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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 EMPLOYMENT AND NON-COMPETITION AGREEMENT  Page 1




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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 EMPLOYMENT AND NON-COMPETITION AGREEMENT  Page 2




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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 EMPLOYMENT AND NON-COMPETITION AGREEMENT  Page 3




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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 EMPLOYMENT AND NON-COMPETITION AGREEMENT  Page 4




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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. EMPLOYMENT AND NON-COMPETITION AGREEMENT  Page 5




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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 EMPLOYMENT AND NON-COMPETITION AGREEMENT  Page 6




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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 EMPLOYMENT AND NON-COMPETITION AGREEMENT  Page 7




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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: EMPLOYMENT AND NON-COMPETITION AGREEMENT  Page 8




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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. EMPLOYMENT AND NON-COMPETITION AGREEMENT  Page 9




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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 75254If to the Company:
    
    Domistyle, Inc.
1649 Frankford Road West
Carrollton, Texas 75007
Attn: Chief Executive OfficerWith 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. EMPLOYMENT AND NON-COMPETITION AGREEMENT  Page 10




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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

Charles L. Elsey, IndividuallyCOMPANY:DOMISTYLE, INC.,
a Texas corporationBy:
    
    /s/ Michael D. LohnerMichael D. Lohner,
Chief Executive Officer
 EMPLOYMENT AND
NON-COMPETITION AGREEMENT  Page 12