As filed with the Securities and Exchange Commission on November 13, 1997

                           Registration No. 33-_______
================================================================================

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                     ---------------------------------------
                                    FORM S-8
                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933
                     ---------------------------------------
                         THE HALLWOOD GROUP INCORPORATED
             (Exact name of registrant as specified in its charter)

                               Delaware 51-0261339
                (State or other jurisdiction of (I.R.S. Employer
               incorporation or organization) Identification No.)

                            3710 Rawlins, Suite 1500
                               Dallas, Texas 75219
               (Address of principal executive offices) (Zip code)

                     ---------------------------------------
                             1995 Stock Option Plan
                                       for
                         The Hallwood Group Incorporated
                            (Full title of the plan)
                     ---------------------------------------
                                 Melvin J. Melle
                     Vice President, Chief Financial Officer
                                  and Secretary
                         The Hallwood Group Incorporated
                            3710 Rawlins, Suite 1500
                               Dallas, Texas 75219
                     (Name and address of agent for service)

                                 (214) 528-5588
          (Telephone number, including area code, of agent for service)

                                 With a copy to
                              W. Alan Kailer, Esq.
                            Jenkens & Gilchrist, P.C.
                          1445 Ross Avenue, Suite 3200
                            Dallas, Texas 75202-2799
                                 (214) 855-4500



                         CALCULATION OF REGISTRATION FEE
================================================================================
                               Amount    Proposed     Proposed
                               to be     maximum      maximum       Amount of
Title of securities            regis-    offering     aggregate     registratior
to be registered               tered(1)  share (2)    price (2)         fee
--------------------------------------------------------------------------------
Common Stock, par value       68,000      $40.00     $2,720,000       $824.24
 $.10 per share......         shares
================================================================================

(1)  Consists  of  68,000  shares of  Common  Stock  reserved  for  issuance  to
     directors, employees and consultants of The Hallwood Group Incorporated and
     its  subsidiaries  pursuant to the 1995 Stock  Option Plan for The Hallwood
     Group Incorporated.
(2)  Estimated  pursuant  to Rule  457(c)  and (h) solely  for the  purposes  of
     computing the  registration  fee based upon the average of the high and low
     prices for the Common Stock quoted on the New York Stock Exchange,  Inc. on
     November 4, 1997 under the Securities Act of 1933, as amended.
--------------------------------------------------------------------------------


CORPDAL:82710.2 18747-00001

                                     PART I

              INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

Item 1. Plan Information*

Item 2. Registrant Information and Employee Plan Annual Information*

--------------------

*    Information  required  by  Part  I to be  contained  in the  Section  10(a)
     prospectus is omitted from the  Registration  Statement in accordance  with
     Rule 428 of the Securities Act of 1933, as amended,  and the Note to Part I
     of Form S-8.


                                     PART II

                 INFORMATION REQUIRED IN REGISTRATION STATEMENT

Item 3. Incorporation of Certain Documents by Reference.


     The Hallwood Group Incorporated (the "Corporation")  hereby incorporates by
reference in this  Registration  Statement  the following  documents  previously
filed with the Securities and Exchange Commission (the "Commission"):

     (1)  The Corporation's Form S-8 (No.  33-63709),  filed with the Commission
          on October 26, 1995.

     (2)  The  Corporation's  Annual  Report  on Form  10-K for the  year  ended
          December 31, 1996.

     (3)  The  Corporation's  Quarterly  Reports  on Form 10-Q for the  quarters
          ended March 31, 1997 and June 30, 1997.

     (3)  The  description of common stock of the  Corporation,  par value $0.10
          per share (the "Common Stock") set forth in the registration statement
          on Form 8-B, dated January 28, 1982, including any amendment or report
          filed for the purpose of updating such description.

     All documents  subsequently  filed by the  Corporation  with the Commission
pursuant to Sections 13(a),  13(c), 14 and 15(d) of the Securities  Exchange Act
of 1934 (the "Exchange Act"), prior to the filing of a post-effective  amendment
which indicates that all securities  offered have been sold or which deregisters
all securities  then remaining  unsold,  shall be deemed to be  incorporated  by
reference in this Registration  Statement and to be a part thereof from the date
of filing of such documents.

     Any statement  contained in this  Registration  Statement,  in an amendment
hereto or in a document  incorporated by reference  herein shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement  contained herein, in any subsequently  filed amendment to this
Registration Statement or in any document that also is incorporated by reference
herein,  modifies or  supersedes  such  statement.  Any statement so modified or
superseded  shall  not be  deemed,  except  as so  modified  or  superseded,  to
constitute a part of this Registration Statement.

