Exhibit 10.2
SEPARATION AGREEMENT AND GENERAL RELEASE
     THIS SEPARATION AGREEMENT AND GENERAL RELEASE (the “Agreement”) is entered
into as of November 9, 2005 (the “Effective Date”), by and between Agere Systems
Inc., a Delaware corporation (together with its predecessors and its successors
and assigns, the “Company” or “Agere”), and Sohail A. Khan (the “Employee”).
W I T N E S S E T H:
     WHEREAS, the Employee is currently employed by the Company;
     WHEREAS, the Employee and the Company (the “Parties”) have decided to
terminate their employment relationship effective as of December 31, 2005 (the
“Termination Date”); and
     WHEREAS, the Parties have negotiated and agreed to a final settlement of
their respective rights, obligations and liabilities; and
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties hereby agree as
follows:
     1.   FY 05 Bonus; Severance.
            (a) The Employee shall not be eligible to participate in the
Company’s FY05 bonus program for executive committee members.
            (b) Subject to the terms and conditions of this Agreement and in
exchange for the Employee executing this Agreement, the Company shall pay the
Employee a severance payment equal to $1,540,000 (the “Payment”). The Payment
together with the Employee’s accrued and unused vacation shall be paid within 30
business days of the Expiration Date (as defined in Section 8 of this
Agreement). The Employee acknowledges and agrees that the Payment (i) represents
the gross amount before all applicable federal, state and local withholding
taxes that are required to, and will, be deducted by the Company, and
(ii) except as set forth in Sections 2, 3 and 4 below, are in consideration of
all amounts owed by the Company to the Employee, including without limitation
any amounts that may be due to the Employee under any Company benefit or welfare
plan or policy.
     2.   Equity. All of the Employees vested and unvested stock options and
restricted stock will be treated in accordance with the agreements and plans
under which they were issued.
     3.   Health and Welfare Benefits. The Employee’s health and welfare
benefits will be treated in accordance with the health and welfare plans and
policies applicable to the Employee, including, without limitation, eligibility
for COBRA benefits. The Company agrees to pay for the Employee’s COBRA benefits
until the earlier of (a) June 30, 2007 and (b)  such date that the Employee is
employed by a third party and becomes eligible for benefits under the new
employer’s benefit plans.

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     4.   Retirement Benefits. The Employee’s retirement benefits will be
treated in accordance with the retirement plan applicable to the Employee. In
addition, the Employee has elected and will receive a one-time lump sum payment
(the “Supplemental Pension Payment”) under the Agere Systems Inc. Supplemental
Pension Plan in an amount equal to $587,483. The Supplemental Pension Payment
shall be paid on July 1, 2006, in accordance with Section 409A of the Internal
Revenue Code of 1986.
     5.   Non-Solicitation; Non-Compete and Cooperation.
            (a) Until December 31, 2006, the Employee shall not, without the
prior written consent of the Company’s Chief Executive Officer, (i) directly or
indirectly solicit or employ (or encourage any company or business organization
in which he is an officer, employee, partner, director, consultant or member of
a technical advisory board to solicit or employ) or (ii) refer to any employee
search firms, any person who was employed by the Company on the Effective Date.
            (b) Until December 31, 2006, the Employee shall not, without the
prior written consent of the Company’s Chief Executive Officer, at any time or
for any reason, anywhere in the world, directly or indirectly (i) engage in any
business or activity, whether as an employee, consultant, partner, principal,
agent, representative, stockholder (except as a holder of less than 5% of the
combined voting power of the outstanding stock of a publicly held company) or in
any other individual, corporate or representative capacity, or render any
services or provide any advice to any business, activity, person or entity, if
the Employee knows or reasonably should know that such business, activity,
service, person or entity, directly or indirectly, competes in any material
manner with the Company’s business, or (ii) meaningfully assist, help or
otherwise support any person, business, corporation, partnership or other entity
or activity, whether as an employee, consultant, partner, principal, agent,
representative, stockholder (other than in the capacity as a stockholder of less
than 5% of the combined voting power of the outstanding shares of stock of a
publicly held company) or in any other individual, corporate or representative
capacity, to create, commence or otherwise initiate, or to develop, enhance or
otherwise further, any business or activity if the Employee knows or reasonably
should know that such business, activity, service, person or entity, directly or
indirectly, competes in any material manner with the Company’s business.
            (c) If at any time the Employee violates the provisions of Sections
5(a) or 5(b) above, any amounts remaining unpaid under the terms of this
Agreement shall immediately be forfeited and terminated, and any amounts already
paid by the Company to the Employee in accordance herewith, except for the sum
of One Thousand Dollars ($1,000) shall, at the sole discretion of the Company,
be required to be repaid by the Employee to the Company within ten (10) business
days of the Company’s request in writing therefore. This provision shall not
affect the Company’s right to otherwise specifically enforce any provision
relating to non-solicitation or non-competition that is in this Agreement or in
any other agreement, document or plan applicable to the Employee.
            (d) The Employee hereby agrees that, from time to time upon the
reasonable request of the Company, the Employee shall assist the Company in
connection with any pending or future dispute, litigation, arbitration or
similar proceeding or investigation or any regulatory requests or filings
involving the Company, any of its employees or directors or the employees and
directors of any subsidiary.

