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                                                                   Exhibit 10.25

                                October 17, 2002

Phyllis Knight
2610 Maple Ridge Lane
Orono, MN  55331

Dear Phyllis:

         The purpose of this letter is to give the general guidelines of an
offer to join Champion Enterprises and the major terms of employment.

1.       The position is Executive Vice President and Chief Financial Officer of
         Champion Enterprises, Inc., based in Auburn Hills, MI. You will report
         directly to me. Within 6 months, we will add the responsibility of
         HomePride Finance.

2.       The base salary is $320,000 annually, paid monthly. After 2 consecutive
         profitable quarters, your base will be increased to $350,000 annually.

3.       You will receive $100,000 cash your first day of employment, to be
         refunded in whole if you resign (for reason other than death or
         disability) within 18 months.

4.       In lieu of a "2002 Bonus" that would be paid in March 2003, you will
         receive a $100,000 cash one time payment on April 1, 2003.

5.       The 2003 annual incentive program is yet to be determined, but will
         have a range of up to 180% of base salary. This bonus will be paid in
         March 2004.

6.       The equity program will be formalized in a separate non-qualified stock
         option agreement to cover a total of 600,000 shares of Champion
         Enterprises stock vesting over the next four years. The general terms
         of the equity program will be as follows:

         a)       120,000 shares at 40% of market price on date of grant to be
                  purchased within 60 days of employment. These shares will vest
                  at a rate of 25% each six months. If you leave the company
                  during the two year period you will lose the prorated gain


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                                                                   Exhibit 10.25

                  amount remaining. You will have tax consequences of the
                  difference between purchase and market price. Once you
                  exercise this portion, you will be eligible for the following:

         b)       480,000 shares at market price on date of grant to be vested
                  over four years at 120,000 shares vested on each anniversary
                  for the four years. The term of this grant is six years from
                  date of grant.

         As a part of this option agreement, there will be a change of control
         provision (similar to Cleberg, Collins and Surles) that immediately
         vests the outstanding, unvested options, as well as requiring
         confidentiality and non-compete provisions.

7.       You will be eligible for the company's normal medical, dental, life
         insurance and long term disability benefits at the first of the month
         following your start date with the letters you provided, we have
         covered all "preconditions" issues. In case of your death, Champion's
         obligation under this agreement will terminate but any amount owed you
         under this agreement or bonus plan plus all vested options at time of
         your death will be paid to your estate. There is no defined benefits
         retirement program, but we do have a 401(k) tax deferred savings
         program. We have a deferred income program for base compensation and
         annual bonuses. You will be entitled to four weeks vacation per year.
         We do not pay cash in lieu of vacations.

8.       In order to expedite and assist your family's move from Minnesota to
         Michigan we will:

         -        Pay for all selling expenses for your Minnesota home.

         -        Pay for all closing costs for purchasing your home in
                  Michigan.

         -        Pay for physical moving of all household goods and incidentals
                  from Minnesota to Michigan.

         -        Pay for temporary housing and transportation expenses during
                  the commuting period. (To be finalized on or before August 1,
                  2003)

         -        Provide a one time gross up on the tax impact of moving
                  expenses.

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                                                                   Exhibit 10.25

9.       You will be an "at will" employee which means your employment may be
         terminated at any time, by you or Champion, for any reason, with or
         without cause and without any further obligation.

10.      If the company separates you for any reason (other than gross
         malfeasance or legal reasons), the company will provide 18 months of
         base salary, bonus and benefits. This severance clause may trigger at
         your option, if your title, compensation and/or responsibilities are
         reduced.

         This offer is based on your commencing employment today.

         If the terms are acceptable, please sign below and return one copy to
me. Phyllis, I look forward to you joining the Champion team.

                                    Very truly yours,

                                    /s/ WALTER R. YOUNG
                                    --------------------------------------------
                                    Walter R. Young
/s/ Phyllis Knight
------------------------------------------------
         Phyllis Knight

                             10/17/02
                  ------------------------------
                              Dated

cc:      Bob Anestis