UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
___________
FORM
8-K
Current
Report Pursuant to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
(Date of
earliest event reported): December 29, 2008
Tanger
Factory Outlet Centers, Inc.
Tanger
Properties Limited Partnership
(Exact
Name of Registrant as Specified in Charter)
North
Carolina
North
Carolina
(State
or Other Jurisdiction
of
Incorporation)
|
1-11986
33-99736-01
(Commission
File
Number)
|
56-1815473
56-1822494
(IRS
Employer
Identification
No.)
|
|
3200
Northline Avenue, Suite 360 Greensboro, NC 27408
(Address
of Principal Executive Offices, including Zip
Code)
|
3200
Northline Avenue, Suite 360 Greensboro, NC 27408
(Address
of Principal Executive Offices, including Zip
Code)
|
Registrant's
telephone number, including area code:
(336) 292-3010
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[
]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange
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[
]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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[
]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Section
5 – Corporate Governance and
Management
|
Item
5.02
|
Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers
|
On
December 29, 2008, in light of Section 409A of the Internal Revenue Code of
1986, as amended, and the Treasury regulations and other guidance issued
thereunder, the Share and Unit Option Committee of Tanger Factory Outlet
Centers, Inc. (the "Company")
approved
an amended and restated Incentive Award Plan. The
material amended and restated provisions of the Incentive Award Plan are
as follows: (1) the removal of the potential award of Dividend
Equivalents
under the Plan, (2) clarification of the timing of, and employment
conditions relating to, the payment of performance awards under the
Incentive Award Plan, and (3) clarification of certain definitions and
terms used in the Incentive Award Plan. No other material amendments were
made to the terms and conditions of the Incentive Award Plan. The foregoing
summary is qualified in its entirety by reference to the Amended and
Restated Incentive Award Plan, which is filed as Exhibit 10.1 to this Form
8-K and incorporated by reference.
On
December 29, 2008, the Company entered into amended and restated employment
agreements (each an “Employment Agreement”) with Stanley K. Tanger, Steven B.
Tanger, Frank C. Marchisello, Jr., Lisa J. Morrison and Joseph H. Nehmen
(collectively, the “Executives”). The Employment Agreements supersede
the Executives’ existing employment agreements and revise certain provisions of
the prior employment agreements for the Executives in order to provide that
certain payments to be made pursuant to the Employment Agreements will be exempt
from or comply with the requirements of Section 409A of the Internal Revenue
Code of 1986, as amended, and the Treasury regulations and other guidance issued
thereunder (collectively, “Section 409A”), including (i) providing that any
compensation or benefits payable to an Executive under an Employment Agreement
that constitutes non-qualified deferred compensation subject to the requirements
of Section 409A (the “Deferred Compensation”) will be delayed for a six month
period following such Executive’s termination date if such Executive
is deemed to be a "specified employee" (within the meaning of Section 409A) at
the time of such termination of employment and (ii) providing that the Company
designates the order of any payment reduction necessary in order to prevent an
Executive from having any liability for the federal excise tax levied on any
“excess parachute payments” under Section 4999 of the Internal Revenue Code. In
addition, the Employment Agreement for Lisa Morrison has been revised to provide
that in the event of a change in control of the Company (as such term is defined
in the applicable Employment Agreement), if the Executive has not terminated her
employment by the seventy-fifth day following such change in control, the
Executive's right to severance benefits under the Employment Agreement
ceases.
The
Employment Agreement for Stanley K. Tanger and the Employment Agreement for
Steven B. Tanger have been revised to reflect their changes in title and
position effective January 1, 2009, as, respectively, Chairman of the board of
directors of the Company and President and Chief Executive Officer of the
Company, as previously announced in the Company’s 8-K dated December 2,
2008.
The
foregoing summary is qualified in its entirety by reference to the Employment
Agreements, which are filed as Exhibits 10.5, 10.6, 10.7, 10.8 and 10.9 to this
Form 8-K and incorporated by reference.
Section
9 - Financial Statements and
Exhibits
|
Item
9.01
|
Financial
Statements and Exhibits
|
The
following exhibits are included with this Report:
Exhibit
10.1
|
Amended
and Restated Incentive Award Plan of Tanger Factory Outlet Centers, Inc.
and Tanger Properties Limited Partnership, effective December 29,
2008.
|
Exhibit
10.5
|
Amended
and Restated Employment Agreement for Stanley K. Tanger, as of December
29, 2008.
|
Exhibit
10.6
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Amended
and Restated Employment Agreement for Steven B. Tanger, as of December 29,
2008.
|
Exhibit
10.7
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Amended
and Restated Employment Agreement for Frank C. Marchisello, Jr., as of
December 29, 2008.
|
Exhibit
10.8
|
Amended
and Restated Employment Agreement for Lisa J. Morrison, as of December 29,
2008.
|
Exhibit
10.9
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Amended
and Restated Employment Agreement for Joseph H. Nehmen, as of December 29,
2008.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrants have
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated: December
31, 2008
TANGER
FACTORY OUTLET CENTERS, INC.
By:
/s/ Frank C.
Marchisello
Jr.
Frank
C. Marchisello, Jr.
Executive
Vice President, Chief Financial Officer and Secretary
TANGER
PROPERTIES LIMITED PARTNERSHIP
By:
TANGER GP TRUST, its sole general partner
By:
/s/ Frank C.
Marchisello
Jr.
Frank
C. Marchisello, Jr.
Vice
President, Treasurer and Assistant Secretary
EXHIBIT
INDEX
Exhibit
No.
Exhibit
10.1
|
Amended
and Restated Incentive Award Plan of Tanger Factory Outlet Centers, Inc.
and Tanger Properties Limited Partnership, effective December 29,
2008.
|
Exhibit
10.5
|
Amended
and Restated Employment Agreement for Stanley K. Tanger, as of December
29, 2008.
|
Exhibit
10.6
|
Amended
and Restated Employment Agreement for Steven B. Tanger, as of December 29,
2008.
|
Exhibit
10.7
|
Amended
and Restated Employment Agreement for Frank C. Marchisello, Jr., as of
December 29, 2008.
|
Exhibit
10.8
|
Amended
and Restated Employment Agreement for Lisa J. Morrison, as of December 29,
2008.
|
Exhibit
10.9
|
Amended
and Restated Employment Agreement for Joseph H. Nehmen, as of December 29,
2008.
|
THE
AMENDED AND RESTATED INCENTIVE AWARD PLAN
OF
TANGER
FACTORY OUTLET CENTERS, INC. AND
TANGER
PROPERTIES LIMITED PARTNERSHIP
Tanger Factory Outlet Centers, Inc., a
corporation organized under the laws of the state of North Carolina (the
“Company”), adopted the Stock Option Plan for Directors and Executive and Key
Employees of Tanger Factory Outlet Centers, Inc., (the “Plan”) on May 28,
1993. The Plan has subsequently been amended from time to
time. Tanger Properties Limited Partnership, a partnership organized
under the laws of the state of North Carolina (the “Partnership”) adopted the
Partnership Unit Option Plan for Employees of Tanger Properties Limited
Partnership (the “Unit Option Plan”) on May 28, 1993, which plan has also
subsequently been amended from time to time. In order to conform the
Plan document to such amendments, to further amend the Plan in certain respects,
and to merge the Unit Option Plan into the Plan, the Plan was amended, restated
and renamed and adopted by the Company and the Partnership, effective as of May
14, 2004. Such Amended and Restated Incentive Award Plan of Tanger
Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership
constituted a complete amendment and restatement of the Plan in its entirety and
a continuation of the Plan. The Plan also serves as the successor to
the Unit Option Plan and no further options have been granted under the Unit
Option Plan since May 14, 2004. All options outstanding under the
Unit Option Plan on May 14, 2004 have been and, to the extent applicable, shall
continue to be treated as outstanding options under the
Plan. However, each outstanding option so incorporated has been and a
shall hereafter continue to be governed solely by the terms of the documents
evidencing such option, and no provision of the Plan has been or shall be deemed
to affect or otherwise modify the rights or obligations of the holders of such
incorporated options with respect to their acquisition of Units or Common
Shares. In order to amend the Plan in certain respects in light of
Section 409A of the Code and Department of Treasury regulations and other
interpretive guidance issued thereunder, including, without limitation, any such
regulations or other guidance that may be issued after the effective date of
this amendment and restatement of the Plan (collectively, “
Section 409A
”) the
Plan is now amended and restated by the Company and the Partnership, effective
as of December 29, 2008.
The
purposes of this Plan are as follows:
(1)To
further the growth, development and financial success of the Company and the
Partnership by providing additional incentives to directors and employees of the
Company, the Partnership and their subsidiaries, who have been or will be given
responsibility for the management or administration of the Company’s business
affairs, by assisting them to become owners of the Company’s Common Shares and
thus to benefit directly from such growth, development and financial
success.
(2)To
enable the Company, the Partnership and their subsidiaries to obtain and retain
the services of the types of professional, technical and managerial employees
and directors considered essential to the long range success of the Company by
providing and offering them an opportunity to own Common Shares and/or rights
which will reflect the growth, development and financial success of the
Company.
This Plan is intended to comply with
all applicable law, including the requirements of Section 409A and shall be
operated and interpreted in accordance with this intention. This Plan
has been operated in reasonable good faith compliance with Section 409A (within
the meaning of Internal Revenue Service Notices 2005-1, 2006-79 and 2007-86)
during the period beginning on January 1, 2005 and ending on the effective date
of this amendment and restatement of the Plan.
ARTICLE
I.
DEFINITIONS
Wherever the following terms are used
in this Plan they shall have the meanings specified below, unless the context
clearly indicates otherwise. The masculine pronoun shall include the
feminine and neuter and the singular shall include the plural, where the context
so indicates.
Section
1.1
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Administrator
|
“Administrator” shall mean the entity
that conducts the general administration of the Plan as provided
herein. With reference to the administration of the Plan with respect
to Awards granted to Independent Directors, the term “Administrator” shall refer
to the Board. With reference to the administration of the Plan with
respect to any other Award, the term “Administrator” shall refer to the
Committee unless the Board has assumed the authority for administration of the
Plan generally as provided in Section 9.2.
“Award” shall mean an Option, a
Restricted Share award, a Performance Award, a Deferred Share award or a Share
Payment award which may be awarded or granted under the Plan (collectively,
“Awards”).
Section
1.3
|
Award
Agreement
|
“Award Agreement” shall mean a written
agreement executed by an authorized officer of the Company, the Partnership or a
Subsidiary, as applicable, and the Holder which shall contain such terms and
conditions with respect to an Award as the Administrator shall determine,
consistent with the Plan.
“Award Limit” shall mean (a) with
respect to Options, 180,000 Common Shares; (b) with respect to Performance
Awards, $1,000,000; and (c) with respect to all other Awards, 60,000 Common
Shares, in each case as adjusted pursuant to Section 10.3.
“Board” shall mean the Board of
Directors of the Company.
Section
1.6
|
Change
in Control
|
“Change in Control” shall
mean:
(a)
The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), (a “Person”) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the
then outstanding Common Shares (the “Outstanding Common Shares”) or (ii) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change in
Control: (i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any corporation pursuant to
a transaction which complies with clauses (i), (ii) and (iii) of subsection (c)
of this Section 1.6; or
(b)
Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
(c)
Consummation
of a reorganization, merger or consolidation or sale or other disposition of all
or substantially all of the assets of the Company or the acquisition of assets
of another corporation (a “Business Combination”), in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Common Shares and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own,
directly
or indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Common Shares and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
(d)
Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.
For
purposes of this Plan, the Partnership Units shall be treated as, and aggregated
with, the Common Shares and/or the Outstanding Company Voting Securities to the
extent such Partnership Units are convertible into Common Shares or voting
securities, respectively.
