<PAGE>
 
                                                                 10. (ix) (B)

November 3, 1997


Alan DiGangi
Executive Vice President
Appliances, Electronics & Automotive
Montgomery Ward
Chicago, IL 60671

Dear Al:

As we discussed, last Friday, October 31, 1997, the court approved our Executive
Compensation Plan for Executive Committee members.  A copy of the court order is
attached.  This package includes the pieces of your personal compensation and
security plan for your position at Montgomery Ward.

Your plan includes:

     1.)  A new employment agreement providing your position, base salary
          and incentive arrangements.

     2.)  The Wards Executive Committee Severance Plan.

     3.)  The Montgomery Ward Special Emergence Bonus Plan.

Please read your agreements and plan documents very carefully.  Payments under
these plans are considered "administrative" claims and have a very secure
priority in our claims payment.  If you have any questions, please contact Bob
Kasenter and he will provide you with any answers.

Once you are comfortable with your participation in your plans, please sign the
documents and return them to Bob.

These plans provide us with the incentives and the security we requested so that
we can focus on the turnaround of our company.  Now it is up to us to make it
happen.

Sincerely,


/s/ Roger V. Goddu
-------------------------
Roger V. Goddu
Chairman and C.E.O.

Attachment
<PAGE>
 
 
                                MONTGOMERY WARD
                          SPECIAL EMERGENCE BONUS PLAN
                                        

Alan Di Gangi
EVP Appliances, Electronics & Automotive
Montgomery Ward


Dear Al:

You have been selected to participate in a special Emergence Bonus Plan for
members of the Montgomery Ward Executive Committee. This Plan will pay you a
lump-sum bonus based upon the date we have a court approved Plan of
Reorganization (POR). Your bonus potential is as follows:

<TABLE>
<CAPTION>
                     Bonus Amount             POR APPROVAL AS OF
                    --------------           --------------------
                    <S>                      <C>
                       $531,250              April 1, 1999
                       $425,000              October 1, 1999
                       $212,500              After October 1, 1999
</TABLE>

The bonus amount earned based upon the date of the POR's approval will be paid
within thirty (30) days of the approval. This bonus payment will be subject to
the following rules:

1.   Any award under this plan will be made as a lump sum payment and will be
     subject to normal tax withholding.

2.   In order to receive an award payment under this plan, except for a Change
     of Control, the participant must be actively employed by the Company upon
     approval of a POR from the bankruptcy court.

3.   In the event of a Change of Control as defined in the Wards Executive
     Committee Plan, participants who are actively employed as of the date of
     the change of control and who are no longer employed by the company upon
     approval from the bankruptcy court of a POR will be eligible for an award
     under the plan if the separation date is within six months of the approved
     POR.
<PAGE>
 
By copy of this letter, you are offered participation in this Special Emergence
Bonus Plan. If you agree to participate and be governed by the rules of this
plan, please sign your acceptance below and return this letter to Bob Kasenter.

This plan offers us an opportunity to earn a bonus for successfully doing what
we want to do.....emerge from bankruptcy quickly. With your help, we will
accomplish this goal.

Sincerely,


/s/ Roger V. Goddu
---------------------------------
Roger V. Goddu
Chairman & CEO


I have read the Wards Executive Committee Severance Plan and understand its
terms and have voluntarily signed this Agreement thereby agreeing to participate
in this Plan and accept its provisions.


Alan DiGangi
---------------------------------
          Print Executive's Name
 
 
/s/ Alan DiGangi
---------------------------------
          Executive's Signature
 
         November 6, 1997
_________________________________
                Date