Document:

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                                                                    EXHIBIT 10nn

May 4, 2001

Jeff Boyer
39850 Blue Star Hwy.
Covert, MI 49043

Dear Jeff,

This letter will confirm our offer of a position with Kmart Corporation as
Executive Vice President, Chief Financial Officer effective May 7, 2001. In this
position you will report to Chuck Conaway, Chairman of the Board and Chief
Executive Officer. This offer and all terms outlined below are subject to
approval by the Kmart Corporation Board of Directors.

We are offering you an initial base salary of $500,000, to be paid to you on a
semi-monthly basis. Based on current practice, your base salary will be reviewed
annually and adjusted, if appropriate, in May, 2002.

In addition to your base salary, you will be provided with the opportunity to
earn an annual performance bonus. The actual bonus is based on Company financial
performance relative to pre-established performance objectives. Your annualized
target award for fiscal 2001 is $275,000. The annualized bonus award has an
upside opportunity of $618,750. For 2001, your actual award under the plan will
be prorated based on time on the job. However, we will guarantee a minimum bonus
payment of $200,000 for fiscal 2001, provided you are employed with Kmart prior
to January 30, 2002. If you terminate your employment with Kmart within twelve
months of your bonus payment, you will be required to reimburse us the full
$200,000.

Under current practice, each year, you will be granted non-qualified stock
options under the long term incentive component of your compensation package.
Initially (i.e., 2002) you will be granted stock options with an annualized
target economic value of approximately $683,000. Under current practice, these
stock options vest over a three-year period, at a rate of 1/3 per year of
service.

You will also be eligible to participate in a Long Term Performance Incentive
Plan tied to the company's achievement of both financial and non-financial
strategic objectives. The performance period for the incentive plan spans eight
quarters. Your target award opportunity for the 2001 - 2002 performance cycle is
$170,800 with an upside potential of $256,200.

As an incentive to joining the Kmart Team we will provide you the following:

     o   120,000 non-qualified stock options. The stock options will cliff on
         the third anniversary of your date of hire. The strike price for these
         special stock options will be set at the fair market value on your date
         of hire.

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     o   Special one-time cash hiring incentive of $100,000. The hiring
         incentive will be paid to you within the first 7 days of your
         employment. If you terminate your employment with Kmart before your
         first anniversary, you will be required to reimburse us this hiring
         incentive.

     o   Special Supplemental Executive Retirement Plan benefit (SSERP). The
         value of this benefit to you is up to 50% of your final average
         compensation.

As a member of the Executive Leadership Team, in exchange for you signing a
comprehensive agreement (enclosed) covering confidentiality, non-competition and
non-solicitation, you will also receive other special incentives that are
detailed in the attached and outlined below:

     o   Special one-time cash incentive of $500,000. This special incentive
         must be paid back in full if you terminate your employment with the
         company prior to January 31, 2004.

     o   Restricted stock award on May 21, 2001 that is valued at $1,500,000.
         These shares will cliff vest on May 20, 2005.

     o   Performance share opportunity of up to an additional 300,000 restricted
         shares. These shares are based on the achievement of corporate
         performance goals.

The company will relocate your household to Michigan. You are eligible for
executive relocation benefits, outlined in the enclosed Relocation Policy. Kmart
Corporation uses a third party professional to assist with the relocation
process. Once this employment offer has been accepted, Relocation Partners will
contact you directly with detailed information. The highlights are:

         o    Kmart policy provides for temporary housing for a period of 90
              days at full tax gross-up. Thereafter, we will review your
              situation on a month-to-month basis.

         o    If you elect to purchase a home in Michigan prior to selling your
              current home, the Company will pay the lesser of the two mortgages
              for up to 6 months in order for you to avoid duplicate payments.

         o    Kmart will assist with real estate commissions on the sale of your
              current home up to a maximum of 6% of sale price.

         o    Kmart will reimburse up to 4% of the amount of the mortgage on
              your new residence. Allowable expenses covered include bank fees,
              attorney fees, mortgage processing, application fees, etc. up to
              the maximum of 4% of the loan.

         o    We will provide you a full-service household goods move.

         o    You will be paid an incidental moving allowance of approximately
              $41,600 (less standard deductions) to provide cash for extraneous
              expenses related to your move.

         o    Should a bridge loan be necessary to enable you to proceed with
              the purchase of a new home in Michigan until the closing on your
              current home is complete, the Company shall provide one to you,
              interest free, for up to 120 days. Thereafter, an interest rate of
              7% per annum will be attached to the loan. The loan amount will
              not exceed the equity in your present home.

