EXHIBIT 10.37

EMPLOYMENT AND NON-COMPETITION AGREEMENT

     THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (this “Agreement”) is made
effective as of September 9, 2003, between DOMISTYLE, INC., a Texas corporation
(together with its successors and assigns, the “Company”), and CHARLES L. ELSEY
(the “Executive”).

     WHEREAS, the Company desires to employ the Executive, and the Executive
desires to be employed by the Company on the terms and conditions set forth
herein;

     NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

     1.  Employment Period. The Company agrees to employ the Executive, and the
Executive agrees to be employed by the Company, in accordance with the terms and
conditions of this Agreement, for the period commencing as of the date of this
Agreement and continuing until December 31, 2004 (the “Employment Period”);
provided, however, that such Employment Period (i) shall be extended for
successive terms of one (1) year unless either party advises the other in
writing, at least sixty (60) days prior to the end of the initial term, or any
annual extension thereof, that it or he will not agree to extend this Agreement,
and (ii) may be terminated in accordance with Section 3 and Section 4, below.

     2.  Terms of Employment.

         (a)  Position and Duties.

               (i) During the Employment Period, the Executive shall perform the
functions of President of the Company, and, in so doing, shall report to the
Board of Directors of the Company. The Executive shall have such powers and
duties as may from time to time be assigned or delegated to him by the Board of
Directors of the Company or by the Chief Executive Officer or President of Home
Interiors & Gifts, Inc. (“HIG”), or, in the absence of such assignment or
delegation, will have such powers and duties as are normally associated with and
inherent with such position. The Executive’s duties shall include, among other
things, oversight and direction of world-wide manufacturing and outside sales of
decorative products of the Company. The Executive shall be responsible for the
design, product development and manufacturing of product samples for the
Company. Executive also shall be responsible for coordinating his efforts for
the Company with HIG’s procurement programs and product development departments.

               (ii) During the Employment Period, excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote such time as the Board of Directors shall deem necessary (which shall
not be less than forty (40) hours during a regular work week), up to and
including substantially all of his business time, to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities
assigned to

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the Executive hereunder, to use the Executive’s reasonable best efforts to
perform faithfully, effectively and efficiently such responsibilities. The
Executive will use his reasonable best efforts to promote the success of the
Company’s business, and will cooperate fully with the Board of Directors of the
Company and with the management of HIG.

(b)  Compensation.

       (i)  Base Salary. During the Employment Period, the Executive shall
receive, at such intervals and in accordance with such Company policies as may
be in effect from time to time, an annual salary (pro rata for any partial year)
equal to Two Hundred Sixty-five Thousand and No/100 Dollars ($265,000.00),
payable in equal installments in accordance with the Company’s normal practices,
but no less often than monthly (the “Annual Base Salary”), which Annual Base
Salary shall be subject to change, as determined in the sole discretion of the
Board of Directors of the Company.

       (ii)  Annual Bonus. The Executive shall be eligible to participate in the
Company’s Key Employee Bonus Plan applicable to executives of the Company (the
“Annual Bonus”) for each fiscal year of the Company commencing with the fiscal
year ending December 31, 2003, as approved by the Board of Directors of the
Company in good faith, and subject to such other criteria as may be recommended
by management and established by the Board of Directors of the Company from time
to time. It is understood that any Annual Bonus for the fiscal year ending
December 31, 2003 shall be calculated on a pro rata basis, based upon the number
of days in such fiscal year that this Agreement is in effect. Each Annual Bonus
(or portion thereof) shall be paid in cash promptly following delivery to the
Board of Directors of HIG of audited financial statements of HIG for the fiscal
year for which the Annual Bonus (or pro rated portion) is earned or awarded,
unless electively deferred by the Executive pursuant to any deferral programs or
arrangements that the Company may make available to the Executive. Although the
Executive shall be eligible for an Annual Bonus, the Company shall be under no
obligation to pay any Annual Bonus, regardless of the performance of the
Executive or the Company.

       (iii)  Incentive Bonus. The Executive shall be eligible to receive an
additional incentive bonus to be paid following delivery to the Board of
Directors of HIG of audited financial statements of HIG for the fiscal year
ending December 31, 2004, in the following amounts:

(A)  $150,000.00 if the Company’s EBITDA equals or exceeds $67,000,000.00 for
the fiscal year ending December 31, 2004;

(B)  An additional $150,000.00 if the Company’s EBITDA equals or exceeds
$75,000,000.00 for the fiscal year ending December 31, 2004; and

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(C)  An additional $75,000.00 if the Company’s revenue from outside sales equals
or exceeds $56,500,000.00 for the fiscal year ending December 31, 2004.

