Document:

Exhibit
10.3

CONSULTING
AGREEMENT

 

This
Consulting Agreement (“Agreement”) is made and entered into as of the 5th day of August 2014 by and between Neonode
Inc. (the “Company”), and David Brunton (“Consultant”).

 

1. GENERAL
INFORMATION

 

Consultant
served as the Company’s Chief Financial Officer, Vice President, Finance, Treasurer and Secretary until his resignation
effective August 15, 2014. The Company desires to enter into this Agreement with Consultant, as an independent contractor, to
perform services as described below for the Company. Consultant is willing to perform such services, on terms set forth more fully
below beginning on August 15, 2014 with the Company (“Commencement Date’).

 

2. SERVICES
AND COMPENSATION

 

(a)
Services: Consultant shall provide the following services: support for regulatory filings, administrative, strategic and operations
assistance for the Company’s chief financial officer (collectively the “Services”).

 

(b)
Compensation: Company agrees to pay at a rate of $3,333.32 per month for the Services of up to forty (40) hours per month.

 

(c)
Benefits: Consultant acknowledges and agrees, and it is the intent
of the parties hereto, that Consultant receives no employee benefits from the Company, either as an independent contractor or
employee; except that the Company will pay compensation and third-party benefit costs, as stated herein, until Consultant’s
65th birthday. Consultant will request monthly reimbursement COBRA payments through the Company’s normal expense report
request procedure. If Consultant is reclassified by a state or federal agency or court as an employee for tax or other purposes,
Consultant will become a non-benefit employee and will receive no benefits from the Company, except those mandated by state or
federal law, even if by the terms of the benefit plans or programs of the Company in effect at the time of such reclassification
Consultant would otherwise be eligible for such benefits. In the event Company terminates this Agreement, the Company will continue
to pay in full Consultant’s monthly COBRA medical and dental benefit until Consultant’s 65th birthday.

 

3.
INDEPENDENT CONTRACTOR STATUS

 

It
is expressly agreed and understood that Consultant will be performing Services under this Agreement as an independent contractor
for Company and that neither Consultant nor any employee, representative, agent or subcontractor of Consultant is an employee
or agent of Company. Consultant shall not hold out himself as an employee, agent, partner or joint venturer of Company. Consultant
will provide his own equipment and materials as may be required to perform the Services, will perform the Services at a location
of his choice, will set his own schedule for performing the Services (subject to interim and final deadlines for the delivery
of work product as may from time to time be stated by Company), and will not be subject to the direction or control of Company
in conjunction with his performance of the Services (subject to specifications to be stated by Company from time to time relating
to the end work product). Consultant will be solely responsible for all withholding and payment of taxes and similar charges related
to the compensation paid hereunder, as well as any applicable insurance, including, but not limited to, any worker's compensation.
Company will report all payments to Consultant hereunder via a Form 1099.

 

    	 

    	 

    

 

4.
LIMITATION OF LIABILITY

 

Company’s
liability to Consultant for the Services is expressly limited to paying Consultant the compensation provided for in this Agreement.
Except as arising from Company’s willful breach of this Agreement or willful misconduct by Company, Company will not be
liable to Consultant for any special, consequential, incidental or punitive damages of any kind under or related to this Agreement,
whether arising in contract, tort or otherwise, and whether or not Company had knowledge of the possibility of any such damages.

 

5.
NO THIRD PARTY VIOLATION; INDEMNITY 

 

Consultant
represents and warrants that his performance of the Services and the delivery of all work product rendered pursuant to this Agreement
will not violate any legal or contractual obligation that Consultant has to any third party (including, but not limited to, copyright,
trademark and patent rights), and that Consultant has the absolute right to generate and distribute, for Company’s commercial
use, any and all work product rendered pursuant to this Agreement. Consultant hereby agrees to indemnify, defend and hold harmless
Company from any and all claims by any third parties against Company that may in any way relate to or arise from any alleged or
actual breach by Consultant of the representations and warranties contained in this paragraph. 

 

6.
CONFLICTING OBLIGATIONS; NO INSIDER TRADING

 

(a)
Consultant certifies that Consultant has no outstanding agreement or obligation that would preclude Consultant from complying
with the provisions hereof, and further certifies that Consultant will not enter into any such conflicting Agreement during the
term of this Agreement.

 

(b)
Consultant is aware of the restrictions imposed by federal securities laws on the purchase or sale of the Company’s securities
by any person who has received material non-public information from or on behalf of the Company and on the communication of such
information to any other person when it is reasonably foreseeable that such other person may purchase or sell the Company’s
securities while in possession of such information. Consultant agrees to comply with these restrictions.

