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                                                                    Exhibit 10.9

                             TERMS OF SEPARATION

Spiegel, Inc. agrees to pay James W. Sievers severance pay in the amount of
four million dollars ($ 4,000,000). This severance pay will be paid to Sievers
in a lump sum no later than July 6, 2001. In addition Spiegel, Inc. will
further pay Sievers at the same time an amount of six hundred and seventy-one
thousand dollars ($ 671,000) in a lump sum which represents bonuses, incentive
plan award and salary for the first six months of 2001. Further Sievers will
receive as salary for the period January 1, 2001 to and including June 30,
2001, compensation calculated based on $420,000 per year as well as other non
cash benefits which are or shall be adopted by Spiegel Inc. covering its senior
management staff. Further, Spiegel agrees to the terms of separation (12/6/00)
attached here to as an addendum to this agreement to the extent they

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are not inconsistent but rather additive to the overall agreement. Sievers
shall perform his current duties and responsibilities and assist with the
transition for the transition period from January 1, 2001 to June 30, 2001.

This agreement is contained in this document and the addendum attached.

Acknowledged, agreed, and accepted as of 12/30/2000.

Spiegel, Inc.

                                                     /s/ James W. Sievers
                                                     --------------------------
                                                     By: James W. Sievers

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                                  ADDENDUM

This Addendum made a part of an agreement dated December 30, 2000 between
Spiegel Inc. and James W. Sievers.

                            TERMS OF SEPARATION
                            -------------------

COMPENSATION FOR YEAR 2000
--------------------------

     My normal salary for 2000 shall continue to be paid on its current
schedule. In addition, no later than February 28, 2001, Spiegel shall pay me my
annual bonus, my long term incentive bonuses for 2000, and profit-sharing,
SERP, and other regular benefits earned through calendar year 2000 in
accordance with the formulas, policies and practices currently in effect for
such matters.

SEVERANCE PAY
-------------

     In accordance with paragraph 3 of my Employment Agreement, Spiegel shall
pay me severance pay equal to the economic value of my entire annual
compensation and benefit package for the remaining term of my Employment
Agreement and for an additional period of twenty-four (24) months. Such
severance pay shall be based on the following:

          .     my present salary;
          .     my annual and long-term incentive bonuses at 2000 levels;
          .     my profit-sharing, 401(k), and SERP contributions for 2000;
                and
          .     my automobile, club, financial, tax, insurance allowances for
                2000.

RETIREMENT PACKAGE
------------------

     In accordance with my Employment Agreement and with the normal retirement
policies and practices for senior level executives, Spiegel shall provide me
with a retirement package that consists of the following:

          .     Spiegel shall continue to pay, on the same basis that it
                currently does, the company share of premium for my individual,
                paid-up split dollar and executive life insurance policies until
                I attain age 65;

          .     Spiegel shall provide medical, dental and vision insurance
                coverage at regular retiree rates to me and my wife until we
                both reach age 65;

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          .     All of my unexpired stock options will be extended until
                December 31, 2003 as non-qualified, fully vested options;

          .     In the event of any claim, lawsuit or other legal proceeding
                against me or otherwise involving me which arises from my
                involvement as an officer, director, employee or agent of
                Spiegel, any of its parent, subsidiary or affiliated companies
                or any company owned or otherwise associated with Otto Versand,
                Spiegel will indemnify me, hold me harmless, and pay my
                attorneys' fees and other legal expenses. Spiegel also will
                maintain appropriate insurance coverage for any liabilities that
                might potentially arise from such matters; and

          .     in addition to the above, Spiegel shall provide me with all
                other benefits usually afforded to its retired executive
                officers.

COMPENSATION DURING TRANSITION PERIOD
-------------------------------------

     For the transition period from January 1, 2001 to and including June 30,
2001, I shall perform my current duties and responsibilities and assist with
the transition, and Spiegel shall compensate me on my current compensation and
benefit terms except that my base salary shall be increased to $420,000 per
year. Thus, my compensation shall include but not be limited to:

          .     annual base salary of $420,000;
          .     annual and long-term incentive bonuses; and
          .     full vacation, savings, 401(k), profit-sharing, health
                insurance, life insurance, disability insurance, club,
                automobile and other benefits which are or shall be adopted by
                Spiegel covering its senior executive management staff.

Acknowledged and Accepted as of December 6, 2000:

Spiegel, Inc.

/s/ Martin Zaepfel                                 /s/ James W. Sievers
-----------------------                            ----------------------------
By: Martin Zaepfel, Director                            James W. Sievers

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