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You will be entitled to receive the standard benefits portfolio offering for
Kmart executives. The offering includes medical, dental, disability and 401(k)
savings plans. The portfolio also includes life insurance. The company covers
the cost of the Basic life insurance, which is equal to 1X your base salary
(i.e., initially $500,000). Additional multiples for you and coverage for any
eligible dependents may be purchased, as an option, under the group plan at your
cost.

You will be eligible for 4 weeks of vacation for the remainder of fiscal 2001,
and 4 weeks of vacation each fiscal year thereafter.

Finally, as a corporate officer of the Company, you are entitled to the
following:

         o    Evergreen severance agreement covering your base salary for 24
              months in the event of involuntary termination.

         o    Personal tax and financial planning provided by AYCO.

         o    Annual Company paid physical examination.

         o    Executive Supplemental Long Term Disability (LTD) which covers the
              difference between the basic LTD plan and 100% of pay for the
              first year and 70%, thereafter, up to age 65.

         o    Opportunity for a company vehicle, per our discussion. This
              opportunity assumes that this new officer benefit is approved by
              our Board of Directors.

Jeff, I am very excited to have you join our team and look forward to working
with you in the future. We would appreciate you signing and returning an
original of this letter as confirmation of your acceptance of the position and
your understanding of the compensation terms we have outlined. We have also
attached a copy of the company's severance agreement for you to review. At the
time you begin employment with Kmart an original will be given to you to sign
and date.

Should you have any questions, please do not hesitate to give me a call.

Sincerely,                                  Accepted:

-----------------------------               -------------------------
David P. Rots                               Jeff Boyer

Employment at Kmart Corporation can be terminated by you or the Company at any
time with or without cause; no representative of the Company other than the
Executive Vice President, Chief Administration Officer, has the authority to
enter into any agreement contrary to the following.

In the interest of safety and to promote a safe and productive work environment,
Kmart Corporation conducts mandatory drug testing and this employment offer is
contingent upon favorable results of such testing.<PAGE>
                                                                  EXHIBIT 10 oo

         FULL AND COMPLETE RELEASE OF LIABILITY AND SEVERANCE AGREEMENT

            This Full and Complete Release of Liability and Severance Agreement
(the "Release Agreement") is made and entered into this 23rd day of November,
2001 by and between Kmart Corporation ("Kmart" or the "Company") and Jeffery N.
Boyer ("Boyer"), an individual with an address of 39850 Blue Star Highway,
Covert MI 49043.

