
<PAGE>   1





                                                                    EXHIBIT 4.25

                             CHANCELLOR CORPORATION
                     12655 N. Central Expressway, Suite 321
                              Dallas, Texas  75243

                               September 30, 1995


Mr. Eric W. Neumann
Senior Vice President of Finance
12655 N. Central Expressway, Suite 321
Dallas, Texas  75243

               Re:     Memorialization, Consolidation, Amendment and Restatement
                       of Stock Options Granted January 10, 1994 and 
                       October 12, 1994

Dear Mr. Neumann:

                 This letter memorializes and consolidates, and amends and
restates the terms and conditions set forth in (i) the grants made by
Chancellor Corporation, a Delaware corporation (the "Company"), to you (the
"Grantee") on January 10, 1994 of options to purchase shares of Nonvoting
Stock, $0.01 par value per share (the "Stock"), of the Company and (ii) the
grants made by the Company to the Grantee on October 12, 1994 of options to
purchase shares of Stock of the Company.  The purpose of these grants was and
is to continue to provide the Grantee an opportunity to purchase shares of
Stock in return for assisting the Company in meeting or exceeding its financial
objectives.

                 1.       Grant of Options

                 The Company hereby grants to the Grantee, as a matter of
separate inducement and not in lieu of any salary or other compensation for his
services, the right and option to purchase (the "Option"), in accordance with
the terms and conditions set forth in this agreement, an aggregate of 531,002
shares of Stock (the "Option Shares") at a price (the "Exercise Price") of (i)
$1.25 per share in cash with respect to 255,000 shares of Stock and (ii) $1.40
in cash with respect to 276,002 shares of Stock, all subject to the terms and
conditions set forth herein.

                 The Option is not intended to be an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").  The Company shall at all times have reserved for
issuance a sufficient number of shares of Stock to permit the Grantee to
acquire the Option Shares on the terms and conditions provided herein.
<PAGE>   2
                 2.       Vesting and Exercise

                          (a)     For purposes of this agreement, the Option
Shares shall become exercisable ("Vested Shares") as set forth below:

                 The Option Shares with an Exercise Price of $1.25 are subject
to the following vesting schedule:


<TABLE>
                 <S>              <C>
                 51,000           exercisable on and after January 10, 1995
                 51,000           exercisable on and after January 10, 1996
                 51,000           exercisable on and after January 10, 1997
                 51,000           exercisable on and after January 10, 1998
                 51,000           exercisable on and after January 10, 1999

</TABLE>

                 The Option Shares with an Exercise Price of $1.40 are subject
to the following vesting schedule:

<TABLE>
                 <S>              <C>
                 55,200           exercisable on and after October 12, 1995
                 55,200           exercisable on and after October 12, 1996
                 55,200           exercisable on and after October 12, 1997
                 55,200           exercisable on and after October 12, 1998
                 55,202           exercisable on and after October 12, 1999
</TABLE>

provided that, with respect to all Option Shares, except as otherwise provided
in Section 2(b) or Section 3 below, the Grantee is an employee of the Company
on each such date.

                          (b)     In addition, the Board of Directors of the
Company may, in its sole discretion, accelerate the vesting schedule set forth
in paragraph (a) above.

                          (c)     Subject to the relevant provisions and
limitations contained herein, the Grantee may exercise the Option to purchase
all or a portion of the applicable number of Vested Shares at any time prior to
the termination of the Option pursuant to this agreement.  In no event shall
the Grantee be entitled to exercise the Option for any unvested shares or for a
fraction of a Vested Share.  Unless earlier terminated in accordance with this
agreement, the Option Shares with an Exercise Price of $1.25 shall
automatically terminate and become null and void on January 10, 2004 and the
Option Shares with an Exercise Price of $1.40 shall automatically terminate and
become null and void on October 12, 2004.

                          (d)     Any exercise by the Grantee of the Option
shall be in writing addressed to the corporate secretary of the Company at its
principal place of business and shall (i) state the number of shares of Stock
being purchased pursuant to such exercise and (ii) be accompanied by payment of
the full amount of the aggregate Exercise Price of the shares so purchased.
Notwithstanding the foregoing, with the consent of the Company's Compensation
Committee the Grantee may pay all or a portion of the aggregate Exercise Price
of the shares to be purchased by delivery to the Company of shares of Stock
having a Fair Market Value (as defined below) equal to such aggregate Exercise
Price or by the withholding from the number of
<PAGE>   3
shares of Stock (or, pursuant to Section 7(a) below, other securities or
property) receivable upon such exercise of the Option of a number of shares of
Stock (or such other securities or property) having a Fair Market Value equal
to such aggregate Exercise Price (it being understood that such withholding
shall be taken first from any cash to be received by the Grantee upon exercise
of the Option).

