Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective December 15, 2008, Melvin J. Melle is no longer Vice President, Chief Financial Officer and Secretary or an employee of The Hallwood Group Incorporated (the "Company").
Effective December 15, 2008, Richard Kelley assumed the positions of Vice President, Chief Financial Officer and Secretary of the Company. Mr. Kelley, age 48, has been with the Company, or one of the Company's affiliates, since 1985. Prior to his appointment, Mr. Kelley had served as the Company's Director of Human Resources since July 2004. He served as the Manager of Financial & SEC Reporting for Hallwood Realty from May 1990 to July 2004. Mr. Kelley served as the Financial Reporting Accountant from June 1985 to March 1987 and as the Manager of Financial & SEC Reporting from March 1987 to May 1990 for Hallwood Energy Corporation.
In connection with Mr. Melle's departure, Mr. Melle and the Company entered into a separation agreement dated December 15, 2008 (the "Separation Agreement"), pursuant to which Mr. Melle will be entitled to receive a lump-sum payment in the amount of $268,277. A copy of the Separation Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

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