 

    	 

    	 

    

 

 

7.
INTELLECTUAL PROPERTY 

 

All
work product created or generated by Consultant under this Agreement is the sole and exclusive property of Company, including,
but not limited to, original works, derivative works, branding, logos, marks, products, services, processes, equipment, code,
images and files (collectively, “Intellectual Property”). All right, title and interest in the Intellectual Property
shall vest absolutely in Company, which shall be entitled, so far as the law permits, to the exclusive use thereof. Notwithstanding
the foregoing, for the sake of clarity and completeness, Consultant assigns to Company all right, title and interest, present
and future, anywhere in the world in copyright and in any other rights in the Intellectual Property in respect of all of Consultant’s
work performed pursuant to this Agreement. Consultant further hereby waives all moral rights as author under applicable law, and
agrees and undertakes that at any time during or after the termination of this Agreement, he will execute such deeds or documents
and do all such acts and things as Company may deem necessary or desirable to substantiate its rights to the Intellectual Property,
including for the purpose of obtaining letters patent or other privileges in all such countries as Company may require.

 

8.
CONFIDENTIALITY OBLIGATIONS OF CONSULTANT

 

Consultant
acknowledges that in rendering Services to Company, Consultant will receive information that Company regards as confidential (“Confidential
Information”). Confidential Information incorporates information or material which is not generally available to or used
by others, or the utility or value of which is not generally known or recognized as standard practice, whether or not the underlying
details are in the public domain, including: (a) information or material which relates to inventions, technological developments,
“know-how”, purchasing, accounting, merchandising, or licensing, (b) trade secrets as defined under applicable law,
(c) software in various stages of development (source code, object code, documentation, diagrams, flow charts), designs, drawings,
specifications, models, data, and customer information, and (d) any information regarding customers, pricing, employees or other
matter of the type which Company treats as proprietary or designates as confidential, whether or not owned or developed by Company.
Consultant agrees to receive and hold Confidential Information with no less than a commercially reasonable degree of care, not
to disclose Confidential Information to any person or entity not a party to this Agreement, and not to use any Confidential Information
for the benefit of Consultant or any third party. Consultant's obligations under this paragraph 8 shall survive and continue with
respect to each item of Confidential Information after the termination of this Agreement.

 

9.
EQUITABLE RELIEF 

 

Consultant
hereby acknowledges that a breach by Consultant of any of the provisions of this Agreement relating to Confidential Information,
Company proprietary information, or non-solicitation will cause Company irreparable injury and damage for which remedies at law
would be inadequate. Therefore, Consultant hereby agrees that Company shall be entitled to seek injunctive and/or other equitable
relief to prevent a breach or threatened breach of this Agreement, or any part of it, and to secure its performance.

 

    	 

    	 

    

 

10.
TERMINATION

 

This
Agreement shall remain in effect unless and until it is terminated as set forth herein. This Agreement may be terminated by either
party upon three (3) months written notice to the other party. Upon termination or expiration of this Agreement, Consultant shall
promptly deliver all work product performed pursuant to this Agreement, whether or not it is completed, and shall promptly comply
with any provisions of this Agreement regarding the return of Confidential Information. Notwithstanding any termination of this
Agreement, the provisions of paragraphs 2(c), 4, 5, 6, 7, 8, 9, 10, 11, and 12 will survive.

 

11.
RETURN OF MATERIALS

 

Consultant
shall deliver to Company promptly upon request, or on the date of termination, any and all Confidential Information, and copies
or summaries thereof.

 

12.
GENERAL PROVISIONS

 

(a)
This Agreement, together with any exhibits hereto, represents the full and complete understanding between Consultant and Company
and supersedes all prior representations and understandings with respect to the subject matter hereof, oral or written. 

 

(b)
All obligations under this Agreement shall be binding upon the heirs, executors, administrators, or other legal representatives,
and all successors and permitted assigns of Consultant, and this Agreement shall inure to the benefit of Company, its successors,
and assigns.

 

(c)
This Agreement may not be amended or modified, in whole or in part, except by a written agreement signed by the parties that expressly
amends terminates or supersedes this Agreement.

 

(d)
Consultant may not assign this Agreement or any right or obligation hereunder or delegate any of its duties hereunder, whether
by operation of law or otherwise, without Company’s prior written consent, which Company may withhold in its sole discretion.
Any and all assignments or delegations without such prior written consent shall be deemed void.