                 3.       Termination of Employment; Change of Control

                          (a)     Upon termination of the Grantee's employment
with the Company (including any subsidiary corporation) for any reason other
than a termination of employment due to death as described in Section 3(b)
below or a termination of employment due to disability as described in Section
3(c) below, or if the Grantee shall terminate his employment with the Company
(including any subsidiary corporation) for any reason, the Grantee's interest
in the Option shall automatically terminate and become null and void on the
30th day following the date of such termination, and the Grantee shall not be
able to exercise the Option for any Vested Shares thereafter.

                          (b)     If the Grantee shall die while in the employ
of the Company (including any subsidiary corporation), all Option Shares shall
immediately become Vested Shares and the Grantee's legal representative, or the
person, if any, who acquired the Grantee's interest in the Option by bequest or
inheritance, may, not later than 1 year from the date of the Grantee's death,
exercise the Option, to the extent not previously exercised.

                          (c)     If the Grantee's employment with the Company
is terminated because he is unable to discharge his duties under his existing
or future employment arrangement with the Company (including any subsidiary
corporation) for a period of 6 consecutive months, or for a total of 6 months
in any 12-month period, by reason of physical or mental illness, injury or
incapacity, all Option Shares shall immediately become Vested Shares and the
Grantee or his legal representative may, not later than one (1) year from the
date of termination of the Grantee's employment, exercise the Option, to the
extent not previously exercised.

                          (d)     Upon a Change of Control (as defined below),
all Option Shares shall become Vested Shares.

                 4.       Transferability

                 The Option is not transferable by the Grantee otherwise than
by will or the laws of descent and distribution, and is exercisable, during the
Grantee's lifetime, only by the Grantee.  The Option may not be assigned,
transferred (except by will or the laws of descent and distribution), pledged,
or hypothecated in any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment, or similar proceeding.  Any attempted
assignment, transfer, pledge, hypothecation, or other disposition of the
Option, contrary to the provisions hereof, and the levy of any attachment or
similar proceeding upon the Option, shall be null and void and without effect.
<PAGE>   4
                 5.       Registration

                 Unless there is in effect a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
issuance of the Option Shares (and, if required, there is available for
delivery a prospectus meeting the requirements of Section 10(a)(3) of the
Securities Act), the Grantee will, upon the exercise of the Option in
accordance with the terms and conditions hereof, deliver to the Company a
certificate pursuant to which the Grantee (i) represents and warrants to the
Company that the Optionee is an "accredited investor" within the meaning of the
rules and regulations under the Securities Act and that the Option Shares then
being purchased by the Grantee pursuant to the Option are being acquired for
investment only and not with a view to the resale or distribution thereof; (ii)
acknowledges and confirms that the Option Shares purchased may not be sold
unless registered for sale under the Securities Act or pursuant to an exemption
from such registration (in which case an opinion of counsel satisfactory to the
Company shall be supplied to the Company by the Grantee prior to the
consummation of such sale to the effect that such sale is exempt from
registration under the Securities Act); and (iii) agrees that the certificates
evidencing such Option Shares shall bear a legend to the effect of the
foregoing.

                 6.       Withholding Taxes

                 By acceptance hereof, the Grantee hereby (i) agrees to
reimburse the Company or any subsidiary corporation by which the Grantee is
employed for any federal, state, or local taxes required by any government to
be withheld or otherwise deducted by such corporation in respect of the
Grantee's exercise of all or a portion of the Option: (ii) authorizes the
Company or any subsidiary corporation by which the Grantee is employed to
withhold from any cash compensation paid to the Grantee or on the Grantee's
behalf, an amount sufficient to discharge any federal, state, and local taxes
imposed on the Company, or the subsidiary corporation by which the Grantee is
employed, and which otherwise has not been reimbursed by the Grantee, in
respect of the Grantee's exercise of all or a portion of the Option; and (iii)
agrees that the Company or any subsidiary corporation by which the Grantee is
employed, may, in its discretion, hold the stock certificate to which the
Grantee is entitled upon exercise of the Option as security for the payment of
the aforementioned withholding tax liability, until cash sufficient to pay that
liability has been accumulated, and may, in its discretion, effect such
withholding by retaining shares issuable upon the exercise of the Option having
a Fair Market Value on the date of exercise which is equal (in the judgment of
such corporation) to the amount to be withheld.

