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                                                                   Exhibit 10.18

                 SEVERANCE AND SETTLEMENT AGREEMENT AND RELEASE

This AGREEMENT is entered into by and between Gensym Corporation (the "Company")
and Lowell B. Hawkinson (the "Executive").

WHEREAS, the parties wish to resolve amicably the Executive's separation as an
employee and officer of the Company and to establish the terms of the
Executive's severance arrangements.

NOW, THEREFORE, in consideration of the promises and conditions set forth
herein, the sufficiency of which is hereby acknowledged, the Company and the
Executive agree as follows:

      1. Effective Date. The Executive's termination as an employee and officer
of the Company shall become effective upon the commencement of the employment of
his successor as the Company's chief executive officer. Nothing herein, however,
shall alter Executive's status as an at-will employee or guarantee Executive's
employment by the Company and for purposes of this Agreement the "Effective
Date" shall mean the date of termination of the Executive's employment with the
Company for any reason whatsoever.

      2. Monetary Consideration. In return for the Executive's execution and
receipt by the Company of this Severance and Settlement Agreement and a Release,
the Company shall provide the Executive with the following benefits to which he
would not otherwise be entitled:

              (a) The Company agrees to pay the Executive his current base
salary for a period of twenty-four (24) months ("Severance Period") after the
Effective Date, less all applicable state and federal taxes, as severance pay.
The severance pay shall be paid to the Executive in accordance with the
Company's regular payroll practices and in the event of the Executive's death
during the Severance Period the payments shall be continued to the Executive's
estate. Notwithstanding the foregoing, if within the Severance Period the
Executive obtains new employment as an employee, independent contractor or
consultant, the amount of severance pay under Section 2 shall be reduced by the
amount of all other cash compensation earned or received for such other
services. For purposes of this Agreement, new employment
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includes but is not limited to any employment relationship, independent
contractor, consulting or advisory relationship with any individual or entity
other than the Company for which services the Executive receives or earns any
form of current or deferred compensation, but excludes service solely as an
outside director of a public company, provided that (consistently with Section
21 of the Gensym Corporation Board Guidelines (the "Guidelines")), if the
Executive's first election to such directorship occurs while the Executive is
also a director of the Company, the Company's board has approved such
directorship in advance (such approval having been obtained with respect to
service as a director of GenRad, Inc.) If the Executive receives or earns
guaranteed or fixed bonus or deferred payments, such amounts shall be included
as part of the set-off amount. The Executive shall provide the Company with
timely and accurate information as to all such compensation.

              (b) Effective as of the Effective Date, the Executive shall be
considered to have elected to continue receiving group medical insurance
pursuant to the law known as COBRA, 29 U.S.C. ss. 1161 et seq. During the
Severance Period, as defined in paragraph 2(a), and to the extent consistent
with applicable law, the Company shall continue to pay the share of the premium
for such coverage that is paid by the Company for active and similarly-situated
employees who receive the same type of coverage. The remaining balance of any
premium costs, and all premium costs after the Severance Period, shall be paid
by the Executive on a monthly basis for as long as, and to the extent that, the
Executive remains eligible for COBRA continuation. The Executive should consult
the COBRA materials to be provided by the Company for more details regarding
these benefits. All other benefits, including life insurance and long-term
disability, will be continued by the Company during the Severance Period.


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              (c) The Executive shall be eligible for a bonus under his 1999
Executive Bonus Plan for all of 1999.

      3. Release. The Executive hereby fully, forever, irrevocably and
unconditionally releases, remises and discharges the Company, its officers,
directors, stockholders, corporate affiliates, attorneys, agents and employees
from any and all claims, charges, complaints, demands, actions, causes of
action, suits, rights, debts, sums of money, costs, accounts, reckonings,
covenants, contracts, agreements, promises, doings, omissions, damages,
executions, obligations, liabilities, and expenses (including attorneys' fees
and costs), of every kind and nature which he ever had or now has against the
Company, its officers, directors, stockholders, corporate affiliates, attorneys,
agents and employees, including, but not limited to, all claims arising out of
his employment, all employment discrimination claims under Title VII of the
Civil Rights Act of 1964, 42 U.S.C. ss. 2000e et seq., the Americans With
Disabilities Act, 42 U.S.C. ss. 12101 et seq., the Age Discrimination in
Employment Act, 29 U.S.C. ss. 621 et seq., and similar state or local statutes
including the Massachusetts Civil Rights Act, Mass. Gen. Laws ch. 12, ss.ss. 11H
and 11I, and the Massachusetts Equal Rights Act, Mass. Gen. Laws ch. 93, ss. 102
et seq., and Mass. Gen. Laws. ch. 151B, ss. 1 et seq., and all wrongful
discharge claims or other common law claims.

      4. Company Acknowledgement. The Company acknowledges and agrees that as of
the date hereof the Company knows of no claims or causes of action of whatever
kind or nature which the Company has or may have against the Executive which
arose on or before the date hereof arising from or in connection with his
employment by the Company whether based on contract, tort including negligence
or otherwise.



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      5. Services To The Company.

              (a) Subject to the Guidelines and the Company's by-laws, the
Executive will serve as a director of the Company for the balance of his present
term. Until the Effective Date, and thereafter subject to the determination of
the Company's chief executive officer, the Executive shall also serve as a
member of the Technology Planning Committee of the board. From and after the
Effective Date, the Executive shall be deemed a non-employee director of the
Company for purposes of entitlement to director compensation.