 

(e)
If one or more provisions of this Agreement are declared invalid, illegal, or unenforceable in any respect, the remaining provisions
contained herein shall not in any way be affected or impaired thereby.

 

(f)
In the event of any litigation in connection with, or concerning
the subject matter of, this Agreement, the prevailing party shall be entitled to recover its attorneys’ fees, costs and
expenses actually incurred in connection with such litigation.

 

(g)
This Agreement shall be governed by the laws of the State of California without regards to its conflicts of laws principles, and
each of the parties hereto expressly consents to the sole and exclusive jurisdiction of the state and federal courts located in
San Francisco, California with respect to any dispute arising out of or in connection with this Agreement. Notwithstanding the
preceding sentence, each party will be entitled to seek and obtain equitable relief, by order, injunction or otherwise, to enforce
its rights under this Agreement in any jurisdiction.

 

    	 

    	 

    

 

(h)
Notices given under this Agreement shall be in writing and shall be addressed to a party at the address of such party designated
below or at such other address as a party may designate in a notice provided in accordance with the foregoing. Any such notice
shall be deemed given upon actual receipt, on the fourth business day following deposit in the U.S. Mail, registered and postage
prepaid, on the next business day following delivery to an internationally recognized express courier, expenses prepaid, for delivery
from and within the United States, or on the second business day following delivery to an internationally recognized express courier,
expenses prepaid, for delivery from or outside the United States. Notices delivered electronically or by facsimile will be deemed
given upon receipt of delivery confirmation.

 

(i)
This Agreement may be executed in counterparts, each of which will be considered an original and all of which together shall constitute
one instrument. Facsimile or electronic signatures will have the same effect as original signatures on this Agreement and otherwise
in connection with this Agreement.

 

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date designated below.

 

	David
Brunton 	 	Neonode Inc.
	 	 	 
	By:	 	By:
	 	 	 
	 	 	Thomas
Eriksson

              Chief
Executive Officer

 

	Address:	 	651 Byrdee Way	 	Address:	 	Storgatan 23C, SE-114 55
	 	 	Lafayette, CA 94549	 		 	Stockholm, Sweden
		 		 		 	
	Phone:	 	(925) 224-2125	 	 Phone	 	+46 8 667 17 17
	Cell:	 	(925) 768-0620SKT 10Q 6.30.2014 EX 10.1

EXHIBIT 10.1

EMPLOYMENT AGREEMENT 
This Agreement is entered into and made effective as of July 17, 2014 (the “Effective Date”) between Tanger Properties Limited Partnership (the “Partnership” and, together with its affiliates, the “Company”) and CHARLES A. WORSHAM (the “Executive”).  The Company and the Executive are sometimes referred to individually as a “Party” and collectively as the “Parties”.
RECITALS
A.    Prior to the Commencement Date, the Executive was employed as the Company’s Vice President, Construction and Development.
B.    The Company and the Executive have agreed upon the terms and conditions of the Executive’s continued employment by the Company on and after the Commencement Date.
C.    The Parties intend to set forth herein the entire agreement between them with respect to the Executive’s continued employment by the Company on and after the Commencement Date.  
Now therefore in consideration of the foregoing recitals and the promises contained herein the Parties agree as follows:
1.EMPLOYMENT AND DUTIES.
1.1    Employment.  During the Contract Term (as defined herein), the Company will employ the Executive and the Executive shall serve the Company as a full-time employee upon and subject to the terms and conditions of this Agreement.  The Executive’s employment hereunder may be terminated before the end of the Contract Term only as provided in Section 5 of this Agreement.
1.2    Position and Responsibilities.  During the Contract Term, the Executive will serve as Senior Vice President, Construction and Development with such customary responsibilities, duties and authority as may from time to time be assigned to the Executive by the Company’s Chief Operating Officer and/or the Board of Directors.  The Executive will work out of the Company's Greensboro, North Carolina office and will be required to maintain his permanent residence in the Greensboro, North Carolina area.
1.3    Time and Effort.  During the Contract Term, the Executive shall be employed on a full-time basis and shall devote his best efforts and substantially all of his attention, business time and effort (excluding sick leave, vacation provided for herein and reasonable time devoted to civic and charitable activities) to the business and affairs of the Company.
2.    PERIOD OF EMPLOYMENT.
2.1    Initial Contract Term.  The period of employment pursuant to this Agreement shall begin on May 16, 2014 (the “Commencement Date”) and shall extend through 

    

