Exhibit 10.3
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 XXXXX X. XXXXXXXXXXX, Xx, a resident of
North Carolina, ("Xxxxxxxxxxx").
RECITALS
A. Company and Xxxxxxxxxxx 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 Xxxxxxxxxxx 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 Xxxxxxxxxxx'x employment hereunder upon (i)
Xxxxxxxxxxx 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).
(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 Xxxxxxxxxxx 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 Xxxxxxxxxxx from
Xxxxxxxxxxx'x 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 Xxxxxxxxxxx or Xxxxxxxxxxx'x legal representative (such agreement as to
acceptability not to be withheld unreasonably).
(g) A "Contract Year" shall be a calendar year.
(h) "Good Reason": Xxxxxxxxxxx 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
Xxxxxxxxxxx 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
Xxxxxxxxxxx'x written demand for payment thereof; or
(4) if Xxxxxxxxxxx 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) Xxxxxxxxxxx'x 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 Xxxxxxxxxxx'x 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)
Xxxxxxxxxxx'x employment has been earlier terminated as provided in Section
6 or (ii) the Company gives written notice to Xxxxxxxxxxx one hundred
eighty (180) days prior to the Extension Date that the Contract Term shall
not be automatically extended. For purposes of illustration, if
Xxxxxxxxxxx'x employment has not been terminated as provided in Section 6
and if the Company has not given written notice to Xxxxxxxxxxx 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, Xxxxxxxxxxx'x
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. Xxxxxxxxxxx shall serve in the following manner:
(a) During Xxxxxxxxxxx'x 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) Xxxxxxxxxxx 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 Xxxxxxxxxxx'x employment
hereunder is terminated; (ii) if Xxxxxxxxxxx'x employment is terminated by
the Company for Cause or by Xxxxxxxxxxx without Good Reason, from the date
of such termination through the date of the first anniversary of such
termination date and (iii) if Xxxxxxxxxxx receives the Severance Payment
described in Section 7(a) because of a termination of his employment by the
Company without Cause or by Xxxxxxxxxxx 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 Xxxxxxxxxxx'x
employment hereunder, the term "Competition" for purposes of this Agreement
shall mean Xxxxxxxxxxx'x 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 Xxxxxxxxxxx'x
employment, Xxxxxxxxxxx shall be considered as engaging in "Competition"
prohibited by this Section only if Xxxxxxxxxxx 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 Xxxxxxxxxxx'x 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 Xxxxxxxxxxx'x employment.
(c) Xxxxxxxxxxx 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
Xxxxxxxxxxx from committing any violation of subsection 4(a) above, and
Xxxxxxxxxxx hereby consents to the issuance of such injunction.
5 . Compensation and Related Matters. During Xxxxxxxxxxx'x employment hereunder,
Xxxxxxxxxxx shall be paid the compensation and shall be provided with the
benefits described below:
(a) Annual Base Salary. Xxxxxxxxxxx'x 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 Xxxxxxxxxxx with respect to each Contract Year thereafter shall
be an amount negotiated between and agreed upon by Xxxxxxxxxxx and the
Company but in no event less than Xxxxxxxxxxx'x Annual Base Salary for the
prior Contract Year.
(b) Annual Bonus. As additional compensation for services rendered,
Xxxxxxxxxxx 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. Xxxxxxxxxxx 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 Xxxxxxxxxxx is eligible (collectively
"Benefits").
(d) Expenses. The Company shall promptly reimburse Xxxxxxxxxxx for all
reasonable travel and other business expenses incurred by Xxxxxxxxxxx in
the performance of his duties to the Company hereunder.
6 . Termination. Xxxxxxxxxxx'x employment hereunder may be terminated prior to
the end of the Contract Term by the Company or Xxxxxxxxxxx, as applicable,
without any breach of this Agreement only under the following circumstances:
(a) Death. Xxxxxxxxxxx'x employment hereunder shall terminate upon his
death.
(b) Disability. If the Disability of Xxxxxxxxxxx has occurred during
the Contract Term, the Company may give Xxxxxxxxxxx written notice of its
intention to terminate Xxxxxxxxxxx'x employment. In such event,
Xxxxxxxxxxx'x employment with the Company shall terminate effective on the
30th day after receipt of such notice by Xxxxxxxxxxx, provided that within
the 30 days after such receipt, Xxxxxxxxxxx shall not have returned to
full-time performance of his duties.
