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                                                                   EXHIBIT 10.14

                               SEVERANCE AGREEMENT
                            AND RELEASE OF ALL CLAIMS


This Severance Agreement and Release of All Claims ("Agreement") is made and
entered into by and between William J. Cornwell (hereinafter "Cornwell") and
Electroglas, Inc. (hereinafter the "Company").

                              W I T N E S S E T H:

          WHEREAS, Cornwell is employed by the Company as President and Chief
Operating Officer; and

          WHEREAS, Cornwell will accept a special assignment and retire as
provided herein; and

          WHEREAS, Cornwell does not have pending against the Company or any
employee, agent, official, or director of the Company any claim, charge, or
action in or with any federal, state or local court or administrative agency;
and

          WHEREAS, Cornwell and the Company desire to settle fully and finally
all differences between them, except as otherwise provided in this Agreement,
including, but not limited to, any and all claims Cornwell may have against the
Company in any way connected with Cornwell's employment with the Company and up
to the effective date of this Agreement.

          NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained and other good and valuable consideration, receipt of which is
hereby acknowledged, and to avoid unnecessary litigation, it is hereby agreed by
and between the parties as follows:

          FIRST: This Agreement and compliance with this Agreement shall not be
construed as an admission by the parties of any liability whatsoever, or as an
admission by the parties of any violation of the rights of the other or any
person, or a violation of any order, law, statute, duty, or contract whatsoever
against the parties or any person. Except as otherwise provided in this
Agreement, the parties specifically disclaim any liability to



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the other or any other person for any alleged violation of the rights of the
other or any person, or for any alleged violation of any order, law, statute,
duty, or contract on the part of the parties, their employees or agents or
related companies or their employees or agents.

          SECOND: (a) Cornwell understands and agrees that he has a full
twenty-one (21) days from receipt of this Agreement to consider its terms and
that he should not execute this Agreement without first consulting with an
attorney. Cornwell also understands and agrees that he has a full seven (7) days
following his execution of this Agreement to revoke this Agreement.

                  (b) Effective April 1, 1996, Cornwell will relinquish his
current position of President and Chief Operating Officer. Effective April 1,
1996, Cornwell shall no longer be covered by the terms and conditions of the
Change of Control Agreement of June 9, 1995, a copy of which is attached hereto
as Attachment A. All of the terms and conditions of said Change of Control
Agreement shall become null and void effective April 1, 1996.

                  (c) Commencing on April 1, 1996 and continuing through March
31, 1997, the Company will provide a special assignment for Cornwell as Special
Assistant to the Chief Executive Officer, at Cornwell's rate and terms of
compensation, including stock options and all benefits in effect as of the date
of execution of this Agreement, such as vacation, health insurance, company car,
GW and WADE, except as provided herein. Cornwell's current stock options will be
subject to the retirement termination terms as specified in the Individual
Option Grant Agreements, copies of which are attached hereto as Attachment B1,
B2, B3. Cornwell shall not be eligible for any additional stock option grants on
or after April 1, 1996. Further, Cornwell shall receive a 1996 performance bonus
payable on March 1, 1997 in the amount of $50,000 minus all withholdings and
deductions customarily withheld by the Company from bonus payments, such as
taxes, 401(k) contributions, etc. The parties agree that Cornwell shall not be
required to perform any duties on behalf of the Company during this special
assignment period.

                  (d) Effective April 1, 1997, and continuing thereafter until
Cornwell reaches age 65, the Company shall offer Cornwell and his spouse, at his
own expense, the same medical and dental benefits offered to the Company's
employees. It is expressly understood and agreed by the parties that in the
event Cornwell elects coverage under said benefits, Cornwell shall be
responsible for all costs of such coverage, including but not limited to,
monthly premium payments. Said cost of coverage shall be no greater than that
amount paid by the Company for current employees.