December 31, 2014 (the “Initial Contract Term”), unless earlier terminated as provided in Section 5 or extended as provided in this Section 2.  The calendar year beginning January 1, 2015 and each calendar year thereafter during the Contract Term is sometimes herein referred to as a “Contract Year.”
2.2    Extended Contract Term.  The Contract Term shall be automatically extended at the end of the Initial Contract Term or an Extended Term for one additional Contract Year (sometimes herein referred to as an “Extended Term”) unless either the Executive or the Company shall give written notice to the other of them that the Contract Term shall not be so extended at least one hundred eighty (180) days prior to the end of the Initial Contract Term or an Extended Term.  An Extended Term shall be upon the same terms and conditions as were applicable to the Initial Contract Term except that the Annual Base Salary shall be the Executive’s Annual Base Salary for the Contract Year immediately preceding the Extended Term.  References herein to the “Contract Term” of this Agreement shall refer to the Initial Contract Term as extended pursuant to this Section.
3.    COMPENSATION.
3.1    Base Salary.  As compensation for the Executive’s services performed pursuant to this Agreement, Employer will pay the Executive a base salary at the annualized rate of $210,000 during 2014 (pro-rated based on the number of days the Executive is employed as a Senior Vice President during 2014) and, with respect to each Contract Year thereafter, in an amount agreed upon by the Executive and the Company but not less than $210,000 per year (the “Annual Base Salary”).  The Annual Base Salary shall be paid in equal installments in arrears in accordance with Employer’s regular pay schedule.
3.2    Bonus or Incentive Compensation.  As additional compensation for services rendered, the Executive shall be eligible to receive such bonus or bonuses as the Board of Directors may from time to time approve including, without limitation, awards under the Company’s Amended and Restated Incentive Award Plan; provided that, for 2014, any bonus or bonuses shall be pro-rated based on the number of days the Executive is employed as a Senior Vice President during 2014.  Such bonuses may be payable in cash (a “Cash Bonus”) and/or in the form of equity based compensation as allowed under the Company’s Amended and Restated Incentive Award Plan, provided, however, that any such bonus shall be payable on or prior to the fifteenth (15th) day of the third (3rd) calendar month following the end of the calendar year in which such bonus is no longer subject to a substantial risk of forfeiture.    
4.    EMPLOYEE BENEFITS.
4.1    Executive Benefit Plans.  During the Contract Term, the Executive shall participate in the employee benefit plans (which currently include group medical and dental plans, a group term life insurance plan, a disability plan and a 401(k) savings plan) generally applicable to employees of the Company, as those plans may be in effect from time to time.
4.2    Expenses.  During the Contract Term, subject to Section 10.2(e), the Company shall promptly reimburse the Executive for all reasonable travel and other business expenses 

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incurred by the Executive in the performance of his duties to the Company hereunder.  The Executive shall observe and comply with the Company’s policies with respect to such reimbursements as in effect from time to time.  At least monthly, the Executive will submit such records and paid bills supporting the amount of the expenses incurred and to be reimbursed as the Company shall reasonably request or as shall be required by applicable laws.
4.3    Vacation.  During the Contract Term, the Executive shall have the number of days of paid vacation during each calendar year that are provided to employees of the Company with the same number of years of service as the Executive has pursuant to the Company’s vacation policy described in the Company’s employee handbook in effect on the first day of that calendar year.
5.    TERMINATION OF EMPLOYMENT.
5.1    Termination Circumstances.  The Executive’s employment hereunder may be terminated prior to the end of the Contract Term by the Company or the Executive, as applicable, without any breach of this Agreement only under the following circumstances:
(a)    Death.  The Executive’s employment hereunder shall terminate upon his death.
(b)    Disability.  The Company may terminate the Executive’s employment upon his Disability.
(c)    Cause.  The Company may terminate the Executive’s employment hereunder for Cause.
(d)    Good Reason.  The Executive may terminate his employment for Good Reason.
(e)    Without Cause.  The Company may terminate the Executive’s employment hereunder other than for Cause for any or no reason upon 30 days' notice.
(f)    Resignation without Good Reason.  The Executive may resign his employment without Good Reason upon 90 days written notice to the Company.
(g)    Resignation following a Change of Control.  The Executive may terminate his employment during the period commencing on the date of the first Change of Control to occur following the Commencement Date and ending on the 75th day following such Change of Control (the “Cessation Date”) by written notice provided to the Company on or prior to the 60th day following such Change of Control.
Except as may otherwise be expressly provided in Section 7.1 or in any written agreement between the Company and the Executive with respect to the issuance of awards under the Company’s Amended and Restated Incentive Award Plan, upon termination of the Executive’s employment, Executive shall be entitled to receive only the compensation accrued but unpaid for the period of employment prior to the date of such termination of employment and 

