EXHIBIT 10.1


                              EMPLOYMENT AGREEMENT
                              --------------------


     THIS  AGREEMENT  is made and entered into effective the 3rd day of October,
2001  (the  "Effective  Date"),  by and between American Homestar Corporation, a
Texas  corporation  (the  "Company"),  and  Finis  F.  Teeter (the "Executive").

     1.     Employment.  The  Company  employs  the  Executive and the Executive
            ----------
accepts  employment  upon  the terms and conditions set forth in this Agreement.

     2.     Term.  The  initial  term  of  this  Agreement  shall  begin  on the
            ----
Effective  Date  and  end  on  the  fifth  anniversary  of  this Agreement.  The
Executive's employment hereunder shall be automatically continued for successive
terms  of  one  (1)  year each unless employment is terminated at the end of the
initial  term  or  any additional term by written notice given by the Company or
the  Executive  not  less  than  thirty (30) days prior to the end of such term.
Notwithstanding  the  foregoing,  the  Executive's  employment  hereunder may be
terminated  earlier  in  accordance  with  the  terms  of  this  Agreement.

     3.     Compensation.
            ------------

     (a)     For  all  services rendered by the Executive, the Company shall pay
the  Executive  a  salary  of  $25,000  per  month  ("Base  Salary"), payable in
accordance  with  the  Company's normal payroll procedures, but in no event less
frequently  than  once  each calendar month. Salary payments shall be subject to
withholding  and  other  applicable  taxes.  The  Executive's Base Salary may be
increased  from  time to time at the discretion of the Compensation Committee of
the  Board  of  Directors  to  reflect Executive's performance and market salary
levels.

     (b)     The  Executive  shall  be  eligible  to  receive  a  discretionary
reasonable annual incentive bonus equal to such percentage of his Base Salary as
is  established  by  the  Board  of Directors based on achievement of reasonable
performance  targets  established  by  the Board of Directors during the term of
this  Agreement. Performance targets shall be set from time to time by the Board
of Directors. The incentive bonus, if any, shall be paid each year within twenty
(20)  days after completion and delivery of audited financial statements for the
year  for  which  the  bonus  is  payable.

     4.     Fringe  Benefits.  The Executive shall be entitled to participate in
            ----------------
fringe  benefit  or  incentive compensation plans as may hereafter be authorized
and  adopted  from  time  to  time  by  the  Company and made available to other
employees,  including  any pension plan, profit-sharing plan, disability or sick
pay  plan,  thrift  and  savings  plan,  medical  reimbursement plan, group life
insurance plan or other employee benefit plans made available to other employees
or  other  Executive  benefit  plans  for  which  the Executive is eligible. The
foregoing enumeration of fringe benefit plans in no way implies that the Company
has adopted or plans to adopt any such plan, nor does it obligate the Company to
do  so; the sole purpose of such enumeration is to indicate the type of benefits
to  which  the  Executive  will  be entitled when and if adopted by the Company.
Without  limitation,  the


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Executive  will  be  entitled  to  participate  in the 2002 Management Incentive
Program  and  to receive options to purchase 2,999,900 shares of Series M Common
Stock  of  the  Company.

     5.     Duties.  The Executive is engaged by the Company to act as President
            ------
and  Chief  Executive  Officer  of  the Company, and in such capacity, Executive
shall  perform  the  customary duties and responsibilities generally assigned to
such  positions.  The  precise  services  of  the  Executive  may be extended or
curtailed  by  the  Company  from  time  to time. If the Executive is elected or
appointed  a  director or an officer of the Company, the Executive will serve in
such  capacity  or  capacities  without further compensation. The termination of
this  Agreement,  Executive's  voluntary  termination  of  employment before the
termination  of  the Agreement, or termination of Executive's employment with or
without  Cause,  will  also  serve as Executive's resignation from the Company's
Board  of  Directors.