            1. In exchange for the consideration contained in paragraph 2 below
and the other terms and provisions herein, Boyer hereby resigns as an officer of
Kmart and any of its affiliates and/or subsidiaries, effective as of November 9,
2001. Further, in exchange for the considerations contained in paragraph 2 below
and other terms and provisions herein, Boyer does hereby release and forever
discharge Kmart and any related or affiliated companies or divisions and their
current or former directors, officers, employees and agents from any and all
actions, causes of action, suits, controversies, claims and demands whatsoever
for, or by reason of any matter, cause or thing whatsoever, weather known or
unknown, including, but not limited to, all claims arising prior to the date
hereof under or in connection with the Worker Adjustment and Remaining
Notification Act, as amended, the Michigan Elliott-Larsen Civil Rights Act, as
amended, the Michigan Whistle Blowers' Protection Act, as amended, the Michigan
Persons with Disabilities Civil Rights Act, as amended, the Age Discrimination
in Employment Act of 1967, as amended, the American with Disabilities Act of
1990, as amended, Title VII of the Civil Rights Act of 1964, as amended, the
Civil Rights Act of 1991, as amended, the employee Retirement Income Security
Act of 1974, as amended, the Older Workers Benefit Protection Act of 1990, as
amended, the Fair Labor Standards Act, as amended, the Family & Medical Leave
Act of 1993, as amended, the common law of the State of Michigan, for tort,
breach of express or implied employment contract or other contract, wrongful
discharge, intentional infliction of emotional distress and defamation or
injuries arising out of this employment. This Release Agreement shall not apply
to any claim (I) for benefits that may be due Boyer under any broad-based
benefit plan of Kmart that provides benefits after termination of employment,
(ii) for indemnification in accordance with paragraph 2(o), (iii) to assert any
affirmative defense in connection with any claim asserted against Boyer, and
(iv) to enforce Boyer's rights under this Release Agreement. Boyer represents
that he has not filed any complaints, charges, or lawsuits arising out of his
employment, or any other matter arising on or prior to the date of this Release
Agreement. Boyer covenants and agrees that he will not seek recovery against
Kmart arising out of any of the matters set forth in this paragraph.

            2. Boyer agrees to accept and Kmart agrees to provide the following
consideration:

            a. Continuation of his base salary of Five Hundred Thousand Dollars
($500,000), less applicable withholding and deductions, for a period commencing
on the date hereof and ending on December 31, 2003, payable monthly. These
payments represent the severance payable to Boyer pursuant to the offer letter
between Boyer and the Company dated May 4, 2001 (the "Offer Letter"). These
payments will be mailed to Boyer's home address on the 1st day of the month and
after expiration of the 7-day revocation period contained in paragraph 12.

            b. Pursuant to COBRA, Boyer has the option to continue his Company
group medical and/or dental plan coverage at the COBRA rate provided his
enrolled dependents are not covered by any other group medical plan or by the
federal Medicare Plan. If continuation of coverage is elected by Boyer, Kmart
agrees to provide 18 months of coverage, or until Boyer obtains employment with
comparable coverage, whichever is sooner, to Boyer at the regular associate
contribution rate to be paid by Boyer on a monthly basis to the Kmart Benefits
Service Center. Boyer agrees to advise Kmart immediately upon obtaining other
employment.

            c. Lump sum payment in the amount of Two Hundred Thousand Dollars
($200,000) which represents the payment of the 2002 Target bonus guaranteed for
the 2002 fiscal year under the Kmart Annual Incentive Compensation Plan if Boyer
continued his employment with the Company through January 30, 2002, pursuant of
the Offer Letter. This payment shall be made, less applicable withholding and
deductions, on January 30, 2002.

            d. Boyer has received the sum of $500,000 pursuant to the terms of
the Confidentiality, Non-Complete and Non-Solicitation Agreement (the
"Non-Complete Agreement"). Notwithstanding the terms of the Non-Complete
Agreement requiring continuation of employment through January 31, 2004, Kmart
agrees that the entire $500,000 is deemed to be fully earned and vested and any
obligation for repayment of such amount is cancelled.

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            e. Kmart will pay for Boyer to receive the Twelve-Month Key
Executive Outplacement Program provided through Right Management Consulting.

            f. A payment, less applicable withholding and deductions,
representing the number of days of his 2001 vacation time that remains unused as
of the date of Boyer's termination of employment. This payment will be mailed to
Boyer's home address promptly after termination of Boyer's employment.

            g. Boyer shall be reimbursed by Kmart for the cost of an executive
physical conducted prior to December 31, 2002 (provided that such reimbursement
shall nor exceed $6,000) and the cost of preparation of 2001 federal and state
tax returns by his attorney and/or accountant (provided that such reimbursement
shall not exceed $5,000). Such reimbursement(s) shall be made promptly following
the presentation of a request for reimbursement accompanied by documentary
evidence of such services and the amount payable for such services.