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shall not be entitled to additional compensation.  Except as otherwise set forth in the Company’s employee benefit plans, such accrued compensation shall be paid in accordance with the Company’s ordinary payment practices and, in any event, on or prior to the fifteenth (15th) day of the third (3rd) calendar month following the end of the calendar year in which the date of termination occurs.
5.2    Notice of Termination.  Any termination of the Executive’s employment hereunder by the Company or by the Executive (other than by reason of the Executive’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 (a) indicates the specific termination provision in the Agreement relied upon, (b) sets forth in reasonable detail any facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision indicated and (c) specifies the effective date of the termination, subject to Section 5.1.
6.    AGREEMENT NOT TO COMPETE.
6.1    Covenant Against Competition.  The Executive agrees that during the term of the Executive’s employment hereunder and (a) if the Executive’s employment is terminated by the Company for Cause, by the Executive without Good Reason or by reason of Disability, for one hundred eighty (180) days after the date of such termination or (b) if the Executive receives the severance payment described in Section 7.1(a) or Section 7.1(d) of this Agreement because of a termination of his employment by the Company without Cause or by the Executive for Good Reason or following a Change of Control, from the date of such termination through the first anniversary thereof, the Executive shall not, directly or indirectly, as an employee, employer, shareholder, proprietor, partner, principal, agent, consultant, advisor, director, officer, or in any other capacity,
(i)    engage in activities involving the development or operation of a manufacturers outlet shopping center which is located within a radius of fifty (50) miles of a retail shopping facility which, within the 365 day period ending on the date of the termination of the Executive’s employment hereunder, was owned (with an effective ownership interest of 50% or more), directly or indirectly, by the Company or was operated by the Company;
(ii)    engage in activities involving the development or operation of a manufacturers outlet shopping center which is located within a radius of fifty (50) miles of any site which, within the 365 day period ending on the date of the termination of the Executive’s employment hereunder, the Company negotiated to acquire and/or lease for the development or operation of a retail shopping facility; or
(iii)    engage in activities involving the development or operation of any other type of retail shopping facility which is located within a radius of five (5) miles of, and competes directly for tenants with, a retail shopping facility which, within the 365 day period ending on the date of the termination of the Executive’s employment hereunder, was (A) under development by the Company; (B) owned (with an effective 

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ownership interest of 50% or more), directly or indirectly, by the Company; or (C) operated by the Company.
6.2    Disclosure of Information.  The Executive acknowledges that in and as a result of his employment prior to the Commencement Date and hereunder, he may have been or may be making use of, acquiring and/or adding to confidential information of a special and unique nature and value relating to such matters as financial information, terms of leases, terms of financing, financial condition of tenants and potential tenants, sales and rental income of shopping centers and other specifics about Company’s development, financing, construction and operation of retail shopping facilities.  The Executive covenants and agrees that he shall not, at any time during or following the term of his employment, directly or indirectly, divulge or disclose for any purpose whatsoever any such confidential information that has been obtained by, or disclosed to, him as a result of his employment by Company.
6.3    Reasonableness of Restrictions.
(a)    The Executive has carefully read and considered the foregoing provision of this Section, and, having done so, agrees that the restrictions set forth in this Section, including but not limited to the time period of restriction set forth in the covenant against competition are fair and reasonable and are reasonably required for the protection of the interests of Company and its officers, directors and other employees.
(b)    In the event that, notwithstanding the foregoing, any of the provisions of this Section shall be held invalid or unenforceable by a court of competent jurisdiction, the remaining provisions thereof shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included herein.  In the event that any provision of this Section relating to the time period and/or the areas of restriction shall be declared by a court of competent jurisdiction to exceed the maximum time period or areas such court deems reasonable and enforceable, the time period and/or areas of restriction deemed reasonable and enforceable by the court shall become and thereafter be the maximum time period and/or areas.
6.4    Consideration.  The Executive promises in this Section not to compete with the Company and not to disclose information obtained during his employment by the Company are made in consideration of the Company’s agreement to pay the compensation provided for herein for the period of employment provided herein.  Such promises by the Executive constitute the material inducement to Company to employ the Executive for the Contract Term and to pay the compensation provided for in this Agreement and to make and to continue to make confidential information developed by Company available to the Executive.
6.5    Company’s Remedies.  The Executive covenants and agrees that if he shall violate any of his covenants or agreements contained in this Section, the Company shall, in addition to any other rights and remedies available to it at law or in equity, have the following rights and remedies against the Executive:
(a)    The Company shall be relieved of any further obligation to the Executive under the terms of this agreement;