                  (e) The indemnification provided under the Indemnification
Agreement of August 10, 1993, a copy of which is attached hereto as Attachment
C, shall continue as to Cornwell as provided in section 14 thereof, for any
action taken or not taken while serving in an indemnified capacity pertaining to
an Indemnifiable Event as defined in the Indemnification Agreement even though
he may have ceased to serve in such capacity at the time of any Proceeding as
defined in the Indemnification Agreement. Cornwell further retains any rights
provided under Labor Code Section 2802, Corporations Code Section 317, or any
other basis providing for employee rights of indemnification.

                  (f) Cornwell agrees that the foregoing payments shall
constitute the entire amount of monetary consideration provided to him under
this Agreement and that he will not seek any further compensation for any other
claimed damage, costs, or attorneys' fees in connection with the matters
encompassed in this Agreement.

                  (g) Cornwell agrees that on the date of the parties' execution
of this Agreement, he will submit to the Company a letter which shall state that
his retirement from his employment with the Company shall be effective on April
1, 1997. Furthermore, Cornwell agrees that he will not seek nor accept regular
employment with the Company in the future and that the Company is entitled to
reject without cause any application for employment with the Company made by
Cornwell. The parties agree that press releases and internal official Company
announcements concerning Cornwell's employment status and/or retirement shall be
subject to Cornwell's prior approval.

          THIRD: The parties represent that they have not filed any complaints,
claims, or actions against the other, their officers, agents, directors,
supervisors, employees, or representatives with any state, federal, or local
agency or court and that they will not do so at any time hereafter based on
matters released herein.

          FOURTH: The parties agree that they will keep the fact, terms, and
amount of this Agreement completely confidential and that they will not
hereafter disclose any information concerning this Agreement to anyone, provided
that any party hereto may make such disclosures as are required by law, as are
necessary for 



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legitimate law enforcement or compliance purposes or as may reasonably be
necessary for discussion with tax, financial or legal advisors. Cornwell may
also disclose the terms of this Agreement to his spouse.

          FIFTH: The parties hereby agree that all rights under section 1542 of
the Civil Code of the State of California are hereby waived. Section 1542
provides as follows:

          A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.

          SIXTH: Notwithstanding the provisions of section 1542 of the Civil
Code of the State of California, the parties irrevocably and unconditionally
release and forever discharge each other and each and all of their officers,
agents, directors, supervisors, employees, representatives, and their successors
and assigns and all persons acting by, through, under, or in concert with any of
them from any and all charges, complaints, claims, and liabilities of any kind
or nature whatsoever, known or unknown, suspected or unsuspected (hereinafter
referred to as "claim" or "claims") which they at any time heretofore had or
claimed to have or which they may have or claim to have regarding events that
have occurred as of the date of this Agreement, including, without limitation,
any and all claims related or in any manner incidental to Cornwell's employment
with the Company or the termination therefrom. It is expressly understood by
Cornwell that among the various rights and claims being waived in this release
are those arising under the Age Discrimination in Employment Act of 1967 (29
U.S.C. Section 621, et seq.). Notwithstanding any other provision or language in
this Severance Agreement, it is the parties' express intention that Cornwell is
not waiving or releasing any rights of indemnification, contribution, or any
other legal right he may have against the Company, its officers, employees,
directors, representatives, agents, predecessors, successors, or assigns,
associated with any criminal or civil proceeding involving Cornwell, whether
formal or informal, actual or threatened, involving or relating to any
allegations of violation of any federal, state or local toxic waste laws or fire
code violations, including, but not limited to Case No. C9562800 now pending in
the Municipal Court of the County of Santa Clara and Citation numbers K002127
and K002128 issued by the Santa Clara Fire Department. The Company expressly
agrees to continue to represent, defend, and indemnify Cornwell in relation to
all such matters.