     6.     Extent  of  Services.  The  Executive  shall devote his entire time,
            --------------------
attention  and  energies to the Company's business and shall not during the term
of this Agreement be engaged in any other business activity, whether or not such
business  activity  is  pursued  for  gain, profit or other pecuniary advantage.
However,  subject  to  the  terms  of the Covenant Not to Compete referred to in
Section 15 hereof, the Executive may invest his assets in such form or manner as
will  not  require his services in the operation of the affairs of the companies
in  which  such  investments  are made. The expenditure of reasonable amounts of
time  for  teaching,  personal  business, and charitable and/or civic activities
shall  not be deemed a breach of this Agreement, provided such activities do not
materially  interfere  with  the  services  required  to  be rendered to Company
hereunder.  The  Executive agrees to perform the services required hereunder and
conduct  business  on behalf of Company in a professional manner.  The Executive
shall  use  his  best  judgment  in  performing  services reasonably required to
further  the  business  of  Company,  but  shall  at all times be subject to the
ultimate  control  of  Company  as to his activities pursuant to this Agreement.

     7.     Expenses.  The Executive may incur reasonable expenses for promoting
            --------
the Company's business, including expenses for entertainment, travel and similar
items.  The  Company will reimburse the Executive for all such expenses upon the
Executive's  periodic  presentation of an itemized account of such expenditures,
subject,  however,  to the general reimbursement policies of the Company as from
time  to  time  adopted  by  its  Board  of  Directors.

     8.     Vacations.  The  Executive shall be entitled each year to a vacation
            ---------
of  up  to  four  (4) weeks, during which time his compensation shall be paid in
full.  Unused vacation will carry forward only with the approval of the Board of
Directors  each  year.

     9.     Disability.  If  the  Executive  is  unable  to perform the services
            ----------
required  by  this  Agreement by reason of illness or incapacity for a period of
more  than twelve (12) consecutive weeks, the compensation thereafter payable to
him  during the continued period of such illness or incapacity after such period
shall  be  reduced by 50%. The Executive's full compensation shall be reinstated
prospectively  for future payroll periods upon his return to full employment and
discharge  of  his  full duties. The Company may terminate this Agreement at any
time  after  the  Executive  shall  be  absent from his employment, for whatever
cause,  for  a  period  of  more  than  six  (6)  consecutive


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months,  and all obligations of the Company under this Agreement shall thereupon
terminate,  unless  extended  by  the  Board  of  Directors.

     10.     Termination  upon  Change  of Control. The Company or the Executive
             -------------------------------------
may  terminate  this  Agreement upon thirty (30) days' notice to the other party
upon  the  occurrence  of a Change of Control or a decision by the Company, with
shareholder  approval,  to  terminate its business and liquidate its assets. For
purposes  of  this  Agreement,  the  term  "Change  of  Control"  shall mean the
occurrence  of  any  of  the  following:

          (i)  any  person  (as  such  term is defined in Section 3(a)(9) of the
     Securities  Exchange  Act  of  1934)  or  group (as such term is defined in
     Section  13(d)(3)  of  the  Securities  Exchange  Act of 1934) other than a
     trustee  or  other  fiduciary  holding securities under an employee benefit
     plan  of the Company or a corporation owned, directly or indirectly, by the
     stockholders  of the Company in substantially the same proportions as their
     ownership  of  stock  or the Company is or becomes the beneficial owner (as
     such  phrase  is defined in Rule l3d-5 under the Securities Exchange Act of
     1934),  directly  or  indirectly, of securities of the Company representing
     fifty  percent  (50%) or more of the combined voting power of the Company's
     then-outstanding  voting  securities;  or

          (ii) the shareholders of the Company approve a merger or consolidation
     of  the  Company,  with  any  other  corporation,  other  than  a merger or
     consolidation  that  would  result  in the voting securities of the Company
     outstanding  immediately  prior  thereto continuing to represent (either by
     remaining  outstanding  or by being converted into voting securities of the
     surviving entity) at least fifty percent (50%) of the combined voting power
     of  the  voting  securities  of  the  Company  or  such  surviving  entity
     outstanding  immediately  after  such  merger  or  consolidation;  or

          (iii)  the  stockholders  of  the Company approve an agreement for the
     sale  or  disposition  by the Company (or its consolidated subsidiaries) of
     all or substantially all of the Company's assets on a consolidated basis or
     the  Board  of  Directors  (or  the  Board  of  Directors of a consolidated
     subsidiary)  approves  such  an agreement for which shareholder approval is
     not  required.