Item 4. Description of Securities.

          Not Applicable.

Item 5. Interest of Named Experts and Counsel.

          None.



CORPDAL:82710.2 18747-00001
                                      II-1

<PAGE>



Item 6. Indemnification of Directors and Officers.

     The  Corporation  has authority  under Section 145 of the Delaware  General
Corporation  Law (the "Delaware  Code") to indemnify its directors and officers.
The Corporation's Second Restated Certificate of Incorporation provides that the
Corporation  shall  indemnify  its  directors  and  officers  to the full extent
permitted by the Delaware Code or other provisions of the laws of Delaware.  The
Corporation's  Bylaws provide for  indemnification  of directors and officers in
connection  with third party suits and derivative  actions,  provided,  however,
that  directors  and  officers  shall not be  entitled to  indemnification  with
respect to  derivative  claims where such  director or officer is adjudged to be
liable for  negligence  or misconduct  in the  performance  of his duties to the
Corporation  unless a court  determines  that  despite such an  adjudication  of
liability,  such  director  or officer is  entitled  to  indemnity  for fair and
reasonable  expenses.  The  Corporation's  Bylaws  further  provide that where a
director or officer successfully defends a third party or derivative action such
director or officer shall be entitled to  indemnification  of expenses  actually
and reasonably incurred in connection therewith.

     The  Corporation's  Bylaws  permit the  Corporation  to advance  litigation
expenses  in the  case of  shareholder  derivative  actions  or  other  actions,
provided the  Corporation  receives an undertaking by the  indemnified  party to
repay such advances  unless it is  ultimately  determined  that the  indemnified
party is entitled to  indemnification.  The Corporation's  Bylaws further permit
the Corporation to purchase and maintain liability, indemnification and/or other
similar insurance.

     The  Second  Restated  Certificate  of  Incorporation  of  the  Corporation
provides that no director shall be personally  liable to the  Corporation or any
stockholder  for  monetary  damages for breach of  fiduciary  duty as a director
except as such  director (a) shall be liable  under  Section 174 of the Delaware
Code or (b) shall be liable by reason  that,  in  addition  to any and all other
requirements  for such liability he, (i) shall have breached his duty of loyalty
to the Corporation or the stockholders,  (ii) shall not have acted in good faith
or, in failing  to act,  shall not have acted in good  faith,  (iii)  shall have
acted in a manner involving intentional misconduct or a knowing violation of the
law, or failing to act, shall act in a manner involving  intentional  misconduct
or a knowing  violation  of the law,  or (iv)  shall have  derived  an  improper
personal benefit.

Item 7. Exemption from Registration Claimed.

          Not Applicable.

Item 8. Exhibits.

          The  following  documents  are  filed  as a part of this  Registration
          Statement.

          Exhibit           Description
          -------           -----------  
           4.1*             1995  Stock  Option  Plan  For  The  Hallwood  Group
                            Incorporated

           4.2*             Second Restated  Certificate of Incorporation of The
                            Hallwood Group Incorporated

           4.3              Restated  Bylaws of The  Hallwood Group Incorporated
                            (incorporated by  reference from Exhibit  3.4 to the
                            Form 10-K of The Hallwood Group Incorporated for the
                            fiscal year ended July 31, 1992)

           5.1**            Opinion  of  Jenkens  &  Gilchrist,  a  Professional
                            Corporation

          23.1***           Consent  of  Jenkens  &  Gilchrist,  a  Professional
                            Corporation

          23.2****          Consent of Deloitte & Touche LLP

          24.1****          Power of Attorney

          -------------------
          *    Filed as Exhibit 4.1 contained in the registrant's  Form S-8 (No.
               33-63709),  filed  with  the  Commission  on  October  26,  1995,
               incorporated herein by reference.

          **   No opinion is being  furnished  herewith  pursuant to Instruction
               (a) to Item 8 of Form S-8 as the shares  registered herein are to
               be issued as treasury shares.



CORPDAL:82710.2 18747-00001
                                      II-2

<PAGE>



          ***  No  consent  is  filed  herewith  because  no  opinion  is  being
               furnished pursuant to Instruction (a) to Item 8 of Form S-8.

          **** Filed herewith.


Item 9. Undertakings.

