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 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).
<PAGE>
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
<PAGE>
     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
<PAGE>
     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
<PAGE>
     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
<PAGE>
     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
<PAGE>
                           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

<PAGE>

                                    (SEAL) FRANK C. MARCHISELLO, JR.