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                                                                    EXHIBIT 10.8

HALLWOOD HOLDINGS INCORPORATED
4441 WEST AIRPORT
FREEWAY IRVING,
TEXAS 75062

                         EMPLOYEE STOCK OPTION AGREEMENT

GRANTEE:          [Name]
                  [Address]
                  [City, State Zip Code]

GRANT DATE:

NUMBER OF
OPTION SHARES:

OPTION PRICE
PER SHARE:

LAST DAY TO
EXERCISE OPTION.

EXERCISABILITY:   [one-half] Shares from and after
                  [one-half] Shares from and after

This Agreement, when signed by Hallwood Holdings Incorporated (the "Company")
and by you as Grantee, evidences the Company's grant of an option to you to
purchase shares of the Company's Common Stock, $.01 par value (the "Common
Stock") and your acceptance of it.

Except as expressly otherwise provided in this Agreement, this Option is
exercisable only by you; it may not be assigned, transferred, pledged or
hypothecated in any way (whether by operation of law or otherwise); and it shall
not be subject to execution, attachment or similar proceeding. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of this Option
contrary to the provisions of this Agreement, or the levy of any attachment or
similar proceeding upon this Option shall be null and void and without effect.

To the extent that Option Shares are exercisable at a given time, any one or
more of such Option Shares may be purchased; provided however, that no Option
Shares may be purchased when the market value of a share of Common Stock at the
time of exercise is LESS THAN the Option Price Per Share.

For an exercise to be effective, the Company must receive from you a signed
letter stating the number of Option Shares you wish to purchase and an
undertaking to make payment of any taxes required to be withheld by the Company,
together with payment for the Option Shares using one of the methods set forth
herein.

      PAYMENT OF THE PURCHASE PRICE OF OPTION SHARES MAY BE MADE BY ANY ONE OR A
      COMBINATION OF THE FOLLOWING METHODS:

            A cashier's or certified check in the amount of the purchase price;
            or

            Delivery of shares of the Company's Common Stock (together with an
            appropriate stock power) having a market value on the date of
            exercise at least equal to the Option Price Per Share multiplied by
            the number of shares being purchased. A certificate representing any
            balance of the shares delivered but not used in payment of the
            purchase price will be returned to you.

HOLDINGS STOCK OPTION AGREEMENT - [OPTIONEE]                         Page 1 of 2

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                         EMPLOYEE STOCK OPTION AGREEMENT
                                    CONTINUED

      THE COMPANY WILL NOT BE OBLIGATED TO DELIVER ANY OPTION SHARES UNLESS:

            There has been compliance with all federal and state laws and
            regulations which the Company may deem applicable;

            All legal matters in connection with the issuance and delivery of
            the Option Shares have been approved by the Company's counsel;

            The Company has withheld, or provision acceptable to the Company has
            been made for the payment of any federal, state and local taxes,
            which are or will become due and payable by reason of the delivery
            of the Option Shares; and

      BY EXECUTING THIS OPTION AGREEMENT, YOU REPRESENT TO THE COMPANY AS
      FOLLOWS:

            That you understand that the sale of the Option Shares acquired by
            you upon exercise of this Option has not at the date hereof been
            registered under the Securities Act of 1933, as amended, (the "Act")
            and that the Option Shares will constitute "restricted stock" as
            that term is defined in Rule 144 promulgated under the Act.

            That you understand that certificates representing Option Shares may
            bear a legend restricting the transfer thereof.

            That any Option Shares acquired by you under this Option will be
            acquired for investment purposes and will not be transferred by you
            without an effective registration statement covering the transfer
            thereof or an applicable exemption from registration under the Act.

This Option shall terminate on the earlier to occur of the Last Day to Exercise
Option set forth above or thirty days after you cease to be at a minimum either
an employee, officer or a director of the Company.

Notwithstanding the foregoing, upon your death or permanent disability occurring
before the Last Day to Exercise Option, this Option shall thereupon become fully
exercisable as to all the Option Shares and shall continue in effect for a
period of one year. During the one-year period you, or your personal
representative, legatees or distributees, if any, may purchase all or any part
of the then remaining Option Shares.

The number and kind of shares issuable under this Option and the Option Price
Per Share shall be equitably adjusted to take into account any reorganization,
merger, recapitalization, stock dividend, stock split, reverse stock split, or
like transaction. Any fractional shares resulting from such an adjustment shall
be rounded up to the next whole share.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Grant
Date set forth above.

