EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is executed and made effective as of July 1,
2003 between TANGER PROPERTIES LIMITED PARTNERSHIP, a North Carolina Limited
Partnership, whose address is P.O. Box 10889, Greensboro, N.C. 27404 (the
"Company") and FRANK C. MARCHISELLO, Jr, a resident of North Carolina, whose
address is 600 Brookfield Drive, Gibsonville, NC 27249 ("Marchisello").
RECITALS
A) Company and Marchisello entered into an employment agreement dated as of
January 1, 1996 which was amended and restated as of January 1, 1999, August 16,
1999 and January 1, 2002 (the "Existing Employment Contract").
B) This agreement supercedes and replaces the Existing Employment Contract and
to enter into this agreement in place thereof.
Now therefore, in consideration of the promises contained herein and
other valuable consideration, the parties agree as follows:
1) Certain Definitions.
a) "Annual Base Salary" is defined in Section 5(a).
b) "Benefits" is defined in Section 5(b)(iv).
c) "Cause": For purposes of this Agreement, the Company shall have
"Cause" to terminate Marchisello's employment hereunder upon (i)
Marchisello causing material harm to the Company through a material
act of dishonesty in the performance of his duties hereunder, (ii) his
conviction of a felony involving moral turpitude, fraud or
embezzlement, or (iii) his willful failure to perform his material
duties under this Agreement (other than a failure due to disability)
after written notice specifying the failure and a reasonable
opportunity to cure (it being understood that if his failure to
perform is not of a type requiring a single action to cure fully, that
he may commence the cure promptly after such written notice and
thereafter diligently prosecute such cure to completion).
d) "Change of Control" shall mean (A) the sale, lease, exchange or other
transfer (other than pursuant to internal reorganization) by the
Company or Tanger Factory Outlet Centers, Inc. (the "TFOC") of more
than 50% of its assets to a single purchaser or to a group of
associated purchasers; (B) a merger, consolidation or similar
transaction in which TFOC or the Company does not survive as an
independent, publicly owned corporation or TFOC or an entity wholly
owned by TFOC ceases to be the sole general partner of the Company; or
(C) the acquisition of securities of TFOC or the Company in one or a
related series of transactions (other than pursuant to an internal
reorganization) by a single purchaser or a group of associated
purchasers (other than Marchisello or any of his lineal descendants,
lineal ancestors or siblings) which results in their ownership of
twenty-five (25%) percent or more of the number of Common Shares of
TFOC (treating any Partnership Units or Preferred Shares acquired by
such purchaser or purchasers as if they had been converted to Common
Shares) that would be outstanding if all of the Partnership Units and
Preferred Shares were converted into Common Shares; (E) a merger
involving TFOC if, immediately following the merger, the holders of
TFOC's shares immediately prior to the merger own less than fifty
(50%) of the surviving company's outstanding shares having unlimited
voting rights or less than fifty percent (50%) of the value of all of
the surviving company's outstanding shares; or (F) a majority of the
members of the Company's Board of Directors are replaced during any
twelve month period by directors whose appointment or election is not
endorsed by a majority of the members of the Board prior to the date
of the appointment or election.
e) "Disability" shall mean the absence of Marchisello from Marchisello's
duties to the Company and/or TFOC on a full-time basis for a total of
16 consecutive weeks during any 12 month period as a result of
incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company and
acceptable to Marchisello or Marchisello's legal representative (such
agreement as to acceptability not to be withheld unreasonably).
f) A "Contract Year" shall be a calendar year.
g) "Good Reason": Marchisello shall have Good Reason to terminate his
employment upon the occurrence of any of the following events:
(1) any material adverse change in his job titles, duties,
responsibilities, perquisites granted hereunder, or authority
without his consent;
(2) if, after a Change of Control, either the principal duties of
Marchisello are required to be performed at a location other than
the Greensboro, North Carolina metropolitan area without his
consent;
(3) a material breach of this Employment Agreement by the Company,
including without limitation, the failure to pay compensation or
benefits when due hereunder if such failure is not cured within
30 days after delivery to the Company of Marchisello's written
demand for payment thereof; or
(4) if Marchisello elects to terminate his employment by written
notice to the Company within the 180 day period following a
Change of Control.
h) "Contract Term " is defined in Section 2(b).