Calculation of EBITDA shall be in accordance with then-existing accounting
practices utilized by HIG generally, and absent manifest error, shall be binding
upon Executive.

       (c)  Incentive, Savings and Retirement Plans. During the term of the
Executive’s employment, the Executive shall be entitled to participate in all
incentive, savings, and retirement plans, practices, policies and programs
applicable generally to management-level employees of the Company (“Investment
Plans”) as determined by and at the discretion of the Board of Directors of the
Company.

       (d)  Welfare Benefit Plans. During the term of the Executive’s
employment, the Executive and/or the Executive’s family, as the case may be,
shall be eligible for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs (“Welfare Plans”)
provided by the Company (including, without limitation, medical, prescription,
dental, disability, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent offered and applicable
generally to other management-level employees of the Company and to the extent
the Executive is eligible under the terms of the Welfare Plans.

       (e)  Stock Options. If approved by the Company’s Board of Directors, in
its sole discretion, the Company shall grant to the Executive options to
purchase One Hundred Thousand (100,000) shares of common stock of the Company.
If granted, the options will be evidenced by a separate Option Agreement and
will be granted pursuant to, and subject to the terms and conditions of HIG’s
1998 Stock Option Plan for Key Employees. If granted, the options will vest and
become exercisable in the manner and at the times provided in the Option
Agreement.

       (f)  Expenses. During the term of the Executive’s employment, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
employment expenses incurred by the Executive at the request of, or on behalf
of, the Company and in performance of the Executive’s duties under this
Agreement, and in accordance with the policies, practices and procedures of the
Company. The Executive must file expense reports with respect to such expenses
in accordance with the Company’s normal policies.

       (g)  Vacation and Holidays. During the term of the Executive’s
employment, the Executive shall be entitled to paid vacation of three (3) weeks
per year and paid holidays in accordance with the plans, policies, programs and
practices of the Company for its employees. Such vacation shall be taken at such
time or times reasonably acceptable to the Company.

       (h)  Automobile. In addition to the other compensation to be provided to
the Executive under this Agreement, the Company shall provide to the Executive

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reimbursement for the use of a vehicle. In satisfaction of this Section 2(h),
the Company will pay to the Executive, in accordance with the Company’s normal
policies, during the Employment Period, the monthly payment of $800.00 for the
Executive’s use of his current vehicle, grossed up for taxes in accordance with
the Company’s normal policy.

3.  Termination of Employment.

     (a)  Death or Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death during the Employment Period. If the
Disability of the Executive has occurred during the Employment Period (pursuant
to the definition of Disability set forth below), the Company shall give to the
Executive no less than thirty (30) days written notice in accordance with
Section 11(b) hereof of its intention to terminate the Executive’s employment
based upon Disability. In such event, the Executive’s employment with the
Company shall terminate effective on the date specified in such notice (the
“Disability Effective Date”). For purposes of this Agreement, “Disability” shall
mean the Executive’s inability to perform his duties and obligations hereunder
for a period of sixty (60) consecutive days or any sixty (60) days in any twelve
(12) month period due to mental or physical incapacity as determined by a
physician selected by the Company or its insurers and acceptable to the
Executive or the Executive’s legal representative (such agreement as to
acceptability not to be withheld unreasonably).

     (b)  Termination by the Company. The Company may terminate the Executive’s
employment during the Employment Period with or without Cause. If termination by
the Company is without Cause, the Company shall give Executive ten (10) days
prior written notice of the Company’s intent to do so. For purposes of this
Agreement, “Cause” means: (i) the Executive’s material breach of this Agreement
or any other document, agreement or contract to which the Executive and the
Company are a party, which constitutes a material nonperformance by the
Executive of his obligations and duties hereunder or thereunder, as reasonably
determined by the Board of Directors of the Company, which is not remedied
within ten (10) business days after receipt of written notice from the Company
in accordance with Section 11(b), specifying such breach; (ii) the Executive’s
failure to adhere to any material written policy of the Company, which is not
remedied within thirty (30) days after receipt of written notice from the
Company specifying such failure; (iii) the Executive’s appropriation (or
attempted appropriation) of a material business opportunity of the Company,
including, without limitation, attempting to secure or securing, any personal
profit in connection with any transaction entered into on behalf of the Company;
(iv) the Executive’s commission of (or attempt to commit) an act of fraud,
illegality, theft or dishonesty toward the Company in the course of employment
with the Company that relates to the Company’s assets, activities, operations or
other employees; (v) the Executive’s conviction of, the indictment for (or its
procedural equivalent), or the entering of a guilty plea or plea of no contest
or deferred adjudication with respect to, a felony, the equivalent thereof, or
any other crime with respect to which imprisonment is a possible punishment;
(vi) the Executive’s absence from his duties without the consent of the
Company’s Board of Directors for more than ten (10) consecutive business days
for reasons other than vacation authorized under this Agreement, illness or
injury; (vii) a material breach by the