                 7.       Adjustment of Shares and Price

                          (a)     In the event of any change in the outstanding
shares of Stock through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split off, spin-off,
combination of shares, exchange of shares, or other like change in capital
structure of the Company, the Board of Directors of the Company shall cause an
appropriate adjustment to be made to each outstanding Option Share, and if
appropriate, the Exercise Price, such that the Option shall thereafter be
exercisable for such securities, cash, and/or other property as would have been
received in respect of the Option Shares subject to the Option had the Option
<PAGE>   5
been exercised in full immediately prior to such change, and such an adjustment
shall be made successively each time any such change shall occur.  The term
"Option Shares" after any such change shall refer to the securities, cash,
and/or property then receivable upon exercise of the Option.

                 8.       Miscellaneous

                 This agreement is not a contract of employment and the terms
of the Grantee's employment shall not be affected hereby or by any agreement
referred to herein except to the extent specifically so provided herein or
therein.  Nothing herein shall be construed to impose any obligation on the
Company or any parent or subsidiary corporation thereof to continue the
Grantee's employment.  This agreement shall be governed by the laws of the
State of Texas (without giving effect to principles of conflict of laws).  This
agreement may be amended if such amendment is in writing and signed by the
Grantee and an authorized officer of the Company.

                 9.       Definitions

                 In addition to the terms specifically defined elsewhere in
this agreement, as used in this agreement, the following terms shall have the
respective meanings indicated:

                 (a)      "Change of Control" shall mean the first to occur of
         the following events: (i) any sale, lease, exchange, or other transfer
         (in one transaction or a series of related transactions) of all or
         substantially all of the assets of the Company to any Person or group
         or related Persons for purposes of Section 13(d) of the Exchange Act
         (a "Group"), other than to Hicks, Muse, Tate & Furst Incorporated and
         any of its affiliates (the "HM Group"); (ii) a majority of the Board
         of Directors of the Company shall consist of Persons who are not
         Continuing Directors; or (iii) the acquisition by any Person or Group
         (other than the HM Group) of the power, directly or indirectly, to
         vote or direct the voting of securities having more than 50% of the
         ordinary voting power for the election of directors of the Company.

                 (b)      "Continuing Director" shall mean, as of the date of
         termination, any Person who (i) was a member of the Board of Directors
         of the Company on the date of this agreement, (ii) was nominated for
         election or elected to the Board of Directors of the Company with the
         affirmative vote of a majority of the Continuing Directors who were
         members of such Board of Directors at the time of such nomination or
         election, or (iii) is a member of the HM Group.

                 (c)      "Exchange Act" shall mean the Securities Exchange Act
         of 1934, as amended.

                 (d)      "Fair Market Value" shall, as it relates to the
         Stock, mean the average of the high and low prices of the Stock as
         reported on the principal national securities exchange on which the
         shares of Stock are then listed on the date specified herein, or if
         there were no sales on such date, on the next preceding day on which
         there were sales, or if such Stock is not listed on a national
         securities exchange, the last reported bid price in
<PAGE>   6
         the over-the-counter market, or if such shares are not traded in the
         over-the-counter market, the per share cash price for which all of the
         outstanding Stock could be sold to a willing purchaser in an arms
         length transaction (without regard to minority discount, absence of
         liquidity, or transfer restrictions imposed by any applicable law or
         agreement) at the date of the event giving rise to a need for a
         determination.  Except as may be otherwise expressly provided in a
         particular Option, Fair Market Value shall be determined in good faith
         by the Board of Directors of the Company.

                 (e)      "Person" shall mean any person or entity of any
         nature whatsoever, specifically including an individual, a firm, a
         company, a corporation, a partnership, a trust, or other entity.

                 Please indicate your acceptance of all the terms and
conditions of this consolidated, amended and restated grant agreement by
signing and returning a copy of this letter.  This agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement.  This agreement shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other parties.

                                  Very truly yours,



                                  CHANCELLOR CORPORATION

                                  By:
                                     -------------------------
                                  Name:    Steven Dinetz
                                  Title:   President and Chief Executive Officer

ACCEPTED AND AGREED TO as of
the date first above written:


- -------------------------
ERIC W. NEUMANN