Section
1.7
Code
“Code” shall mean the Internal Revenue
Code of 1986, as amended.
“Committee” shall mean the Share and
Unit Option Committee of the Board, appointed as provided in Section
9.1.
Section
1.9
|
Common
Shares
|
“Common
Shares” shall mean the common shares of the Company, par value $0.01 per
share.
“Company”
shall mean Tanger Factory Outlet Centers, Inc., a North Carolina
corporation.
Section
1.11
|
Company
Employee
|
“Company Employee” shall mean any
employee (as defined in accordance with Section 3401(c) of the Code) of the
Company or of any Company Subsidiary.
Section
1.12
|
Company
Subsidiary
|
“Company Subsidiary” shall mean (i) a
corporation, association or other business entity of which 50% or more of the
total combined voting power of all classes of capital stock is owned, directly
or indirectly, by the Company or by one or more Company Subsidiaries or by the
Company and one or more Company Subsidiaries, (ii) any partnership or limited
liability company of which 50% or more of the capital and profits interests is
owned, directly or indirectly, by the Company or by one or more Company
Subsidiaries or by the Company and one or more Company Subsidiaries, and (iii)
any other entity not described in clauses (i) or (ii) above of which 50% or more
of the ownership and the power, pursuant to a written contract or agreement, to
direct the policies and management or the financial and other affairs thereof,
are owned or controlled by the Company or by one or more other Company
Subsidiaries or by the Company and one or more Company Subsidiaries;
provided
,
however
, that
“Company Subsidiary” shall not include the Partnership or any Partnership
Subsidiary.
Section
1.13
|
Deferred
Shares
|
“Deferred Shares” shall mean Common
Shares awarded under Article VIII of the Plan.
“Director” shall mean a member of the
Board.
“Employee” shall mean any Company
Employee or Partnership Employee.
Section
1.16
|
Exchange
Act
|
“Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.
Section
1.17
|
Fair
Market Value
|
“Fair Market Value” of a Common Share
as of a given date shall be (i) the closing price of the Common Shares, on the
principal exchange on which Common Shares are trading, on the trading day
previous to such date, or, if Common Shares were not traded on the day previous
to such date, then on the next preceding trading day during which a sale
occurred; (ii) if such Common Shares are not traded on an exchange but are
quoted on Nasdaq or a successor quotation system, (A) the last sales price (if
the Common Shares are then listed as Global Market Issue under the Nasdaq Global
Market System) or (B) the mean between the closing representative bid and asked
prices for the Common Shares on the trading day previous to such date as
reported by Nasdaq or such successor quotation system; or (iii) if such Common
Shares are not publicly traded on an exchange and not quoted on Nasdaq or a
successor quotation system, the fair market value of a Common Share as
established by the Administrator acting in good faith.
“Holder” shall mean a person who has
been granted or awarded an Award.
Section
1.19
|
Incentive
Share Option
|
“Incentive Share Option” shall mean an
option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Share Option by the
Administrator.
Section
1.20
|
Independent
Director
|
“Independent Director” shall mean a
member of the Board who is not an Employee.
Section
1.21
|
Non-Qualified
Share Option
|
“Non-Qualified Share Option” shall mean
an Option which is not designated as an Incentive Share Option by the
Administrator.
“Option” shall mean an option to
purchase Common Shares granted under Article IV of this Plan. An
Option granted under this Plan shall, as determined by the Administrator, be
either a Non-Qualified Share Option or an Incentive Share Option; provided,
however, that Options granted to Independent Directors and to individuals other
than Company Employees shall be Non-Qualified Share Options.
“Partnership” shall mean Tanger
Properties Limited Partnership, a partnership organized under the laws of the
state of North Carolina.
Section
1.24
|
Partnership
Agreement
|
“Partnership Agreement” shall mean the
Amended and Restated Agreement of Limited Partnership of Tanger Properties
Limited Partnership, dated as of December 30, 1999, as the same may be amended,
modified or restated from time to time.
Section
1.25
|
Partnership
Employee
|
“Partnership Employee” shall mean any
employee (as defined in accordance with Section 3401(c) of the Code) of the
Partnership or of any Partnership Subsidiary.
Section
1.26
|
Partnership
Holder Purchased Shares
|
“Partnership Holder Purchased Shares”
shall have the meaning set forth in Section 6.4.
Section
1.27
|
Partnership
Purchase Price
|
“Partnership Purchase Price” shall have
the meaning set forth in Section 6.4.
Section
1.28
|
Partnership
Purchased Shares
|
“Partnership Purchased Shares” shall
have the meaning set forth in Section 6.4.
Section
1.29
|
Partnership
Subsidiary
|
“Partnership Subsidiary” shall mean (i)
a corporation, association or other business entity of which 50% or more of the
total combined voting power of all classes of capital stock is owned, directly
or indirectly, by the Partnership or by one or more Partnership Subsidiaries or
by the Partnership and one or more Partnership Subsidiaries, (ii) any
partnership or limited liability company of which 50% or more of the capital and
profits interests is owned, directly or indirectly, by the Partnership or by one
or more Partnership Subsidiaries or by the Partnership and one or more
Partnership Subsidiaries, and (iii) any other entity not described in clauses
(i) or (ii) above of which 50% or more of the ownership and the power, pursuant
to a written contract or agreement, to direct the policies and management or the
financial and other affairs thereof, are owned or controlled by the Partnership
or by one or more other Partnership Subsidiaries or by the Partnership and one
or more Partnership Subsidiaries.
Section
1.30
|
Partnership
Unit; Unit
|
“Partnership Unit” shall have the
meaning ascribed to such term in the Partnership Agreement and may be referred
to herein as a “Unit”.
Section
1.31
|
Performance
Award
|
“Performance Award” shall mean a cash
bonus, share bonus or other performance or incentive award that is paid in cash,
Common Shares or a combination of both, awarded under Article VIII of this
Plan.
Section
1.32
|
Performance
Criteria
|
“Performance Criteria” shall mean (a)
the following business criteria with respect to the Company, the Partnership or
any Subsidiary or any division or operating unit of either of them: (i) net
income; (ii) pre-tax income; (iii) operating income; (iv) cash flow; (v)
earnings per share; (vi) return on equity; (vii) return on invested capital or
assets; (viii) cost reductions or savings; (ix) funds from operations; (x)
appreciation in the Fair Market Value of a Common Share; (xi) total return
performance on Common Shares as reported in the Company’s annual proxy
statement; (l) operating profit; (m) working capital; and (n) earnings before
any one or more of the following items: interest, taxes, depreciation or
amortization;
provided,
that each of the business criteria described in subsections (a) through (n)
shall be determined in accordance with generally accepted accounting principles
(“GAAP”); and (b) the following objective performance criteria as applied to any
Employee: (i) lease renewals; (ii) occupancy rates; (iii) average
tenant sales per square foot; and (iv) rental rates. For each
fiscal year of the Company, the Committee may provide for objectively
determinable adjustments, as determined in accordance with GAAP, to any of the
business criteria described in subsections (a) and (b) for one or more of the
items of gain, loss, profit or expense: (A) determined to be
extraordinary or unusual in nature or infrequent in occurrence; (B) related to
the disposal of a segment of a business; (C) related to a change in accounting
principles under GAAP; (D) related to discontinued operations that do not
qualify as a segment of a business under GAAP; (E) attributable to the
business operations of any entity acquired by the Company or the Partnership
during the fiscal year and (F) reflecting adjustments to funds from operations
with respect to straight-line rental income as reported in the Company’s
Exchange Act reports.
“Plan” shall mean The Amended and
Restated Incentive Award Plan of Tanger Factory Outlet Centers, Inc. and Tanger
Properties Limited Partnership.
“REIT” shall mean a real estate
investment trust within the meaning of Sections 856 through 860 of the
Code.
Section
1.35
|
Restricted
Share
|
“Restricted Share” shall mean a Common
Share awarded under Article VII.
“Rule 16b-3” shall mean that certain
Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to
time.
“Secretary” shall mean the Secretary of
the Company.
Section
1.38
|
Section
162(m) Participant
|
“Section 162(m) Participant” shall mean
any Employee designated by the Administrator as an individual whose compensation
for the fiscal year of such designation or a future fiscal year may be subject
to the limit on deductible compensation imposed by Section 162(m) of the
Code.
Section
1.39
|
Section
409A
|
“Section 409A” shall have the meaning
set forth in the preamble.
Section
1.40
|
Share
Payment
|
“Share Payment” shall mean (a) a
payment in the form of Common Shares, or (b) an option or other right to
purchase Common Shares, as part of a deferred compensation arrangement, made in
lieu of all or any portion of the compensation, including without limitation,
salary, bonuses and commissions, that would otherwise become payable to an
Employee or Independent Director in cash, awarded under Article VIII of the
Plan.
“Subsidiary” shall mean any Company
Subsidiary or Partnership Subsidiary.
Section
1.42
|
Termination
of Directorship
|
“Termination of Directorship” shall
mean the time when a Holder who is an Independent Director ceases to be a
Director for any reason, including, but not by way of limitation, a termination
by resignation, failure to be elected, death or retirement; provided, that, in
any such case, such termination constitutes a “separation from service” within
the meaning of Section 1.409A-1(h) of the Department of Treasury
Regulations. The Board, in its sole discretion, shall determine the
effect of all matters and questions relating to Termination of Directorship with
respect to Independent Directors.
Section
1.43
|
Termination
of Employment
|
“Termination of Employment” shall mean
the time when the employee-employer relationship between a Holder and the
Company, the Partnership or any Subsidiary of either of them is terminated for
any reason, with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death, disability or retirement;
provided, that, in any such case, such termination constitutes a “separation
from service” within the meaning of Section 1.409A-1(h) of the Department of
Treasury Regulations; but excluding (i) a termination where there is a
simultaneous reemployment or continuing employment of such Holder by the
Company, the Partnership or any Subsidiary of either of them, (ii) at the
discretion of the Administrator, a termination which results in a temporary
severance of the employee-employer relationship, and (iii) at the discretion of
the Administrator, a termination which is followed by the simultaneous
establishment of a consulting relationship by the Company, the Partnership or
any Subsidiary of either of them with the former employee. The
Administrator, in its sole discretion, shall determine the effect of all matters
and questions relating to Termination of Employment, including, but not by way
of limitation, the question of whether a Termination of Employment resulted from
a discharge for good cause, and all questions of whether a particular leave of
absence constitutes a Termination of Employment; provided, however, that, unless
otherwise determined by the Administrator in its discretion, a leave of absence,
change in status from an Employee to an independent contractor or other change
in the employee-employer relationship shall constitute a Termination of
Employment if, and to the extent that, such leave of absence, change in status
or other change interrupts employment for the purposes of Section 422(a)(2) of
the Code and the then applicable regulations and revenue rulings under said
Section.
ARTICLE
II.
SHARES
SUBJECT TO PLAN
Section
2.1
|
Shares
Subject to Plan
|
(a)
Subject
to Section 2.2 and adjustment pursuant to Section 10.3, the aggregate number of
Common Shares (or Units) which may be issued with respect to Awards under the
Plan shall not exceed 3,000,000. Such limitation shall be reduced by
one for each Unit issued pursuant to the exercise of options granted under the
Unit Option Plan. The Common Shares issuable with respect to Awards
may be either previously authorized but unissued shares or treasury
shares.
(b)
The
maximum number of Common Shares which may be subject to Awards granted under the
Plan to any individual in any calendar year shall not exceed the Award
Limit. To the extent required by Section 162(m) of the Code, shares
subject to Options which are canceled continue to be counted against the Award
Limit.