            h. Pursuant to the Offer Letter, Boyer is obligated to repay to
Kmart the sum of the One Hundred Thousand Dollars (100,000) paid to him upon his
employment with Kmart. Kmart hereby agrees that such repayment obligation is
rescinded and the entire amount of such payment is deemed to have been fully
earned by Boyer.

            i. Kmart has granted 120,000 stock options to Boyer which options
vest in full if Boyer's employment with the Company is continued through May 4,
2004 (the "Option"). Kmart agrees that the Options are hereby fully vested and
exercisable, the term of such Options shall continue and such Options may be
exercised at any time until December 1, 2006.

            j. In the event that Boyer's new employer does not offer or provide
Boyer with a relocation package that includes the payment to Boyer of closing
costs, real estate commissions, moving expenses and reimbursement of any loss on
the sale of his Bloomfield Hills, MI residence (the "Relocation Costs"), or in
the event Boyer relocates prior to such time as he obtains new employment, Kmart
will fully reimburse such Relocation Costs plus an additional amount such that
the net amount retained by Boyer, after deduction of any U.S. federal, state and
or local income or payroll tax equals to the Relocation Costs. Kmart will
reimburse Boyer for monthly mortgage payments (principal, interest and taxes)
during the period in which he is actively marketing such residence for sale, up
to a maximum of twelve (12) months.

            k. Pursuant to the Non-Complete Agreement Boyer was granted 128,315
restricted shares of Kmart common stock and the opportunity to earn an
additional 300,000 restricted shares of Kmart common stock (collectively the
"Restricted Shares"0. Boyer agrees that in consideration of the terms of the
Release and Severance Agreement, all of such Restricted Shares shall be
cancelled and Boyer waives any rights related thereto.

            l. Boyer acknowledges that pursuant to the Kmart Corporation Annual
Incentive Plan and the Kmart Corporation Long-Term Incentive Plan, Boyer has not
earned and is not entitled to the payment of any amount of bonus under either of
such plans, except as expressly set forth in subparagraph c above. Boyer further
agrees that he has not vested in and shall not be entitled to any benefits or
payments pursuant to the Kmart Special Supplemental Retirement Plan.

            m. Boyer shall return to Kmart the Range Rover vehicle currently
leased to him through the Company and any other property in his possession.

            n. Kmart agrees that it will reimburse Boyer for the costs
associated with legal representation incurred by Boyer (I) in connection with
Boyer's resignation from Kmart, and (ii) for the purpose of asserting his rights
to compensation payable by Sears Roebuck & Co., Inc., provided that such
reimbursement amount, in the aggregate, shall not exceed One Hundred Thousand
Dollars ($100,000) (excluding amounts previously submitted for reimbursement
prior to the date hereof.

            o. Kmart shall continue to indemnify Boyer to the By-Laws and to
maintain D&O insurance coverage for Boyer consistent with that maintained on
behalf of the Company's continuing officers.

            Notwithstanding anything herein to the contrary, Boyer will not be
required to seek other employment or

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otherwise mitigate the value of the payments and benefits contemplated by this
Release Agreement, nor shall any such payments and benefits be reduced by any
earnings or benefits that Boyer may receive from other employment (except as
expressly contemplated in paragraph 2(b) and (j). If Boyer dies, any payments or
benefits then or thereafter due hereunder will be paid to his designated
beneficiaries or, if none are designated or nine survive Boyer, his estate.

