Document:

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                                                                   Exhibit 10.22
                          Form of Severance Agreement

                           [Gliatech Inc. Letterhead]

[Name of employee]
[Address of employee]

Dear _____________:

                  Gliatech Inc. (the "Company") recognizes that, as is the case
for most publicly held companies, the possibility of a change in control exists.
The Company wishes to ensure that its senior executives and management are not
distracted from performing their duties in the event of a proposed or actual
transaction involving a change of control. Accordingly, the Company has
determined that as an additional inducement for you (the "Executive") to
continue to remain in the employ of the Company and to assure itself of both
present and future continuity of management, the Company agrees to provide the
Executive with severance benefits under the following circumstances pursuant to
the following terms and conditions (the "Agreement"):

                  1. (a) Term. This Agreement shall commence as of the date
hereof and expire as of the later of (i) the close of business on December 31,
2002, or (ii) the expiration of the Severance Period (as described below);
provided, however, that (A) commencing on January 1, 2003 and each January 1
thereafter, the term of this Agreement will automatically be extended for an
additional year unless, not later than September 30 of the immediately preceding
year, the Company or the Executive shall have given notice that it or the
Executive, as the case may be, does not wish to have the Term extended and (B)
subject to the last sentence of Section 9, if, prior to a Change in Control (as
described below), the Executive ceases for any reason to be an employee of the
Company and any entity in which the Company directly or indirectly beneficially
owns 50% or more of the outstanding Voting Stock (a "Subsidiary"), thereupon
without further action this Agreement will immediately terminate and be of no
further effect (the "Term"). For purposes of this Section 1(a), the Executive
shall not be deemed to have ceased to be an employee of the Company and any
Subsidiary by reason of the transfer of Executive's employment between the
Company and any Subsidiary, or among any Subsidiaries.

                  (b) Change in Control. For purposes of this Agreement, "Change
in Control" means the occurrence during the Term of any of the following events:

                           (i) The Company is merged, consolidated or
         reorganized into or with another corporation or other legal person, and
         as a result of such merger, consolidation or reorganization less than a
         majority of the combined voting power of the then-outstanding voting
         stock (the "Voting Stock") of such corporation or person immediately
         after such transaction is held in the aggregate by the holders of
         Voting Stock of the Company immediately prior to such transaction;

                           (ii) The Company sells or otherwise transfers all or
         substantially all of its assets to another corporation or other legal
         person, and as a result of such sale or transfer less than a majority
         of the combined voting power of the then-outstanding Voting Stock of
         such corporation or person immediately after such sale or transfer is
         held in the
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         aggregate by the holders of Voting Stock of the Company immediately
         prior to such sale or transfer;

                           (iii) There is a report filed on Schedule 13D or
         Schedule 14D-1 (or any successor schedule, form or report), each as
         promulgated pursuant to the Securities Exchange Act of 1934 ("Exchange
         Act"), disclosing that any person (as the term "person" is used in
         Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) (a "Person")
         has become the beneficial owner (as the term "beneficial owner" is
         defined under Rule 13d-3 or any successor rule or regulation
         promulgated under the Exchange Act) of securities representing 20% or
         more of the combined voting power of the then-outstanding Voting Stock
         of the Company;

                           (iv) The Company files a report or proxy statement
         with the Securities and Exchange Commission pursuant to the Exchange
         Act disclosing in response to Form 8-K or Schedule 14A (or any
         successor schedule, form or report or item therein) that a change in
         control of the Company has occurred or will occur in the future
         pursuant to any then-existing contract or transaction; or

                           (v) If, during any period of two consecutive years,
         individuals who at the beginning of any such period constitute the
         Directors of the Company cease for any reason to constitute at least a
         majority thereof; provided, however, that for purposes of this clause
         (v) each Director who is first elected, or first nominated for election
         by the Company's stockholders, by a vote of at least two-thirds of the
         Directors of the Company (or a committee thereof) then still in office
         who were Directors of the Company at the beginning of any such period
         will be deemed to have been a Director of the Company at the beginning
         of such period, but excluding, for this purpose, any such Director
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-1 of the
         Exchange Act) with respect to the election or removal of Directors or
         other actual or threatened solicitation of proxies or consents by or on
         behalf of a Person other than the Board of Directors of the Company
         (the "Board").