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(b)    The Company shall be entitled to an accounting and repayment of all profits, compensation, commissions, remunerations or other benefits that the Executive, directly or indirectly, has realized and/or may realize as a result of, growing out of or in connection with, any such violation; and
(c)    The Company shall be entitled to a permanent injunction to prevent or restrain the breach or violation of the agreements contained herein by the Executive or by the Executive’s partners, agents, representatives, servants, employees and/or any and all persons directly acting for or with the Executive without the requirement to post a bond.
The foregoing rights and remedies of the Company shall be cumulative and the election by the Company to exercise any one or more of them shall not preclude the Company’s exercise of any other rights described above or otherwise available under applicable principles of law or equity.
7.    SEVERANCE BENEFITS.
7.1    Description of Benefits.
(a)    Termination without Cause or for Good Reason:  Subject to Section 7.1(g), if the Executive’s employment shall be terminated (i) by the Company other than for Cause or (ii) by the Executive for Good Reason, subject to the limitation in Section 7.2 and the provisions of Section 10.2 hereof, the Company shall pay the Executive an amount equal to one hundred percent (100%) of the sum of (x) his Annual Base Salary and (y) his Average Annual Cash Bonus (as defined below).  Such amount shall be paid in equal consecutive installments, in accordance with the Company’s regular pay schedule and subject to Section 10.2(d), over a twelve (12) month period beginning on the effective date of the termination of the Executive’s employment.  For these purposes, the Executive’s “Average Annual Cash Bonus” shall be the average of the Cash Bonuses earned by the Executive for each of the three consecutive calendar years (or if the Executive has not been employed for three full calendar years, such fewer number of full calendar years he has been employed by the Company) immediately preceding the calendar year in which the Executive’s termination of employment occurs
(b)    Termination by Death or Disability.  Subject to Section 7.1(g), upon the termination of the Executive’s employment by reason of his death or Disability, the Company shall pay to the Executive or to the personal representatives of his estate (i) within thirty (30) days after the termination, a lump-sum amount equal to fifty percent (50%) of the Executive’s Annual Base Salary for the calendar year in which the termination occurs and (ii) on or before the day on which the Executive’s Cash Bonus for the calendar year in which the termination occurs would have been payable pursuant to Section 3.2 if the termination had not occurred (or, if earlier, the fifteenth (15th) day of the third (3rd) calendar month following the end of the calendar year in which the date of termination occurs), an amount equal to the Cash Bonus the Executive would have received for that calendar year if the termination had not occurred multiplied by a fraction the numerator of which is the number of days in that calendar year before the date of termination and the denominator of which is 365.  This Section 7.1(b) shall not limit the entitlement of the Executive, his estate or beneficiaries to any disability or other 

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benefits then available to the Executive under any life, disability insurance or other benefit plan or policy which is maintained by the Company for the Executive’s benefit.
(c)    Termination for Cause or Without Good Reason.  If the Executive’s employment is terminated by the Company for Cause or by the Executive without Good Reason, the Executive shall be entitled to receive all Annual Base Salary and all benefits accrued through the date of termination, payable, unless otherwise required under the applicable employee benefit plan, in accordance with the Company’s ordinary payment practices and, in any event, on or prior to the fifteenth (15th) day of the third (3rd) calendar month following the end of the calendar year in which the date of termination occurs.
(d)    Resignation following a Change of Control.  If the Executive elects to terminate his employment following the first Change of Control to occur during the Contract Term (pursuant to Section 5.1(g)), the Company shall pay the Executive an amount equal to one hundred percent (100%) of the sum of (x) his Annual Base Salary and (y) his Average Annual Cash Bonus.  Such amount shall be paid in equal consecutive installments, in accordance with the Company’s regular pay schedule and subject to Section 10.2(d), over a twelve (12) month period beginning on the effective date of the termination of the Executive’s employment and, in any event, the first installment shall be paid on or prior to the Cessation Date.
(e)    Survival.  Neither the termination of the Executive’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.
(f)    Mitigation of Damages.  In the event of any termination of the Executive’s employment by the Company, the Executive shall not be required to seek other employment to mitigate damages, and any income earned by the Executive from other employment or self‐employment shall not be offset against any obligations of the Company to the Executive under this Agreement.
(g)    Cessation of Severance Benefits.  In the event of any termination of the Executive’s employment following the Cessation Date, including, without limitation, a termination of employment by the Company without Cause or by the Executive for Good Reason, the Executive shall not be entitled to receive any severance payments or benefits that would otherwise have been payable to the Executive pursuant to this Agreement in connection with a termination of employment.
7.2    Limitation on Severance Benefits.
(a)    Notwithstanding any other provision of this Agreement, and except as provided in Section 7.2(b) below, payments and benefits to which the Executive would otherwise be entitled under the provisions of this Agreement will be reduced (or the Executive shall make reimbursement of amounts previously paid) to the extent necessary to prevent the Executive 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 Effective Date.