            3. Boyer agrees that any right to receive payments and/or benefits
under paragraph 2 above will cease if during the one-year period following his
termination of employment he directly or indirectly becomes an employee,
director, advisor, or otherwise affiliated with, any other entity or enterprise
whose business is in competition with the business of the Company. An entity or
enterprise whose business is in competition with the business of the Company
shall mean an entity or enterprise that operates retail stores selling general
merchandise and/or food (which excludes specialty retailers such as Home Depot,
Circuit City, Lowes and Best Buys) if at least 10 stores have a area of 50,000
or more square feet and at lest 10 of such stores with 50,000 or more square
feet are within 25 miles of one or more Kmart stores. In addition, Boyer agrees
that if he violates any of the provisions this paragraph, the Company shall be
entitled to an accounting and repayment of all profits or other benefits that
Boyer, or any other person or entity on whose behalf he is acting, may realize
arising from or related to any such violation. Boyer agrees and acknowledges
that the duration, scope and geographic area of the covenant not to complete
described in this paragraph are fair, reasonable and necessary in order to
protect the good will and other legitimate interests of the Company, that
adequate compensation has been received by Boyer for such obligations and that
these obligations do not prevent Boyer from earning a livelihood. If, however,
for any reason any court determines under applicable law that the provisions in
this paragraph pertaining to duration, scope and geographic area in relation to
non-competition are too broad or otherwise unreasonable, that the consideration
provided for hereunder is inadequate or that Boyer has been prevented unlawfully
from earning a livelihood (together, such provisions being hereinafter referred
to as "Restrictions"), such Restrictions shall be interpreted, modified or
rewritten, and such court is hereby requested and authorized by the Company and
Boyer to revise the Restrictions, to include the maximum Restriction as are
valid and enforceable under applicable law.

            4. Boyer agrees that the acts done and evidences hereby, and release
granted hereunder, are done and granted to compromise any doubtful and disputed
claims and to avoid litigation, and are not a admission of liability on the part
of Kmart, by whom any liability is expressly denied.

            5. Boyer acknowledges that his employment with Kmart will terminate
as of November 9, 2001. Boyer acknowledges that he has no seniority, recall,
reinstatement, or rehire rights with Kmart in any capacity and Boyer agrees that
after his employment with Kmart terminates, he will not seek employment with
Kmart or any of its affiliated or related companies, or entities at any time in
the future. Boyer also acknowledges that, except for base salary and benefits
for the reminder of his employment, and the other items of compensation set
forth herein, he is not entitled to any compensation from Kmart including any
compensation for unpaid salary, bonus, or in connection with any Kmart common
stock or stock options or otherwise.

            6. Boyer agrees that he will not use, disclose, provide, or in any
way communicate, either directly or indirectly, "confidential information" or
"intellectual property" of the Company. "Confidential information" means any and
all information regarding the Company's business that has not been made
available to the general public by the Company. "Intellectual property" means
any and all ideas, inventions, formulas, processes, methods, apparatuses,
machines, patents, trademarks, trade names, service marks, copyrightable works,
artwork, designs, logos, original works of authorship, musical compositions,
computer software programs, databases, trade secrets and the like that a Company
associate has made, conceived or developed either alone or jointly with other in
the course of employment by, or using resources of, the Company or that are
otherwise acquired by the Company.

            7. Boyer agrees that he will not make public nor disclose to anyone
except his financial advisor, tax consultant, or attorney (provided they agree
to keep confidential), unless compelled by law, the discussions surrounding this
Release Agreement as well as the terms of this Release Agreement.

            8. Boyer agrees that he will not engage in any action or make any
public or private comments that disparage or criticize the Company or its
management or practices or that disrupt or impair its normal operations or harms
the reputation of the Company with its customers, suppliers or the public; or
interfere with existing contractual relationships with customers, suppliers or
Company associates; provided that Boyer may make such

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public comments as are approved in advance by the Company or as may be required
by law. Kmart agrees that neither it, nor its officers, will engage in any
public or private comments that disparage or criticize Boyer.

            9. Boyer agrees that for the one-year period following his
termination of employment, he will not either directly or indirectly, alone or
in conjunction with another party, including any employer of Boyer, solicit to
leave employment with Kmart, employ, attempt to employ or cause to be employed
by any third party, any individual who on the date of Boyer's termination is, or
within six months prior thereof was, an employee of Kmart.

