<PAGE>
 
                                                                   10.(xiv)(B)
                                                                                
                                   AMENDMENT
                                   ---------
                                        

                                THIS AMENDMENT
                     IS ADDED TO THE EMPLOYMENT AGREEMENT 
                   OF SPENCER H. HEINE DATED APRIL 13, 1997
                                        
As you know, Montgomery Ward's filing under Chapter 11 on July 7, 1997
necessitated the re-approval by the Court of all Senior Executive Employment
Agreements.  This letter re-affirms our April 13, 1997 Employment Agreement with
you and adds this Amendment as a part of your Employment Agreement going
forward.  The terms of your agreement as a member of the Senior Executive Team
at Montgomery Ward  remain the same except that decisions concerning equity
considerations will be deferred until Montgomery Ward emerges from bankruptcy
with a confirmed Plan of Reorganization and the following provisions are added
to and modify your existing April 13, 1997 Employment Agreement:

EQUITY CONSIDERATION
--------------------

     Due to Chapter 11 filing, the specifics of long term equity awards to
     individual participants are not possible to announce at this time.
     However, upon the company's emergence from bankruptcy, you will be eligible
     for participation in any equity plans at a level consistent with your
     Executive Committee peers, provided that you are actively employed by
     Montgomery Ward at such time and have a satisfactory performance
     evaluation.

EMERGENCE PLAN
--------------

     In lieu of equity participation during the Chapter 11 process, you will
     participate in a special Emergence Bonus Plan (copy attached) that has a
     target range of $200,000 to $500,000 that is payable upon Montgomery Ward's
     emergence from bankruptcy with a confirmed Plan of Reorganization.

BENEFITS & PERQUISITES
----------------------

     In addition to all normal company benefit plans, you will participate in
the following Executive Benefits Plan:

               .  Annual Physical Examination
               .  Executive Accident Insurance
               .  Executive Medical Coverage
               .  Executive Vacation
<PAGE>
 
TERMINATION PLAN
----------------

     The term of this employment agreement is for October 1, 1997 until October
     1, 2000.  If your employment is terminated by Montgomery Ward for any
     reason other than "Cause" as defined below or your voluntary resignation,
     you will receive a lump sum payment equal to the greater of your base
     salary for the remainder of the agreement period; or, your base salary for
     a twenty-four month period.

     In addition, you will receive Executive Outplacement Services and continue
     to participate in Executive Benefits Plans which includes the Health Care
     Plan along with "Benefits and Perquisites" described above for the twenty-
     four month period following your separation.

     If this agreement is not renewed at the end of its term, you will receive
     within thirty (30) days following the end of this agreement a lump sum
     payment equal to twenty-four months base salary, as well as the
     outplacement and Executive Benefits.

     "Cause" shall mean (i) your willful failure to substantially perform your
     duties hereunder, (ii) your willful failure to follow a written, lawful
     order or written directive for the Board of Directors or Chief Executive
     Officer of the company, or (iii) your conviction of any kind of felony or
     any misdemeanor involving moral turpitude.  For purposes of this paragraph,
     no act, or failure to act, on your part will be considered "willful" unless
     such act, or failure to act by you was not in good faith and was without
     reasonable belief that your action or omission was in the best interest of
     the Company.

     For purposes of this agreement, any diminution of your job title, executive
     committee membership, base salary, target bonus, other compensation or
     benefits, or a reduction in your job responsibilities, or a relocation of
     your job location of greater than 50 miles from the present location
     without your prior written approval during the terms of this agreement,
     will allow you to elect the terms of this section as if you were terminated
     without "Cause".  However, such election must be done in writing to the
     Chairman & CEO within sixty (60) days of the triggering event.

CHANGE OF CONTROL
-----------------

     After a Change of Control Event as defined below, and for a period of three
     years after such date, if  you are separated from the Company under
     provisions in the Termination Plan above (including any of the diminutions,
     reductions or relocation provisions under which you may elect to leave the
     Company), the lump sum severance payment will be three years base salary,
     plus three times your target bonus amount.  In addition, your Executive
     Benefits will be extended to three years from your separation date.

     A "Change of Control" shall mean:

     (i) any sale, lease, license, exchange, or other transfer (in one
     transaction or a series of related transactions) of all, or substantially
     all, of the business and for assets of the Company or Holding (without
     regard to Signature);
<PAGE>
 
     (ii) the possession by any person or entity (other than Holding, General
     Electric Capital Corporation or an affiliate of either of them) of
     beneficial ownership (as such term is defined in Rule 13d-3 under the
     Securities Exchange Act of 1934, as amended) of either (A) a number of
     securities carrying a greater voting power than General Electric Capital
     Corporation and its affiliates  taken together or (B) over 50% of the then
     outstanding voting securities of the Company (entitled to vote generally in
     the election of directors) ("Outstanding Company Voting Securities"); or

     (iii) merger, consolidation or reorganization ("Business Combination")
     unless following such Business Combination all or substantially all of the
     individuals and entities who were the beneficial owners of the Outstanding
     Company Voting Securities immediately prior to such Business Combination
     beneficially own more than 50% of the combined voting power of the then
     outstanding voting securities entitled to vote generally in the election of
     directors of the entity resulting from the Business Combination in
     substantially the same proportions as their ownership immediately prior to
     the Business Combination of the Outstanding Company Voting Securities;
     provided that a Change of Control shall not be construed to include any
     transaction that occurs solely as a result of transfer of equity to holders
     of claims against the Company or Holding or any affiliate on account of
     such claims in connection with the consummation of a plan of reorganization
     for the Company or Holding or any affiliate in connection with the
     proceedings under Chapter 11 of the United States Bankruptcy Code pending
     at the date of hereof.

     Except as provided in the following sentence, payments pursuant to this
     employment agreement ("Payments") shall not exceed the largest sum
     ("Parachute Limitation") which will not result, directly or indirectly, in
     the treatment of any amount paid or payable by the Company or any successor
     to you (whether or not pursuant to this employment agreement, and including
     the Payments) as an Excess Parachute Payment.  Notwithstanding the
     preceding sentence, you shall receive the full amount of the Payments
     without regard to the Parachute Limitation if you would realize a greater
     aftertax amount receiving the full amount of the Payments without regard to
     the Parachute Limitation than you would realize by receiving the Payments
     limited to the Parachute Limitation as provided in the preceding sentence.

     All computations and determinations required by the preceding paragraph
     shall be made by your accountant, acting in good faith. The computations
     and determinations made any time by your accountant shall affect only those
     Payments not yet made pursuant to this employment agreement. For purposes
     of this employment agreement, the term "Excess Parachute Payment" shall
     have the same meaning as the term "excess parachute payment" has under
     section 280G of the Internal Revenue Code of 1986, as amended and the
     regulations thereunder.

NON-COMPETE
-----------

     In the event that you voluntarily leave Montgomery Ward, you will be bound
     by a non-compete agreement that provides that you will not be directly
     employed by nor perform work as director, officer, independent contractor,
     partner, or consultant for Sears, K-Mart Corporation, WalMart Stores Inc.,
     Dayton Hudson Corporation or J.C. Penney or any of their affiliates for a
     period of one (1) year following your termination date.
<PAGE>
 
This Agreement will be subject to the Laws of Illinois where applicable.


 
                                            /s/ Spencer Heine
                                          -----------------------------
                                            November 3, 1997
                                          -----------------------------
                                            Date
 
 
 
                                            /s/ Robert A. Kasenter
                                          -----------------------------