
<PAGE>   1
                                                                   EXHIBIT 4.26

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

                               September 30, 1995


Mr. Marvin Dinetz
Chancellor Corporation
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. Dinetz:

          This letter memorializes and consolidates, 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 265,501
shares of Stock (the "Option Shares") at a price (the "Exercise Price") of (i)
$1.25 per share in cash with respect to 127,500 shares of Stock and (ii) $1.40
in cash with respect to 138,001 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.

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          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>
          25,500            exercisable on and after January 10, 1995
          25,500            exercisable on and after January 10, 1996
          25,500            exercisable on and after January 10, 1997
          25,500            exercisable on and after January 10, 1998
          25,500            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>
          27,600            exercisable on and after October 12, 1995
          27,600            exercisable on and after October 12, 1996
          27,600            exercisable on and after October 12, 1997
          27,600            exercisable on and after October 12, 1998
          27,601            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

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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), 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.

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          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

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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
     determination, 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

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     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:


- -----------------------------
MARVIN DINETZ