Section
2.2
|
Share
Counting
|
Notwithstanding Section 2.1(a): (i) the
Administrator may adopt reasonable counting procedures to ensure appropriate
counting, avoid double counting (as, for example, in the case of tandem or
substitute awards), and make adjustments if the number of Common Shares actually
delivered differs from the number of shares previously counted in connection
with an Award; (ii) Common Shares that are potentially deliverable under
any Award that expires or is canceled, forfeited, settled in cash or otherwise
terminated without a delivery of such shares to the Holder will not be counted
as delivered under the Plan; (iii) Common Shares that have been issued in
connection with any Award (e.g., Restricted Shares) that is canceled, forfeited,
or settled in cash such that those shares are returned to the Company will again
be available for Awards; and (iv) Common Shares withheld in payment of the
exercise
price or taxes relating to any Award and shares equal to the number surrendered
in payment of any exercise price or taxes relating to any Award shall be deemed
to constitute shares not delivered to the Holder and shall be deemed to be
available for Awards under the Plan;
provided, however,
that, no
shares shall become available pursuant to this Section 2.2 to the extent that
(x) the transaction resulting in the return of shares occurs more than ten years
after the date of the most recent shareholder approval of the Plan, or (y) such
return of shares would constitute a “material revision” of the Plan subject to
shareholder approval under then applicable rules of the New York Stock Exchange
(or any other applicable exchange or quotation system). In addition,
in the case of any Award granted in substitution for an award of a company or
business acquired by the Company, the Partnership or any Subsidiary, Common
Shares issued or issuable in connection with such substitute Award shall not be
counted against the number of shares reserved under the Plan, but shall be
available under the Plan by virtue of the Company’s assumption of the plan or
arrangement of the acquired company or business. This
Section 2.2 shall apply to the share limit imposed to conform to the
regulations promulgated under the Code with respect to Incentive Share Options
only to the extent consistent with applicable regulations relating to Incentive
Share Options under the Code. Because shares will count against the
number reserved in Section 2.1 upon delivery, the Administrator may, subject to
the share counting rules under this Section 2.2, determine that Awards may be
outstanding that relate to a greater number of shares than the aggregate
remaining available under the Plan, so long as Awards will not result in
delivery and vesting of shares in excess of the number then available under the
Plan. For purposes of this Section 2.2, Units under options granted
under the Unit Option Plan will be treated as, and aggregated with, Common
Shares.
ARTICLE
III.
GRANTING
OF AWARDS
Section
3.1
|
Award
Agreement
|
Each
Award shall be evidenced by an Award Agreement. Award Agreements
evidencing Awards intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code.
Section
3.2
|
Provisions
Applicable to Section 162(m)
Participants
|
(a)
The
Committee, in its discretion, may determine whether or not an Award is to
qualify as performance-based compensation as described in Section 162(m)(4)(C)
of the Code.
(b)
Notwithstanding
anything in the Plan to the contrary, the Committee may, in its sole discretion,
grant any Award to a Section 162(m) Participant, including Restricted Shares the
restrictions with respect to which lapse upon the attainment of performance
goals which are related to one or more of the Performance Criteria, and any
performance or incentive award described in Article VIII that vests or becomes
exercisable or payable upon the attainment of performance goals which are
related to one or more of the Performance Criteria.
(c)
To the
extent necessary to comply with the performance-based compensation requirements
of Section 162(m)(4)(C) of the Code, with respect to any Award granted under
Articles VII or VIII to a Section 162(m) Participant which is intended by the
Committee to qualify as performance-based compensation, no later than ninety
(90) days following the commencement of any fiscal year in question or any other
designated fiscal period or period of service (or such other time as may be
required or permitted by Section 162(m) of the Code), the Committee shall, in
writing, (i) designate one or more Section 162(m) Participants,
(ii) select the Performance Criteria applicable to the fiscal year or other
designated fiscal period or period of service, (iii) establish the various
performance targets, in terms of an objective formula or standard, and amounts
of such Awards, as applicable, which may be earned for such fiscal year or other
designated fiscal period or period of service, and (iv) specify the relationship
between Performance Criteria and the performance targets and the amounts of such
Awards, as applicable, to be earned by each Section 162(m) Participant for such
fiscal year or other designated fiscal period or period of
service. Following the completion of each fiscal year or other
designated fiscal period or period of service, the Committee shall certify in
writing whether the applicable performance targets have been achieved for such
fiscal year or other designated fiscal period or period of
service. Except as otherwise provided by any written agreement
between the Company and any applicable Holder, in determining the amount earned
by a Section 162(m) Participant, the Committee shall have the right to reduce
(but not to increase) the amount payable at a given level of performance to take
into account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the fiscal year or other
designated fiscal period or period of service.
(d)
Furthermore,
notwithstanding any other provision of the Plan, any Award which is granted to a
Section 162(m) Participant and which is intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall be
subject to any additional limitations set forth in Section 162(m) of the Code
(including any amendment to Section 162(m) of the Code) or any regulations or
rulings issued thereunder that are requirements for qualification as
performance-based compensation as described in Section 162(m)(4)(C) of the Code,
and the Plan shall be deemed amended to the extent necessary to conform to such
requirements.
Section
3.3
|
Limitations
Applicable to Section 16 Persons
|
Notwithstanding any other provision of
the Plan, the Plan and any Award granted or awarded to any individual who is
then subject to Section 16 of the Exchange Act, shall be subject to any
additional limitations set forth in any applicable exemptive rule under Section
16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange
Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and Awards
granted or awarded hereunder shall be deemed amended to the extent necessary to
conform to such applicable exemptive rule.
Section
3.4
|
Consideration
|
In consideration of an Award under the
Plan, the Holder shall agree, in the written Award Agreement, to remain in the
employ of (or to serve as a Director of, as applicable) the Company, the
Partnership or a Subsidiary for a period of one year from the date of Award
grant (or, in the case of a Director, until the next annual meeting of
shareholders of the Company), or such shorter period as may be fixed by the
Administrator in the Award Agreement or by action of the Administrator following
grant of the Award.
Section
3.5
|
At-Will
Employment
|
Nothing in the Plan or in any Award
Agreement hereunder shall confer upon any Holder any right to continue in the
employ of the Company, the Partnership or any Subsidiary, or as a Director of
the Company, or shall interfere with or restrict in any way the rights of the
Company, the Partnership or any Subsidiary, which are hereby expressly reserved,
to discharge any Holder at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in a written employment
agreement between the Holder and the Company, the Partnership or any
Subsidiary.
ARTICLE
IV.
GRANTING
OF OPTIONS
Any Employee selected by the Committee
pursuant to Section 4.3(a)(i) shall be eligible to be granted an
Option. Any Independent Director selected by the Board pursuant to
Section 4.3(b)(i) shall be eligible to be granted an Option.
Section
4.2
|
Qualification
of Incentive Share Options
|
No Incentive Share Option shall be
granted to any person who is not a Company Employee.
Section
4.3
|
Granting
of Options
|
(a)
The
Committee shall from time to time, in its sole discretion, and subject to
applicable limitations of this Plan:
(i)
|
Select
from among the Employees (including Employees who have previously received
Awards) such of them as in its opinion should be granted
Options;
|
(ii)
|
Subject
to the Award Limit, determine the number of shares to be subject to such
Options granted to the selected
Employees;
|
(iii)
|
Subject
to Section 4.2, determine whether such Options are to be Incentive Share
Options or Non-Qualified Share Options and whether such Options are to
qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code; and
|
(iv)
|
Determine
the terms and conditions of such Options, consistent with this Plan;
provided, however, that the terms and conditions of Options intended to
qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall include, but not be limited to, such terms
and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code.
|
(b)
The Board
shall from time to time, in its sole discretion, and subject to applicable
limitations of this Plan:
(i)
|
Determine
which Independent Directors (including Independent Directors who have
previously received Options) such of them as in its opinion should be
granted Options; and
|
(ii)
|
Determine
the terms and conditions of such Options, consistent with this
Plan.
|
(c)
Upon the
selection of an Employee or Independent Director to be granted an Option, the
Administrator shall instruct the Secretary to issue the Option and may impose
such conditions on the grant of the Option as it deems appropriate.
ARTICLE
V.
TERMS
OF OPTIONS
Section
5.1
|
Exercise
Price
|
The exercise price per share of the
shares subject to each Option shall be set by the Administrator in its
discretion; provided, however, that such price shall be no less than the Fair
Market Value of a Common Share on the date the Option is granted, and, in the
case of Incentive Share Options granted to an individual then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of shares of the Company or any subsidiary or parent
corporation thereof (within the meaning of Section 422 of the Code) such price
shall not be less than 110% of the Fair Market Value of a Common Share on the
date the Option is granted.
The term of an Option shall be set by
the Administrator in its discretion; provided, however, that (i) in the case of
Incentive Share Options, the term shall not be more than ten (10) years from the
date the Incentive Share Option is granted, or five (5) years from such date if
the Incentive Share Option is granted to an individual then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of shares of the Company or any subsidiary or parent
corporation thereof (within the meaning of Section 422 of the
Code). Except as limited by requirements of Section 422 of the Code
and regulations and rulings thereunder applicable to Incentive Share Options and
the requirements of Section 409A, the Administrator may extend the term of any
outstanding Option in connection with any Termination of Employment or
Termination of Directorship, or amend any other term or condition of such Option
relating to such a termination.
Section
5.3
|
Option
Vesting
|
(a)
The
period during which the right to exercise an Option in whole or in part vests in
the Holder shall be set by the Administrator and the Administrator may determine
that an Option may not be exercised in whole or in part for a specified period
after it is granted. At any time after grant of an Option, the
Administrator may, in its sole discretion and subject to whatever terms and
conditions it selects, accelerate the period during which an Option
vests.
(b)
No
portion of an Option which is unexercisable at Termination of Employment or
Termination of Directorship shall thereafter become exercisable, except as may
be otherwise provided by the Administrator (other than with respect to Options
granted to Independent Directors) either in the Award Agreement or by action of
the Administrator following the grant of the Option.
(c)
To the
extent that the aggregate Fair Market Value of shares with respect to which
“incentive stock options” (within the meaning of Section 422 of the Code, but
without regard to Section 422(d) of the Code) are exercisable for the first time
by a Holder during any calendar year (under the Plan and all other incentive
stock option plans of the Company and any subsidiary) exceeds $100,000, such
Options shall be treated as Non-Qualified Share Options to the extent required
by Section 422 of the Code. The rule set forth in the preceding
sentence shall be applied by taking options into account in the order in which
they were granted. For purposes of this Section 5.3(c), the Fair
Market Value of shares shall be determined as of the time the option with
respect to such shares is granted.
(d)
In the
event of a Change in Control, each Option granted to an Independent Director or
to an Employee shall be exercisable as to all shares covered thereby immediately
prior to the consummation of such Change in Control and subject to such
consummation, notwithstanding anything to the contrary in this Section 5.3 or
the vesting schedule of such Option.
ARTICLE
VI.
EXERCISE
OF OPTIONS
Section
6.1
|
Partial
Exercise
|
An exercisable Option may be exercised
in whole or in part. However, an Option shall not be exercisable with
respect to fractional shares and the Administrator may require that, by the
terms of the Option, a partial exercise be with respect to a minimum number of
shares.