              (b) From and after the Effective Date through the end of the
Severance Period, the Executive shall be available as a consultant to the
Company on such terms as he and the Company's then chief executive officer may
reasonably agree upon, taking into account the needs of the Company, the special
knowledge and capabilities of the Executive and his other professional and
personal commitments.

      6. Nature of Agreement. The Executive understands and agrees that this
Agreement is a severance and settlement agreement and does not constitute an
admission of liability or wrongdoing on the part of the Company.

      7. Non-Competition and Non-Solicitation. For so long as the Executive is
receiving any severance pay from the Company pursuant to Section 2(a) and
thereafter for a period of one year following the Company's final payment to him
thereunder, the Executive will not directly or indirectly:

              (a) as an individual proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, consultant or in any other
capacity whatsoever (other than as the holder of not more than 1% of the
combined voting power of the outstanding stock of a publicly-held company),
develop, design, produce, market, sell or render (or assist any other person in
developing, designing, producing, marketing, selling or rendering) products or
services


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competitive with those developed, designed, produced, marketed, sold or rendered
by the Company as of the Effective date or under consideration by the Company as
of the Effective Date: or,

              (b) solicit, divert or take away, or attempt to divert or to take
away, the business or patronage of any of the clients, customers or accounts, or
prospective clients, customers or accounts, of the Company which were contacted,
solicited or served by the Executive while employed by the Company; or,

              (c) directly or indirectly recruit, solicit or hire any employee
of the Company or induce or attempt to induce any employee of the Company to
terminate his/her employment with, or otherwise cease his/her relationship with,
the Company.

Notwithstanding the foregoing, if the Executive receives an offer of employment
or other business relationship from an entity engaged both in activities within
the scope of section 6(a) of this Agreement and also in other non-prohibited
activities where such employment is not related to the prohibited activity, the
Executive may request that the Company authorize a limited exception to section
6(a) provided sufficient safeguards have been established so that the Executive
will not be involved, directly or indirectly, in the prohibited activity.
Nothing herein, however, obligates the Company to grant any exception or
modification to section 6(a).

If any restriction set forth in this Section 6 is found by any court of
competent jurisdiction to be unenforceable because it extends for too long a
period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.

      8. Amendment. This Agreement shall be binding upon the parties and may not
be abandoned, supplemented, changed or modified in any manner, orally or
otherwise, except by an instrument in writing of concurrent or subsequent date
signed by a duly authorized representative of the parties hereto. This Agreement
is binding upon and shall inure to the benefit of the parties and their
respective agents, assigns, heirs, executors, successors and administrators.

      9. Validity. Should any provision of this Agreement be declared or be
determined by any court of competent jurisdiction to be illegal or invalid, the
validity of the remaining parts,


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terms, or provisions shall not be affected thereby and said illegal and invalid
part, term or provision shall be deemed not to be a part of this Agreement.

      10. Non-Disparagement. Neither the Executive nor any officer or director
of the Company shall make any false, disparaging or derogatory statements in
public or private regarding the other or, in the case of the Executive, any of
the Company's directors, officers, employees, agents, or representatives or the
Company's business affairs and financial condition.

      11. Entire Agreement. This Agreement contains and constitutes the entire
understanding and agreement between the parties hereto with respect to the
severance and settlement and cancels all previous oral and written negotiations,
agreements, commitments, and writings in connection therewith.

      12. Acknowledgements. The Executive acknowledges that he has been given
twenty-one (21) days to consider this agreement and that the Company advised the
Executive to consult with an attorney of his own choosing prior to signing this
agreement. The Executive understands that he may revoke this agreement for a
period of seven (7) days after the execution of this agreement, and the
agreement shall not be effective or enforceable until the expiration of this
seven (7) day revocation period.

      13. Applicable Law. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts, and is binding upon and shall inure to the
benefit of the parties and their respective agents, assigns, heirs, executors,
successors and administrators.

      14. Voluntary Assent. The Executive affirms that no other promises or
agreements of any kind have been made to or with him by any person or entity
whatsoever to cause him to sign this Agreement, and that he fully understands
the meaning and intent of this Agreement. The Executive states and represents
that he has had an opportunity to fully discuss and review the


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terms of this Agreement with an attorney. The Executive further states and
represents that he has carefully read this Agreement, understands the contents
herein, freely and voluntarily assents to all of the terms and conditions
hereof, and signs his name of his own free act.

      15. Public Announcement. Any public announcement relating to the
termination of Executive's employment by the Company shall be mutually agreed
upon except as required by law.

      16. Fees. The Company shall bear the fees and expenses of the Executive's
counsel in connection with the negotiation and execution of this Agreement up to
a maximum of two thousand, five hundred dollars ($2,500).

IN WITNESS WHEREOF, all parties have set their hand and seal to this Agreement
as of the date written below.

Gensym Corporation


By: /s/ John A. Shane                      Date: June 2, 1999
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   John A. Shane, hereunto duly authorized

I hereby agree to the terms and conditions set forth above. I intend that this
Severance and Settlement Agreement and Release become a binding Agreement
between me and the Company if I do not revoke my acceptance within seven (7)
days.

 /s/ Lowell B. Hawkinson                   Date: June 24, 1999
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Lowell B. Hawkinson


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