Notwithstanding the foregoing provisions of Section 1(b)(iii) or 1(b)(iv),
unless otherwise determined in a specific case by majority vote of the Board, a
"Change in Control" shall not be deemed to have occurred for purposes of Section
1(b)(iii) or 1(b)(iv) solely because (A) the Company, (B) a Subsidiary, or (C)
any Company-sponsored employee stock ownership plan or any other employee
benefit plan of the Company or any Subsidiary either files or becomes obligated
to file a report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) under the Exchange Act disclosing beneficial ownership
by it of shares of Voting Stock, whether equal to or in excess of 20% or
otherwise, or because the Company reports that a change in control of the
Company has occurred or will occur in the future by reason of such beneficial
ownership.

                  2. Operation of Agreement. This Agreement will be effective
and binding immediately upon its execution, but, notwithstanding anything in
this Agreement to the contrary, this Agreement will not be operative unless and
until a Change in Control (as defined below) occurs. Upon the occurrence of a
Change in Control at any time during the Term, without further

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action, this Agreement shall become immediately operative, including, without
limitation, the last sentence of Section 9 notwithstanding that the Term may
have theretofore expired.

                  3. Termination Following a Change in Control. (a) In the event
of the occurrence of a Change in Control, the Executive's employment may be
terminated by the Company or any Subsidiary during the period of time commencing
on the date of the first occurrence of a Change in Control and continuing until
the earlier of (i) the first anniversary of the occurrence of the Change in
Control, or (ii) the Executive's death; provided, however, that commencing on
each anniversary of the Change in Control, this period will automatically be
extended for an additional year unless, not later than 90 calendar days prior to
such anniversary date, either the Company or the Executive shall have given
written notice to the other that this period is not to be so extended (the
"Severance Period"). In the event of such termination, the Executive shall be
entitled to the benefits provided by Section 4 unless such termination is the
result of the occurrence of one or more of the following events:

                           (i) The Executive's death;

                           (ii) If the Executive becomes permanently disabled
         within the meaning of, and begins actually to receive disability
         benefits pursuant to, the long-term disability plan in effect for, or
         applicable to, Executive immediately prior to the Change in Control; or

                           (iii) Prior to any termination pursuant to Section
         3(b) or Section 3(c), the Executive shall have:

                                    (x) been convicted of a criminal violation
                           involving fraud, embezzlement or theft in connection
                           with his duties or in the course of his employment
                           with the Company or any Subsidiary;

                                    (y) committed intentional wrongful damage to
                           property of the Company or any Subsidiary; or

                                    (z) committed intentional wrongful
                           disclosure of secret processes or confidential
                           information of the Company or any Subsidiary;

         and any such act shall have been demonstrably and materially harmful to
         the Company ("Cause"). For purposes of this Agreement, no act or
         failure to act on the part of the Executive shall be deemed
         "intentional" if it was due primarily to an error in judgment or
         negligence, but shall be deemed "intentional" only if done or omitted
         to be done by the Executive not in good faith and without reasonable
         belief that the Executive's action or omission was in the best interest
         of the Company. Notwithstanding the foregoing, the Executive shall not
         be deemed to have been terminated for "Cause" hereunder unless and
         until there shall have been delivered to the Executive a copy of a
         resolution duly adopted by the affirmative vote of not less than three
         quarters of the Board then in office at a meeting of the Board called
         and held for such purpose, after reasonable notice to the Executive and
         an opportunity for the Executive, together with the Executive's counsel
         (if the Executive chooses to have counsel present at such meeting), to
         be heard before the Board, finding that, in the good faith opinion of
         the Board, the Executive had committed

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         an act constituting "Cause" as herein defined and specifying the
         particulars thereof in detail. Nothing herein will limit the right of
         the Executive or his beneficiaries to contest the validity or propriety
         of any such determination.

If, during the Severance Period, the Executive's employment is terminated by the
Company or any Subsidiary other than pursuant to Section 3(a), the Executive
will be entitled to the benefits provided by Section 4 hereof.

                  (b) In the event of the occurrence of a Change in Control, the
Executive may terminate employment with the Company and any Subsidiary during
the Severance Period with the right to severance compensation as provided in
Section 4 upon the occurrence of one or more of the following events (regardless
of whether any other reason, other than Cause as hereinabove provided, for such
termination exists or has occurred, including, without limitation, other
employment):

                           (i) Failure to elect or reelect or otherwise to
         maintain the Executive in the office or the position, or a
         substantially equivalent office or position, of or with the Company
         and/or a Subsidiary (or any successor thereto by operation of law of or
         otherwise), as the case may be, which the Executive held immediately
         prior to a Change in Control, or the removal of the Executive as a
         Director of the Company and/or a Subsidiary (or any successor thereto)
         if the Executive shall have been a Director of the Company and/or a
         Subsidiary immediately prior to the Change in Control;