     However, in no event shall a "Change of Control" be deemed to have occurred
with  respect  to  the Executive, if the Executive is part of a purchasing group
that  consummates  the  Change  of  Control  transaction. The Executive shall be
deemed  "part  of  a purchasing group" for purposes of the preceding sentence if
the  Executive  is  an  equity  participant  in the purchasing company or group.

     11.     Death  During  Employment. If the Executive dies during the term of
             -------------------------
employment  provided for in this Agreement, this Agreement shall terminate as of
the  date of death, and the Company shall pay to the estate of the Executive the
compensation  which would otherwise be payable to the Executive up to the end of
the  month  in  which  his  death  occurs.


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     12.     Termination for Cause or Economic Cause. The Company shall have the
             ---------------------------------------
right to terminate this Agreement and the Executive's employment at any time for
Cause  or  Economic  Cause.

     (a)     In  this  Agreement,  termination for "Cause" shall mean any of the
following: (i) failure by the Executive (as determined by the Board of Directors
in  good faith) to perform his duties as specified by the Company diligently and
in  a  manner  consistent  with  prudent  business  practice  and, to the extent
applicable, consistent with the Company's written policies and procedures, which
is not cured within thirty (30) days after actual receipt of written notice from
the Company; (ii) theft of Company property or falsification of documents of the
Company or dishonesty in their preparation; (iii) Executive's conviction of or a
plea of nolo contendere or guilty to a felony or conviction of a crime involving
moral  turpitude;  (iv) the commission of any act that causes the Company public
disrepute  or  disgrace  or  causes  material  harm  to  the  Company's customer
relations, operations, or business prospects; (v) failing a drug or alcohol test
or  being under the influence of illegal drugs or alcohol while working; or (vi)
inability  to  acquire or maintain necessary licenses for performing Executive's
duties  under  this  Agreement  unless  Executive  is  diligently  pursuing such
licenses  or  challenging  any  revocation  thereof  by appropriate proceedings.

     (b)     In  this Agreement, termination for "Economic Cause" shall mean the
failure  of  Executive  or  the  Company  to meet reasonable performance targets
applicable  to  them  established  by  the Board of Directors from time to time.

     13.     Effect  of  Termination.
             -----------------------

     (a)     In  the event this Agreement is terminated pursuant to Section 9 or
11  hereof, by the Company for Cause or by Executive on a Change of Control, all
compensation  and  benefits  to  the Executive shall terminate as of the date of
termination,  and  Executive  shall  not be entitled to receive any severance or
other  payments as a result of such termination; provided, however, that if this
Agreement  is  terminated  pursuant  to Section 11, the Executive's estate shall
have  the  right  to  receive  the  compensation which would otherwise have been
payable  to  the Executive up to the end of the month in which his death occurs.

     (b)     In  the  event  this  Agreement  is  terminated by the Company on a
Change  of  Control,  for Economic Cause, or without Cause, all compensation and
benefits to Executive shall terminate as of the date of termination; except that
if  the  Executive  is  terminated  for  Economic  Cause  or  without Cause, the
Executive shall receive (i) one-half of his Base Salary for the remainder of the
original  five-year  term or of the continued one-year term of this Agreement if
the  Executive  is terminated without Cause or (ii) shall receive one-quarter of
his  Base  Salary  for  the  remainder  of the original five-year term or of the
continued  one-year  term  of  this Agreement if the Executive is terminated for
Economic  Cause,  payable  in  accordance  with  the  Company's  normal  payroll
procedures  but  in  no  event  less  frequently  than once each calendar month.
Notwithstanding  the  foregoing,  the  maximum  amount that shall be paid to the
Executive pursuant to this paragraph shall be $500,000. The amounts set forth in
this  paragraph (and the vesting, if any, of Executive's options) shall serve as
liquidated  damages  for  the  termination of the Executive's employment and the
Company  shall  have  no  further