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Executive of Section 6 or Section 9 hereof; or (viii) the failure of the
Executive to carry out, or comply with, in any material respect any directive of
the Board of Directors consistent with the terms of this Agreement, which is not
remedied within thirty (30) days after receipt of written notice from the
Company specifying such failure.

     (c)  Voluntary Termination by Executive. Notwithstanding anything in this
Agreement to the contrary, the Executive’s employment may be terminated during
the Employment Period by the Executive for “Good Reason” or no reason, provided
the Executive gives thirty (30) days prior written notice to the Company of the
Executive’s intention to do so. “Good Reason” means: (i) a reduction in the
Executive’s Annual Base Salary below that set forth in the first sentence of
Section 2(b)(i) or a failure to pay amounts due under Section 2(b)(iii); or
(ii) a material diminishment in the responsibilities of Executive described in
Section 2(a)(i), in each case, which is not remedied by the Company within ten
(10) business days after receipt of written notice in accordance with Section
11(b) by the Executive specifying the “Good Reason.”

     (d)  Notice of Termination. Any termination by the Company (for Cause or
otherwise), or by the Executive, shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 11(b).

     (e)  Date of Termination. “Date of Termination” means: (i) the date of
receipt of a Notice of Termination or any later date specified therein, and
(ii) if the Executive’s employment is terminated by reason of death or
Disability, the date of death of the Executive or the Disability Effective Date,
as the case may be.

4.  Obligations of the Company upon Termination.

     (a)  Termination by the Company Other Than For Cause or by the Executive
for Good Reason. If the Company terminates the Executive without Cause (other
than for or in connection with death or Disability) during the Employment Period
or if the Executive terminates the Executive’s own employment for Good Reason,
the Company shall pay to the Executive: (i) in a lump sum in cash within thirty
(30) days after the Date of Termination (1) the sum of the Executive’s
applicable Annual Base Salary through the Date of Termination to the extent not
theretofore paid (“Accrued Obligations”), (2) any amount arising from the
Executive’s participation in, or benefits under, any Investment Plans (“Accrued
Investments”), which amounts shall be payable in accordance with the terms and
conditions of such Investment Plans, and (3) severance pay in an amount equal to
one month of the Executive’s Annual Base Salary (“Severance Pay”); and (ii) any
earned but unpaid Annual Bonus in respect of any full fiscal year ended prior to
the date the Executive’s employment is terminated, payable in a lump sum in cash
at such time as such Annual Bonus otherwise would be payable (“Accrued Bonus”),
but not a prorated or partial bonus with respect to the time period between the
end of the previous full fiscal year and the date the Executive’s employment is
terminated. An election by the Company not to extend the initial term of this
Agreement beyond its initial expiration date shall not be considered a
termination without Cause for purposes of this Section 4(a). Following
December 31, 2004, the Company shall have no obligation to pay Severance Pay to
the Executive.

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     (b)  Termination by the Company for Death or Disability. If the Executive’s
employment is terminated by reason of the Executive’s death or Disability during
the Employment Period, the Company shall pay to his legal representatives:
(i) in a lump sum in cash within thirty (30) days after the Date of Termination
the aggregate Accrued Obligations; (ii) the Accrued Investments, which shall be
payable in accordance with the terms and conditions of the Investment Plans; and
(iii) any Accrued Bonus, which shall be payable at such time as such Annual
Bonus otherwise would be payable. The Company shall have no further payment
obligations to the Executive or his legal representatives under this Agreement.

     (c)  Termination by the Company for Cause or by Executive without Good
Reason. If the Executive’s employment shall be terminated by the Company for
Cause or terminated by the Executive without Good Reason, during the Employment
Period, the Company shall have no further payment obligations to the Executive
other than for payment of Accrued Obligations (which shall be paid within thirty
(30) days after the Date of Termination), Accrued Investments (which shall be
payable in accordance with the terms and conditions of the Investment Plans) and
Accrued Bonus (which shall be payable at such time as such Annual Bonus
otherwise would be payable).