          A.   The undersigned registrant hereby undertakes:

          (1)  To file, during  any  period  in which  offers or sales are being
     made, a post-effective  amendment to this registration statement to include
     any  material  information  with  respect to the plan of  distribution  not
     previously  disclosed in the Registration  Statement or any material change
     to such information in the Registration Statement;

          (2)  That, for the  purpose of  determining  any  liability  under the
     Securities Act, each such post-effective  amendment shall be deemed to be a
     new registration  statement relating to the securities offered therein, and
     the  offering  of such  securities  at that time  shall be deemed to be the
     initial bona fide offering thereof; and

          (3)  To  remove  from  registration  by  means  of  a   post-effective
     amendment  any  securities  being  registered  which  remain  unsold at the
     termination of the offering.

          B.    The undersigned  registrant hereby undertakes that, for purposes
     of determining any liability under the  Securities  Act, each filing of the
     registrant's  annual  report  pursuant to section 13(a) or section 15(d) of
     the Exchange Act (and, where applicable, each filing of an employee benefit
     plan's annual report pursuant to section 15(d) of the Exchange Act) that is
     incorporated by reference in the Registration  Statement shall be deemed to
     be a new registration statement relating to the securities offered therein,
     and the offering of such  securities at that time shall be deemed to be the
     initial bona fide offering thereof.

          C.    Insofar as indemnification  for  liabilities  arising  under the
     Securities  Act may be permitted  to  directors,  officers and  controlling
     persons  of  the  registrant  pursuant  to  the  foregoing   provisions  or
     otherwise,  the  registrant  has been  advised  that in the  opinion of the
     Commission  such  indemnification  is against public policy as expressed in
     the Securities Act and is,  therefore,  unenforceable.  In the event that a
     claim for indemnification  against such liabilities (other than the payment
     by the  registrant of expenses  incurred or paid by a director,  officer or
     controlling  person of the  registrant  in the  successful  defense  of any
     action,  suit or  proceeding)  is  asserted  by such  director,  officer or
     controlling person in connection with the securities being registered,  the
     registrant  will,  unless in the opinion of its counsel the matter has been
     settled  by  controlling  precedent,  submit  to  a  court  of  appropriate
     jurisdiction the question of whether such  indemnification by it is against
     public  policy as expressed in the  Securities  Act and will be governed by
     the final adjudication of such issue.



CORPDAL:82710.2 18747-00001
                                      II-3

<PAGE>



                                   SIGNATURES

     Pursuant  to  the  requirements  of  the  Securities  Act,  the  registrant
certifies  that it has  reasonable  grounds  to  believe  that it meets  all the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in Dallas, Texas, on November 4, 1997:

                       THE HALLWOOD GROUP INCORPORATED


                       By: /s/ Melvin J. Melle
                           -----------------------------------------------------
                           Melvin J. Melle
                           Vice President, Chief Financial Officer and Secretary

                                POWER OF ATTORNEY

     KNOW  ALL MEN BY THESE  PRESENTS,  that  each  individual  whose  signature
appears  below hereby  constitutes  and appoints  Melvin J. Melle and Anthony J.
Gumbiner,  and each of them, each with full power to act without the other,  his
true  and  lawful   attorneys-in-fact  and  agents,  each  with  full  power  of
substitution and resubstitution for him and in his name, place and stead, in any
and  all  capacities,  to  sign  any  or all  amendments  to  this  Registration
Statement, and to file the same with all exhibits thereto and other documents in
connection  therewith,   with  the  Commission,   granting  unto  each  of  said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection  therewith,
as fully to all  intents and  purposes as he might or could do in person  hereby
ratifying and confirming that each of said  attorneys-in-fact  and agents or his
substitutes may lawfully do or cause to be done by virtue hereof.

     Pursuant to the  requirements  of the  Securities  Act,  this  Registration
Statement has been signed by the following  persons in the capacities and on the
dates included:

Signature                    Capacity                           Date
---------                    --------                           ----


/s/ Anthony J. Gumbiner      Chairman of the Board of           November 4, 1997
--------------------------   Directors and Chief
Anthony J. Gumbiner          Executive Officer 


/s/ Melvin J. Melle          Vice President, Chief Financial    November 4, 1997
--------------------------   Officer and Secretary
Melvin J. Melle


/s/ Brian M. Troup           President, Chief Operating         November 4, 1997
--------------------------   Officer and Director
Brian M. Troup


/s/ Charles A. Crocco, Jr.   Director                           November 4, 1997
--------------------------
Charles A. Crocco, Jr.