(c) Cause. The Company may terminate Xxxxxxxxxxx'x employment
hereunder for Cause.
(d) Good Reason. Xxxxxxxxxxx may terminate his employment for Good
Reason.
(e) Without Cause. The Company may terminate Xxxxxxxxxxx'x employment
hereunder without Cause upon 30 days notice.
(f) Resignation without Good Reason. Xxxxxxxxxxx may resign his
employment without Good Reason upon 90 days written notice to the Company.
(g) Notice of Termination. Any termination of Xxxxxxxxxxx'x employment
hereunder by the Company or Xxxxxxxxxxx (other than by reason of
Xxxxxxxxxxx'x 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 Xxxxxxxxxxx'x 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 Xxxxxxxxxxx'x
employment shall be terminated (i) by the Company other than for Cause (as
defined above) or (ii) by Xxxxxxxxxxx for Good Reason (as defined above),
the Company shall pay Xxxxxxxxxxx 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 Xxxxxxxxxxx'x employment. For these
purposes, Xxxxxxxxxxx'x 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. Xxxxxxxxxxx'x Average Annual
Bonus for a Contract Year shall be an amount equal to the sum of all Annual
Bonuses earned by Xxxxxxxxxxx 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 Xxxxxxxxxxx'x Annual Bonus or Average Annual Bonus for a
Contract Year, the amount of any share-based award under the Incentive
Award Plan that Xxxxxxxxxxx is required to recognize as income for federal
income tax purposes in a Contract Year shall be included as part of
Xxxxxxxxxxx'x Annual Bonus for that Contract Year.
(b) Termination by Death or Disability. Upon the termination of
Xxxxxxxxxxx'x employment by reason of his death or Disability, the Company
shall pay to Xxxxxxxxxxx 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 Xxxxxxxxxxx'x
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 Xxxxxxxxxxx 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 Xxxxxxxxxxx, his estate or beneficiaries to
any disability or other benefits then available to Xxxxxxxxxxx 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 Xxxxxxxxxxx'x
employment is terminated by the Company for Cause or by Xxxxxxxxxxx without
Good Reason, Xxxxxxxxxxx shall be entitled to all Annual Base Salary and
all Benefits accrued through the date of termination.
(d) Survival. Neither the termination of Xxxxxxxxxxx'x 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
Xxxxxxxxxxx'x employment by the Company, Xxxxxxxxxxx shall not be required
to seek other employment to mitigate damages, and any income earned by
Xxxxxxxxxxx from other employment or self-employment shall not be offset
against any obligations of the Company to Xxxxxxxxxxx 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 Xxxxxxxxxxx shall make reimbursement of
amounts previously paid) to the extent necessary to prevent Xxxxxxxxxxx
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) Xxxxxxxxxxx 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 Xxxxxxxxxxx are to be reduced
pursuant to paragraph 8(a) will be determined by the accounting firm
servicing the Company on the date that Xxxxxxxxxxx'x 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
Xxxxxxxxxxx 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 Xxxxxxxxxxx any
additional amounts that may be due or Xxxxxxxxxxx shall reimburse the
Company for any estimated amounts paid to Xxxxxxxxxxx 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 Xxxxxxxxxxx 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:
Xx. Xxxxxxx X. Xxxxxx
Tanger Properties Limited Partnership
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000 or X.X. Xxx 00000
Xxxxxxxxxx, XX 00000
(b) If to Xxxxxxxxxxx, to:
Xx. Xxxxx X. Xxxxxxxxxxx, Xx.
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
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 Xxxxxxxxxxx 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 Xxxxxxxxxxx and the
Company. By an instrument in writing similarly executed, Xxxxxxxxxxx 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 Xxxxxxxxxxx under any other
agreement between Xxxxxxxxxxx and the Company, or in any way diminish
Xxxxxxxxxxx'x 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: ____________________________________
Xxxxxxx X. Xxxxxx, Chief Executive Officer
and Chairman of the Board
(SEAL) XXXXX X. XXXXXXXXXXX, XX.