Section
6.2
|
Manner
of Exercise
|
All or a portion of an exercisable
Option shall be deemed exercised upon delivery of all of the following to the
Secretary or his office prior to the time when such Option or such portion
becomes unexercisable under the Plan or the applicable Award
Agreement:
(a)
A written
notice complying with the applicable rules established by the Administrator
stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Holder or other person then entitled to exercise
the Option or such portion of the Option;
(b)
Such
representations and documents as the Administrator, in its sole discretion,
deems necessary or advisable to effect compliance with all applicable provisions
of the Securities Act of 1933, as amended, and any other federal or state
securities laws or regulations. The Administrator may, in its sole
discretion, also take whatever additional actions it deems appropriate to effect
such compliance including, without limitation, placing legends on share
certificates and issuing stop-transfer notices to agents and
registrars;
(c)
In the
event that the Option shall be exercised pursuant to Section 10.1 by any person
or persons other than the Holder, appropriate proof of the right of such person
or persons to exercise the Option; and
(d)
Full cash
payment to the Secretary for the shares with respect to which the Option, or
portion thereof, is exercised. However, the Administrator may in its
discretion (i) allow a delay in payment up to thirty (30) days from the date the
Option, or portion thereof, is exercised; (ii) allow payment, in whole or in
part, through the delivery of Common Shares owned by the Holder, duly endorsed
for transfer to the Company with a Fair Market Value on the date of delivery
equal to the aggregate exercise price of the Option or exercised portion
thereof; (iii) allow payment, in whole or in part, through the surrender of
Common Shares then issuable upon exercise of the Option having a Fair Market
Value on the date of Option exercise equal to the aggregate exercise price of
the Option or exercised portion thereof; (iv) allow payment, in whole or in
part, through the delivery of property of any kind which
constitutes
good and valuable consideration; (v) allow payment, in whole or in part, through
the delivery of a full recourse promissory note bearing interest (at no less
than such rate as shall then preclude the imputation of interest under the Code)
and payable upon such terms as may be prescribed by the Administrator; (vi)
allow payment, in whole or in part, through the delivery of a notice that the
Holder has placed a market sell order with a broker with respect to Common
Shares then issuable upon exercise of the Option, and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to the
Company in satisfaction of the Option exercise price, provided that payment of
such proceeds is then made to the Company upon settlement of such sale; or (vii)
allow payment through any combination of the consideration provided in the
foregoing subparagraphs (ii), (iii), (iv), (v) and (vi). In the case
of a promissory note, the Administrator may also prescribe the form of such note
and the security to be given for such note. The Option may not be
exercised, however, by delivery of a promissory note or by a loan from the
Company, the Partnership or any Subsidiary when or where such loan or other
extension of credit is prohibited by law, and payment in the manner prescribed
by the preceding sentences shall not be permitted to the extent that the
Administrator determines that payment in such manner may result in an extension
or maintenance of credit, an arrangement for the extension of credit, or a
renewal of an extension of credit in the form of a personal loan to or for any
Director or executive officer of the Company that is prohibited by Section 13(k)
of the Exchange Act or other applicable law.
Section
6.3
|
Transfer
of Shares to a Company Employee or Independent
Director
|
As soon as practicable after receipt by
the Company, pursuant to Section 6.2(d), of payment for the shares with respect
to which an Option (which in the case of a Company Employee or Independent
Director was issued to and is held by such Holder in such capacity), or portion
thereof, is exercised by a Holder who is a Company Employee or Independent
Director, then, with respect to each such exercise, the Company shall transfer
to the Holder the number of shares equal to
(a)
The
amount of the payment made by the Holder to the Company pursuant to Section
6.2(d), divided by
(b)
The price
per share of the shares subject to the Option as determined pursuant to Section
5.1.
Section
6.4
|
Transfer
of Shares to a Partnership Employee
|
As soon as practicable after receipt by
the Company, pursuant to Section 6.2(d), of payment for the shares with respect
to which an Option (which was issued to and is held by a Partnership Employee in
such capacity), or portion thereof, is exercised by a Holder who is a
Partnership Employee, then, with respect to each such exercise:
(a)
the
Company shall transfer to the Holder the number of shares equal to (A) the
amount of the payment made by the Holder to the Company pursuant to Section
6.2(d) divided by (B) the Fair Market Value of a share of Common Stock at
the time of exercise (the “
Partnership Holder Purchased
Shares
”);
(b)
the
Company shall sell to the Partnership the number of shares (the “
Partnership Purchased
Shares
”) equal to the excess of (i) the amount obtained by dividing
(A) the amount of the payment made by the Holder to the Company pursuant to
Section 6.2(d) by (B) the price per share of the shares subject to the
Option as determined pursuant to Section 5.1, over (ii) the number of
Partnership Holder Purchased Shares. The price to be paid by the
Partnership to the Company for the Partnership Purchased Shares (the “
Partnership Purchase
Price
”) shall be an amount equal to the product of (x) the number of
Partnership Purchased Shares and (y) the Fair Market Value of a share of Common
Stock at the time of the exercise; and
(c)as
soon as practicable after receipt of the Partnership Purchased Shares by the
Partnership, the Partnership shall transfer such shares to the Holder at no
additional cost, as additional compensation.
Section
6.5
|
Transfer
of Payment to the Partnership
|
As soon as practicable after receipt by
the Company of the amounts described in Sections 6.2(d) and 6.4(b), the Company
shall contribute to the Partnership an amount of cash equal to such payments and
the Partnership shall issue an additional interest in the Partnership on the
terms set forth in the Partnership Agreement.
Section
6.6
|
Conditions
to Issuance of Share Certificates
|
Neither the Company nor the Partnership
shall be required to issue or deliver any certificate for Common Shares
purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:
(a)
The
admission of such shares to listing on all stock exchanges on which such series
or class of shares is then listed;
(b)
The
completion of any registration or other qualification of such shares under any
state or federal law, or under the rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body which the
Administrator shall, in its sole discretion, deem necessary or
advisable;
(c)
The
obtaining of any approval or other clearance from any state or federal
governmental agency which the Administrator shall, in its sole discretion,
determine to be necessary or advisable;
(d)
The lapse
of such reasonable period of time following the exercise of the Option as the
Administrator may establish from time to time for reasons of administrative
convenience; and
(e)
The
receipt by the Company or the Partnership of full payment for such shares,
including payment of any applicable withholding tax.
Section
6.7
|
Rights
as Shareholders
|
The Holders of Options shall not be,
nor have any of the rights or privileges of, shareholders of the Company in
respect of any shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been issued by the
Company or the Partnership to such Holders.
Section
6.8
|
Ownership
and Transfer Restrictions
|
The Administrator, in its sole
discretion, may impose such restrictions on the ownership and transferability of
the shares purchasable upon the exercise of an Option as it deems
appropriate. Any such restriction shall be set forth in the
respective Award Agreement or other written agreement between the Company and
the Holder and may be referred to on the certificates evidencing such
shares.
ARTICLE
VII.
AWARD OF
RESTRICTED SHARES
Subject
to the Award Limit, Restricted Shares may be awarded to any Employee or
Independent Director.
Section
7.2
|
Award
of Restricted Shares
|
(a)
The
Administrator may from time to time, in its sole discretion:
(i)
Select
from among Employees and Independent Directors (including Employees and
Independent Directors who have previously received other Awards under the Plan)
such of them as in its opinion should be awarded Restricted Shares;
and
(ii)
Determine
the purchase price, if any, and other terms and conditions (including, without
limitation, in the case of awards to Employees of the Partnership or any
Partnership Subsidiary, the mechanism for the transfer of the Restricted Shares
and payment therefor, and any surrender of such Restricted Shares pursuant to
Section 7.4) applicable to such Restricted Shares, consistent with the
Plan.
(b)
The
Administrator shall establish the purchase price, if any, and form of payment
for Restricted Shares;
provided
,
however
, that such
purchase price, if any, shall be no less than the par value of the Common Shares
to be purchased, unless otherwise permitted by applicable state
law. In all cases, legal consideration shall be required for each
issuance of a Restricted Share.
(c)
Upon the
selection of an Employee or Independent Director to be awarded Restricted
Shares, the Administrator shall instruct the Secretary to issue such Restricted
Shares and may impose such conditions on the issuance of such Restricted Shares
as it deems appropriate.
Section
7.3
|
Rights
as Shareholders
|
Subject to Section 7.4, upon delivery
of the Restricted Shares to the Holder or the escrow holder pursuant to Section
7.6, the Holder shall have, unless otherwise provided by the Administrator, all
the rights of a shareholder with respect to said shares, subject to the
restrictions in his or her Award Agreement, including the right to receive all
dividends and other distributions paid or made with respect to the shares;
provided
,
however
, that in the
discretion of the Administrator, any extraordinary distributions with respect to
the Common Shares shall be subject to the restrictions set forth in Section
7.4.
All Restricted Shares issued under the
Plan (including any shares received by holders thereof with respect to
Restricted Shares as a result of share dividends, share splits or any other form
of recapitalization) shall, in the terms of each individual Award Agreement, be
subject to such restrictions as the Administrator shall provide, which
restrictions may include, without limitation, restrictions concerning voting
rights and transferability and restrictions based on duration of employment with
the Company, the Partnership or any Subsidiary or performance of the Company,
the Partnership or a Subsidiary or individual performance;
provided
,
however
,
that, except with
respect to Restricted Shares granted to Section 162(m) Participants, by action
taken after the Restricted Shares are issued, the Administrator may, on such
terms and conditions as it may determine to be appropriate, remove any or all of
the restrictions imposed by the terms of the Award
Agreement. Restricted Shares may not be sold or encumbered until all
restrictions are terminated or expire. Except as otherwise provided
by any written agreement between the Company, the Partnership or any Subsidiary,
as applicable, and any applicable Holder, if no cash consideration was paid by
the Holder upon issuance, a Holder’s rights in unvested Restricted Shares shall
lapse, and such Restricted Shares shall be surrendered to the Company, the
Partnership or the Subsidiary, as applicable, without consideration, upon a
Termination of Employment or Termination of Directorship.
Section
7.5
|
Repurchase
of Restricted Shares
|
Except as otherwise provided by the
individual Award Agreement, the Company, the Partnership or a Subsidiary shall
have the right to repurchase from the Holder the Restricted Shares then subject
to restrictions under the Award Agreement immediately upon a Termination of
Employment or, if applicable, upon a Termination of Directorship, at a cash
price per share equal to the lesser of (i) the Fair Market Value of a Common
Share on the date of Termination of Employment or Termination of Directorship,
as applicable, and (ii) the price per share paid by the Holder for such
Restricted Shares.
Except as otherwise provided in any
Award Agreement, the Secretary or such other escrow holder as the Administrator
may appoint shall retain physical custody of each certificate representing
Restricted Shares until all of the restrictions imposed under the Award
Agreement with respect to the shares evidenced by such certificate expire or
shall have been removed.
In order to enforce the restrictions
imposed upon Restricted Shares hereunder, the Administrator shall cause a legend
or legends to be placed on certificates representing all Restricted Shares that
are still subject to restrictions under Award Agreements, which legend or
legends shall make appropriate reference to the conditions imposed
thereby.
ARTICLE
VIII.
PERFORMANCE
AWARDS,
DEFERRED
SHARES, SHARE PAYMENTS
Subject to the Award Limit, one or more
Performance Awards, awards of Deferred Shares and/or Share Payments may be
granted to any Employee or Director whom the Administrator determines should
receive such an Award.
Section
8.2
|
Performance
Awards
|
(a)
Any
Employee or Independent Director selected by the Administrator may be granted
one or more Performance Awards. The value of such Performance Awards
may be linked to any one or more of the Performance Criteria or other specific
performance criteria determined appropriate by the Administrator, in each case
on a specified date or dates or over any period or periods determined by the
Administrator. In making such determinations, the Administrator shall
consider (among such other factors as it deems relevant in light of the specific
type of award) the contributions, responsibilities and other compensation of the
particular Employee or Independent Director.
