A $10 million bonus for Transmeta Corp.’s general counsel is too rich, according to a lawsuit filed by activist hedge fund Riley Investment Management.

The tiny Santa Clara chip licensing company agreed to give its general counsel, John O’Hara Horsley, a large cut of a $250 million settlement reached with Intel Corp. in October. The lawsuit says the bonus is worth more than $10 million and calls it “outrageous, illegal and unconscionable.”