<PAGE>
 
                                                                        10. (xv)

March 6, 1998



Worthington W. Linen
300 Central Park West
New York, NY  10024

Dear Worth:

This document is the Employment Agreement between you and The Signature Group.
The terms of your Employment Agreement are as follows:

POSITION
--------

     Your job title is Chairman & Chief Executive Officer, The Signature Group.
     You will report to the Chairman and C.E.O. Montgomery Ward and be a member
     of the Signature Group Board of Directors and Executive Committee.

BASE SALARY
-----------

     Your annual base salary is $700,000 and is paid semi-monthly.  Any salary
     adjustments will require approval of the Signature Board of Directors and
     the Compensation Committee of the Montgomery Ward Board of Directors.
     However, your compensation (both base and target bonus level) will be
     reviewed for adjustment annually, and neither your base nor your target
     bonus will be decreased without your written consent.

SHORT TERM BONUS
----------------

     Your short term incentive plan target bonus is $350,000 annually.  Based
     upon the achievement of specific goals conveyed to you in January of each
     year beginning in 1999 as determined by the Chairman & CEO of Montgomery
     Ward or his designee, subject to approval by the Compensation Committee of
     the Montgomery Ward Board of Directors which approval will not be
     unreasonably withheld, you may earn from zero up to 150% of your annual
     target bonus amount.  Your target bonus award for each year shall be
     calculated and paid during the first fiscal quarter of the following year.

     For 1998 your annual target bonus award of $350,000 is guaranteed.

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

     Due to Montgomery Ward's Chapter 11 filing and the Signature Group's
     relationship with Montgomery Ward, the specifics of long term equity awards
     to individual participants are not possible to announce at this time.
     However, upon

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     Montgomery Ward's emergence from bankruptcy or a Signature I.P.O., you will
     be eligible for participation in any equity or equity-like compensation
     plan(s) actually implemented, at a level consistent with your position with
     Signature, provided that you are actively employed by Signature at such
     time and Signature is still owned by Montgomery Ward.  We will work with
     you to develop any equity plan in a manner that will provide a mutually
     beneficial tax consequence for all parties if possible.

SPECIAL LONG TERM BONUS PLAN
----------------------------

     For the period of fiscal 1998 through fiscal 2001, you will participate in
     a one-time Special Long Term Bonus Plan as Signature's Chief Executive
     Officer.  This plan will reward you for your ability to increase the
     Earnings Before Interest and Taxes without Admin. Fee (E.B.I.T.) for the
     Signature Group.

     Using year-end 1997 E.B.I.T. for Signature of $90.2 million as your base
     line, you will receive a bonus award of 1.5% of the E.B.I.T. dollars over
     $90.2 million for each year of 1998 and 1999 which will be paid in the
     first quarter of 2000.  A second bonus award of 1.5% of the EBIT dollars
     over $90.2 million for each year of 2000 and 2001 will be paid in the first
     quarter of 2002. These long term bonus awards will be paid as soon as
     possible after the final numbers for 1999 and 2001 are finalized.

     As an example, if you achieve the current forecasts for Signature's
     E.B.I.T. dollars for each year through 2001, your Long Term Bonus Plan
     would pay out as follows:

<TABLE>
<CAPTION>
     ------------------------------------------------------------------------------------------------------ 
                                                First Two                                   Second Two  
                                                Year Award                                  Year Award  
                         1998        1999     Total Increase        2000          2001    Total Increase
                       --------    --------   --------------      --------      --------  --------------
     <S>               <C>         <C>       <C>             <C>       <C>           <C>                           
     Forecast EBIT*    $115.2MM    $128.1MM                       $141.2MM      $150.7MM                           
     1997 Base Line      90.2MM      90.2MM                         90.2MM        90.2MM                           
                       --------    --------                       --------      --------                           
                                                                                                                   
     EBIT Increase       25.0MM      37.9MM       $62.9MM           51.0MM        60.5MM    $111.5MM    
                                                  x  .015                                   x   .015 
                                                  -------                                   -------- 
                                                  $.944MM                                   $1.673MM  
     ------------------------------------------------------------------------------------------------------ 
</TABLE>
        
     *  Changes in accounting practices/rules will not negatively impact you or
        the calculation of this bonus award. If such changes occur, your bonus
        award will be calculated using the current methodology.

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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             

RELOCATION PLAN
---------------

     Signature will provide you with a relocation plan, including movement of
     household goods, househunting trips, home purchase plan at 100% of the
     appraised value of your home, and payment of your closing costs, without
     limitation, on your home purchase, plus up to two points on your financing
     of a new home.  Your temporary housing expenses in the Chicago area for the
     first six months (or until relocation, if sooner) will be paid by
     Signature.  You will be paid for your airfare to New York City weekly
     during your temporary living period.  You will receive a gross up for the
     taxes (35% Federal and 3% State) you incur as a result of your relocation
     expenses.