2) EMPLOYMENT.
a) Marchisello's employment by the Company is continued under this
Agreement, which supercedes and replaces the Existing Employment
Contract, during the Contract Term (as defined below) upon the terms
and conditions herein provided, unless Marchisello's employment is
terminated earlier as provided in Section 6 hereof.
b) The initial Contract Term of this Employment Agreement shall begin as
of January 1, 2003 (the "Commencement Date") and shall end on December
31, 2005 (the "Initial Contract Term"). On January 1, 2004 and on the
first day of January of each calendar year thereafter (an "Extension
Date"), the Contract Term shall be automatically extended by one year
unless (i) Marchisello's employment has been earlier terminated as
provided in Section 6 or (ii) the Company gives written notice to
Marchisello one hundred eighty (180) days prior to the Extension Date
that the Contract Term shall not be automatically extended. For
purposes of illustration, if Marchisello's employment has not been
terminated as provided in Section 6 and if the Company has not given
written notice to Marchisello at least 180 days prior to January 1,
2004 that the Contract Term will not be extended, on January 1, 2004,
the Contract Term will be extended to and including December 31, 2006.
If the Contract Term is extended as provided herein, Marchisello's
employment may be terminated (other than upon expiration) only as provided in
Section 6. References herein to the "Contract Term" shall refer to the Initial
Contract Term as extended pursuant to this Section 2.
3) Position and Duties. Marchisello shall serve in the following manner:
a) During Marchisello's employment hereunder, he shall serve as:
(1) an executive employee of the Company and shall report to a
designated senior executive officer of the Company, and
(2) the Executive Vice President and Chief Financial Officer of TFOC
and shall have such duties, functions, responsibilities and
authority as are consistent with those positions.
4) Competition.
a) Marchisello shall be prohibited from engaging in Competition (as
defined in subsection 4(b) below) with the Company or TFOC during the
following described periods: (i) during the period beginning on the
date hereof and extending through the date on which Marchisello's
employment hereunder is terminated; (ii) if Marchisello's employment
is terminated by the Company for Cause or by Marchisello without Good
Reason, from the date of such termination through the date of the
first anniversary of such termination date and (iii) if Marchisello
receives the Severance Payment described in Section 7(a) because of a
termination of his employment by the Company without Cause or by
Marchisello for Good Reason, from the date of such termination through
the date of the third anniversary of such termination date.
b) During the period prior to the termination of Marchisello's employment
hereunder, the term "Competition" for purposes of this Agreement shall
mean Marchisello's management, development or construction of any
factory outlet centers or competing retail commercial property outside
the Company and TFOC or any other active or passive investment in
property connected with a factory outlet center or a competing retail
commercial property outside the Company and TFOC, with the exception
of
(1) the ownership of up to 1% of any class of securities of any
publicly traded company, and
(2) service on the board of directors of any publicly traded company,
whether or not such company engages in Competition as defined in
this subsection 4(b).
Provided however, for any period following the termination of Marchisello's
employment, Marchisello shall be considered as engaging in "Competition"
prohibited by this Section only if Marchisello engages in the prohibited
activities with respect to a property that is within a fifty (50) mile radius of
the site of any commercial property owned, leased or operated by TFOC and/or the
Company on the date Marchisello's employment terminated or with respect to a
property that is within a fifty (50) mile radius of any commercial property
which TFOC and/or Company actively negotiated to acquire, lease or operate
within the six (6) month period ending on the date of the termination of
Marchisello's employment.
c) Marchisello covenants that a breach of subsection 4(a) above would
immediately and irreparably harm the Company and TFOC and that a
remedy at law would be inadequate to compensate the Company and TFOC
for their losses by reason of such breach and therefore that the
Company and/or TFOC shall, in addition to any other rights and
remedies available under this Agreement, at law or otherwise, be
entitled to an injunction to be issued by any court of competent
jurisdiction enjoining and restraining Marchisello from committing any
violation of subsection 4(a) above, and Marchisello hereby consents to
the issuance of such injunction.