                           (ii) (A) A significant adverse change in the nature
         or scope of the authorities, powers, functions, responsibilities or
         duties attached to the position with the Company and any Subsidiary
         which the Executive held immediately prior to the Change in Control,
         (B) a reduction in the aggregate of the Executive's annual base salary
         rate as in effect from time to time ("Base Pay") and annual bonus,
         incentive or other payment of compensation, in addition to Base Pay,
         made or to be made in regard to services rendered in any year or other
         period pursuant to any bonus, incentive, profit-sharing, performance,
         discretionary pay or similar agreement, policy, plan, program or
         arrangement (whether or not funded) of the Company or a Subsidiary, or
         any successor thereto (collectively "Incentive Pay") received from the
         Company and any Subsidiary, or (C) the termination or denial of the
         Executive's rights to the perquisites, benefits and service credit for
         benefits as provided under any and all employee retirement income and
         welfare benefit policies, plans, programs or arrangements in which
         Executive is entitled to participate, including, without limitation,
         any stock option, performance share, performance unit, stock purchase,
         stock appreciation, savings, pension, supplemental executive
         retirement, or other retirement income or welfare benefit, deferred
         compensation, incentive compensation, group or other life, health,
         medical/hospital or other insurance (whether funded by actual insurance
         or self-insured by the Company or a Subsidiary), disability, salary
         continuation, expense reimbursement and other employee benefit
         policies, plans, programs or arrangements that may now exist or any
         equivalent successor policies, plans, programs or arrangements that may
         be adopted hereafter by the Company or a Subsidiary, providing
         perquisites, benefits and service credit for benefits at least as great
         in the aggregate as are payable thereunder prior to a Change in Control
         (collectively, "Employee Benefits") or a reduction in the scope or
         value thereof, any of which is not remedied by the Company

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         within 10 calendar days after receipt by the Company of written notice
         from the Executive of such change, reduction or termination, as the
         case may be;

                           (iii) A determination by the Executive (which
         determination will be conclusive and binding upon the parties hereto
         provided it has been made in good faith and in all events will be
         presumed to have been made in good faith unless otherwise shown by the
         Company by clear and convincing evidence) that a change in
         circumstances has occurred following a Change in Control, including,
         without limitation, a change in the scope of the business or other
         activities for which the Executive was responsible immediately prior to
         the Change in Control, which has rendered the Executive substantially
         unable to carry out, has substantially hindered Executive's performance
         of, or has caused Executive to suffer a substantial reduction in, any
         of the authorities, powers, functions, responsibilities or duties
         attached to the position held by the Executive immediately prior to the
         Change in Control, which situation is not remedied within 10 calendar
         days after written notice to the Company from the Executive of such
         determination;

                           (iv) The liquidation, dissolution, merger,
         consolidation or reorganization of the Company or transfer of all or
         substantially all of its business and/or assets, unless the successor
         or successors (by liquidation, merger, consolidation, reorganization,
         transfer or otherwise) to which all or substantially all of its
         business and/or assets have been transferred (by operation of law or
         otherwise) assumed all duties and obligations of the Company under this
         Agreement pursuant to Section 11(a);

                           (v) The Company relocates its principal executive
         offices (if such offices are the principal location of Executive's
         work), or requires the Executive to have his principal location of work
         changed, to any location that, in either case, is in excess of 50 miles
         from the location thereof immediately prior to the Change in Control,
         or requires the Executive to travel away from his office in the course
         of discharging his responsibilities or duties hereunder at least 20%
         more (in terms of aggregate days in any calendar year or in any
         calendar quarter when annualized for purposes of comparison to any
         prior year) than was required of Executive in any of the three full
         years immediately prior to the Change in Control without, in either
         case, his prior written consent; or

                           (vi) Without limiting the generality or effect of the
         foregoing, any material breach of this Agreement by the Company or any
         successor thereto which is not remedied by the Company within 10
         calendar days after receipt by the Company of written notice from the
         Executive of such breach.

                  [(c) Notwithstanding anything contained in this Agreement to
the contrary, in the event of a Change in Control, other than a Change of
Control satisfying the provisions of Section 3(b)(iv), the Executive may
terminate employment with the Company and any Subsidiary for any reason, or
without reason, during the 30-day period immediately following the first
anniversary of the first occurrence of a Change in Control with the right to
severance compensation as provided in Section 4.]