            10. Boyer acknowledges that if he were to breach any of the
covenants he makes in this Release Agreement, the Company would suffer
significant injury, and that the Company would not otherwise make this agreement
without his covenants herein. Boyer also acknowledges that although very real
and material injury to the Company would occur as a result of any breach by
Boyer, it would nevertheless be impossible to accurately quantify in dollars the
damages the Company would suffer. Given the importance of these provisions,
Boyer agrees that it would be reasonable, in the event the Company in its sole
judgement determines that Boyer has breached paragraphs 3, 6, 7, 8 or 9, for
Boyer to pay liquidated damages to the Company. Boyer agrees that reasonable
liquidated damages would be equal to the remaining payments he would otherwise
receive under this Release Agreement and that the Company would have no
obligation to make any further payments.

            11. If any provision or paragraph of this Release Agreement is ever
determined not enforceable, the remaining provisions and paragraphs shall in
full force and effect.

            12. Boyer acknowledges that he has been given 21 days within which
to consider this Release Agreement and that he has 7 days following his
execution to revoke his signature. If Boyer revokes his consent hereto prior to
the expiration of such 7-day period, this Release Agreement shall not be
effective, and Kmart shall have no further obligations to Boyer hereunder.

            13. This Release Agreement constitutes the final and entire
agreement between Boyer and Kmart regarding the subject matter hereof and there
are no oral or written agreements, understandings, or representations that vary
from the terms of this Release Agreement and the terms of this Release Agreement
can only be amended in writing signed by both Kmart and Boyer.

            14. Boyer agrees to cooperate with the Company following the
termination of his employment by being reasonably available to testify on behalf
of the Company or any subsidiary or affiliate in any action, suit, or
proceeding, weather civil, criminal, administrative, or investigative; provided,
that nothing contained herein shall be deemed a waiver of Boyer's right to
counsel or any testimonial or other privileges related thereto. In addition,
Boyer agrees to assist the Company, or any subsidiary or affiliate, in any such
action, suit or proceeding, by providing information and meeting and consulting
with the Board or its representatives or counsel, or representative or counsel
to the company, or any subsidiary or affiliate, as reasonably requested. The
Company agrees to reimburse Boyer for all expenses actually incurred in
connection with his provision of testimony or assistance.

            15. Boyer acknowledges that this Release Agreement will be governed
by and constructed and enforced in accordance with the internal laws of the
State of Michigan, without reference to the conflicts of laws provisions. If a
dispute arises concerning any provisions of this Release Agreement it shall be
resolved by arbitration in Troy, Michigan in accordance with the rules of the
American Arbitration Association. Notwithstanding the foregoing, the Company
shall not be required to engage in arbitration and may pursue injunctive or
other equitable relief in the event of a breach of the provisions of Sections 3,
6, 8 or 9 of this Agreement.

            16. Unless otherwise noted herein, all payments and benefits to be
made hereunder shall be subject to applicable tax deductions and withholdings
and any applicable court orders.

            BOYER ACKNOWLEDGES THAT HE HAS READ THIS RELEASE AGREEMENT, THAT HE
HAS BEEN PROVIDED 21 DAYS TO CONSIDER THIS RELEASE AGREEMENT, THAT HE HAS BEEN
ADVISED THAT HE HAS 7 DAYS TO REVOKE HIS SIGNATURE, THAT HE HAS BEEN ADVISED
THAT HE SHOULD CONSULT WITH A ATTORNEY BEFORE HE EXECUTES THIS FULL AND
COMPLETE RELEASE OF LIABILITY, AND THAT HE UNDERSTANDS ALL OF ITS TERMS AND
EXECUTES IT

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VOLUNTARILY AND WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND CONSEQUENCES
THEREOF.

                                         /s/ Jeffrey N. Boyer
                                         ---------------------------------------
                                         JEFFREY N. BOYER

Sworn to and subscribed before me this
23RD day of NOVEMBER, 2001.

/s/ Wynetta S. Moser
--------------------------------------
Notary Public

          [NOTARY STAMP]
         WYNETTA S. MOSER
NOTARY PUBLIC, BERRION COUNTY, MI
 MY COMMISSION EXPIRES 03/26/2004

                                     KMART CORPORATION

                                     /s/ David Rots
                                     -------------------------------------------
                                     David Rots, Executive Vice President, Chief
                                     Administrative Officer

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