     (d)  Full Settlement, Mitigation. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the Executive
obtains other employment. The Company shall not be liable to the Executive for
any damages in addition to the amounts payable under Section 4 arising out of
the termination of the Executive’s employment, for any reason, prior to the end
of the Employment Period; provided, however, that the Company shall be entitled
to seek damages from the Executive for any breach of Sections 6, 7, or 9 hereof
or criminal misconduct.

       5.  Ownership of Intellectual Property. Any and all inventions, trade
secrets, copyrights, patents or other intellectual property rights relating to
the Business (as defined below) prepared or created by the Executive during the
Employment Period (together with all extension and renewal rights), shall be
owned exclusively by the Company, its successors and assigns, absolutely and
forever, and for all uses and purposes whatsoever and free from the payment of
any royalty or compensation whatsoever to Executive. In the event any such items
may not, by operation of law, be deemed the property of the Company, the
Executive hereby assigns to the Company, for no additional consideration, all
rights, including intellectual property rights, in such items. The Executive
shall execute such documents, and provide such assistance as the Company may
reasonably request to give full effect to the provisions of this Section 5. This
provision shall survive the termination of this Agreement.

       6.  Confidential Information.

     (a)  The Executive acknowledges that during the Employment Period and as
part of his employment, the Executive will be and has been afforded access to
confidential information of the Company, HIG and its Affiliates, as defined
herein. The Executive further acknowledges that for purposes of this Agreement,
“Affiliates” shall be

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defined as any corporation, partnership, limited liability company or other
entity controlling, controlled by or under common control with HIG, all of which
have trade, business, and financial secrets and other confidential and
proprietary information, including, but not limited to, product information,
designs and formulas, processes, pricing and cost information, sales and
marketing strategies, and identities of suppliers and displayers, and that such
confidential information constitutes valuable, special and unique property of
the Company, HIG and its Affiliates (collectively, the “Confidential
Information”). As defined herein, Confidential Information shall not include
(i) public information or information that is generally known to other persons
or entities, (ii) information that is or becomes available to the Executive on a
non-confidential basis from a source other than the Company, HIG and its
Affiliates, provided that such source was not known by Executive to be bound by
a confidentiality agreement with the Company, HIG and its Affiliates or to be
otherwise prohibited from transmitting the information to Executive by a
contractual, legal or fiduciary obligation; (iii) information that was within
the Executive’s possession prior to its being furnished to the Executive by or
on behalf of the Company, HIG and its Affiliates, including, without limitation,
product and marketing information possessed by Executive prior to employment by
the Company , provided that the source of such information was not known by the
Executive to be bound by a confidentiality agreement with the Company, HIG and
its Affiliates or to be otherwise prohibited from transmitting the information
to Executive by a contractual, legal or fiduciary obligation; or
(iv) information required to be disclosed by the Executive pursuant to a
subpoena or court order, or pursuant to a requirement of a governmental agency
or law of the United States of America or a state thereof or any governmental or
political subdivision thereof; provided, however, that the Executive shall take
all reasonable steps, at the cost of the Company, to prohibit disclosure of such
Confidential Information pursuant to subsection (iv) herein.

     (b)  The Executive also acknowledges that public disclosure of such
Confidential Information could have an adverse effect on the Company and its
business and that the provisions of this Section 6 are reasonable and necessary
to prevent the improper use or disclosure of Confidential Information.

     (c)  In consideration of the compensation and benefits to be paid or
provided to the Executive by the Company under this Agreement, the Executive
covenants that both during and after the Employment Period, the Executive shall
(i) hold Confidential Information in confidence; (ii) not disclose, disseminate,
publish or release (either directly or indirectly) Confidential Information to
any person (other than Company employees and other persons to whom it is
appropriate to disclose such Confidential Information in order to carry out the
Executive’s duties or to pursue the best interests of the Company or to whom the
Company has authorized the Executive to disclose such information and then only
to the extent that such Company employees and other persons authorized by the
Company have a need for such knowledge); and (iii) not use any Confidential
Information for the benefit of any person or entity other than the Company.

     (d)  If the Executive becomes legally compelled to disclose any
Confidential Information, he will provide the Company with prompt written notice
of such requirement prior to disclosure so that the Company may seek appropriate
relief. If such

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relief is not obtained, then the Executive will furnish only that portion of the
Confidential Information that the Executive is legally required to furnish and
will use commercially reasonable efforts to assist the Company in obtaining
assurances that such Confidential Information will be accorded confidential
treatment.