                  (d) A termination by the Company pursuant to Section 3(a) or
by the Executive pursuant to Section 3(b) or Section 3(c) will not affect any
rights that the Executive may have

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pursuant to any agreement, policy, plan, program or arrangement of the Company
or Subsidiary providing Employee Benefits, which rights shall be governed by the
terms thereof, which rights shall, during the Severance Period, be superseded by
this Agreement.

                  4. Severance Compensation. (a) If, following the occurrence of
a Change in Control, the Company or Subsidiary terminates the Executive's
employment during the Severance Period other than pursuant to Section 3(a), or
if the Executive terminates his employment pursuant to Section 3(b) or Section
3(c), the Company will pay to the Executive the amounts described in Annex A
within five business days after the date on which the Executive's employment is
terminated (the effective date of which shall be the date of termination, or
such other date that may be specified by the Executive if the termination is
pursuant to Section 3(b) or Section 3(c)) (the "Termination Date") and will
continue to provide to the Executive the benefits described on Annex A for the
periods described therein.

                  (b) Without limiting the rights of the Executive at law or in
equity, if the Company fails to make any payment or provide any benefit required
to be made or provided hereunder on a timely basis, the Company will pay
interest on the amount or value thereof at an annualized rate of interest equal
to the so-called composite "prime rate" as quoted from time to time during the
relevant period in the Midwest Edition of The Wall Street Journal, plus 1.0%.
Such interest will be payable as it accrues on demand. Any change in such prime
rate will be effective on and as of the date of such change.

                  (c) Notwithstanding any provision of this Agreement to the
contrary, the parties' respective rights and obligations under this Section 4
and under Sections 5, 7, 8 and the last sentence of Section 9 will survive any
termination or expiration of this Agreement or the termination of the
Executive's employment following a Change in Control for any reason whatsoever.

                  (d) Unless otherwise expressly provided by the applicable
plan, program or agreement, after the occurrence of a Change in Control, the
Company shall pay in cash to the Executive a lump sum amount equal to the value
of any annual bonus or long-term incentive pay (including, without limitation,
incentive-based annual cash bonuses and performance units, but not including any
equity-based compensation or compensation provided under a qualified plan)
earned or accrued with respect to the Executive's service during the performance
period or periods that includes the date on which the Change in Control
occurred, disregarding any applicable vesting requirements; provided that such
amount shall be calculated at the plan target or payout rate, but prorated to
base payment only on the portion of the Executive's service that had elapsed
during the applicable performance period. Such payment shall take into account
service rendered through the payment date and shall be made at the earlier of
(i) the date prescribed for payment pursuant to the applicable plan, program or
agreement and (ii) within five business days after the Termination Date.

                  (e) Pursuant to the terms and conditions of any applicable
plan, program or agreement, upon the occurrence of a Change of Control, all
equity incentive awards held by the Executive shall become vested and
exercisable in accordance with such plan, program or agreement.

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                  5. Certain Additional Payments by the Company. (a) Anything in
this Agreement to the contrary notwithstanding, in the event that this Agreement
shall become operative and it shall be determined (as hereafter provided) that
any payment (other than the Gross-Up payments provided for in this Section 5) or
distribution by the Company or any of its affiliates to or for the benefit of
the Executive, whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise pursuant to or by reason of any
other agreement, policy, plan, program or arrangement, including, without
limitation, any stock option, performance share, performance unit, stock
appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing (a
"Payment"), would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") (or any successor
provision thereto) by reason of being considered "contingent on a change in
ownership or control" of the Company, within the meaning of Section 280G of the
Code (or any successor provision thereto) or to any similar tax imposed by state
or local law, or any interest or penalties with respect to such tax (such tax or
taxes, together with any such interest and penalties, being hereafter
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment or payments (collectively, a "Gross-Up
Payment"); provided, however, that no Gross-up Payment shall be made with
respect to the Excise Tax, if any, attributable to (i) any incentive stock
option, as defined by Section 422 of the Code ("ISO") granted prior to the
execution of this Agreement, or (ii) any stock appreciation or similar right,
whether or not limited, granted in tandem with any ISO described in clause (i).
The Gross-Up Payment shall be in an amount such that, after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payment.

