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                                                                    EXHIBIT 10.1

                    EMPLOYMENT AND NON-COMPETITION AGREEMENT

      THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "Agreement") is made
effective as of January 1, 2004, between HOME INTERIORS & GIFTS, INC., a Texas
corporation (together with its successors and assigns, the "Company"), and
MARY-KNIGHT TYLER (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 one hundred twenty (120) days prior to the end of the initial
term, or any annual extension thereof, that it 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 have
            the title of Senior Vice President of Operations of the Company and
            shall report to the President of the Company or such other member of
            executive management as shall be designated by the President. The
            Executive shall have such powers and duties as may from time to time
            be assigned or delegated to her by appropriate officers of the
            Company, or, in the absence of such assignment or delegation, shall
            have such powers and duties as are normally associated with and
            inherent in such position.

                  (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 shall be necessary (which
            shall not be less than forty (40) hours during a regular work week),
            up to and including substantially all of her business time, to the
            business and affairs of the Company and, to the extent necessary to
            discharge the responsibilities assigned to the Executive hereunder,
            to use the Executive's reasonable best efforts to perform
            faithfully, effectively and efficiently such responsibilities. The
            Executive will use her reasonable best efforts to promote the
            success of the Company's business, and will cooperate fully with the
            Board of Directors and executive management of the Company.
            Notwithstanding the foregoing, nothing herein prohibits Executive
            from serving on corporate, civic or charitable board or committee,
            or from delivering lectures and fulfilling speaking engagements, or
            managing personal investments; provided

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            that such activities do not significantly interfere with Executive's
            obligations hereunder.

            (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 One Hundred Ninety Thousand
            and No/100 Dollars ($190,000.00), 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 increase, 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
            senior executives of the Company (the "Annual Bonus") for the fiscal
            year of the Company ending December 31, 2004 and thereafter during
            the term of this Agreement, as may be extended from year to year, 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. The Annual Bonus (or portion thereof) shall be in an amount
            up to forty percent (40%) of Executive's Annual Base Salary, paid in
            cash promptly following delivery to the Board of Directors of the
            Company of audited financial statements of the Company 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.

            (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. In addition, during the term of Executive's employment,
      the Company shall (A) pay all medical, dental and vision insurance costs
      for the Executive and the Executive's family, including all premiums and
      co-payments, and (B) increase the Executive's and family members' annual
      maximum dental covered expenses from $1,000 to $5,000.

            (e)   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

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      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.

            (f)   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.

            (g)   Automobile. In addition to the other compensation to be
      provided to the Executive under this Agreement, the Company shall provide
      to the Executive reimbursement for the use of a vehicle. In satisfaction
      of this Section 2(g), 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 her current vehicle.

            (h)   Physical Exam. During the term of the Executive's employment,
      the Company shall reimburse the Executive for all costs associated with
      Executive's physical exam at the Cooper Clinic or a similar facility;
      provided, that the Executive shall only be reimbursed for the costs of one
      such exam during each calendar year.

      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 later of 30 days from the date specified in such notice
      or the date that Executive's disability benefits begin (the "Disability
      Effective Date"). For purposes of this Agreement, "Disability" shall mean
      the Executive's inability to perform her duties and obligations hereunder
      for a period of one hundred twenty (120) consecutive days or any one
      hundred twenty (120) 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 her 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

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      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 her 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 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 three (3) months prior written
      notice to the Company of the Executive's intention to do so.

            (d)   Termination for Good Reason. The Executive may terminate her
      employment at any time for Good Reason. For purposes of this Agreement,
      "Good Reason" shall mean (i) any reduction, approved by the Board of
      Directors without the Executive's written consent, in the Executive's
      title or the Executives' Base Salary other than under a circumstance that
      constitutes Cause; provided, that any such reduction or alteration in the
      Executive's title without the Executive's consent during the thirty-day
      cure period applicable to subparagraph (viii) of Section 3(b) shall not
      constitute Good Reason; (ii) any alteration, approved by the Board of
      Directors without the Executive's written consent, in the Executive's
      duties, which alteration results in duties that are not commensurate with
      Executive's title in businesses of similar size and complexity (it being
      understood that alterations in Executive's duties are contemplated during
      the term of this Agreement), other than under a circumstance that
      constitutes Cause; provided, that any such alteration in the Executive's
      duties without the Executive's consent during the thirty-day cure period
      applicable to subparagraph (viii) of Section 3(b) shall not constitute
      Good Reason; and (iii) a change, without the Executive's written consent,
      of more than fifty (50) miles in the office or location where the
      Executive is based. Notwithstanding the above, the occurrence of any of
      the events described above will not constitute Good Reason unless the
      Company fails to cure any such event within thirty (30) days after receipt
      from the Executive of the Notice of Termination (as defined in Section
      3(e)).

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            (e)   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
      1l(b).

            (f)   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. If the
      Company terminates the Executive without Cause or in connection with death
      or Disability or fails to renew this Agreement beyond the initial term
      ending December 31, 2004, or any extension term, or if the Executive
      terminates this Agreement 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 twelve (12) months 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.

            (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 her
      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 her legal representatives under this Agreement.

            (c)   Termination by the Company for Cause or by Executive. If the
      Executive's employment shall be terminated by the Company for Cause or
      terminated by the Executive, 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

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      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 her employment, the Executive will be and has been afforded
      access to confidential information of the Company and its Affiliates, as
      defined herein. The Executive further acknowledges that for purposes of
      this Agreement, "Affiliates" shall be defined as any corporation,
      partnership, limited liability company or other entity controlling,
      controlled by or under common control with the Company, 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 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 and its
      Affiliates, provided that such source was not known by Executive to be
      bound by a confidentiality agreement with the Company 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 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 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

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      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, she will provide the Company with prompt written
      notice of such requirement prior to disclosure so that the Company may
      seek appropriate relief. If such 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 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

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      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 her under this Agreement are of a special, unique, unusual,
      extraordinary, and intellectual character; (ii) the Business is
      international in scope and the Company's and its Affiliates' products are
      marketed throughout the United States and the world; (iii) the Company
      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 and its Affiliates' production
      and sale of home decorative and garden decorative products of the types
      offered for sale by the Company 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 she will not,
      directly or indirectly:

                  (i)   during the Employment Period, except in the course of
            her 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 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 to any customer of the
            Company 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 or its
            Affiliates or in any manner induce or attempt to induce any employee
            of the Company or its Affiliates to terminate her employment with
            the Company or its Affiliates; or

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

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            (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.

            (f)   The term "Post-Employment Period" means the one (1) year
      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 and the
      Affiliates' proprietary information, plans and services and to protect the
      other legitimate business interests of the Company 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:

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            If to the Executive:  Mary-Knight Tyler
                                  619 Stratford Lane
                                  Coppell, Texas 75019

            If to the Company:    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.

            (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

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 10

<PAGE>

      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.

            (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."

                            (SIGNATURE PAGE FOLLOWS)

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 11

<PAGE>

      EXECUTED to be effective as of January 1, 2004.

                                          EXECUTIVE:

                                          /s/ Mary-Knight Tyler
                                          --------------------------------------
                                          Mary-Knight Tyler, Individually

                                          COMPANY:

                                          HOME INTERIORS & GIFTS, INC.,
                                          a Texas corporation

                                          By: /s/ Michael D. Lohner
                                              ----------------------------------
                                                 Michael D. Lohner
                                                 President

EMPLOYMENT AND NON-COMPETITION AGREEMENT - Page 12