TANGER FACTORY OUTLET CENTERS INC
EXHIBIT 10.1
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>tfoc10q093003fcm.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>

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.


</TEXT>
</DOCUMENT>