                  (b) Subject to the provisions of Section 5(f), all
determinations required to be made under this Section 5, including whether an
Excise Tax is payable by the Executive and the amount of such Excise Tax and
whether a Gross-Up Payment is required to be paid by the Company to the
Executive and the amount of such Gross-Up Payment, if any, shall be made by a
nationally recognized accounting firm (the "Accounting Firm") selected by the
Executive in his sole discretion. The Executive shall direct the Accounting Firm
to submit its determination and detailed supporting calculations to both the
Company and the Executive within 30 calendar days after the Termination Date, if
applicable, and any such other time or times as may be requested by the Company
or the Executive. If the Accounting Firm determines that any Excise Tax is
payable by the Executive, the Company shall pay the required Gross-Up Payment to
the Executive within five business days after receipt of such determination and
calculations with respect to any Payment to the Executive. If the Accounting
Firm determines that no Excise Tax is payable by the Executive, it shall, at the
same time as it makes such determination, furnish the Company and the Executive
an opinion that the Executive has substantial authority not to report any Excise
Tax on his federal, state or local income or other tax return. As a result of
the uncertainty in the application of Section 4999 of the Code (or any successor
provision thereto) and the possibility of similar uncertainty regarding
applicable state or local tax law at the time of any determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made (an "Underpayment"),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies pursuant to Section
5(f) and the Executive thereafter is required to make a payment of any Excise
Tax, the Executive shall direct the Accounting Firm to determine the amount of
the Underpayment that has occurred and to submit its determination and detailed

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supporting calculations to both the Company and the Executive as promptly as
possible. Any such Underpayment shall be promptly paid by the Company to, or for
the benefit of, the Executive within five business days after receipt of such
determination and calculations.

                  (c) The Company and the Executive shall each provide the
Accounting Firm access to and copies of any books, records and documents in the
possession of the Company or the Executive, as the case may be, reasonably
requested by the Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the determinations and
calculations contemplated by Section 5(b). Any determination by the Accounting
Firm as to the amount of the Gross-Up Payment shall be binding upon the Company
and the Executive.

                  (d) The federal, state and local income or other tax returns
filed by the Executive shall be prepared and filed on a consistent basis with
the determination of the Accounting Firm with respect to the Excise Tax payable
by the Executive. The Executive shall make proper payment of the amount of any
Excise Tax, and at the request of the Company, provide to the Company true and
correct copies (with any amendments) of his federal income tax return as filed
with the Internal Revenue Service and corresponding state and local tax returns,
if relevant, as filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing such payment. If prior
to the filing of the Executive's federal income tax return, or corresponding
state or local tax return, if relevant, the Accounting Firm determines that the
amount of the Gross-Up Payment should be reduced, the Executive shall within
five business days pay to the Company the amount of such reduction.

                  (e) The fees and expenses of the Accounting Firm for its
services in connection with the determinations and calculations contemplated by
Section 5(b) shall be borne by the Company. If such fees and expenses are
initially paid by the Executive, the Company shall reimburse the Executive the
full amount of such fees and expenses within five business days after receipt
from the Executive of a statement therefor and reasonable evidence of his
payment thereof.

                  (f) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service or any other taxing authority that, if
successful, would require the payment by the Company of a Gross-Up Payment. Such
notification shall be given as promptly as practicable but no later than 10
business days after the Executive actually receives notice of such claim and the
Executive shall further apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid (in each case, to the extent
known by the Executive). The Executive shall not pay such claim prior to the
earlier of (i) the expiration of the 30-calendar-day period following the date
on which he gives such notice to the Company and (ii) the date that any payment
of amount with respect to such claim is due. If the Company notifies the
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:

                           (i) provide the Company with any written records or
                  documents in his possession relating to such claim reasonably
                  requested by the Company;

                           (ii) take such action in connection with contesting
                  such claim as the Company shall reasonably request in writing
                  from time to time, including, without

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                  limitation, accepting legal representation with respect to
                  such claim by an attorney competent in respect of the subject
                  matter and reasonably selected by the Company;

                           (iii) cooperate with the Company in good faith in
                  order effectively to contest such claim; and

                           (iv) permit the Company to participate in any
                  proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and shall indemnify and hold harmless the Executive, on an after-tax
basis, for and against any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limiting the foregoing provisions of this
Section 5(f), the Company shall control all proceedings taken in connection with
the contest of any claim contemplated by this Section 5(f) and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim
(provided, however, that the Executive may participate therein at his own cost
and expense) and may, at its option, either direct the Executive to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and
the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs the Executive to pay the tax claimed and sue for a refund, the
Company shall advance the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income or other tax, including interest
or penalties with respect thereto, imposed with respect to such advance; and
provided further, however, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which the contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of any such contested claim
shall be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority.

                  (g) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 5(f), the Executive receives any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 5(f)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
any taxes applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 5(f), a determination is made
that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to
contest such denial or refund prior to the expiration of 30 calendar days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of any such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid by the
Company to the Executive pursuant to this Section 5.

