CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE

Exhibit 10.1 CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE      This Confidential Separation Agreement and General Release ("Agreement"), entered into by and between the undersigned individual ("you") and The Hallwood Group Incorporated (the "Company") on the latest date set forth on the Agreement’s signature page, arises from the termination of your employment.      This Agreement is legally binding. You should consult with your attorney before signing it.      The Company acknowledges its appreciation for your nearly 30 years of faithful service to the Company.      You acknowledge and agree that your employment and all of your positions held with the Company will be voluntarily terminated effective December 15, 2008 (the "Termination Date"). The Company has offered you the following separation package. You are not entitled to any separation package, unless you execute this Agreement by signing the signature line at page 8 and initialing each page on the space provided, and do not revoke it during the revocation period described below. You acknowledge that you are being offered this severance package in advance of the Termination Date, but that the Termination Date is the first date upon which you can enter into this Agreement.      1.  Separation Benefits . In exchange for the promises you make in this Agreement, the Company covenants and agrees to provide you with a lump-sum payment in the amount set forth in Exhibit A, subject to applicable federal, state and local taxes and related withholding requirements, payable on the next regular payday, following the Termination Date, after the expiration of ten (10) calendar days from the date you sign the Agreement without revocation. You acknowledge that these monies are in addition to any monies or benefits to which you were already entitled. You and the Company agree that you are already entitled to receive payment for your accrued but unused vacation (of $15,384.00 before deduction of federal income tax withholding and medicare), your regular pay through December 31, 2008 ($8,333.34 before deduction of federal income tax withholding, medicare and other regular deductions) and a bonus in lieu of a matching contribution to the Company’s 401(k) plan on your behalf (amount to be determined pursuant to the provisions of the plan and scheduled for payment by March 31, 2009).      2.  Alternative Employment . You are free to pursue other employment or consulting opportunities at any time, subject to your obligations as stated in Paragraph 10 of this Agreement.      3.  Reference Letters . If a prospective employer contacts the Company to obtain your employment information or a recommendation, the Company will provide only your employment dates and job title, unless you authorize the Company in writing to provide additional information.      4.  Company Property . You agree to return all Company property, equipment, documents and other tangible things, including keys, cell phones, pagers, corporate credit cards, and laptop or other computers, in accordance with the Company’s policies and rules, before your separation package becomes payable. You agree to not destroy, alter, erase, or otherwise change any software, data, or other information belonging to the Company. You further agree the Company may withhold from your separation monies the value of Company property, equipment and tangible things you fail to return. In addition, you agree that the Company may withhold from your separation monies any monies you owe the Company, including but not limited to, charges to the corporate credit card for which you did not submit a valid expense report, unused travel advances, salary draws, etc. In consideration for the separation payments described in this Agreement, you agree to the following:      5.  General Release . In consideration for the Separation Benefits described in this Agreement, you agree to the following:

(a) You knowingly and voluntarily agree to waive and release the Company, Odyssey OneSource, Inc. d/b/a Odyssey OneSource, Inc. ("Employer"), their members, affiliates, and subsidiaries, and each of their respective officers, directors, employees, stockholders, representatives and agents, including successors and assigns (collectively with the Employer, the "Releasees"), with respect to any and all claims, losses, liabilities, obligations and causes of action, known and unknown, arising out of, connected with, or relating to: (i) your employment; (ii) the Releasees’ refusal or failure to continue your employment; or (iii) the termination of your employment, including, but not limited to, claims for compensation, commissions, bonuses, stock options, other wages and benefits, breach of contract, wrongful termination, impairment of economic opportunity, intentional infliction of emotional distress, claims based on personal injury, work-related accident, any breach of implied or express covenant of good faith and fair dealing, violation of public policy, or any other contract, tort or personal injury claim, or claim based on any municipal, state or federal statute, regulation or ordinance relating to employment, employment discrimination or retaliation, including Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000 et seq. ; The Civil Rights Act of 1866, as amended, 42 U.S.C. § 1981; The Civil Rights Act of 1991, as amended, 42 U.S.C. § 1981a; The Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq. ; The Older Workers Benefit Protection Act, as amended, 29 U.S.C. § 623 et seq. ; Americans With Disabilities Act, as amended, 42 U.S.C. § 12101 et seq. ; Fair Labor Standards Act, as amended, 29 U.S.C. § 201, et seq. ; Equal Pay Act, as amended, 29 U.S.C. § 201 et seq .; National Labor Relations Act, as amended, 29 U.S.C. § 151 et seq .; Worker Adjustment and Retraining Notification Act, as amended, 29 U.S.C. § 2101 et seq ., Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1000 et seq. ; Family and Medical Leave Act, as amended, 29 U.S.C. § 2601, et seq.; The Texas Commission on Human Rights Act, as amended, Tex. Lab. Code §  21.001, et seq. ; or any other statute, rule, regulation, ordinance, or common civil or other law, or judicial or administrative interpretation whether promulgated by federal, state, local or other jurisdiction or political subdivision. You understand that this Agreement also precludes you from recovering any relief as a result of any lawsuit, grievance or claims brought on your behalf and arising out of your employment or resignation or separation from, employment; provided that nothing in this Agreement will affect your entitlement, if any, to workers’ compensation or unemployment compensation. (b) You further represent and warrant that you have not assigned to any third party any claim involving the Releasees or authorized any third party to assert on your behalf any claim against the Releasees. If a third party asserts a claim against the Releasees on your behalf or includes you as a class member in any class action involving any claim, you agree to not accept any benefits or damages relating or arising out of such claim. (c) You additionally represent, warrant and agree that you have received full and timely payment of all wages, salary, bonuses, and other compensation, and benefits that may have been due and payable to you by the Releasees. You further represent, warrant and agree that you have received all leave or other benefits that may have been available

to you under the Family and Medical Leave Act of 1993 ("FMLA") or any comparable state law and that you have not been denied any rights or benefits available to you under the FMLA or any comparable state law. You expressly acknowledge and agree that the Releasees are entering into this Agreement in reliance upon these representations by you.      6.  Effect of Release . You understand and agree that by signing this Agreement, you - on behalf of yourself, your family, assigns, representatives, agents, estate, heirs, beneficiaries, executors, administrators, successors, and/or attorneys, if any — agree to give up any right or entitlement you may have under federal, state or local law against the Releasees, concerning any events related to your employment or termination, or the Company’s or Employer’s failure to continue your employment. This Agreement extinguishes any potential employment discrimination claims you may have relating to your employment with