<PAGE>
Exhibit 10.25

SEVERANCE AGREEMENT 
AND GENERAL RELEASE OF ALL CLAIMS

     The intent of this Agreement and Release is to mutually, amicably and 
finally resolve and compromise all issues and claims surrounding the 
employment of PHILLIPS W. SMITH, (the "Employee") by ZYCAD CORPORATION, (the 
"Company") and the termination thereof.  The execution of this Agreement 
shall not in any way be considered an admission of any liability on the part 
of the Company.

1.   The Employee has notified the Company that he is retiring and that his 
employment with the Company is being voluntarily terminated effective 
SEPTEMBER 30, 1997.  In exchange for the Release described below, the Company 
agrees to pay Employee the severance package as described in Section 2 below. 
This amount includes money which is not due to him now, or in the future, and 
which is valuable consideration for the promises and undertakings set forth 
herein.

2.   SEVERANCE PAY:  
     The Company will pay Employee Severance Pay consisting of the following:

<TABLE>
<S>                                          <C>
6 months base salary                         $120,000
Cash in lieu of 7,500 warrants               $ 10,000
                                             --------
               Sub-Total                     $130,000
</TABLE>

3.   BONUSES

<TABLE>
<S>                                          <C>
Bonus under Stock Option Bonus Plan          $ 47,000
Bonus for IKOS settlement                    $ 73,000
                                             --------
               Sub-Total                     $120,000

               Grand Total                   $250,000
</TABLE>

4.   PAYMENT SCHEDULE:
     The Company will pay Employee the Severance Pay and Bonuses specified 
above over a period of twenty-four (24) months beginning OCTOBER 1, 1997 and 
continuing through SEPTEMBER 30, 1999 (the "Severance Period") at the rate of 
$10,416.67 per month payable on the 15th and last day of each month during 
which time Employee shall be deemed an inactive employee. Severance payments 
do not include FSA, car plan payments, bonuses, or any other monies.

5.   GROUP INSURANCE:
     Employee's group coverage for medical, dental, life and AD&D will remain 
in effect through SEPTEMBER 30, 1999 at which time you may elect continuation 
coverage through COBRA. The Company will cease paying the premiums for any 
supplemental life insurance on September 30, 1997.

6.   401(k) PLAN:
     Employee's participation in Zycad's 401(k) Plan will cease upon 
termination of Severance Pay as stated above. The Company will not be liable 
for matching contributions after SEPTEMBER 30, 1997. Employee may receive a 
lump sum distribution for the amount of Employee's vested account balance 
within approximately 90 days after ceasing participation in the Plan. If 
Employee's vested account balance is greater than $3,500, Employee may elect 
to leave his money in the Plan.

7.   STOCK OPTIONS:
     Employee has exercised all his stock options and there are no stock 
options outstanding.

<PAGE>
8.   DEATH:
     In the event Employee dies during the Severance Period, any unpaid 
Severance Pay and Bonuses shall be paid to the Phillips W. Smith Family Trust.

9.   CONFIDENTIALITY:
     Employee agrees that the terms and conditions of this Agreement are 
strictly confidential and shall not be disclosed to any other persons except 
his counsel, immediate family, financial advisor or as required by applicable 
law.

10.  RELEASE:
     In consideration for the payment and undertakings described above 
Employee, his representatives, successors, and assigns, do hereby completely 
release and forever discharge, the Company, its parent, affiliated and 
subsidiary corporations, and its shareholders, officers and all other 
representatives, agents, directors, employees, successors and assigns, from 
all claims, rights, demands, actions, obligations, and causes of action of 
any and every kind, nature and character, know or unknown, which Employee may 
now have, or has ever had, against them arising from or in any way connected 
with the employment relationship between the parties, any actions during the 
relationship, or the termination thereof, including but not limited to all 
"wrongful discharge" claims; and all claims relating to any contracts of 
employment, express or implied; any tort of nature; any federal, state, or 
municipal statute or ordinance; any claims under the California Fair 
Employment and Housing Act, Title VII of the Civil Rights Act of 1964, the 
Age Discrimination in Employment Act of 1967, 42 U.S.C. Section 1981 and any 
other laws and regulations relating to employment discrimination any and all 
claims for attorney's fees and costs.

11.  STATUTORY NOTICE
     Employee has read Section 1542 of the Civil Code of the State of 
California, which 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.

     Employee understands that Section 1542 gives him the right not to 
release existing claims of which he is not now aware, unless he voluntarily 
chooses to waive this right.  Having been so apprised, he nevertheless 
hereby voluntarily elects to, and does, waive the rights described in Section 
1542, and elects to assume all risks for claims that now exist in his favor, 
KNOWN or UNKNOWN, from the subject of this Agreement.

12.  ENTIRE UNDERSTANDING:

     This Agreement constitutes the entire understanding of the parties on 
the subjects covered.  Employee expressly warrants that he has read and fully 
understands this Agreement; that he has had the opportunity to consult with 
legal counsel of his own choosing and to have the terms of the Agreement 
fully explained to him; that he is not executing this Release in reliance on 
any promises, representations or inducements other than those contained 
herein; and that he is executing this Release voluntarily, free of any duress 
or coercion.

          ZYCAD CORPORATION
<TABLE>
<S>                               <C>
September 30, 1997                By:  /s/ JAMES R. FIEBIGER
----------------------------           -----------------------------
                                  President & CEO

                   EMPLOYEE

September 30, 1997                By:       /s/ PHILLIPS W. SMITH 
----------------------------          ------------------------------
</TABLE>