          SEVENTH: The parties understand the word "claims" to include all
actions, claims, and grievances, whether actual or potential, known or unknown,
and specifically, but not exclusively, all claims arising out of Cornwell's
employment with the Company and the termination of his employment with the
Company. All such claims (including related attorneys' fees and costs) are
forever barred by this Agreement and without regard to whether those claims are
based on any alleged breach of a duty arising in a statute, contract, or tort;
any alleged unlawful act, including, without limitation, age discrimination; any
other claim or cause of action; and regardless of the forum in which it might be
brought.

          EIGHTH: Cornwell understands and agrees that he:

                  A. Has had a full twenty-one (21) days within which to
consider this Agreement before executing it.

                  B. Has carefully read and fully understands all of the
provisions of this Agreement.

                  C. Is, through this Agreement, releasing the Company from any
and all claims he may have against the Company, including any claims under the
Age Discrimination in Employment Act of 1967 (29 U.S.C. Section 621, et seq.)
which arose before the date this Agreement is executed.

                  D. Knowingly and voluntarily agrees to all of the terms set
forth in this Agreement.

                  E. Knowingly and voluntarily intends to be legally bound by
the same.

                  F. Was advised and hereby is advised in writing to consider
the terms of this Agreement and consult with an attorney of his choice prior to
executing this Agreement.

                  G. Has a full seven (7) days following the execution of this
Agreement to revoke this Agreement and has been and hereby is advised in writing
that this Agreement shall not become effective or enforceable until the
revocation period has expired.

                  H. Understands that rights or claims under the Age
Discrimination in Employment Act of 1967 (29 U.S.C. Section 621, et seq.) that
may arise after the date this Agreement is executed are not waived.

          NINTH: The parties hereto represent and acknowledge that in executing
this Agreement they do not rely and have not relied upon any representation or
statement made by any of the parties or by any of the parties' agents,
attorneys, or representatives with regard to the subject matter, basis, or
effect of this Agreement or otherwise, other than those specifically stated in
this written Agreement.



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          TENTH: This Agreement shall be binding upon the parties hereto and
upon their heirs, administrators, representatives, executors, successors, and
assigns, and shall inure to the benefit of said parties and each of them and to
their heirs, administrators, representatives, executors, successors, and
assigns. The parties expressly warrant that they have not transferred to any
person or entity any rights, causes of action, or claims released in this
Agreement.

          ELEVENTH: Should any provision of this Agreement be declared or be
determined by any court of competent jurisdiction to be wholly or partially
illegal, invalid, or unenforceable, the legality, validity, and enforceability
of the remaining parts, terms, or provisions shall not be affected thereby, and
said illegal, unenforceable, or invalid part, term, or provision shall be deemed
not to be a part of this Agreement.

          TWELFTH: This Agreement sets forth the entire agreement between the
parties hereto and fully supersedes any and all prior agreements or
understandings, written or oral, between the parties hereto pertaining to the
subject matter hereof.

          THIRTEENTH: This Agreement shall be interpreted in accordance with the
plain meaning of its terms and not strictly for or against any of the parties
hereto.

          FOURTEENTH: It is further understood and agreed that if, at any time,
a violation of any term of this Agreement is asserted by any party hereto, that
party shall have the right to seek specific performance of that term and/or any
other necessary and proper relief, including but not limited to damages. The
resolution of such claims shall be decided by binding arbitration conducted
pursuant to the Employment Law Rules of the American Arbitration Association.
The A.A.A. decision shall be final and binding and may be enforced in any court
of competent jurisdiction. Each party shall be responsible for its own
attorney's fees and costs. The costs of the arbitration shall be divided
equally.

          FIFTEENTH: This Agreement is being made and delivered, and is intended
to be performed, in the State of California, and shall be construed and enforced
in accordance with, and governed by, the laws of that State.

                                         ELECTROGLAS, INC.

Dated:  4-1-96                           By /s/   Fran Keegan

Dated:  4-1-96                           By /s/   William J. Cornwell
                                                  William J. Cornwell





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