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     6.   Publicity and Non-Disparagement.
            The Employee agrees that he shall not (i) testify or otherwise
provide testimony in any form at or for any legal or administrative proceeding,
including testimony related to any matter involving the Company, unless legally
compelled to do so or (ii) make statements to third parties, the public, the
press or the media or any administrative agency, in either case that would
portray the Company in an adverse light or disparage the Company, or cause
injury to the Company with respect to events occurring prior to or after the
Effective Date.
     7.   Confidentiality. The Employee hereby agrees and covenants, that:
            (a) he shall not divulge to any person or entity other than the
Company, without express written authorization of the Company’s Chief Executive
Officer, any proprietary or confidential information, whether written or oral,
received or gained by him in the course of his employment by the Company or of
his duties with the Company (“Confidential Information”), nor shall he make use
of any such Confidential Information on his own behalf or on behalf of any other
person or entity, for so long as such Confidential Information is not known to
the general public; and
            (b) he shall return or cause to be returned to the Company’s Chief
Executive Officer any and all property of the Company of any kind or description
whatsoever, including, but not limited to, any Confidential Information, which
has been furnished to him or is held by him, at his residence or elsewhere, and
shall not retain any copies, duplicates, reproductions or excerpts thereof.
     8.   Release. In consideration of the Company’s entering into this
Agreement and the payments and benefits set forth herein, the Employee, on
behalf of himself and his heirs, executors, administrators, successors and
assigns, knowingly and voluntarily waives, releases and forever discharges the
Company, each of its subsidiaries or affiliated companies, their respective
current and former officers, employees, agents and directors, and any successor
or assign of any of the foregoing, from any claim, charge, action or cause of
action any of them may have against any such released person, whether known or
unknown, from the beginning of time through the date of this Agreement based
upon any matter, cause or thing whatsoever related to or arising out of his
employment by the Company or his termination other than claims arising out of a
breach of this Agreement or any claim that cannot be waived by law. All such
claims are forever barred by this Agreement.
            This release and waiver includes, but is not limited to, any rights
or claims under United States federal, state or local law, for wrongful or
abusive discharge, for breach of any contract, or for discrimination based upon
race, color, ethnicity, sex, age, national origin, religion, disability, sexual
orientation, or any unlawful criterion or circumstance, including, but not
limited to, rights or claims under the Family and Medical Leave Act, claims of
discrimination under the Employee Retirement Income Security Act, the Equal Pay
Act, the Occupational Safety and Health Act, the Workforce Adjustment Retraining
Notification Act, Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, Section 1981 through 1988 of the Civil Rights Act of 1866, the
Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the
Older Workers Benefit Protection Act, the Rehabilitation Act of 1973, Executive
Order 11246 and any other executive order, the Fair Labor Standards Act and its
state and local counterparts, the Uniform Services Employment and Reemployment
Rights Act, and the Immigration Reform Control Act, all as amended. The Employee
confirms that he has no claim