/s/ J. Thomas Talbot         Director                           November 4, 1997
--------------------------
J. Thomas Talbot

CORPDAL:82710.2 18747-00001
                                      II-4

<PAGE>



                                INDEX TO EXHIBITS


                                                                     Sequential
                                                                      Numbering
  Exhibit         Description                                          Page No.
  -------         -----------                                        -----------
  
    4.1*          1995 Stock Option Plan For The Hallwood Group Incorporated


    4.2*          Second  Restated Certificate of  Incorporation of The Hallwood
                  Group Incorporated

    4.3           Restated    Bylaws   of   The   Hallwood  Group   Incorporated
                  (incorporated by reference from  Exhibit 3.4 to  the Form 10-K
                  of The Hallwood Group Incorporated  for the fiscal  year ended
                  July 31, 1992)

    5.1**         Opinion of Jenkens & Gilchrist, a Professional Corporation

   23.1***        Consent of Jenkens & Gilchrist, a Professional Corporation

   23.2****       Consent of Deloitte & Touche LLP

   24.1****       Power of Attorney (see signature page of this Registration
                  Statement)

----------------
*        Filed  as  Exhibit  4.1   contained  in   the  registrant's   Form  S-8
         (No. 33- 63709),  filed  with  the  Commission  on  October  26,  1995,
         incoporated herein by reference.

**       No opinion is  being furnished herewith  pursuant to Insurance  (a)  to
         Item 8 of Form S-8 as the shares registered herein are  to be issued as
         treasury shares.

***      No  consent is filed  herewith  because no opinion  is being  furnished
         pursuant to Instruction (a) to Item 8 of Form S-8.

****     Filed herewith.

CORPDAL:82710.2 18747-00001
                                      II-5
[{"type": "S-8", "sequence": "1", "description": "FORM S-8 -- THE HALLWOOD GROUP, INC.", "secsgml_size_bytes": 19030}]
{"company-data": {"conformed-name": "HALLWOOD GROUP INC", "cik": "0000355766", "assigned-sic": "2221", "irs-number": "510261339", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-40169", "film-number": "97717386"}, "business-address": {"street1": "3710 RAWLINS STE 1500", "city": "DALLAS", "state": "TX", "zip": "75219", "phone": "2145285588"}, "mail-address": {"street1": "3710 RAWLINS STE 1500", "city": "DALLAS", "state": "TX", "zip": "75219"}, "former-company": {"former-conformed-name": "ATLANTIC METROPOLITAN CORP", "date-changed": "19840605"}}
As filed with the Securities and Exchange Commission on November 13, 1997

                           Registration No. 33-_______
================================================================================

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                     ---------------------------------------
                                    FORM S-8
                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933
                     ---------------------------------------
                         THE HALLWOOD GROUP INCORPORATED
             (Exact name of registrant as specified in its charter)

                               Delaware 51-0261339
                (State or other jurisdiction of (I.R.S. Employer
               incorporation or organization) Identification No.)

                            3710 Rawlins, Suite 1500
                               Dallas, Texas 75219
               (Address of principal executive offices) (Zip code)

                     ---------------------------------------
                             1995 Stock Option Plan
                                       for
                         The Hallwood Group Incorporated
                            (Full title of the plan)
                     ---------------------------------------
                                 Melvin J. Melle
                     Vice President, Chief Financial Officer
                                  and Secretary
                         The Hallwood Group Incorporated
                            3710 Rawlins, Suite 1500
                               Dallas, Texas 75219
                     (Name and address of agent for service)

                                 (214) 528-5588
          (Telephone number, including area code, of agent for service)

                                 With a copy to
                              W. Alan Kailer, Esq.
                            Jenkens & Gilchrist, P.C.
                          1445 Ross Avenue, Suite 3200
                            Dallas, Texas 75202-2799
                                 (214) 855-4500

                         CALCULATION OF REGISTRATION FEE
================================================================================
                               Amount    Proposed     Proposed
                               to be     maximum      maximum       Amount of
Title of securities            regis-    offering     aggregate     registratior
to be registered               tered(1)  share (2)    price (2)         fee
--------------------------------------------------------------------------------
Common Stock, par value       68,000      $40.00     $2,720,000       $824.24
 $.10 per share......         shares
================================================================================