       7.  Surrender of Materials Upon Termination. Upon termination of the
Executive’s employment for any reason, the Executive shall immediately return to
the Company all originals and/or copies, in whatever form, of any and all
Confidential Information and any other property of the Company, HIG and its
Affiliates, which are in the Executive’s possession, custody or control, whether
or not provided by the Company.

       8.  Successors.

     (a)  This Agreement is personal to the Executive and shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive’s legal representatives.

     (b)  This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

     (c)  The Company may assign this Agreement only to an assignee that agrees
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place. The
failure of any assignee of the Company to expressly assume to perform this
Agreement in writing, which is not remedied within ten (10) business days after
receipt of written notice from the Executive in accordance with Section 11(b),
notifying Company or Company’s assignee of such failure, shall, at the election
of Executive, be deemed to be a termination of this Agreement without cause.

       9.  Non-Competition and Non-Solicitation.

     (a)  The Executive acknowledges that: (i) the services to be performed by
him under this Agreement are of a special, unique, unusual, extraordinary, and
intellectual character; (ii) the Business is international in scope and the
Company’s, HIG’s and its Affiliates’ products are marketed throughout the United
States and the world; (iii) the Company and HIG compete with other businesses
both nationally within the United States and internationally; and (iv) the
provisions of this Section 9 are reasonable and necessary to protect the
Business. For purposes of this Agreement, the term “Business” shall mean the
Company’s, HIG’s and its Affiliates’ production and sale of home decorative and
garden decorative products of the types offered for sale by the Company, HIG and
its Affiliates as of the date of this Agreement and during the Employment
Period.

     (b)  In consideration of the acknowledgments by the Executive, and in
consideration of the compensation and benefits to be paid or provided to the
Executive by the Company, the Executive agrees that he will not, directly or
indirectly:

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               (i)  during the Employment Period, except in the course of his
employment hereunder, and during the Post-Employment Period, engage in, invest
in, own, manage, operate, finance, control, or participate in the ownership,
management, operation, financing or control of, be employed by, or render
services to, any business whose products or services compete with the Business,
anywhere within the United States or within foreign countries in which the
Company, HIG or its Affiliates conduct the Business;

               (ii)  whether for the Executive’s own account or for the account
of any other person, at any time during the Employment Period and the
Post-Employment Period, solicit business from (either directly or indirectly) or
sell products of any kind, to any customer of the Company, HIG or its
Affiliates, including without limitation, customers with whom the Executive had
personal contact prior to Executive’s employment with the Company;

               (iii)  whether for the Executive’s own account or the account of
any other person, at any time during the Employment Period and the
Post-Employment Period, solicit, employ, or otherwise engage as an employee,
independent contractor, or otherwise, any person who is or was at the time of
such solicitation, employment or engagement an employee, consultant or
independent contractor of the Company, HIG or its Affiliates or in any manner
induce or attempt to induce any employee of the Company, HIG or its Affiliates
to terminate his/her employment with HIG or its Affiliates; or

               (iv)  at any time during or after the Employment Period, and
during the Post-Employment Period, disparage the Company, HIG or its Affiliates
or any of their shareholders, partners, members, other holders of equity in the
Company or HIG, directors, officers, employees, or agents or any Affiliate of
the foregoing.

     (c)  If any covenant in this Section 9 is held to be unreasonable,
arbitrary, or against public policy, such covenant will be considered to be
divisible with respect to scope, time, and geographic area, and such lesser
scope, time, or geographic area, or all of them, as a court of competent
jurisdiction may determine to be reasonable, not arbitrary, and not against
public policy, will be effective, binding, and enforceable against the
Executive.

     (d)  The period of time applicable to any covenant in this Section 9 will
be extended by the duration of any conduct which the Executive knew or should
reasonably have known violated such covenant.

     (e)  The Executive will, while the covenant under this Section 9 is in
effect, give written notice to the Company, within ten (10) days after accepting
any other employment or consulting arrangement, of the identity of the
Executive’s new employer or contractor and all of the material duties and
services to be provided by the Executive in such employment or retention, which
shall not require disclosure by the Executive of any terms of compensation. The
Company may notify such new employer that the Executive is bound by this
Agreement and, at the Company’s election, furnish such new employer with a copy
of this Agreement or relevant portion thereof.

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     (f)  The term “Post-Employment Period” means the one-year (1) period
beginning on the date of termination of the Executive’s employment with the
Company.