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liability  to  the  Executive  on  account  of  this Employment Agreement or its
termination.  The  parties agree that such payment is reasonable in light of the
anticipated or actual harm to the Executive as a result of any such termination,
the  difficulty  of  proof  of  loss and the inconvenience or non-feasibility of
otherwise  obtaining  a  remedy.

     If  the Executive terminates this Agreement for Good Reason (as hereinafter
defined)  such  termination shall be deemed a termination by the Company without
Cause for all purposes of this Agreement.  The Executive shall be deemed to have
terminated  his employment for "Good Reason" if (without the Executive's express
written  consent)  the Board of Directors materially diminishes or detracts from
(whether  by delegation in whole or in part to others or otherwise) the scope of
powers  and  responsibilities  assigned  to  the  Executive from those generally
assigned  to  chief executive officers of companies in the Company's industry or
of  companies  of similar size and circumstances of the Company, unless such act
is corrected within thirty (30) days after actual receipt of written notice from
the  Executive;  provided,  however, that the Executive's right to terminate the
Executive's  employment for Good Reason shall not apply if a change in the scope
of  powers  or responsibilities assigned to the Executive is attributable to the
Executive's  incapacity  due  to  physical  or  mental  illness.

     14.     Right  of  First  Refusal.  In  the  event  the  Board of Directors
             -------------------------
receives  a  bona  fide third party offer during the term hereof to enter into a
transaction  described  in  clause  (ii) or (iii) of the definition of Change of
Control  in  Section 10 hereof (a "Transaction"), prior to submitting such offer
to  the  shareholders  of the Company for approval, the Board of Directors shall
provide the Executive with written notice (the "Offer Notice") of such offer and
the  details  of  such  Transaction, including copies of all agreements relating
thereto.  The  Executive  shall  have  thirty (30) days following receipt of the
Offer  Notice  to  notify the Company in writing (the "Exercise Notice") that he
will  enter  into  the  Transaction  with  the  Company  on  the  same terms and
conditions. The Exercise Notice by the Executive must be accompanied by evidence
of  his financial ability to complete the Transaction on the same basis provided
by  the  proposed  transferee. If the Executive delivers the Exercise Notice and
evidence  of  financial  ability,  the  Company  shall  proceed  to  submit  the
Transaction  to  the  shareholders  of  the  Company for approval along with the
recommendation  of  the  Board  of  Directors  to  approve the Transaction.  The
Executive  agrees  to  cooperate  in  any  reasonable manner with the Company in
preparing  any  disclosure  statement  or proxy statement to be delivered to the
shareholders.  If the Executive fails to deliver the Exercise Notice or evidence
of  financial  ability within the thirty (30) day period, the Board of Directors
shall have the right to proceed with consummating the Transaction with the third
party  or its designee on terms not less favorable to the Company than those set
forth  in  the  Offer  Notice  within  one  hundred  eighty (180) days after the
expiration  of the thirty (30) day period. Any agreement with a third party with
respect  to  a  proposed  Transaction  shall  be  made  expressly subject to the
foregoing  right  of  first  refusal.

     15.     Covenant Not to Compete. The Covenant Not to Compete dated the date
             -----------------------
hereof  between  the Company and the Executive is incorporated herein and made a
part  of  this  Agreement for all purposes, but shall survive the termination of
this  Agreement  in  accordance  with  its  terms.


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     16.     Miscellaneous
             -------------

     (a)     Notices.  Any  notice  required  or  desired to be given under this
             -------
Agreement  shall  be  deemed  given  if  in  writing  sent by certified mail and
addressed  as  follows:

          If to the Company:     American Homestar Corporation
                                 2450 South Shore Boulevard, Suite 300
                                 League City, Texas 77573

          If to the Executive:   Finis F. Teeter

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

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

The Executive may change the address for notice set forth above by giving notice
in  writing, stating the new address, to the Company. The Company may change the
address  for  notice  set forth above by giving similar notice to the Executive.