(1)  Consists  of  68,000  shares of  Common  Stock  reserved  for  issuance  to
     directors, employees and consultants of The Hallwood Group Incorporated and
     its  subsidiaries  pursuant to the 1995 Stock  Option Plan for The Hallwood
     Group Incorporated.
(2)  Estimated  pursuant  to Rule  457(c)  and (h) solely  for the  purposes  of
     computing the  registration  fee based upon the average of the high and low
     prices for the Common Stock quoted on the New York Stock Exchange,  Inc. on
     November 4, 1997 under the Securities Act of 1933, as amended.
--------------------------------------------------------------------------------

CORPDAL:82710.2 18747-00001

                                     PART I

              INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

Item 1. Plan Information*

Item 2. Registrant Information and Employee Plan Annual Information*

--------------------

*    Information  required  by  Part  I to be  contained  in the  Section  10(a)
     prospectus is omitted from the  Registration  Statement in accordance  with
     Rule 428 of the Securities Act of 1933, as amended,  and the Note to Part I
     of Form S-8.

                                     PART II

                 INFORMATION REQUIRED IN REGISTRATION STATEMENT

Item 3. Incorporation of Certain Documents by Reference.

     The Hallwood Group Incorporated (the "Corporation")  hereby incorporates by
reference in this  Registration  Statement  the following  documents  previously
filed with the Securities and Exchange Commission (the "Commission"):

     (1)  The Corporation's Form S-8 (No.  33-63709),  filed with the Commission
          on October 26, 1995.

     (2)  The  Corporation's  Annual  Report  on Form  10-K for the  year  ended
          December 31, 1996.

     (3)  The  Corporation's  Quarterly  Reports  on Form 10-Q for the  quarters
          ended March 31, 1997 and June 30, 1997.

     (3)  The  description of common stock of the  Corporation,  par value $0.10
          per share (the "Common Stock") set forth in the registration statement
          on Form 8-B, dated January 28, 1982, including any amendment or report
          filed for the purpose of updating such description.

     All documents  subsequently  filed by the  Corporation  with the Commission
pursuant to Sections 13(a),  13(c), 14 and 15(d) of the Securities  Exchange Act
of 1934 (the "Exchange Act"), prior to the filing of a post-effective  amendment
which indicates that all securities  offered have been sold or which deregisters
all securities  then remaining  unsold,  shall be deemed to be  incorporated  by
reference in this Registration  Statement and to be a part thereof from the date
of filing of such documents.

     Any statement  contained in this  Registration  Statement,  in an amendment
hereto or in a document  incorporated by reference  herein shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement  contained herein, in any subsequently  filed amendment to this
Registration Statement or in any document that also is incorporated by reference
herein,  modifies or  supersedes  such  statement.  Any statement so modified or
superseded  shall  not be  deemed,  except  as so  modified  or  superseded,  to
constitute a part of this Registration Statement.

Item 4. Description of Securities.

          Not Applicable.

Item 5. Interest of Named Experts and Counsel.

          None.

CORPDAL:82710.2 18747-00001
                                      II-1
Item 6. Indemnification of Directors and Officers.

     The  Corporation  has authority  under Section 145 of the Delaware  General
Corporation  Law (the "Delaware  Code") to indemnify its directors and officers.
The Corporation's Second Restated Certificate of Incorporation provides that the
Corporation  shall  indemnify  its  directors  and  officers  to the full extent
permitted by the Delaware Code or other provisions of the laws of Delaware.  The
Corporation's  Bylaws provide for  indemnification  of directors and officers in
connection  with third party suits and derivative  actions,  provided,  however,
that  directors  and  officers  shall not be  entitled to  indemnification  with
respect to  derivative  claims where such  director or officer is adjudged to be
liable for  negligence  or misconduct  in the  performance  of his duties to the
Corporation  unless a court  determines  that  despite such an  adjudication  of
liability,  such  director  or officer is  entitled  to  indemnity  for fair and
reasonable  expenses.  The  Corporation's  Bylaws  further  provide that where a
director or officer successfully defends a third party or derivative action such
director or officer shall be entitled to  indemnification  of expenses  actually
and reasonably incurred in connection therewith.

     The  Corporation's  Bylaws  permit the  Corporation  to advance  litigation
expenses  in the  case of  shareholder  derivative  actions  or  other  actions,
provided the  Corporation  receives an undertaking by the  indemnified  party to
repay such advances  unless it is  ultimately  determined  that the  indemnified
party is entitled to  indemnification.  The Corporation's  Bylaws further permit
the Corporation to purchase and maintain liability, indemnification and/or other
similar insurance.