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                  6. No Mitigation Obligation. The Company hereby acknowledges
that it will be difficult and may be impossible for the Executive to find
reasonably comparable employment following the Termination Date. Accordingly,
the payment of the severance compensation by the Company to the Executive in
accordance with the terms of this Agreement is hereby acknowledged by the
Company to be reasonable, and the Executive will not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise, nor will any profits, income, earnings or other benefits from any
source whatsoever create any mitigation, offset, reduction or any other
obligation on the part of the Executive hereunder or otherwise, except as
expressly provided in the last sentence of Paragraph 2 set forth on Annex A.

                  7. Legal Fees and Expenses. It is the intent of the Company
that the Executive not be required to incur legal fees and the related expenses
associated with the interpretation, enforcement or defense of Executive's rights
under this Agreement by litigation or otherwise because the cost and expense
thereof would substantially detract from the benefits intended to be extended to
the Executive hereunder. Accordingly, if it should appear to the Executive that
the Company has failed to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes or
threatens to take any action to declare this Agreement void or unenforceable, or
institutes any litigation or other action or proceeding designed to deny, or to
recover from, the Executive the benefits provided or intended to be provided to
the Executive hereunder, the Company irrevocably authorizes the Executive from
time to time to retain counsel of Executive's choice, at the expense of the
Company as hereafter provided, to advise and represent the Executive in
connection with any such interpretation, enforcement or defense, including,
without limitation, the initiation or defense of any litigation or other legal
action, whether by or against the Company or any Director, officer, stockholder
or other person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between the
Company and such counsel, the Company irrevocably consents to the Executive's
entering into an attorney-client relationship with such counsel, and in that
connection the Company and the Executive agree that a confidential relationship
shall exist between the Executive and such counsel. Without respect to whether
the Executive prevails, in whole or in part, in connection with any of the
foregoing, the Company will pay and be solely financially responsible for any
and all attorneys' and related fees and expenses incurred by the Executive in
connection with any of the foregoing; provided that, in regard to such matters,
the Executive has not acted in bad faith or with no colorable claim of success.

                  8. Confidentiality. (a) During the Term, the Company agrees
that it will disclose to Executive its confidential or proprietary information
(as defined in this Section 8) to the extent necessary for Executive to carry
out his obligations to the Company. The Executive hereby covenants and agrees
that he will not, without the prior written consent of the Company, during the
Term or thereafter disclose to any person not employed by the Company, or use in
connection with engaging in competition with the Company, any confidential or
proprietary information of the Company. For purposes of this Agreement, the term
"confidential or proprietary information" will include all information of any
nature and in any form that is owned by the Company and that is not publicly
available (other than by Executive's breach of this Section 8) or generally
known to persons engaged in businesses similar or related to those of the
Company. Confidential or proprietary information will include, without
limitation, the Company's financial matters, customers, employees, industry
contracts, strategic business plans, product development (or other proprietary
product data), marketing plans, and all other secrets

                                       10
<PAGE>   11
and all other information of a confidential or proprietary nature. For purposes
of the preceding two sentences, the term "Company" will also include any
Subsidiary (collectively, the "Restricted Group"). The foregoing obligations
imposed by this Section 8 will not apply (i) during the Term, in the course of
the business of, and for the benefit of, the Company, (ii) if such confidential
or proprietary information will have become, through no fault of the Executive,
generally known to the public or (iii) if the Executive is required by law to
make disclosure (after giving the Company notice and an opportunity to contest
such requirement).

                  (b) Executive and the Company agree that the covenants
contained in this Section 8 are reasonable under the circumstances, and further
agree that if in the opinion of any court of competent jurisdiction any such
covenant is not reasonable in any respect, such court will have the right, power
and authority to excise or modify any provision or provisions of such covenants
as to the court will appear not reasonable and to enforce the remainder of the
covenants as so amended. Executive acknowledges and agrees that the remedy at
law available to the Company for breach of any of his obligations under this
Section 8 would be inadequate and that damages flowing from such a breach may
not readily be susceptible to being measured in monetary terms. Accordingly,
Executive acknowledges, consents and agrees that, in addition to any other
rights or remedies that the Company may have at law, in equity or under this
Agreement, upon adequate proof of his violation of any such provision of this
Agreement, the Company will be entitled to immediate injunctive relief and may
obtain a temporary order restraining any threatened or further breach, without
the necessity of proof of actual damage.