(b)
Without
limiting Section 8.2(a), the Administrator may grant Performance Awards to any
162(m) Participant in the form of a cash bonus payable upon the attainment of
objective performance goals which are established by the Administrator and
relate to one or more of the Performance Criteria, in each case on a specified
date or dates or over any period or periods determined by the Administrator;
provided that any such bonus shall be subject to the continued employment of
such Participant on the last day of such period or periods determined by the
Administrator (the “
Performance Date
”),
which Performance Date, with respect to bonuses determined on an annual basis,
shall be December 31 of the applicable calendar year; and, provided, further,
that any such bonus shall be payable to such Participant either (i) on or prior
to the 15
th
day of
the third calendar month following the calendar year in which the Performance
Date occurs or (ii) in a manner that complies with the requirements of Section
409A. Any such bonuses paid to 162(m) Participants shall be based
upon objectively determinable bonus formulas established in accordance with the
provisions of Section 3.2. The maximum amount of any Performance
Award payable to a 162(m) Participant under this Section 8.2(b) shall not exceed
the Award Limit with respect to any calendar year. Unless otherwise
specified by the Administrator at the time of grant, the Performance Criteria
with respect to a Performance Award payable to a 162(m) Participant shall be
determined on the basis of generally accepted accounting
principles.
Section
8.3
|
Share
Payments
|
Any Employee or Independent Director
selected by the Administrator may receive Share Payments in the manner
determined from time to time by the Administrator. The number of
shares shall be determined by the Administrator and may be based upon the
Performance Criteria or other specific criteria determined appropriate by the
Administrator, determined on the date such Share Payment is made or on any date
thereafter.
Section
8.4
|
Deferred
Shares
|
Any
Employee or Independent Director selected by the Administrator may be granted an
award of Deferred Shares in the manner determined from time to time by the
Administrator. The number of Deferred Shares shall be determined by
the Administrator and may be linked to the Performance Criteria or other
specific criteria determined to be appropriate by the Administrator, in each
case on a specified date or dates or over any period or periods determined by
the Administrator. Common Shares underlying a Deferred Share award
will not be issued until the Deferred Share award has vested, pursuant to a
vesting schedule or performance criteria set by the
Administrator. Unless otherwise provided by the Administrator, a
Holder of Deferred Shares shall have no rights as a Company shareholder with
respect to such Deferred Shares until such time as the Award has vested and the
Common Shares underlying the Award have been issued.
The term of a Performance Award, award
of Deferred Shares and/or Share Payment shall be set by the Administrator in its
discretion.
Section
8.6
|
Exercise
or Purchase Price
|
The Administrator may establish the
exercise or purchase price of a Performance Award, Deferred Share award or
shares received as a Share Payment;
provided
,
however
, that such
price shall not be less than the par value of a share of Common Share, unless
otherwise permitted by applicable state law.
Section
8.7
|
Exercise
Upon Termination of Employment or Termination of
Directorship
|
A Performance Award, award of Deferred
Shares and/or Share Payment is exercisable or payable only while the Holder is
an Employee or Independent Director, as applicable;
provided
,
however
, that, except
with respect to Performance Awards granted to Section 162(m) Participants, the
Administrator in its sole discretion may provide that the Performance Award,
award of Deferred Shares and/or Share Payment may be exercised or paid
subsequent to a Termination of Employment or Termination of Directorship, or
following a Change in Control, or because of the Holder’s retirement, death or
disability, or otherwise.
Section
8.8
|
Form
of Payment
|
Payment of the amount determined under
Section 8.2 above shall be in cash, in Common Shares or a combination of both,
as determined by the Administrator. To the extent any payment under
this Article VIII is effected in Common Shares, it shall be made subject to
satisfaction of all provisions of Section 6.6.
ARTICLE
IX.
ADMINISTRATION
Section
9.1
|
Share
and Unit Option Committee
|
The Share and Unit Option Committee
shall consist of two or more Directors, appointed by and holding office at the
pleasure of the Board, none of whom shall be an Employee and each of whom is
both a “non-employee director” as defined by Rule 16b-3 and an “outside
director” for purposes of Section 162(m) of the Code. Appointment of
Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering
written notice to the Board. Vacancies in the Committee may be filled
by the Board.
Section
9.2
|
Duties
and Powers of Committee
|
It shall be the duty of the Committee
to conduct the general administration of this Plan in accordance with its
provisions. The Committee shall have the power to interpret this
Plan, the Award Agreements and to adopt such rules for the administration,
interpretation and application of this Plan as are consistent therewith and to
interpret, amend or revoke any such rules. Any such interpretations
and rules with respect to Incentive Share Options shall be consistent with the
provisions of Section 422 of the Code. The Committee shall have the
power to amend any Award Agreement provided that the rights or obligations of
the Holder of the Award that is the subject of any such Award Agreement are not
affected adversely;
provided
,
however
, that without
the approval of the shareholders of the Company, neither the Committee nor the
Board shall authorize the amendment of any outstanding Option to reduce its
exercise price. Notwithstanding anything contained herein, no Option
shall be canceled and replaced with the grant of an Option having a lower
exercise price without the approval of the shareholders of the
Company. Grants or Awards under the Plan need not be the same with
respect to each Holder. In its sole discretion, the Board may at any
time and from time to time exercise any and all rights and duties of the
Committee under the Plan except with respect to matters which under Rule 16b-3
or Section 162(m) of the Code, or any regulations or rules issued thereunder,
are required to be determined in the sole discretion of the
Committee. Notwithstanding the foregoing, the full Board, acting by a
majority of its members in office, shall conduct the general administration of
the Plan with respect to Awards granted to Independent Directors.
Section
9.3
|
Majority
Rule
|
The Committee shall act by a majority
of its members in attendance at a meeting where quorum is present or by a
memorandum or other written instrument signed by all members of the
Committee.
Section
9.4
|
Compensation;
Professional Assistance; Good Faith
Actions
|
Members of the Committee shall receive
such compensation for their services as members as may be determined by the
Board. All expenses and liabilities which members of the Committee
incur in connection with the administration of this Plan shall be borne by the
Company. The Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers or other
persons. The Committee, the Company and the Company’s officers and
Directors shall be entitled to rely upon the advice, opinions or valuations of
any such persons. All actions taken and all interpretations and
determinations made by the Committee or the Board in good faith shall be final
and binding upon all Holders, the Company and all other interested
persons. No members of the Committee or the Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to this Plan or any Award, and all members of the Committee and the
Board shall be fully protected by the Company in respect of any such action,
determination or interpretation.
ARTICLE
X.
MISCELLANEOUS
PROVISIONS
Section
10.1
|
Not
Transferable
|
(a)
Awards
under this Plan may not be sold, pledged, assigned, or transferred in any manner
other than by will or the laws of descent and distribution or, with the consent
of the Administrator, pursuant to a transfer to the spouse and/or lineal
descendants of the Holder and/or to a trust, partnership or other entity the
sole beneficiaries, partners or other members of which are such Holder’s spouse
and/or lineal descendants, unless and until such Awards have been exercised, or
the shares underlying such Awards have been issued, and all restrictions
applicable to such shares have lapsed. No Award or interest or right
therein shall be liable for the debts, contracts or engagements of the Holder or
his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence.
(b)
During
the lifetime of the Holder, only he may exercise an Option or other Award (or
any portion thereof) granted to him under the Plan, unless it has been disposed
of pursuant to the foregoing paragraph. After the death of the Holder
(or transferee), any exercisable portion of an Option or other Award may, prior
to the time when such portion becomes unexercisable under the Plan or the
applicable Award Agreement or other agreement, be exercised by the personal
representative of, or by any person empowered to do so under, the deceased
Holder’s (or transferee’s) will or under the then applicable laws of descent and
distribution.
Section
10.2
|
Amendment,
Suspension or Termination of this
Plan
|
The plan will expire on, and no Award
may be granted pursuant to the Plan after, May 14, 2014; and any Award
outstanding on such date shall remain in force according to the terms of the
applicable Award Agreement. In addition, this Plan may be wholly or
partially amended or otherwise modified, suspended or terminated at any time or
from time to time by the Board or the Committee;
provided
,
however
, that (a) to
the extent necessary and desirable to comply with any applicable law,
regulation, or stock exchange rule, the Company shall obtain shareholder
approval of any Plan amendment in such a manner and to such a degree as
required, and (b) shareholder approval is required for any amendment to the Plan
that (i) increases the number of shares available under the Plan (other than any
adjustment as provided by Section 10.3), (ii) permits the Administrator to grant
Options with an exercise price that is below Fair Market Value on the date of
grant, or (iii) permits the Administrator to extend the exercise period for an
Option beyond ten years from the date of grant. The Award Limit may
be increased by the Board or the Committee at any time and from time to time,
and Awards may be granted with respect to a number of shares not in excess of
such increased
Award
Limit; provided, however, that no such increase of the Award Limit shall be
effective unless and until such increase is approved by the Company’s
shareholders and if such approval is not obtained all Awards granted with
respect to a number of shares in excess of the Award Limit in effect prior to
such increase shall be canceled and shall become null and void. No
amendment, suspension or termination of this Plan shall, without the consent of
the Holder alter or impair any rights or obligations under any Awards
theretofore granted, unless the Award Agreement itself otherwise expressly so
provides. No Award may be granted during any period of suspension or
after termination of this Plan, and in no event may any Incentive Share Option
be granted under this Plan after May 28, 2003.
Section
10.3
|
Changes
in Common Shares or Assets of the Company; Acquisition or Liquidation of
the Company and Other Corporate
Events
|
(a)
Subject
to Section 10.3(d), in the event that the Administrator determines that any
dividend or other distribution (whether in the form of cash, Common Shares,
other securities or other property), recapitalization, reclassification, share
split, reverse share split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, liquidation, dissolution, or sale, transfer,
exchange or other disposition of all or substantially all of the assets of the
Company (including, but not limited to, a Change in Control), or exchange of
Common Shares or other securities of the Company, issuance of warrants or other
rights to purchase Common Shares or other securities of the Company, or other
similar corporate transaction or event, in the Administrator’s sole discretion,
affects the Common Shares such that an adjustment is appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan or with respect to an Award, then the
Administrator shall, in such manner as it may deem equitable, adjust any or all
of:
(i)
|
The
number and kind of Common Shares (or other securities or property) with
respect to which Awards may be granted or awarded (including, but not
limited to, adjustments of the limitations in Section 2.1 on the maximum
number and kind of shares which may be issued and adjustments of the Award
Limit);
|
(ii)
|
The
number and kind of Common Shares (or other securities or property) subject
to outstanding Awards; and
|
(iii)
|
The
grant or exercise price with respect to any
Award.
|
(b)
Subject
to Section 10.3(d), except as otherwise provided in any Award Agreement, in the
event of any transaction or event described in Section 10.3(a) or any unusual or
nonrecurring transactions or events affecting the Company, any affiliate of the
Company, or the financial statements of the Company or any affiliate thereof
(including, without limitation, any Change in Control), or of changes in
applicable laws, regulations or accounting principles, the Administrator, in its
sole discretion, and on such terms and conditions as it deems appropriate,
either by the terms of the applicable Award Agreement or by action taken prior
to the occurrence of such transaction or event and either automatically or upon
the Holder’s request, is hereby authorized to take any one or more of the
following actions whenever the Administrator determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any Award under the Plan, to facilitate such transactions or events or to
give effect to such changes in laws, regulations or principles:
(i)
|
To
provide for either the purchase of any such Award for an amount of cash
equal to the amount that could have been attained upon the exercise of
such Award or realization of the Holder’s rights had such Award been
currently exercisable or payable or fully vested or the replacement of
such Award with other rights or property selected by the Administrator in
its sole discretion;
|
(ii)
|
To
provide that the Award cannot vest, be exercised or become payable after
such event;
|
(iii)
|
To
provide that such Award shall be exercisable as to all shares covered
thereby, notwithstanding anything to the contrary in Section 5.3 or 5.4 or
the provisions of such Award;
|
(iv)
|
To
provide that such Award be assumed by the successor or survivor
corporation, or a parent or subsidiary thereof, or shall be substituted
for similar options, rights or awards covering the stock of the successor
or survivor corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and
prices;
|
(v)
|
To
make adjustments in the number and type of Common Shares (or other
securities or property) subject to outstanding Awards, and in the number
and kind of outstanding Restricted Shares or Deferred Shares and/or in the
terms and conditions of (including the grant or exercise price), and the
criteria included in, outstanding options, rights and awards and options,
rights and awards which may be granted in the future;
and
|
(vi)
|
To
provide that, for a specified period of time prior to such event, the
restrictions imposed under an Award Agreement upon some or all Restricted
Shares or Deferred Shares may be terminated, and, in the case of
Restricted Shares, some or all of such Restricted Shares may cease to be
subject to repurchase under Section 7.5 or forfeiture under
Section 7.4 after such event.
|
(c)
Subject
to Sections 3.2, 3.3 and 10.3(d), the Administrator may, in its discretion,
include such further provisions and limitations in any Award, agreement or
certificate, as it may deem equitable and in the best interests of the
Company.