     The  Second  Restated  Certificate  of  Incorporation  of  the  Corporation
provides that no director shall be personally  liable to the  Corporation or any
stockholder  for  monetary  damages for breach of  fiduciary  duty as a director
except as such  director (a) shall be liable  under  Section 174 of the Delaware
Code or (b) shall be liable by reason  that,  in  addition  to any and all other
requirements  for such liability he, (i) shall have breached his duty of loyalty
to the Corporation or the stockholders,  (ii) shall not have acted in good faith
or, in failing  to act,  shall not have acted in good  faith,  (iii)  shall have
acted in a manner involving intentional misconduct or a knowing violation of the
law, or failing to act, shall act in a manner involving  intentional  misconduct
or a knowing  violation  of the law,  or (iv)  shall have  derived  an  improper
personal benefit.

Item 7. Exemption from Registration Claimed.

          Not Applicable.

Item 8. Exhibits.

          The  following  documents  are  filed  as a part of this  Registration
          Statement.

          Exhibit           Description
          -------           -----------  
           4.1*             1995  Stock  Option  Plan  For  The  Hallwood  Group
                            Incorporated

           4.2*             Second Restated  Certificate of Incorporation of The
                            Hallwood Group Incorporated

           4.3              Restated  Bylaws of The  Hallwood Group Incorporated
                            (incorporated by  reference from Exhibit  3.4 to the
                            Form 10-K of The Hallwood Group Incorporated for the
                            fiscal year ended July 31, 1992)

           5.1**            Opinion  of  Jenkens  &  Gilchrist,  a  Professional
                            Corporation

          23.1***           Consent  of  Jenkens  &  Gilchrist,  a  Professional
                            Corporation

          23.2****          Consent of Deloitte & Touche LLP

          24.1****          Power of Attorney

          -------------------
          *    Filed as Exhibit 4.1 contained in the registrant's  Form S-8 (No.
               33-63709),  filed  with  the  Commission  on  October  26,  1995,
               incorporated herein by reference.

          **   No opinion is being  furnished  herewith  pursuant to Instruction
               (a) to Item 8 of Form S-8 as the shares  registered herein are to
               be issued as treasury shares.

CORPDAL:82710.2 18747-00001
                                      II-2
***  No  consent  is  filed  herewith  because  no  opinion  is  being
               furnished pursuant to Instruction (a) to Item 8 of Form S-8.

          **** Filed herewith.

Item 9. Undertakings.

          A.   The undersigned registrant hereby undertakes:

          (1)  To file, during  any  period  in which  offers or sales are being
     made, a post-effective  amendment to this registration statement to include
     any  material  information  with  respect to the plan of  distribution  not
     previously  disclosed in the Registration  Statement or any material change
     to such information in the Registration Statement;

          (2)  That, for the  purpose of  determining  any  liability  under the
     Securities Act, each such post-effective  amendment shall be deemed to be a
     new registration  statement relating to the securities offered therein, and
     the  offering  of such  securities  at that time  shall be deemed to be the
     initial bona fide offering thereof; and

          (3)  To  remove  from  registration  by  means  of  a   post-effective
     amendment  any  securities  being  registered  which  remain  unsold at the
     termination of the offering.

          B.    The undersigned  registrant hereby undertakes that, for purposes
     of determining any liability under the  Securities  Act, each filing of the
     registrant's  annual  report  pursuant to section 13(a) or section 15(d) of
     the Exchange Act (and, where applicable, each filing of an employee benefit
     plan's annual report pursuant to section 15(d) of the Exchange Act) that is
     incorporated by reference in the Registration  Statement shall be deemed to
     be a new registration statement relating to the securities offered therein,
     and the offering of such  securities at that time shall be deemed to be the
     initial bona fide offering thereof.