                  9. Employment Rights. Nothing expressed or implied in this
Agreement will create any right or duty on the part of the Company or the
Executive to have the Executive remain in the employment of the Company or any
Subsidiary prior to or following any Change in Control. Any termination of
employment of the Executive or the removal of the Executive from the office or
position in the Company or any Subsidiary that occurs (i) not more than 90 days
prior to the date on which a Change in Control occurs, and (ii) following the
commencement of any discussion with a third person that ultimately results in a
Change in Control, shall be deemed to be a termination or removal of the
Executive after a Change in Control for purposes of this Agreement.

                  10. Withholding of Taxes. The Company may withhold from any
amounts payable under this Agreement all federal, state, city or other taxes as
the Company is required to withhold pursuant to any applicable law, regulation
or ruling.

                  11. Successors and Binding Agreement. (a) The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the
business or assets of the Company, by agreement in form and substance reasonably
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent the Company would be
required to perform if no such succession had taken place. This Agreement will
be binding upon and inure to the benefit of the Company and any successor to the
Company, including without limitation any persons acquiring directly or
indirectly all or substantially all of the business or assets of the Company
whether by purchase, merger, consolidation, reorganization or otherwise (and
such successor shall thereafter be deemed the "Company" for the purposes of this
Agreement), but will not otherwise be assignable, transferable or delegable by
the Company.

                                       11
<PAGE>   12
                  (b) This Agreement will inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and legatees.

                  (c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in Sections 11(a) and 11(b). Without limiting the generality
or effect of the foregoing, the Executive's right to receive payments hereunder
will not be assignable, transferable or delegable, whether by pledge, creation
of a security interest, or otherwise, other than by a transfer by Executive's
will or by the laws of descent and distribution and, in the event of any
attempted assignment or transfer contrary to this Section 11(c), the Company
shall have no liability to pay any amount so attempted to be assigned,
transferred or delegated.

                  12. Notices. For all purposes of this Agreement, all
communications, including, without limitation, notices, consents, requests or
approvals, required or permitted to be given hereunder will be in writing and
will be deemed to have been duly given when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof orally confirmed), or
five business days after having been mailed by United States registered or
certified mail, return receipt requested, postage prepaid, or three business
days after having been sent by a nationally recognized overnight courier service
addressed to the Company (to the attention of the Secretary of the Company) at
its principal executive office and to the Executive at his principal residence,
or to such other address as any party may have furnished to the other in writing
and in accordance herewith, except that notices of changes of address shall be
effective only upon receipt.

                  13. Governing Law. The validity, interpretation, construction
and performance of this Agreement will be governed by and construed in
accordance with the substantive laws of the State of Delaware, without giving
effect to the principles of conflict of laws of such State.

                  14. Validity. (a) If any provision of this Agreement or the
application of any provision hereof to any person or circumstances is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision to any other person or circumstances will not
be affected, and the provision so held to be invalid, unenforceable or otherwise
illegal will be reformed to the extent (and only to the extent) necessary to
make it enforceable, valid or legal.

                  (b) Notwithstanding any provision contained herein to the
contrary, this Agreement shall become null and void and have no further force or
effect without any action by the Executive or the Company, if it is determined
by the independent accountants of the Company that as a result of this
Agreement, the Company will not be permitted to account for any proposed
transaction which is a Change of Control as a "pooling of interests" under U.S.
generally acceptable accounting principles.

                  15. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be

                                       12
<PAGE>   13
performed by such other party will be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, expressed or implied with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. References to Sections are to
references to Sections of this Agreement.

                  16. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same agreement.

                                       13
<PAGE>   14
                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered as of the date first above written.

                                     GLIATECH INC.

                                     By:
                                        ----------------------------------------
                                     Name:
                                     Title:

                                                        AND

                                     -------------------------------------------
                                                     [Executive]

                                       14<PAGE>   1
                                                                   Exhibit 10.23

                    SEPARATION AGREEMENT AND GENERAL RELEASE
                    ----------------------------------------

1.       I, JON D. SCHOELER ("Employee"), accept the termination of my
         employment from Gliatech Inc. ("Gliatech") effective 12/31/99 (the
         "Separation Date"), in accordance with the terms of this Agreement. In
         accepting the consideration stated in Paragraph 2 below, Employee
         hereby releases Gliatech and each of its successors, assigns,
         shareholders, officers, directors, employees, agents and counsel from
         any and all actions, suits, claims, and demands of any kind, in law or
         equity, that Employee ever had or now has, by reason of any event,
         claim, matter, cause or thing, and particularly any claim relating in
         any way to Employee's employment or the termination of Employee's
         employment with Gliatech, including without limitation any claim under
         the Age Discrimination in Employment Act, any claim arising under any
         federal, state, or local law, and any claim under common law.