(d)
With
respect to Awards which are granted to Section 162(m) Participants and are
intended to qualify as performance-based compensation under
Section 162(m)(4)(C), no adjustment or action described in this Section
10.3 or in any other provision of the Plan shall be authorized to the extent
that such adjustment or action would cause such Award to fail to so qualify
under Section 162(m)(4)(C), or any successor provisions thereto. No adjustment
or action described in this Section 10.3 or in any other provision of the Plan
shall be authorized to the extent that such adjustment or action would cause the
Plan to violate Section 422(b)(1) of the Code. Furthermore, no
such adjustment or action shall be authorized to the extent such adjustment or
action would result in short-swing profits liability under Section 16 or violate
the exemptive conditions of Rule 16b-3 unless the Administrator determines that
the Award is not to comply with such exemptive conditions. The number
of Common Shares subject to any Award shall always be rounded to the next whole
number.
(e)
The
existence of the Plan, the Award Agreement and the Awards granted hereunder
shall not affect or restrict in any way the right or power of the Company or the
shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any issue
of shares or of options, warrants or rights to purchase shares or of bonds,
debentures, preferred or prior preference shares whose rights are superior to or
affect the Common Shares or the rights thereof or which are convertible into or
exchangeable for Common Shares, or the dissolution or liquidation of the
company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
Section
10.4
|
Approval
of Plan by
Shareholders.
|
The Plan
will be submitted for the approval of the Company’s shareholders after the date
of the Board’s initial adoption of the Plan, and any amendment to the Plan
increasing the aggregate number of Common Shares issuable under the Plan will be
submitted for the approval of the Company’s shareholders after the date of the
Board’s adoption of such amendment. Awards may be granted or awarded
prior to such shareholder approval, provided that such Awards shall not be
exercisable nor shall such Awards vest prior to the time when the Plan is
approved by the shareholders, and provided further that if such approval is not
obtained, all Awards previously granted or awarded under the Plan shall
thereupon be canceled and become null and void. In addition, if the
Board determines that Awards other than Options which may be granted to Section
162(m) Participants should continue to be eligible to qualify as
performance-based compensation under Section 162(m)(4)(C) of the Code, the
Performance Criteria must be disclosed to and approved by the Company’s
shareholders no later than the first shareholder meeting that occurs in the
fifth year following the year in which the Company’s shareholders previously
approved the Performance Criteria.
Section
10.5
|
Tax
Withholding
|
The Company or the Partnership, as
applicable, shall be entitled to require payment in cash or deduction from other
compensation payable to each Holder of any sums required by federal, state or
local tax law to be withheld with respect to the issuance, vesting, exercise or
payment of any Award. The Administrator may in its discretion and in
satisfaction of the foregoing requirement allow such Holder to elect to have the
Company or the Partnership, as applicable, withhold Common Shares otherwise
issuable under such Award (or allow the return of Common Shares) having a Fair
Market Value equal to the sums required to be
withheld. Notwithstanding any other provision of the Plan, the number
of Common Shares which may be withheld with respect to the issuance, vesting,
exercise or payment of any Award (or which may be repurchased from the Holder of
such Award within six months after such Common Shares were acquired by the
Holder from the Company) in order to satisfy the Holder’s federal and state
income and payroll tax liabilities with respect to the issuance, vesting,
exercise or payment of the Award shall be limited to the number of Common Shares
which have a Fair Market Value on the date of withholding or repurchase equal to
the aggregate amount of such liabilities based on the minimum statutory
withholding rates for federal and state tax income and payroll tax purposes that
are applicable to such supplemental taxable income.
The Committee may, in its discretion,
extend one or more loans to Employees in connection with the exercise or receipt
of an Award granted or awarded under the Plan, or the issuance of Restricted
Shares or Deferred Shares awarded under the Plan. The terms and
conditions of any such loan shall be set by the
Committee. Notwithstanding the foregoing, no loan shall be made to an
Employee under this Section to the extent such loan shall result in an extension
or maintenance of credit, an arrangement for the extension of credit, or a
renewal of an extension of credit in the form of a personal loan to or for any
Director or executive officer of the Company that is prohibited by Section 13(k)
of the Exchange Act or other applicable law. In the event that the
Committee determines in its discretion that any loan under this Section may be
or will become prohibited by Section 13(k) of the Exchange Act or other
applicable law, the Committee may provide that such loan shall be immediately
due and payable in full and may take any other action in connection with such
loan as the Committee determines in its discretion to be necessary or
appropriate for the repayment, cancellation or extinguishment of such
loan.
Section
10.7
|
Effect
of Plan Upon Options and Compensation
Plans
|
The adoption of this Plan shall not
affect any other compensation or incentive plans in effect for the Company, the
Partnership or any Subsidiary. Nothing in this Plan shall be
construed to limit the right of the Company, the Partnership or any Subsidiary
(i) to establish any other forms of incentives or compensation for Employees or
Independent Directors or (ii) to grant or assume options or other rights or
awards otherwise than under this Plan in connection with any proper corporate
purpose including but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, securities or assets of any
corporation, partnership, limited liability company, firm or
association.
Section
10.8
|
Section
83(b) Election Prohibited
|
No Holder may make an election under
Section 83(b) of the Code, or any successor section thereto, with respect to any
award or grant under the Plan without the consent of the Administrator, which
the Administrator may grant or withhold at its sole discretion.
Section
10.9
|
Grants
of Awards to Certain Employees
|
The Company, the Partnership and any
Subsidiary may provide through the establishment of a formal written policy or
otherwise for the method by which Common Shares and/or payment therefor may be
exchanged or contributed between the Company and such other party, or may be
returned to the Company upon any forfeiture of Common Shares by the Holder, for
the purpose of ensuring that the relationship between the Company and the
Partnership or such Subsidiary remains at arm’s-length.
Section
10.10
|
Restrictions
on Awards
|
This Plan shall be interpreted and
construed in a manner consistent with the Company’s status as a
REIT. No Award shall be granted or awarded, and with respect to an
Option already granted under the Plan, such Option shall not be
exercisable:
(a)
to the
extent such Award or Option exercise could cause the Holder to be in violation
of the Ownership Limit (as defined in the Company’s Articles of Incorporation,
as amended from time to time); or
(b)
if, in
the discretion of the Administrator, such Award or Option exercise could result
in income to the Company which, when considered in light of the Company’s other
income, could cause the Company to fail to satisfy the gross income limitations
set forth in Code Section 856(c) or otherwise impair the Company’s status as a
REIT.
Section
10.11
|
Compliance
with Laws
|
The Plan, the granting and vesting of
Awards under the Plan and the issuance and delivery of Common Shares and the
payment of money under the Plan or under Awards granted or awarded hereunder are
subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law and
federal margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith;
provided
,
however
, that the
foregoing shall not relieve the Company of its obligations under any
Award. Any securities delivered under the Plan shall be subject to
such restrictions, and the person acquiring such securities shall, if requested
by the Company, provide such assurances and representations to the Company as
the Company may deem necessary or desirable to assure compliance with all
applicable legal requirements. To the extent permitted by applicable
law, the Plan and Awards granted or awarded hereunder shall be deemed amended to
the extent necessary to conform to such laws, rules and
regulations.
Titles are provided herein for
convenience only and are not to serve as a basis for interpretation or
construction of this Plan.
Section
10.13
|
Governing
Law
|
This Plan and any agreements hereunder
shall be administered, interpreted and enforced under the internal laws of the
state of North Carolina without regard to conflicts of laws
thereof.
Notwithstanding any other provision of
the Plan, no Holder shall acquire or have any right to acquire any Common
Shares, and shall not have other rights under the Plan, which are prohibited
under the Company’s Articles of Incorporation, as amended from time to
time.
Section
10.15
|
Section
409A
|
To the extent that the Committee
determines that any Award granted under the Plan is subject to Section 409A, the
Award Agreement evidencing such Award shall incorporate the terms and conditions
required by Section 409A. To the extent applicable, the Plan and
Award Agreements shall be interpreted in accordance with Section
409A. Notwithstanding any provision of the Plan to the contrary, in
the event that the Committee determines that any Award may be subject to Section
409A, the Committee reserves the right (without any obligation to do so or to
indemnify any Holder for failure to do so) to adopt such amendments to the Plan
and the applicable Award Agreement or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take
any other actions, that the Committee determines are necessary or appropriate to
(a) exempt the Award from Section 409A and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (b) to comply
with the requirements of Section 409A and thereby avoid the application of any
penalty taxes under such Section. Notwithstanding the foregoing, no provision of
any Award or this Plan shall be interpreted or construed to transfer any
liability for failure to comply with the requirements of Section 409A from a
Holder or any other individual to the Company or any of its affiliates,
employees or agents.
|
IN
WITNESS WHEREOF, the parties below have caused the foregoing Plan to be
approved by their officers duly authorized on December 29,
2008.
|
TANGER
FACTORY OUTLET CENTERS, INC.
a North
Carolina corporation
By:
/s/ Stanley K.
Tanger
Stanley K. Tanger
Chief Executive Officer
TANGER
PROPERTIES LIMITED PARTNERSHIP
a North
Carolina limited partnership
By: Tanger
GP Trust
a Maryland business trust
Its General Partner
By:
/s/
Stanley K.
Tanger
Stanley K. Tanger
Chairman of the Board
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into as of December 29,
2008 and made effective as of January 1, 2009 (the “Effective Date”) by and
among
TANGER PROPERTIES LIMITED
PARTNERSHIP
(the “Partnership”), a North Carolina limited partnership,
TANGER FACTORY OUTLET CENTERS,
INC.
(the “Company”), a North Carolina corporation and
STANLEY K. TANGER
(the
“Executive”).
RECITALS:
A. The
Executive is the Chief Executive Officer of the Partnership, an officer of the
Company and Chairman of the Board of Directors of the Company under the terms of
an Amended and Restated Employment Agreement dated as of January 1, 2004 between
the Executive, the Partnership and the Company (the “Existing Employment
Contract”).
B. The
Company, the Partnership and the Executive intend to modify and amend the
Existing Employment Contract as provided herein.
NOW,
THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements set forth below the parties hereto agree as follows:
1.
Certain
Definitions
.
(a)
“
Annual Base Salary
”
is defined in Section 7(a).
