into the Merger Event, as determined by the Calculation Agent. Negotiated Resolution. Notwithstanding anything in the Definitions to the contrary, beginning on the Merger Date with respect to a Merger Event other than a Share-for-Other Merger Event, the parties will negotiate for five Exchange Business Days to determine whether to continue the Transactions subject to this Master Confirmation on revised terms to which the parties agree (a "NEGOTIATED RESOLUTION") or to terminate such Transactions. If the parties do not agree on a Negotiated Resolution within that negotiation period, then Cancellation and Payment as described below shall apply. Cancellation and Payment. Notwithstanding anything in the Definitions to the contrary, if Cancellation and Payment is applicable, then the Transactions subject to this Master Confirmation will be cancelled and Company will pay Citibank an amount determined as provided below, such payment to be made not later than three Currency Business Days following the determination by the Calculation Agent of such amount (denominated in the currency for settlement of the relevant Transaction as determined by the Calculation Agent). The amount to be paid by Company to Citibank will be the amount agreed promptly by the parties after the end of the negotiation period referred to in "Negotiated Resolution" above (in the case of Merger Events other than a Share-for-Other Merger Event), the Merger Date (in the case of a Share-for-Other Merger Event) or the date Citibank elects Cancellation and Payment as the result of the occurrence of a Nationalization, Insolvency or De-Listing Event, as the case may be, failing which it will be determined by the Calculation Agent based on an amount representing the Calculation Agent's determination of the fair value to Citibank of a comparable security with terms (including but not limited to imbedded options) that would preserve for Citibank the economic equivalent of any payment or delivery (assuming satisfaction of each applicable condition precedent) by the parties in respect of the relevant Transaction that would have been required after that date but for the occurrence of the Merger Event, Nationalization, Insolvency or De-Listing Event, as the case may be. The Calculation Agent shall provide Company with a schedule or other reasonably detailed explanation of the basis for and determination of such amount. Nationalization, Insolvency or De-Listing: Cancellation and Payment as described above shall apply, at the election of Citibank at any time after the relevant Announcement Date. "INSOLVENCY" means that "Bankruptcy" as defined in Section 5(a)(vii) of the ISDA Master Agreement has occurred with respect to the Issuer (without regard to any grace periods included therein). "DE-LISTING EVENT" means that the Shares cease to be listed on or quoted by any of the New York Stock Exchange, the American Stock Exchange or the NASDAQ National Market (or their respective successors) for any reason other than a Merger Event. For purposes of a De-Listing Event, the Announcement Date shall be deemed to be the date that the De-Listing Event first occurs (as determined by the Calculation Agent). CALCULATION AGENT: Citibank is the Calculation Agent and shall make all calculations, adjustments and determinations required pursuant to a Transaction, and such calculations, adjustments and determinations shall be binding absent manifest error. REPRESENTATIONS OF COMPANY: Company represents to Citibank that: (a) Company is not, and within the preceding three months has not been, an Insider of the Issuer. Until the Maturity Date, Forward Seller will not become an Insider. "INSIDER" means a person who is an officer, director or beneficial owner of more than 10% of any class of equity securities of the Issuer required to file reports pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, or otherwise an affiliate of the Issuer within the meaning of the Securities Act; (b) Company is entering into this Forward Term Sheet and this transaction for Company's own account and not with a view to transfer, resale or distribution and understands that this transaction may involve the purchase or sale of a security as defined in the Securities Act and the securities laws of certain states, that any such security has not been registered under the Securities Act or the securities laws of any state and, therefore, may not be sold, pledged, hypothecated, transferred or otherwise disposed of unless such security is registered under the Securities Act and any applicable state securities law, or an exemption from registration is available; (c) On the Trade Date and on any day in which Net Share Settlement or Net Cash Settlement have been elected, Company will not be in possession of any material non-public information regarding the Issuer. TERMINATION: At Maturity or upon the occurrence of the Termination Event specified above, the Company shall have the option to elect Net Cash Settlement, Net Share Settlement or Physical Settlement. Make-whole for Citibank on buying/selling shares paid/received in net share settlement. EARLY UNWIND PROVISION: The Company will pay Citibank the breakage costs of the early unwind. OTHER TERMS: This Term Sheet incorporates by reference the definitions and provisions of the 1992 Cross Border - Multi Currency ISDA Master Agreement without any Schedule thereto (the "ISDA Master Agreement") and the 1996 ISDA Equity Definitions (the "Definitions"). This Term Sheet is a Confirmation of a Transaction and a Credit Support Document each as defined in the ISDA Master Agreement. Capitalized terms not defined herein but defined in the ISDA Master Agreement or the Definitions shall the meaning set forth therein. Second Method and Loss will apply to this Contingent Forward Term Sheet. The execution of this Forward Sale Term Sheet shall be followed by the execution of a more detailed Confirmation subject also to the ISDA Master Agreement. Additional terms (not inconsistent with the terms set forth above) shall be set forth in the subsequent Confirmation. The Seller and Buyer agree to conclude the negotiation of an ISDA Master Agreement, Schedule as soon as possible after the executing of this Forward Term Sheet. GOVERNING LAW: New York Agreeing to be legally bound, the terms and conditions of this Forward Term Sheet as set forth above are accepted and agreed by the parties as of the Trade Date. Citibank, N.A. Warburg Pincus Private Equity VIII, L.P. By: Warburg, Pincus & Co., As General Partner By: /s/ Herman Hirsch By: /s/ James Neary ------------------------ ------------------- Name: Herman Hirsch Name: James Neary Title: Director Title: Partner -----END PRIVACY-ENHANCED MESSAGE-----