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or basis for a claim whatsoever against the Company with respect to any such
matters related to or arising out of his employment by the Company or his
termination.
            The Employee affirms that he has been given at least 21 days within
which to consider this release and its consequences, that he has seven days
following his signing of this Agreement (the seventh day being the “Expiration
Date”) to revoke and cancel the terms and conditions contained herein and the
terms and conditions of this Agreement shall not become effective or enforceable
until the seven-day revocation and cancellation period has expired, and that,
prior to the execution of this Agreement, he has been advised by the Company to
consult with an attorney of his choice concerning the terms and conditions set
forth herein. Any revocation or cancellation of this Agreement by the Employee
pursuant to this Section shall be in writing delivered to the Company.
     9.   Entire Agreement. This Agreement contains the entire agreement between
the Parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations, and undertakings, whether
written or oral, between the Parties with respect thereto. This Agreement may
not be modified or amended except by a writing signed by both Parties.
     10.   No Admission. The Parties acknowledge and agree that this Agreement
does not constitute and should not be construed in any way as an admission by
any other party of (a) any wrongdoing or liability whatsoever, (b) any violation
of the Employee’s rights or those of any other person, or (c) any violation of
any order, law, statute, duty or contract. The Company specifically disclaims
any liability for any alleged wrongdoing or liability, for any alleged violation
of my rights or those of any other person, or for any alleged violation of any
order, law, statute, duty or contract.
     11.   Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions or portions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.
     12.   Survival; Termination. The respective rights and obligations of the
Parties hereunder shall survive any termination of this Agreement to the extent
necessary for the intended preservation of such rights and obligations. This
Agreement may be terminated by the Company if the Employee breaches any
provision hereof.
     13.   Interpretation; Governing Law. This Agreement shall be interpreted in
accordance with the plain meaning of its terms and not strictly for or against
any person or entity. To the extent that federal law controls the interpretation
or enforceability of any provision of this Agreement, this Agreement shall be
construed and enforced in accordance with federal law. Otherwise, this Agreement
shall be governed by and construed and interpreted in accordance with the laws
of the Commonwealth of Pennsylvania without reference to the principles of
conflicts of law.
     14.   Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument. Signatures delivered by
facsimile shall be effective for all purposes.

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     BY SIGNING AND DELIVERING THIS AGREEMENT, THE EMPLOYEE STATES:
            (A) HE HAS READ IT AND UNDERSTANDS IT AND HAS AT LEAST 21 DAYS TO
CONSIDER IT AND A PERIOD OF SEVEN DAYS AFTER EXECUTING IT TO REVOKE IT;
            (B) HE AGREES WITH IT AND IS AWARE THAT HE IS GIVING UP IMPORTANT
RIGHTS, INCLUDING RIGHTS PROVIDED BY THE OLDER WORKERS BENEFIT PROTECTION ACT,
FOR CONSIDERATION TO WHICH HE WAS NOT ALREADY OTHERWISE ENTITLED;
            (C) HE WAS ADVISED TO, AND IS AWARE OF HIS RIGHT TO CONSULT WITH AN
ATTORNEY BEFORE SIGNING IT; AND
            (D) HE HAS SIGNED IT KNOWINGLY AND VOLUNTARILY.
     IN WITNESS WHEREOF, the Parties have executed this Agreement on the date
first written above.

              AGERE SYSTEMS INC.
 
       
 
  By:   /s/ Richard L. Clemmer
 
  Name:   Richard L. Clemmer
 
  Title:   President and Chief Executive
Officer
 
       
 
       
 
            /s/ Sohail A. Khan
 
  Name:   Sohail A. Khan

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