(b)
“
Annual Bonus
” is
defined in Section 7(d).
(c)
“
Benefits
” is defined
in Section 7(b)(iii).
(d)
“
Cause
” For purposes
of this Agreement, the Partnership or the Company shall have “Cause” to
terminate the Executive’s employment hereunder upon (i) the Executive 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 the Partnership 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 the Company or the
Partnership does not survive as an independent, publicly owned corporation or
the Company ceases to be the sole general partner of the Partnership; or (C) the
acquisition of securities of the Company 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 twenty-five (25%) percent or more of the number of Common
Shares of the Company (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 the Company if,
immediately following the merger, the holders of the Company’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 the Executive from the Executive’s duties to the Partnership
and/or the Company 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 Partnership or the Company and acceptable to the Executive or the
Executive’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
” The
Executive 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; provided, however, that,
notwithstanding the foregoing, effective January 1, 2009, the Executive shall
have Good Reason to terminate his employment pursuant to this Section (k)(1)
only upon the occurrence of a material adverse change in his title as Chairman
of the Board or the duties, responsibilities or authority related thereto
without his consent;
(2)
if, after
a Change of Control, either (i) 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 or (ii) the Executive no longer reports
directly to the Board of Directors;
(3)
the
relocation of the Company and/or the Partnership headquarters outside of the
Greensboro, North Carolina metropolitan area without his consent;
(4)
a
material breach of this Employment Agreement by the Partnership or 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 and the Partnership of the Executive’s written demand for payment
thereof;
(5)
if the
Executive elects to terminate his employment by written notice to the Company
and the Partnership within the 180 day period following a Change of Control;
or
(6)
if the
Executive is removed, or is not re-elected as a Director of the
Company.
(i)
“
Contract Term
” is
defined in Section 2(b).
(j)
“
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 date of this
amendment and restatement.
2.
Employment
.
(a)
The
Partnership and the Company shall continue to employ the Executive and the
Executive shall remain in the employ of the Partnership and the Company during
the Contract Term (as defined in this Section 2) in the positions set forth in
Section 3 and upon the other terms and conditions herein provided, unless the
Executive’s employment is terminated earlier as provided in Section 8
hereof
(b)
The
initial Contract Term of the Existing Employment Contract began as of January 1,
2004 (the “Commencement Date”) and ended on December 31, 2006 (the “Initial
Contract Term”). On each January 1 for the calendar years 2005
through 2008, the Contract Term was automatically extended by one year, 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) the
Executive’s employment has been earlier terminated as provided in Section 8 or
(ii) either the Partnership or the Company gives written notice to the Executive
one hundred eighty (180) days prior to the Extension Date that the Contract Term
shall not be automatically extended. For purposes of illustration, if
the Executive’s employment has not been terminated as provided in Section 8 and
if neither the Company nor the Partnership has given written notice to the
Executive at least 180 days prior to January 1, 2010 that the Contract Term will
not be extended, on January 1, 2010, the Contract Term will be extended to and
including December 31, 2012.
If the
Contract Term is extended as provided herein, the Executive’s employment may be
terminated (other than upon expiration) only as provided in Section
8. References herein to the “Contract Term” shall refer to the
Initial Contract Term as extended pursuant to this Section 2.
3.
Position and
Duties
. During
the Executive’s employment hereunder, he shall serve as:
(a)
an
executive employee of the Partnership and shall have such duties, functions,
responsibilities and authority as are consistent with the Executive’s
position,
(b)
the Chief
Executive Officer and Chairman of the Board of Directors of the Company and
shall have such duties, functions, responsibilities and authority as are
consistent with the Executive’s position as the senior executive officer in
charge of the general management, business and affairs of the Company (and the
Partnership, through the Company’s capacity as general partner of the
Partnership), and
(c)
if
elected or appointed thereto, as a Director and Chairman of the Board of
directors of the Company;
provided,
however, that effective December 31, 2008, the Executive shall resign as
Chief Executive Officer and thereafter will have the title of Chairman of the
Board and will have the duties and responsibilities described in the attached
Exhibit B
and
such other duties and responsibilities not inconsistent therewith as shall be
assigned to him by the Board. The Executive’s position, duties and
responsibilities may not be changed and the Executive’s Annual Base Salary may
not be reduced during his employment hereunder without the Executive’s written
consent.
4.
Competition
.
(a)
The
Executive shall be permanently prohibited from engaging in Competition (as
defined in subsection 4(b) below) with the Partnership or the
Company.
(b)
The term
“Competition” for purposes of this Agreement shall mean the engagement outside
the Partnership and the Company
(1)
in any
material commercial real estate activities, with the exception of
(i)
the
development or ownership of properties (or replacement properties) which were
owned collectively or individually by the Executive, by members of his family or
by any entity in which any of them owned an interest or which was for the
benefit of any of them prior to June 30, 1993 (including the three factory
outlet centers in which the Executive is a 50% partner, the shopping center on
West Market Street in Greensboro, North Carolina (such four properties defined
herein as the “Excluded Properties”) and the interests of the Tanger Family
Limited Partnership),
(ii)
the
direct or indirect passive investment in commercial real estate,
and
(iii)
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 that,
(2)
“Competition”
shall include management, development or construction of any factory outlet
centers or competing retail commercial property or any other active or passive
investment in property connected with a factory outlet center or a competing
retail commercial property, with the exception of
(i)
the
activities permitted in subparagraph 4(b)(i)(A) with respect to the Excluded
Properties,
(ii)
the
ownership of up to 1 % of any class of securities of any publicly traded
company, and
(iii)
the
employment under this Agreement.
(c)
The
Executive covenants that a breach of subsection 4 (a) above would immediately
and irreparably harm the Partnership and the Company and that a remedy at law
would be inadequate to compensate the Partnership and the Company for their
losses by reason of such breach and therefore that the Partnership and/or the
Company 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 the Executive from
committing any violation of subsection 4(a) above, and the Executive hereby
consents to the issuance of such injunction.
5.
Registration
Rights
. The
Executive shall have registration rights pursuant to the Registration Rights
Agreement attached hereto as
Exhibit
A
.
6.
Place of
Performance
. During
his employment hereunder, the Executive shall be based at the Partnership’s
principal executive offices and the Company’s principal executive offices
located in Greensboro, North Carolina.
7.
Compensation and Related
Matters
. During
the Executive’s employment hereunder, the Executive shall be paid the
compensation and shall be provided with the benefits described
below:
(a)
Annual Base
Salary
. The Executive’s annual base compensation (“Annual Base
Salary”) payable with respect to the Contract Year ending December 31, 2004
shall be $470,000. The amount of Annual Base Salary payable to the
Executive with respect to each Contract Year thereafter shall be an amount
negotiated between and agreed upon by the Executive and the Board of Directors
of the Company (in its capacity as general partner and in its own behalf) but in
no event less than the Executive’s Annual Base Salary for the prior Contract
Year.
(b)
Benefits,
The
Executive shall be entitled to
(1)
receive
stock options (incentive or nonqualified) under the Company’s Stock Option Plan
and the Partnership’s Unit Option Plan;
(2)
participate
in the Partnership’s 401(k) Savings Plan, and
(3)
participate
in or receive benefits under any employee benefit plan or other arrangement made
available by the Partnership or the Company to any of its employees
(collectively “Benefits”), on terms at least as favorable as those on which any
other employee of the Partnership or the Company shall participate; provided,
however, that the Executive shall be entitled to four weeks of paid vacation
during each Contract Year, exclusive of Partnership holidays.
Without
the Executive’s prior written consent, the Company and/or the Partnership will
not terminate or reduce any benefits paid to the Executive under this Section
7(b) unless the Executive is furnished with a benefit that is substantially
equivalent.
(c)
Automobile
. In
addition to the other compensation and benefits described in this Section 7, the
Executive shall be entitled to receive a monthly automobile allowance of $800,
payable at the same times Base Salary is payable hereunder. The
Executive may apply such allowance in any manner, and shall be entitled to
retain any portion of such allowance not applied towards his automobile
expense. The Executive shall be responsible for all automobile costs
and expenses in excess of the allowance provided hereunder.
(d)
Annual Bonus
. As
additional compensation for services rendered, the Executive shall receive such
bonus or bonuses as the Company’s Compensation Committee may from time to time
approve including without limitations awards under the Company’s Incentive Award
Plan;
provided
that any Annual Bonus shall be payable on or prior to the fifteenth (15
th
) day of
the third (3
rd
)
calendar month following the end of the calendar year with respect to which such
Annual Bonus relates.
(e)
Expenses
. Subject
to Section 23(b)(v), the Partnership and the Company shall promptly reimburse
the Executive for all reasonable travel and other business expenses incurred by
the Executive in the performance of his duties to the Partnership and the
Company, respectively, hereunder.
(f)
Payment of
Compensation
. For each Contract Year or portion thereof covered by
this Agreement, the Company shall be liable for the percentage described below
(the “Company Percentage”) of the cost of the Executive’s Annual Base Salary,
and for any awards granted by the Company to the Executive pursuant to the
Incentive Award Plan of the Company and the Partnership (the “Incentive Award
Plan”), and the Partnership shall be liable for the remainder of the cost of the
Executive’s total compensation (including any awards granted by the Partnership
pursuant to the Incentive Award Plan).
The
Company Percentage for each Contract Year shall be determined by the Board of
Directors of the Company (in its capacity as sole owner of the general partner
and in its own behalf), excluding the Executive, as the reasonable allocation of
the benefits for the Executive’s services.
8.
Termination
. The
Executive’s employment hereunder may be terminated prior to the end of the
Contract Term by the Partnership, 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
. If
the Disability of the Executive has occurred during the Contract Term, the
Partnership or the Company, respectively, may give the Executive written notice
in accordance with Section 8(g) of its intention to terminate the Executive’s
employment. In such event, the Executive’s employment with the
Partnership and the Company shall terminate effective on the 30th day after
receipt of such notice by the Executive, provided that within the 30 days after
such receipt, the Executive shall not have returned to full-time performance of
his duties.
(c)
Cause
. The
Partnership or 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 Partnership or the Company may terminate the Executive’s
employment hereunder without Cause 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 Partnership and the Company.
(g)
Notice of
Termination
. Any termination of the Executive’s employment hereunder
by the Partnership, the Company or the Executive (other than by reason of the
Executive’s death) shall be communicated by a notice of termination to the other
parties 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 the Executive’s employment under the provision indicated and
(iii) specifies the effective date of the termination.
9.
Severance
Benefits
.
(a)
Termination without Cause or
for Good Reason
:
Subject to
Section 23(b), if the Executive’s employment shall be terminated (i) by the
Company or the Partnership other than for Cause (as defined above) or (ii) by
the Executive for Good Reason (as defined above), the Partnership and the
Company shall pay a lump sum cash payment (the “Severance Payment”) to the
Executive within thirty (30) days after such termination of the Executive’s
employment in an amount equal to 300% of the sum of (A) his Annual Base Salary,
(B) his Deemed Annual Bonus for the Contract Year in which the termination
occurs and (C) his annual automobile allowance under Section 7(c)
hereof. In addition, subject to Section 23(b), the Partnership and
the Company shall continue to provide all Benefits to the Executive under this
Agreement for each Contract Year through the end of the Contract
Term. For these purposes, the Executive’s Deemed Annual Bonus for any
Contract Year shall be the greater of (i)the Executive’s Average Annual Bonus
for that Contract Year and (ii) Executive’s Annual Bonus for the prior Contract
Year. The Executive’s Average Annual Bonus for a Contract Year shall
be an amount equal to the sum of all Annual Bonuses earned by the Executive 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 the Executive’s
Annual Bonus or Average Annual Bonus for a Contract Year, the amount of any
share-based award under the Incentive Award Plan that the Executive is required
to recognize as income for federal income tax purposes in a Contract Year shall
be included as part of the Executive’s Annual Bonus for that Contract
Year.