     Additionally, you will receive a relocation allowance of $50,000 to handle
     incidental personal expenses in the move.

TERMINATION PLAN
----------------

     The term of this employment agreement is for April 1, 1998 until December
     31, 2001.  If your employment is terminated by Signature for any reason
     other than "Cause" as defined below or your voluntary resignation, you will
     receive within 30 days following your termination (with no mitigation
     obligation), a lump sum payment equal to 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.  In addition, you will receive
     in the first quarter after the fiscal year end of the year in which you
     were terminated, the portion of your Special Long Term Bonus Plan for the
     period that you have worked.  The calculation will include any year end
     earnings for the year in which you are terminated.

     You will be given six months written notice if this agreement is not going
     to be renewed at the end of its term.  If it is not renewed, you will
     receive within thirty (30) days following the end of this agreement (with
     no mitigation obligation) a lump sum payment equal to twenty-four months
     base salary, as well as the outplacement and Executive Benefits, and any
     award due under the Special Long Term Bonus Plan.

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<PAGE>
 
     "Cause" shall mean (i) your willful failure for reasons, other than an
     illness or disability, 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  Montgomery Ward,
     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.  No
     termination under clause (i) or (ii) above shall be effective unless:  (1)
     within ten (10) business days of any action by you which causes the Board
     of Directors to conclude that cause exists, the Board provides written
     notice to you specifying in detail the nature of the claimed cause; and (2)
     you, without conceding that cause exists, have the opportunity to cure the
     alleged infraction as soon as practical but no later than thirty (30) days
     after receipt of the applicable notice (or such longer time as may be
     reasonably required by the nature of the alleged breach).

     For purposes of this agreement, any diminution of your job title, executive
     committee membership, board membership, base salary, target bonus, other
     compensation or benefits, a reduction in your job responsibilities, or, if
     Signature remains a subsidiary of Montgomery Ward, a change in your
     reporting relationship, or, if there is a Change of Control event as
     defined below, a substantial diminution in your reporting relationship
     within the new organization, without your prior written approval during the
     term 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 Montgomery Ward or his successor as
     your supervisor within sixty (60) days of the triggering event and the
     Company will have thirty (30) days to cure an action that caused your
     election to separate under this section.

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

     After a Change of Control Event as defined below, and for a period of four
     years after such date, if you are separated from the Company under
     provisions in the Termination Plan above (including any of the diminutions
     provisions under which you may elect to leave the Company), the lump sum
     severance payment payable within 30 days after your separation (with no
     mitigation obligation) will be twenty-four months base salary, plus two
     times your target bonus amount.  Your Executive Benefits will continue for
     two years from your separation date.  If the Change of Control Event is
     completed after December 31, 1998, you will also receive the portion of
     your Special Long Term Bonus Plan for the period that you were employed
     including any earnings for the year of your separation or $900,000,
     whichever is greater.

     A "Change of Control Event" shall mean 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 assets of The Signature
     Group or its Parent Company; a merger or consolidation in which Signature
     is not the surviving entity; a sale or other transfer where more than fifty
     percent (50%) of the voting 

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<PAGE>
 
     stock of Signature is no longer owned by Montgomery Ward. However, this
     provision does not apply to an internal reorganization of Signature within
     Montgomery Ward so long as Signature remains a direct or indirect majority-
     owned subsidiary of Montgomery Ward.

     The Signature Group or its successor company will reimburse you for all
     reasonable attorney fees needed to enforce your rights under this section
     if the Company is found to be in breach of this Agreement.

     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 The Signature Group, 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 Cendant, Sears, Discover,
     Memberworks nor J. C. Penney or any of their affiliates for a period of one
     (1) year following your termination date.

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<PAGE>
 
This Agreement will be subject to the Laws of Illinois where applicable.

Each of the individuals signing this Agreement represents to the others that he
has the right, capacity, power and authority to sign this Agreement on his
behalf, or on behalf of Montgomery Ward and The Signature Group, as the case may
be.  This Agreement may be signed in counterparts, and facsimile signatures are
deemed original signatures for purposes of executing this Agreement.

If you are in agreement with this letter, please sign for your acceptance below
and return it to me.

Agreed to and Accepted for
Montgomery Ward and
The Signature Group


/s/ Roger V. Goddu
-------------------------------------------
      Roger V. Goddu                       
      Chairman & Chief                     
      Executive Officer                    
      Montgomery Ward & Co. Incorporated   
                                           
                                           
/s/ Worthington Linen                      
-------------------------------------------
            Agreed to and Accepted by
                                    

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