5) Compensation and Related Matters. During Marchisello's employment
hereunder, Marchisello shall be paid the compensation and shall be provided
with the benefits described below:
a) Annual Base Salary. Marchisello's annual base compensation ("Annual
Base Salary") payable with respect to the Contract Year ending
December 31, 2003 shall be $243,101.31. The amount of Annual Base
Salary payable to Marchisello with respect to each Contract Year
thereafter shall be an amount negotiated between and agreed upon by
Marchisello and the Board of Trustees of the Company's general partner
but in no event less than Marchisello's Annual Base Salary for the
prior Contract Year.
b) Benefits. Marchisello shall be entitled to (i) receive stock options
(incentive or nonqualified) under the Company's Unit Option Plan; (ii)
participate in the Company's 401(k) Savings Plan; (iii) receive
vacation during each Contract Year in accordance with the policy of
the Company; and (iv) participate in or receive benefits under any
employee benefit plan or other arrangement made available by the
Company to any of its employees generally and for which Marchisello is
eligible (collectively "Benefits").
c) Expenses. The Company shall promptly reimburse Marchisello for all
reasonable travel and other business expenses incurred by Marchisello
in the performance of his duties to the Company hereunder.
6) Termination. Marchisello's employment hereunder may be terminated prior to
the end of the Contract Term by the Company or Marchisello, as applicable,
without any breach of this Agreement only under the following
circumstances:
a) Death. Marchisello's employment hereunder shall terminate upon his
death.
b) Disability. If the Disability of Marchisello has occurred during the
Contract Term, the Company may give Marchisello written notice of its
intention to terminate Marchisello's employment. In such event,
Marchisello's employment with the Company shall terminate effective on
the 30th day after receipt of such notice by Marchisello, provided
that within the 30 days after such receipt, Marchisello shall not have
returned to full-time performance of his duties.
c) Cause. The Company may terminate Marchisello's employment hereunder
for Cause.
d) Good Reason. Marchisello may terminate his employment for Good Reason.
e) Without Cause. The Company may terminate Marchisello's employment
hereunder without Cause upon 30 days notice.
f) Resignation without Good Reason. Marchisello may resign his employment
without Good Reason upon 90 days written notice to the Company.
g) Notice of Termination. Any termination of Marchisello's employment
hereunder by the Company or Marchisello (other than by reason of
Marchisello's death) shall be communicated by a notice of termination
to the other party hereto. For purposes of this Agreement, a "notice
of termination" shall mean a written notice which (i) indicates the
specific termination provision in the Agreement relied upon, (ii) sets
forth in reasonable detail any facts and circumstances claimed to
provide a basis for termination of Marchisello's employment under the
provision indicated and (iii) specifies the effective date of the
termination.
7) Severance Benefits.
a) Termination without Cause or for Good Reason: If Marchisello's
employment shall be terminated (i) by the Company other than for Cause
(as defined above) or (ii) by Marchisello for Good Reason (as defined
above), the Company shall pay Marchisello an amount equal to 300% of
his Annual Base Salary for the Contract Year in which the termination
occurs. Such amount shall be paid in equal consecutive monthly or
bi-weekly installments in accordance with the Company's regular pay
schedule over a 36 month period beginning on the effective date of the
termination of Marchisello's employment.
b) Termination by Death or Disability. Upon the termination of
Marchisello's employment by reason of his death or Disability, the
Company shall pay to Marchisello or to the personal representatives of
his estate an amount equal to the Annual Base Salary for the Contract
Year within which such termination occurs. Such amount shall be paid
in equal consecutive monthly or bi-weekly installments in accordance
with the Company's regular pay schedule over the 12 month period
beginning on the effective date of the termination of Marchisello's
employment.
c) Termination for Cause or Without Good Reason. If Marchisello's
employment is terminated by the Company for Cause or by Marchisello
without Good Reason, Marchisello shall be entitled to all Annual Base
Salary and all Benefits accrued through the date of termination.
d) Survival. Neither the termination of Marchisello's employment
hereunder nor the expiration of the Contract Term shall impair the
rights or obligations of any party hereto which shall have accrued
hereunder prior to such termination or expiration.
e) Mitigation of Damages. In the event of any termination of
Marchisello's employment by the Company, Marchisello shall not be
required to seek other employment to mitigate damages, and any income
earned by Marchisello from other employment or self-employment shall
not be offset against any obligations of the Company to Marchisello
under this Agreement.
