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EXHIBIT 10.26
[TESSERA LETTERHEAD]
April 26, 1999
Dr. Bruce McWilliams
Dear Bruce:
On behalf of the Board of Directors of Tessera, I would like to offer you
employment as President and Chief Executive Officer serving at the pleasure of
Tessera's Board of Directors. This is an exempt position at a starting annual
salary of $230,000. In addition, there will be a bonus plan for you and your
key managers for reaching the Company's key operational and financial goals.
Your bonus would allow earning up to 50% of base pay for the achievement of all
objectives (bonus plan and goals to be more fully developed working with
Tessera's Board of Directors). You will be expected to retain key people, as
well as, to recruit and strengthen Tessera's management team in keeping with the
wishes of the Board of Directors.
In addition to directing the Company's Operations, your responsibilities will
include strategically positioning the Company and leading the Company in the
completion of a successful IPO in the next 18 months with a post transaction
value of at least five hundred million ($500,000,000). In the near term, you
will be responsible for generating an updated business plan and leading a
private financing round sufficient to meet the Company's needs through the end
of the year 2000. In addition to formulating a comprehensive Five Year Sales
Plan, you will be expected to formulate an operating forecast by month for 1999
and to maintain rolling monthly profit and loss forecast for twelve months out.
You will be expected to drive the manufacturing and sales processes and to
assume a key role as the Company positions its dual strategy of Licensing and
Technology Services for an IPO in the 12 to 18 months. As a regular employee,
you will be eligible for certain benefits more fully described in the Tessera
Employee Handbook, which will be issued to you upon your employment.
If you accept this officer, you agree to begin work on June 8, 1999 or sooner
if your other commitments permit. Subject to Board of Directors and shareholder
approvals as required, in addition to your salary you will receive stock
options under the Company's 1999 Incentive Stock Option Plan to purchase two
million two hundred twenty-five thousand (2,250,000) Shares of Tessera Common
Stock at a price set by the Board of Directors upon your acceptance (current
option price is $3.00 per share). Your stock options will be scheduled to vest
as follows:
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[TESSERA LETTERHEAD] Mr. Bruce McWilliams
April 26, 1999
Page 2
1. One million three hundred fifty thousand (1,350,000) of your shares will
be scheduled to vest as follows: 337,500 shares will be scheduled to vest
on the first anniversary of your employment, and 28,125 shares scheduled
to vest monthly for thirty six months thereafter.
2. Upon successful completion of an IPO referenced herein above, the
remaining nine hundred thousand (900,000) additional shares will be
layered on the previous vesting schedule for a combined 2,250,000 shares
vesting as follows: 562,500 shares shall be scheduled to vest on the first
anniversary of your employment, and 46,875 shall be scheduled to vest
monthly for thirty six months thereafter.
This offer of employment Option Grant is subject to approval by the Board of
Directors. Your employment pursuant to it is contingent upon your providing
legally required proof of your identity and authorization to work in the United
States and your execution of an Employment Proprietary Information, Invention,
and Arbitration Agreement containing provisions protecting Tessera's
Confidential Information, Inventions, and other Intellectual Property,
including any that you may generate during your employment, along with a notice
that your employment is "at will" and thus can be terminated at any time by you
or Tessera, with or without cause.
By your acceptance of this offer, you represent that: a) you will bring no
confidential information or proprietary intellectual property of any previous
employer or other third party with you to your job at Tessera, b) you will not
solicit for hire any employees of a former employer, and c) you expressly agree
to all the terms of this offer and the terms of the Employment, Proprietary
Information, Invention, and Arbitration Agreement. This offer supersedes any
previous written or verbal offer and shall remain open and valid until May 10,
1999. Any modification of the terms of this offer or other provisions must be
made in writing and signed by Tessera's Chairman of the Board of Directors.
If you accept the above describe offer, please return the signed original copy
of this letter to me. We will send you under separate cover the Employee
Proprietary Information and Inventions Agreement. Please execute and return to
me.
If you have any additional questions please call me at 617.761.1250.
Sincerely,
/s/ ROBERT A. YOUNG
Robert A. Young
Chairman of the Board of Directors
Accepted: /s/ BRUCE M. McWILLIAMS Date: April 27, 1999
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