2.       In full consideration of Employee signing this Separation Agreement and
         General Release ("Agreement") and the covenants contained herein,
         Gliatech agrees to the following:

         A.       Employee shall be paid a total of ONE HUNDRED SEVENTY THOUSAND
                  DOLLARS ($170,000.00) (representing ONE (1) YEAR of severance
                  pay) (the "Severance Amount"), less all applicable withholding
                  taxes, payable in a lump sum on or before January 31, 2000,
                  plus 1999 bonus of 10% of salary ($17,000.00).

         B.       Employee shall be paid for credited but unused vacation time
                  determined as of the Separation Date, with such payment to be
                  made within fifteen days of the Separation Date.

         C.       Employee shall be entitled to continuation of medical and
                  dental coverage at Employee's present level of benefits as
                  provided under COBRA, for the period of THREE (3) MONTHS
                  following separation date.

         D.       Gliatech will provide Employee with an employee outplacement
                  service with Drake Beam Morin for a period of SIX (6) MONTHS
                  following Employee's termination with Gliatech.

3.       Gliatech's obligations hereunder shall terminate in the event Employee
         breaches any of Employee's obligations under this Agreement.

4.       Employee agrees that Employee will maintain the confidentiality of
         confidential information Employee has received by virtue of Employee's
         employment with Gliatech and will not use such information or disclose
         it to any person other than

<PAGE>   2
         Gliatech. For purposes of this Agreement, confidential information is
         information which Gliatech endeavors to keep proprietary, including
         without limitation customer lists, employee lists, rate schedules,
         underwriting information, the terms of contracts and policies,
         marketing plans, program designs, trade secrets, proprietary
         information, and any information provided by a third-party to Gliatech
         in confidence. Employee agrees that, upon Employee's separation,
         Employee will return to Gliatech any records in Employee's possession
         containing confidential information of Gliatech and all records which
         are the property of Gliatech.

5.       Employee acknowledges that the consideration set forth in Paragraph 2
         is solely in exchange for the promises in this Agreement and is an
         amount in excess of any amount to which he is entitled under any law,
         regulation or company policy, procedure or practice. Employee further
         acknowledges that such payment does not constitute an admission by
         Gliatech or the other released parties of liability or of violation of
         any applicable law or regulation, all of whom deny any liability or
         alleged violation and state that payment has been made solely for the
         purpose of compromising any and all actual or potential claims of
         Employee.

6.       Employee may revoke and cancel this Agreement in writing at any time
         within seven days after Employee's execution of this Agreement by
         providing notice of revocation to GLIATECH INC., ATTENTION: MONICA
         THAYER, AT 23420 COMMERCE PARK ROAD, BEACHWOOD, OH 44122. For
         revocation to be effective, written notice must be received by
         REGISTERED MAIL no later than the close of business on the seventh day
         after Employee signs this Agreement. If Employee does so revoke, this
         Agreement will be null and void and Gliatech shall have no obligation
         to make the payments provided in Paragraph 2. This Agreement shall not
         become effective and enforceable until after the expiration of the
         seven-day revocation period; after such time, if there has been no
         revocation, this Agreement shall be fully effective and enforceable.

7.       Employee agrees that he has had the opportunity to consult counsel,
         that no deadline of less than 21-days has been imposed upon him to
         execute this Agreement, and that Employee has had time to read and
         consider this Agreement before signing it.

8.       Employee has read and understands all of the terms of this Agreement
         and signs this Agreement in exchange for the consideration to be given
         to Employee. Neither Gliatech nor any of its agents, representatives or
         employees has made any representations to Employee concerning the terms
         or effects of this Agreement other than those contained in this
         Agreement.

9.       This Agreement shall be governed and interpreted in accordance with the
         laws of the State of Ohio.

IN WITNESS WHEREOF, the parties have executed this Agreement this 7 day of
December, 1999.

/s/Jon Schoeler                              Gliatech Inc.
----------------------------                 By:/s/Rodney E. Dausch
Jon Schoeler                                    -------------------------------
                                             Name: Rodney E. Dausch
/s/Monica Thayer                             Title: Executive Vice President
----------------------------
Monica Thayer                                /s/Jodi Baldi
Witness                                      -----------------------------------
                                             Jodi Baldi
                                             Witness

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