     (g)  The Executive acknowledges that the geographic boundaries, scope of
prohibited activities, and time duration of the preceding paragraphs are
reasonable in nature and are no broader than are necessary to maintain the
confidentiality and the goodwill of the Company’s, HIG’s and the Affiliates’
proprietary information, plans and services and to protect the other legitimate
business interests of the Company, HIG and the Affiliates.

       10.  Effect of Agreement on Other Benefits. The existence of this
Agreement shall not prohibit or restrict the Executive’s entitlement to full
participation in the employee benefit and other plans or programs in which
management-level employees of the Company are eligible to participate.

       11.  Miscellaneous.

     (a)  Jurisdiction and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas without reference to
principles of conflict of laws. Any legal action to enforce or interpret any
provision of this Agreement shall be brought exclusively in Dallas County,
Texas. By execution and delivery of this Agreement, the Executive accepts and
consents to for himself, the jurisdiction of the Courts of the State of Texas,
County of Dallas.

     (b)  Notice. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery, by overnight courier (providing
proof of delivery) or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

     
If to the Executive:
  Charles L. Elsey
7425 Spring Valley Road
Dallas, Texas 75254
 
   
If to the Company:
  Domistyle, Inc.
1649 Frankford Road West
Carrollton, Texas 75007
Attn: Chief Executive Officer
 
   
With a required copy to:
  Home Interiors & Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007
Attn: President

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

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     (c)  Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a portion of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of such illegal, invalid
or unenforceable provision there shall be added automatically as part of this
Agreement a provision as similar-in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

     (d)  Withholding. The Company may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

     (e)  Obligations Contingent on Performance. The obligations of the Company
hereunder, including its obligation to pay the compensation provided for herein,
are contingent upon the Executive’s performance of the Executive’s obligations
hereunder.

     (f)  Waiver. The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder shall not be deemed to be
a waiver of such provision or right or any other provision or right of this
Agreement.

     (g)  Injunctive Relief and Additional Remedy. The Executive acknowledges
that money damages would be both incalculable and an insufficient remedy for a
breach of Section 6 or 9 by the Executive and that any such breach would cause
the Company irreparable harm. Accordingly, the Company, in addition to any other
remedies at law or in equity it may have, shall be entitled, without the
requirement of posting of bond or other security, to equitable relief, including
injunctive relief and specific performance, in connection with a breach of
Section 6 or 9 by the Executive. If the Executive breaches in any material
respect any of the material provisions of Section 6 or 9, following termination
of Executive’s employment, the Company will have the right to cease making any
payments otherwise due to the Executive under this Agreement.

     (h)  Entire Agreement; Amendments. The provisions of this Agreement
constitute the complete understanding and agreement between the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, between or among the parties hereto. This
Agreement may not be amended orally, but only by an agreement in writing signed
by the parties hereto or their respective successors and legal representatives.

     (i)  Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same Agreement.

EMPLOYMENT AND NON-COMPETITION AGREEMENT — Page 11

 

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     (j)  Covenants of Sections 6 and 9 are Essential and Independent Covenants.
The covenants by the Executive in Sections 6 and 9 are essential elements of
this Agreement, and without the Executive’s agreement to comply with such
covenants, the Company would not have entered into this Agreement or employed or
continued the employment of the Executive. The Company and the Executive have
independently consulted their respective counsel and have been advised in all
respects concerning the reasonableness and propriety of such covenants, with
specific regard to the nature of the business conducted by the Company.

     (k)  Section Headings, Construction. The captions or headings of Sections
in this Agreement are provided for convenience only and are not part of the
provisions hereof and shall have no force or effect. Whenever the terms
“hereof’, “hereby”, “herein”, or words of similar import are used in this
Agreement they shall be construed as referring to this Agreement in its entirety
rather than to a particular section or provision, unless the context
specifically indicates to the contrary. Any reference to a particular “Section”
or “paragraph” shall be construed as referring to the indicated section or
paragraph of this Agreement unless the context indicates to the contrary. The
use of the term “including” herein shall be construed as meaning “including,
without limitation.”

EXECUTED to be effective as of September 9, 2003.

              EXECUTIVE:
 
            /s/ Charles L. Elsey

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Charles L. Elsey, Individually
 
            COMPANY:
 
            DOMISTYLE, INC.,
a Texas corporation
 
       

  By:   /s/ Michael D. Lohner

     

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      Michael D. Lohner, Chief Executive Officer

EMPLOYMENT AND NON-COMPETITION AGREEMENT — Page 12