HALLWOOD HOLDINGS INCORPORATED

BY: _______________________________  _________________________________
                                                  Grantee

HOLDINGS STOCK OPTION AGREEMENT - [OPTIONEE]                         Page 2 of 2<PAGE>

                                                                   EXHIBIT 10.10

                            STEEL CITY PRODUCTS, INC.
                                 AMENDMENT NO. 1
                                       TO
                     TERRANCE W. ALLAN EMPLOYMENT AGREEMENT

THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this "Agreement") is made as of
this 17th day of October 2002 by and between TERRANCE W. ALLAN (hereinafter
referred to as "Mr. Allan") and STEEL CITY PRODUCTS, INC., a Delaware
corporation (hereinafter referred to as the "Company.")

1.    BACKGROUND. Mr. Allan and the Company entered into an employment agreement
      dated as of May 1, 2000 (the "Employment Agreement.") Among other things,
      the Employment Agreement provides (i) for Mr. Allan's entitlement to an
      Annual Executive Bonus (the "Executive Bonus") and (ii) for Mr. Allan's
      participation in the Company's Annual Management Bonus pool (the "the
      Bonus Pool"). The parties now wish to amend the Employment Agreement in
      certain respects all as more particularly set forth herein.

2.    CONSIDERATION. The parties are entering into this Agreement for and in
      consideration of the mutual covenants contained herein and other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged.

3.    EXHIBIT A. The Section of Exhibit A of the Employment Agreement entitled
      "Incentive Compensation" of Exhibit A of the Employment Agreement is
      hereby amended in its entirety effective retroactively to January 1, 2002
      to delete all references to Mr. Allan's entitlement to the Executive Bonus
      or his participation in the Bonus Pool, and to read as follows:

      INCENTIVE         Mr. Allan shall be entitled to incentive compensation in
      COMPENSATION:     accordance with the bonus plan or plans in effect from
                        time to time for senior managers of the Company. All
                        references in this Agreement to bonuses or incentive
                        compensation of any kind shall refer to such plan or
                        plans.

4.    NO OTHER CHANGES. In all other respects, the Employment Agreement shall
      remain as originally written.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

STEEL CITY PRODUCTS, INC.

By /s/ Bernard H. Frank                              /s/ Terrance W. Allan
   ----------------------------------          ---------------------------------
   Bernard H. Frank                                            TERRANCE W. ALLAN
   Chairman of the Board of Directors<PAGE>

                                                                   EXHIBIT 10.11

                            STEEL CITY PRODUCTS, INC.
                                 AMENDMENT NO. 2
                                       TO
                     TERRANCE W. ALLAN EMPLOYMENT AGREEMENT

THIS AMENDMENT NO. 2 TO TERRANCE W. ALLAN EMPLOYMENT AGREEMENT (this
"Agreement") is made as of the 24th day of May 2004 by and between TERRANCE W.
ALLAN (hereinafter referred to as "Mr. Allan") and STEEL CITY PRODUCTS, INC., a
Delaware corporation (hereinafter referred to as the "Company.")

1.    BACKGROUND. Mr. Allan and the Company entered into an employment agreement
      dated as of May 1, 2000 (the "Employment Agreement.") The Employment
      Agreement was amended in certain respects by Amendment No. 1 in October
      2002. The parties now wish to further amend the Employment Agreement as
      more particularly set forth below.

2.    CONSIDERATION. The parties are entering into this Agreement for and in
      consideration of the foregoing recitals, the mutual covenants contained
      herein and other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged.

3.    EXHIBIT A. The Section of Exhibit A of the Employment Agreement entitled
      "Annualized Base Salary" is hereby amended in its entirety to read as
      follows:

      ANNUALIZED
      BASE SALARY: $133,000 effective on the date hereof;
                   $140,000 effective September 1, 2001;
                   $145,000 effective September 1, 2002 through September 30,
                   2004
                   $150,000 effective October 1, 2004 and thereafter

4.    NO OTHER CHANGES. In all other respects, the Employment Agreement shall
      remain as originally written, as the same was amended by Amendment No.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

STEEL CITY PRODUCTS, INC.

By /s/ Maarten D. Hemsley                            /s/ Terrance W. Allan
   -----------------------                      --------------------------------
   Maarten D. Hemsley                                          TERRANCE W. ALLAN
   Chief Financial Officer

                                                                     Page 1 of 1

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