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(b)    The Company may determine the amount (if any) of reduction for each payment or benefit that the Executive would otherwise be entitled to receive.  The extent to which the payments or benefits to the Executive are to be reduced pursuant to Section 7.2(a) will be determined by the accounting firm servicing the Company on the date that the Executive’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 the Executive 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 Section 7.2(b).  When the final determination is made, the Company shall pay the Executive any additional amounts that may be due or the Executive shall reimburse the Company for any estimated amounts paid to the Executive that were in excess of the amount payable hereunder.
8.    DEFINITIONS.
“Annual Base Salary” is defined in Section 3.1.
“Average Annual Cash Bonus” is defined in Section 7.1(a). 
“Board of Directors” shall mean the Board of Directors of TFOC.
“Cash Bonus” is defined in Section 3.2.
“Cause”    For purposes of this Agreement, the Company shall have “Cause” to terminate the Executive’s employment hereunder upon (a) the Company’s determination that he has embezzled money or property, (b) the Executive’s willful refusal to perform reasonable duties incident to his employment after ten (10) days’ written notice to the Executive from the Company’s Chief Executive Officer or Chief Operating Officer or the Board of Directors of the specific duties to be performed, or (c) commission of a felony which, in the judgment of the Board of Directors, adversely affects the business or reputation of the Company.
“Cessation Date” is defined in Section 5.1(g).
“Change of Control” shall mean (a) the sale, lease, exchange or other transfer (other than pursuant to internal reorganization) by the Partnership or TFOC of more than 50% of the total gross fair market value of its assets to a single purchaser or to a group of associated purchasers; (b) the acquisition of securities of TFOC or the Partnership 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 the Executive or any of his lineal descendants, lineal ancestors or siblings) which results in their ownership of fifty (50%) percent or more of the number of Common Shares (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; or (c) a majority of the members of the 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 of Directors prior to the date of the appointment or election.

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“Common Shares” shall mean the common shares of TFOC, par value $0.01 per share.
“Contract Term” is defined in Section 2.2.  
“Contract Year” is defined in Section 2.1.
“Disability” shall mean the Executive’s inability, due to a physical or mental illness that is expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, to perform any of the material duties assigned to his by the Company for a period of ninety (90) days or more within any twelve consecutive calendar months.
“Good Reason”    The Executive shall have “Good Reason” to terminate his employment hereunder if (a) the Company materially fails to make payment of amounts due to the Executive hereunder; (b) Company commits a material breach of its obligations under this Agreement; or (c) the principal duties of the Executive are required to be performed at a location other than the Greensboro, North Carolina metropolitan area without his consent following the occurrence of (i) a Change of Control, (ii) a merger, consolidation or similar transaction in which TFOC or the Partnership 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 Partnership, or (iii) a merger involving TFOC if, immediately following the merger, the holders of TFOC’s shares immediately prior to the merger own less than fifty percent (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.  Notwithstanding the foregoing, the Executive shall not have Good Reason to resign his employment unless (A) he provides the Company with Notice of Termination within 90 days after the occurrence of the act purported to constitute Good Reason, (B) the Company has not remedied the alleged violation(s) on or before the date of termination specified in the Notice of Termination (which, for the avoidance of doubt, shall be a date not less than 30 days following the date such Notice of Termination is provided), and (C) such resignation occurs on or prior to the second anniversary of such act.
“Section 409A” shall mean, collectively, Section 409A of the Internal Revenue Code of 1986, as amended, and the Department of Treasury Regulations and other interpretive guidance promulgated thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date.
“TFOC” shall mean Tanger Factory Outlet Centers, Inc., a North Carolina corporation.
9.    MISCELLANEOUS.
9.1    Binding on Successors.  This Agreement shall be binding upon and inure to the benefit of the Partnership, the Company, the Executive 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 

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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.  All notices, demands, requests or other communications (collectively, “Notices”) required to be given or which may be given hereunder shall be in writing and shall be sent by (a) certified or registered mail, return receipt requested, postage prepaid, or (b) national overnight delivery service, or (c) facsimile transmission (provided that the original shall be simultaneously delivered by national overnight delivery service or personal delivery), or (d) personal delivery, addressed as follows:
	
			
	If to Company,
	 
	Tanger Properties Limited Partnership 

	to:
	 
	3200 Northline Avenue

	 
	 
	Suite 360 

	 
	 
	Greensboro, NC 27408

	 
	 
	Attention:  Frank C. Marchisello, Jr.