     (b)     Waiver  of  Breach.  The  waiver by either party of a breach of any
             ------------------
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent  breach.  No waiver shall be valid unless in writing and signed by an
authorized  officer  of  the  Company  or  the  Executive,  as  the case may be.

     (c)     Assignment.  The  Executive  acknowledges  that  the  service to be
             ----------
rendered  by  him  are  unique  and personal. Accordingly, the Executive may not
assign any of his rights or delegate any of his duties or obligations under this
Agreement.  The rights and obligations of the Company under this Agreement shall
inure  to the benefit of and shall be binding upon the successors and assigns of
the  Company.

     (d)     Amendment.  This Agreement may not be changed orally but only by an
             ---------
amendment in writing signed by the party against whom enforcement of any waiver,
change,  modification,  extension  or  discharge  is  sought.

     (e)     Governing  Law.  This Agreement shall be interpreted, construed and
             --------------
governed  in  accordance  with  the  internal laws of the State of Texas without
regard  to  conflicts  of  law  principles.

     (f)     Headings.  The section headings contained in this Agreement are for
             --------
convenience only, and shall in no manner be construed as part of this Agreement.

     (g)     Counterparts.  This  Agreement  may  be  executed  in  multiple
             ------------
counterparts,  each  of  which  shall  be  deemed  an  original and all of which
together  shall  constitute one and the same agreement. A fully executed copy of
this  Agreement  shall  be  delivered  to  each  party  hereto.


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     (h)     Legal  Construction.  In  case any one or more of the provisions in
             -------------------
this  Agreement  shall  for  any  reason  be  held  to  be  invalid,  illegal or
unenforceable  in  any  respect, such invalidity, illegality or unenforceability
shall  not  affect  any  other  provision  hereof,  and  this Agreement shall be
construed  as if such invalid, illegal or unenforceable provision had never been
contained  herein.

     (i)     Prior  Agreements Superseded.  This Agreement, the Option Agreement
             ----------------------------
pursuant  to  the  2002  Management  Incentive  Program, and the Covenant Not to
Compete  constitute  the  sole  and  only  agreements  of the parties hereto and
supersede any prior understandings or agreements between the parties, written or
oral  respecting  the  subject  matter  hereof.

     (j)     Arbitration.  Save  and except for any action for injunctive and/or
             -----------
equitable relief seeking the enforcement of any of the terms of the Covenant not
to  Compete,  any  dispute  or  controversy  arising between the Company and the
Executive  shall  be  settled  exclusively  by arbitration in Houston, Texas (in
accordance  with  the  American Arbitration Association's National Rules for the
Resolution  of  Employment  Disputes  then  in  effect).  In reaching his or her
decision, which shall be a written, reasoned decision, the arbitrator shall have
no  authority to ignore, change, modify, add to, or delete from any provision of
this Agreement, but instead is limited to interpreting this Agreement.  Judgment
may  be  entered on the arbitrator's award in any court having jurisdiction. The
prevailing  party  shall  also  be  entitled  to  recover  from the losing party
attorney's  fees and other reasonable costs and expenses incurred as a result of
such  arbitration.

     IN  WITNESS  WHEREOF,  the  parties  have executed this Agreement as of the
Effective Date.

                                         COMPANY:

                                         AMERICAN  HOMESTAR  CORPORATION


                                         By:    /s/ Craig A. Reynolds
                                            ------------------------------------
                                         Name:  Craig A. Reynolds
                                              ----------------------------------
                                         Title: Executive Vice President and
                                               ---------------------------------
                                                Chief Financial Officer
                                               ---------------------------------


                                         EXECUTIVE:


                                         /s/ Finis  F.  Teeter
                                         ---------------------------------------
                                         Finis  F.  Teeter


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