TANGER FACTORY OUTLET CENTERS INC
EXHIBIT 10.3 FCM
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>tfoc10q063004ex10_3fcm.txt
<DESCRIPTION>EXHIBIT 10.3 FCM
<TEXT>
                              EMPLOYMENT AGREEMENT

         THIS  EMPLOYMENT  AGREEMENT  is entered  into and made  effective as of
January 1, 2004 between TANGER PROPERTIES LIMITED PARTNERSHIP,  a North Carolina
Limited Partnership, (the "Company") and FRANK C. MARCHISELLO, Jr, a resident of
North Carolina, ("Marchisello").

                                    RECITALS


A. Company and Marchisello entered into an employment agreement dated as of July
1,  2003  (the  "Existing  Employment  Contract").  The  term  of  the  Existing
Employment Contract has been extended by its terms to end on December 31, 2006.


B. The Company and Marchisello wish to modify and amend the Existing  Employment
Contract and to extend its term as provided herein.

         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)  "Annual Bonus" is defined in Section 5(b).

     (c)  "Benefits" is defined in Section 5(b)(iv).

     (d) "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).



<PAGE>




     (e) "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;  (D) 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 (E) 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.

     (f) "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).

     (g) A "Contract Year" shall be a calendar year.

     (h) "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.

               (i)  "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, 2004 (the "Commencement  Date") and shall end on December 31, 2006
(the  "Initial  Contract  Term").  On  January  1,  2005 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, 2005 that the
Contract Term will not be extended,  on January 1, 2005,  the Contract Term will
be extended to and including December 31, 2007.

         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, 2004
shall be  $275,000.00.  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 Company but in no event less than
Marchisello's Annual Base Salary for the prior Contract Year.

     (b)  Annual  Bonus.  As  additional  compensation  for  services  rendered,
Marchisello  shall  receive  such  bonus or bonuses  as the  Company's  Board of
Directors may from time to time approve  including  without  limitations  awards
under the Company's Incentive Award Plan.

     (c)  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").

     (d) 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 the sum of (x) his
Annual Base Salary and (y) (B) his Deemed  Annual Bonus 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.  For these  purposes,  Marchisello's
Deemed  Annual  Bonus for any  Contract  Year  shall be the  greater  of (i) his
Average  Annual Bonus for that  Contract  Year and (ii) his Annual Bonus for the
prior  Contract  Year.  Marchisello's  Average  Annual Bonus for a Contract Year
shall be an amount equal to the sum of all Annual  Bonuses earned by Marchisello
for the Contract  Years  immediately  preceding  the Contract Year for which the
calculation  is being made (not exceeding  three (3) Contract  Years) divided by
the number of such Annual Bonuses. In calculating  Marchisello's Annual Bonus or
Average Annual Bonus for a Contract Year,  the amount of any  share-based  award
under the  Incentive  Award Plan that  Marchisello  is required to  recognize as
income for federal  income tax purposes in a Contract  Year shall be included as
part of Marchisello's Annual Bonus for that Contract Year.

     (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 (i) within
thirty (30) days after the termination, a lump-sum amount equal to the amount of
Annual Base Salary for the Contract  Year within which such  termination  occurs
and  (ii) on or  before  the day on which  Marchisello's  Annual  Bonus  for the
Contract  Year in which the  termination  occurs  would have been payable if the
termination  had not occurred,  an amount equal to the Annual Bonus  Marchisello
would have received for that Contract Year if the  termination  had not occurred
multiplied  by a fraction  the  numerator of which is the number of days in that
Contract Year before the date of  termination  and the  denominator  of which is
365. This subsection  9(b) shall not limit the  entitlement of Marchisello,  his
estate or  beneficiaries  to any  disability or other benefits then available to
Marchisello under any life, disability insurance or other benefit plan or policy
which is maintained by the Company for his benefit.

     (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.

     .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.

     .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.

     .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.

     .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.

     .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.

     .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.

     .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.

     .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 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: ____________________________________
                               Stanley K. Tanger, Chief Executive Officer
                                  and Chairman of the Board


                        (SEAL) FRANK C. MARCHISELLO, JR.


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</DOCUMENT>