	 
	 
	 

	With a copy to:
	 
	Latham & Watkins LLP

	 
	 
	885 Third Avenue 

	 
	 
	New York, NY 10022

	 
	 
	Attention: Bradd L. Williamson

	 
	 
	 

	If to the Executive,
	 
	 

	to:
	 
	The address set forth in the Company's records

	 
	 
	 

Any Notice so sent by certified or registered mail, national overnight delivery service or personal delivery shall be deemed given on the date of receipt or refusal by the intended recipient as indicated on the return receipt, or the receipt of the national overnight delivery service or personal delivery service.  Any Notice sent by facsimile transmission shall be deemed given when received by the intended recipient as confirmed by the telecopier electronic confirmation receipt.  A Notice may be given either by a party or by such party’s attorney.  A Party may (i) change the address to which any Notice to that Party hereunder is to be delivered or (ii) designate additional or substituted parties to whom Notices hereunder to such Party should be sent with any such change or designation to be effective five (5) Business Days (as defined below) after delivery of notice thereof to the other Party in the manner herein provided.  As used herein the term “Business Day” shall mean every day, other than Saturdays, Sundays and any other day on which banks in the State of North Carolina are not generally open for the conduct of banking business during normal business hours.

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9.5    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 the Executive by the Partnership and 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.
10.    SECTION 409A.
10.1    General.  The parties acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A.  Notwithstanding any provision of this Agreement to the contrary, in the event that the Company determines that any compensation or benefits payable or provided under this Agreement may be subject to Section 409A, the Company may adopt (without any obligation to do so or to indemnify the Executive for failure to do so) such limited amendments to this Agreement and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Company reasonably determines are necessary or appropriate to (i) exempt the compensation and benefits payable under this Agreement from Section 409A and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement or (ii) comply with the requirements of Section 409A.  Notwithstanding anything herein to the contrary, in no event shall any liability for failure to comply with the requirements of Section 409A be transferred from the Executive or any other individual to the Company or any of its affiliates, employees or agents pursuant to the terms of this Agreement or otherwise.
10.2    Separation from Service under 409A.  Notwithstanding any provision to the contrary in this Agreement:
(a)    No amount shall be payable pursuant to Sections 7.1(a), (b) or (d) unless the termination of the Executive’s employment constitutes a “separation from service” within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations; and
(b)    If the Executive is deemed at the time of his separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the termination benefits to which the Executive is entitled under this Agreement (after taking into account all exclusions applicable to such termination benefits under Section 409A), including, without limitation, any portion of the additional compensation awarded pursuant to Sections 7.1(a), (b) or (d), is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the Executive’s termination benefits shall not be provided to the Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of the Executive’s “separation from service” with the Company (as such term is defined in the Department of Treasury Regulations issued under Section 409A of the Code) or (ii) the date of the Executive’s death.  Upon the earlier of such dates, all payments deferred pursuant to this Section 10.2(b) shall be paid in a lump sum to the Executive, and any remaining payments due under the Agreement shall be paid as otherwise provided herein; and

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(c)    The determination of whether the Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his separation from service shall be made by the Company in accordance with the terms of Section 409A (including without limitation Section 1.409A-1(i) of the Department of Treasury Regulations and any successor provision thereto); and
(d)    For purposes of Section 409A, the Executive’s right to receive installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments; and 
(e)    The reimbursement of any expense under this Agreement shall be made no later than December 31 of the year following the year in which the expense was incurred.  The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year.

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IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate originals as of the day and year first above written.
	
						
	 
	 
	TANGER PROPERTIES LIMITED PARTNERSHIP

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Thomas E. McDonough
	 

	 
	 
	 
	 
	 
	 

	 
	 
	Name:
	 
	Thomas E. McDonough

	 
	 
	Title:
	 
	Vice President

	 
	 
	 
	 
	 
	 

	 
	 
	/s/ Charles A. Worsham
	(SEAL)

	 
	 
	Executive
	 

	 
	 
	 
	 
	 
	 

	 
	 
	Print Name:
	CHARLES A. WORSHAM
	 

Signature Page to Employment Agreement for Charles A. Worsham

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