8) Limitation on Severance Benefits.
a) Notwithstanding any other provision of this Agreement, and except as
provided in paragraph 8(b) below, payments and benefits to which
Executive would otherwise be entitled under the provisions of this
Agreement will be reduced (or Marchisello shall make reimbursement of
amounts previously paid) to the extent necessary to prevent
Marchisello from having any liability for the federal excise tax
levied on certain "excess parachute payments" under section 4999 of
the Internal Revenue Code as it exists as of the date of this
Agreement.
b) Marchisello may determine the amount (if any) of reduction for each
payment or benefit that he would otherwise be entitled to receive. The
extent to which the payments or benefits to Marchisello are to be
reduced pursuant to paragraph 8(a) will be determined by the
accounting firm servicing the Company on the date that Marchisello's
employment is terminated. The Company shall pay the cost of such
determination.
c) If the final determination of any reduction in any benefit or payment
pursuant to this Section has not been made at the time that
Marchisello is entitled to receive such benefit or payment, the
Company shall pay or provide an estimated amount based on a
recommendation by the accounting firm making the determination under
subparagraph 8(b). When the final determination is made, the Company
shall pay Marchisello any additional amounts that may be due or
Marchisello shall reimburse the Company for any estimated amounts paid
to Marchisello that were in excess of the amount payable hereunder.
9) Miscellaneous.
9.1) Binding on Successors. This Agreement shall be binding upon and
inure to the benefit of the Company and Marchisello and their
respective successors, assigns, personal and legal
representatives, executors, administrators, heirs, distributees,
devisees, and legatees, as applicable.
9.2) Governing Law. This Agreement is being made and executed in and
is intended to be performed in the State of North Carolina, and
shall be governed, construed, interpreted and enforced in
accordance with the substantive laws of the State of North
Carolina without any reference to principles of conflicts or
choice of law under which the law of any other jurisdiction would
apply.
9.3) Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
9.4) Notices. Any notice, request, claim, demand, document and other
communication hereunder to any party shall be effective upon
receipt (or refusal of receipt) and shall be in writing and
delivered personally or sent by telex, telecopy, or certified or
registered mail, postage prepaid, as follows:
(a) If to the Company, to:
Mr. Stanley K. Tanger
Tanger Properties Limited Partnership
3200 Northline Avenue,
Suite 360 or P.O. Box 10889
Greensboro, NC 27408
(b) If to Marchisello, to:
Mr. Frank C. Marchisello, Jr.
600 Brookfield Drive
Gibsonville, NC 27249
or at any other address as any party shall have specified by notice in writing
to the other parties.
9.5) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original,
but all of which together will constitute one and the same
Agreement.
9.6) Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with
respect to the employment of Marchisello by the Company and may
not be contradicted by evidence of any prior or contemporaneous
agreement. The parties further intend that this Agreement shall
constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding to vary the
terms of this Agreement.
9.7) Amendments; Waivers. This Agreement may not be modified, amended,
or terminated except by an instrument in writing, signed by
Marchisello and the Company. By an instrument in writing
similarly executed, Marchisello or the Company may waive
compliance by the other party with any provision of this
Agreement that such other party was or is obligated to comply
with or perform, provided, however, that such waiver shall not
operate as a waiver of, or estoppel with respect to, any other or
subsequent failure. No failure to exercise and no delay in
exercising any right, remedy, or power hereunder preclude any
other or further exercise of any other right, remedy, or power
provided herein or by law or in equity.
9.8) No Effect on Other Contractual Rights. Notwithstanding Section 6,
the provisions of this Agreement, and any other payment provided
for hereunder, shall not reduce any amounts otherwise payable to
Marchisello under any other agreement between Marchisello and the
Company, or in any way diminish Marchisello's rights under any
employee benefit plan, program or arrangement of the Company to
which he may be entitled as an employee of the Company.
9.9) No Inconsistent Actions. The parties hereto shall not voluntarily
undertake or fail to undertake any action or course of action
inconsistent with the provisions or essential intent of this
Agreement. Furthermore, it is the intent of the parties hereto to
act in a fair and reasonable manner with respect to the
interpretation and application of the provisions of this
Agreement.
IN WITNESS WHEREOF, the parties have executed or caused this Agreement to
be executed as of the day and year first above written.
TANGER PROPERTIES LIMITED PARTNERSHIP, a
North Carolina Limited Partnership
By: TANGER GP TRUST, its sole General Partner
By: /s/ Stanley K. Tanger
________________________
Stanley K. Tanger, Chief Executive Officer
and Chairman of the Board
(SEAL) FRANK C. MARCHISELLO, JR.