          C.    Insofar as indemnification  for  liabilities  arising  under the
     Securities  Act may be permitted  to  directors,  officers and  controlling
     persons  of  the  registrant  pursuant  to  the  foregoing   provisions  or
     otherwise,  the  registrant  has been  advised  that in the  opinion of the
     Commission  such  indemnification  is against public policy as expressed in
     the Securities Act and is,  therefore,  unenforceable.  In the event that a
     claim for indemnification  against such liabilities (other than the payment
     by the  registrant of expenses  incurred or paid by a director,  officer or
     controlling  person of the  registrant  in the  successful  defense  of any
     action,  suit or  proceeding)  is  asserted  by such  director,  officer or
     controlling person in connection with the securities being registered,  the
     registrant  will,  unless in the opinion of its counsel the matter has been
     settled  by  controlling  precedent,  submit  to  a  court  of  appropriate
     jurisdiction the question of whether such  indemnification by it is against
     public  policy as expressed in the  Securities  Act and will be governed by
     the final adjudication of such issue.

CORPDAL:82710.2 18747-00001
                                      II-3
SIGNATURES

     Pursuant  to  the  requirements  of  the  Securities  Act,  the  registrant
certifies  that it has  reasonable  grounds  to  believe  that it meets  all the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in Dallas, Texas, on November 4, 1997:

                       THE HALLWOOD GROUP INCORPORATED

                       By: /s/ Melvin J. Melle
                           -----------------------------------------------------
                           Melvin J. Melle
                           Vice President, Chief Financial Officer and Secretary

                                POWER OF ATTORNEY

     KNOW  ALL MEN BY THESE  PRESENTS,  that  each  individual  whose  signature
appears  below hereby  constitutes  and appoints  Melvin J. Melle and Anthony J.
Gumbiner,  and each of them, each with full power to act without the other,  his
true  and  lawful   attorneys-in-fact  and  agents,  each  with  full  power  of
substitution and resubstitution for him and in his name, place and stead, in any
and  all  capacities,  to  sign  any  or all  amendments  to  this  Registration
Statement, and to file the same with all exhibits thereto and other documents in
connection  therewith,   with  the  Commission,   granting  unto  each  of  said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection  therewith,
as fully to all  intents and  purposes as he might or could do in person  hereby
ratifying and confirming that each of said  attorneys-in-fact  and agents or his
substitutes may lawfully do or cause to be done by virtue hereof.

     Pursuant to the  requirements  of the  Securities  Act,  this  Registration
Statement has been signed by the following  persons in the capacities and on the
dates included:

Signature                    Capacity                           Date
---------                    --------                           ----

/s/ Anthony J. Gumbiner      Chairman of the Board of           November 4, 1997
--------------------------   Directors and Chief
Anthony J. Gumbiner          Executive Officer 

/s/ Melvin J. Melle          Vice President, Chief Financial    November 4, 1997
--------------------------   Officer and Secretary
Melvin J. Melle

/s/ Brian M. Troup           President, Chief Operating         November 4, 1997
--------------------------   Officer and Director
Brian M. Troup

/s/ Charles A. Crocco, Jr.   Director                           November 4, 1997
--------------------------
Charles A. Crocco, Jr.

/s/ J. Thomas Talbot         Director                           November 4, 1997
--------------------------
J. Thomas Talbot

CORPDAL:82710.2 18747-00001
                                      II-4
INDEX TO EXHIBITS

                                                                     Sequential
                                                                      Numbering
  Exhibit         Description                                          Page No.
  -------         -----------                                        -----------
  
    4.1*          1995 Stock Option Plan For The Hallwood Group Incorporated

    4.2*          Second  Restated Certificate of  Incorporation of The Hallwood
                  Group Incorporated

    4.3           Restated    Bylaws   of   The   Hallwood  Group   Incorporated
                  (incorporated by reference from  Exhibit 3.4 to  the Form 10-K
                  of The Hallwood Group Incorporated  for the fiscal  year ended
                  July 31, 1992)

    5.1**         Opinion of Jenkens & Gilchrist, a Professional Corporation

   23.1***        Consent of Jenkens & Gilchrist, a Professional Corporation

   23.2****       Consent of Deloitte & Touche LLP

   24.1****       Power of Attorney (see signature page of this Registration
                  Statement)

----------------
*        Filed  as  Exhibit  4.1   contained  in   the  registrant's   Form  S-8
         (No. 33- 63709),  filed  with  the  Commission  on  October  26,  1995,
         incoporated herein by reference.

**       No opinion is  being furnished herewith  pursuant to Insurance  (a)  to
         Item 8 of Form S-8 as the shares registered herein are  to be issued as
         treasury shares.

***      No  consent is filed  herewith  because no opinion  is being  furnished
         pursuant to Instruction (a) to Item 8 of Form S-8.

****     Filed herewith.

CORPDAL:82710.2 18747-00001
                                      II-5