(b)
Termination by Death or
Disability
. Subject to Section 23(b), 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 the amount of
Annual
Base
Salary that would have been due through the end of the Contract Term assuming no
early termination had occurred and assuming no increases or decreases in Annual
Base Salary and (ii) on or before the day on which the Executive’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 the
Executive 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
the Executive, his estate or beneficiaries to any disability or other benefits
then available to the Executive under any life, disability insurance or other
benefit plan or policy which is maintained by the Partnership or 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 all Annual Base Salary and all Benefits accrued through the
date of termination and to any accrued but unpaid Annual Bonus for a Contract
Year prior to the Contract Year in which the Executive’s employment was
terminated. 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 (15
th
) day of
the third (3
rd
)
calendar month following the end of the calendar year in which the date of
termination occurs.
(d)
Assignment of Life
Insurance
. Upon any termination of the Executive’s employment
hereunder, the Partnership and the Company shall, at Executive’s option
(exercisable at any time during the period commencing upon the termination of
his employment and ending 90 days thereafter), transfer the life insurance
policy described in such Section 11(b) to Executive, for no
consideration. In addition, notwithstanding any provision of the
Partnership’s Executive Deferred Compensation Plan to the contrary but subject
to Section 23(b), all amounts in the Executive’s account under such Plan (if
there is such a Plan) shall be immediately payable to him.
(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 Partnership or 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 Partnership or the Company to the Executive under
this Agreement.
10.
Limitation on Severance
Benefits
.
(a)
Notwithstanding
any other provision of this Agreement, and except as provided in paragraph 10(b)
below, payments and benefits to which 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 date of this Agreement.
(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 paragraph 10(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
subparagraph 10(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.
11.
Insurance
.
(a)
Officers and Directors
Fiduciary Liability Insurance
:
During the
Executive’s employment hereunder, the Company shall maintain, at its expense,
officers and directors fiduciary liability insurance that would cover the
Executive in an amount of no less than $3 million per year.
(b)
Term Life Insurance or Other
Employee Benefit
:
During the
Executive’s employment hereunder, the Company shall maintain in force a term
life insurance policy on the Executive or shall provide Executive with another
employee benefit selected by the Executive at an annual cost to the Company of
no more than $17,150. if the Executive’s employment is terminated
prior to the expiration of the Contract Term (other than by reason of the
Executive’s death, a termination by the Company for Cause or a termination by
the Executive without Good Reason), the Company shall pay, prior to the
expiration of the ninety (90) period described in Section 9(d), either to the
Executive or, on behalf of the Executive, to the issuer(s) of such life
insurance policy(ies) (if any), an amount sufficient to pay the premiums to
maintain such policy(ies) in force for the remainder of the Contract Term but in
no event more than $17,150 each Contract Year.
The
Company shall be liable for the Company Percentage (as described in Section
7(f)) of the annual premium for any such term life insurance policy and the
Partnership shall be liable for the remainder of such premium. The
beneficiary of any such insurance shall be designated, from time to time, by the
Executive in his sole and absolute discretion.
12.
Disputes and
Indemnification
.
(a)
Any
dispute or controversy arising under, out of, in connection with or in relation
to this Agreement shall, at the election and upon written demand of any party to
this Agreement, be finally determined and settled by arbitration in the City of
Greensboro, North Carolina in accordance with the rules and procedures of the
American Arbitration Association, and judgment upon the award may be entered in
any court having jurisdiction thereof.
(b)
The
Partnership and/or the Company shall promptly pay pursuant to Section 7(e) as
incurred, to the full extent permitted by law, all legal fees and expenses which
the Executive may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Partnership, the Company, the Executive or others of the
validity or enforceability of, or liability under, any provision of this
Agreement.
(c)
The
Company and the Partnership agree that if the Executive is made a party, or is
threatened to be made a party, to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a “Proceeding”), by reason of the
fact that he is or was a director, officer or employee of the Company or the
Partnership or is or was serving at the request of the Company or the
Partnership as a director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether or not the basis of such
Proceeding is the Executive’s alleged action in an official capacity while
serving as a director, officer, member, employee or agent, the Executive shall
be indemnified and held harmless by the Company and the Partnership to the
fullest extent legally permitted, against all cost, expense, liability and loss
(including, without limitation, attorney’s fees, judgements, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by the Executive in connection therewith, and such
indemnification shall continue as to the Executive even if he has ceased to be a
director, officer, member, employee or agent of the Company or the Partnership
or other entity and shall inure to the benefit of Executive’s heirs, executors
and administrators. The Company and/or the Partnership shall advance
to the Executive all reasonable costs and expenses incurred by him in connection
with a Proceeding within 20 days after receipt by them of a written request for
such advance. Such request shall include an undertaking by the
Executive to repay the amount of such advance, without interest, if it shall
ultimately be determined that he is not entitled to be indemnified against such
costs and expenses.
13.
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.
14.
Governing
Law
. This
Agreement is being made and executed in and is intended to be perfol sued 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.
15.
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.
16.
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:
If to the
Partnership, to:
Tanger
Properties Limited Partnership
P.O. Box
10889
3200
Northline Avenue, Suite 360
Greensboro,
NC 27404
Attn: General
Counsel
If to the
Company, to:
Tanger
Factory Outlets Centers, Inc.
P.O. Box
10889
3200
Northline Avenue, Suite 360
Greensboro,
NC 27404
Attn: General
Counsel
If to the
Executive, to:
Mr.
Stanley K. Tanger
P.O. Box
10889
3200
Northline Avenue, Suite 360
Greensboro,
NC 27404
or at any
other address as any party shall have specified by notice in writing to the
other parties.
17.
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.
18.
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 terns and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding to vary the terms of this
Agreement.
19.
Amendments;
Waivers
. This
Agreement may not be modified, amended, or terminated except by an instrument in
writing, signed by the Executive, a member of the Partnership and a
disinterested director of the Company. By an instrument in writing
similarly executed, the Executive or the Company and the Partnership may waive
compliance by the other party or parties 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.
20.
No Effect on Other
Contractual Rights
. Notwithstanding
Section 8, the provisions of this Agreement, and any other payment provided for
hereunder, shall not reduce any amounts otherwise payable to the Executive under
any other agreement between the Executive and the Partnership and the Company,
or in any way diminish the Executive’s rights under any employee benefit plan,
program or arrangement of the Partnership or the Company to which he may be
entitled as an employee of the Partnership or the Company.
21.
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.
22.
Legal
Fees
. The
Company and/or the Partnership agree to pay all legal fees and expenses incurred
by the Executive in negotiating this Agreement promptly upon receipt of
appropriate statements therefor.
23.
Section
409A
.
(a)
The
parties acknowledge and agree that, to the extent applicable, this Agreement
shall be interpreted in accordance with, and the parties agree to use their best
efforts to achieve timely compliance with Section
409A. Notwithstanding any provision of this Agreement to
the contrary, in the event that the Company and/or the Partnership determines
that any compensation or benefits payable or provided under this Agreement may
be subject to Section 409A, the Company and/or the Partnership 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 and/or the Partnership 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. No provision of this Agreement
shall be interpreted or construed to transfer any liability for failure to
comply with the requirements of Section 409A from the Executive or any other
individual to the Company and/or the Partnership or any of their respective
affiliates, employees or agents.
(b)
Separation
from Service under 409A. Notwithstanding any provision to the
contrary in this Agreement:
(i) No
amount shall be payable pursuant to Sections 9(a) or (b) 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 with
respect to both the Company and the Partnership; and
(ii) 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 (any such delayed commencement, a “
Payment Delay
”) 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 Section 9 and Section 11, 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 (A) 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 (B) the date of the Executive’s death. Upon the
earlier of such dates (the “
Delayed Payment
Date
”), all payments deferred pursuant to this Section 23(b)(ii) 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; Any payment subject
to the Payment Delay shall be credited with interest for the period during which
such payment is delayed pursuant to the Payment Delay at a rate equal to the
then current borrowing rate on the Company’s unsecured line of credit that is
used for daily cash management by the Company as in effect on the date of the
Executive’s “separation from service” (the “
Daily Cash Rate
”)
and, to the extent any payment subject to the Payment Delay is not paid on the
Delayed Payment Date, such payment shall be credited with interest at a rate
equal two times the Daily Cash Rate for the period commencing with the day after
the Delayed Payment Date and ending on the date such payment is made (unless
such non-payment is required by applicable law, rule or regulation, in which
case such payment shall continue to be credited with interest at the Daily Cash
Rate); and
(iii) 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 of the Code and applicable guidance thereunder (including without
limitation Section 1.409A-1(i) of the Department of Treasury Regulations and any
successor provision thereto); and
(iv) For
purposes of Section 409A of the Code, the Executive’s right to receive
installment payments shall be treated as a right to receive a series of separate
and distinct payments; and
(v) The
reimbursement of any expense under Section 7 or Section 9 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. The amount of any Benefits provided in one year shall not
affect the amount of Benefits provided in any other year.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
EXECUTIVE
/s/ Stanley K.
Tanger
Stanley K. Tanger
TANGER
FACTORY OUTLET CENTERS, INC.,
a North
Carolina Corporation
By:
/s/ Frank
C. Marchisello Jr.
Frank
C. Marchisello, Jr.
Executive Vice
President, Chief Financial Officer and Secretary
TANGER
PROPERTIES LIMITED PARTNERSHIP
a North
Carolina Limited Partnership
By: TANGER
GP TRUST, its sole General Partner
By:
/s/ Frank C. Marchisello
Jr.
Frank C. Marchisello,
Jr.
Vice President,
Treasurer and Assistant Secretary
The
Partnership and the Company hereby jointly and severally guarantee to the
Executive the prompt payment in full of the compensation owed hereunder by the
other.
TANGER
PROPERTIES LIMITED PARTNERSHIP
a North
Carolina Limited Partnership
By: TANGER
GP TRUST, its sole General Partner
By:
/s/ Frank C. Marchisello Jr.
Frank C. Marchisello,
Jr.
Vice President,
Treasurer and Assistant Secretary
TANGER
FACTORY OUTLET CENTERS, INC.
a North
Carolina corporation
By:
/s/ Frank
C. Marchisello
Jr.
Frank
C. Marchisello, Jr.
Executive Vice
President, Chief Financial Officer and Secretary
Exhibit
A
Registration Rights
Agreement
Exhibit
B
Chairman of the Board Job
Description
TANGER
FACTORY OUTLET CENTERS
CHAIRMAN
OF THE BOARD JOB DESCRIPTION
RESPONSIBILITY
|
Strategy
|
·
As
necessary, Chairman will participate in:
o
Developing
Financing plans
o
Setting
growth targets
o
Setting
goals for executive management
·
Chairman
will continue efforts to promote brand awareness and participate in
Company marketing
|
Acquisition/Development/New
Investments
|
·
As
necessary, Chairman will participate in:
o
Representing
the Company in negotiations
o
Sourcing
acquisitions
o
Sourcing
development opportunities
|
Financing
|
·
As
necessary, Chairman will participate in:
o
Maintaining
relationships with financial institutions
o
Facilitating
negotiations
|
Other
Duties
|
·
Continue
service on Board
·
Set
Board agendas
·
Actively
participate in establishing Company’s strategic direction
·
Authorize
use of corporate jet
·
As
necessary, Chairman will participate in:
o
Company
events
o
Any
major transactions the Company or Board of Directors plan to
undertake
|
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into as of December
29
, 2008 and made effective as of
January 1, 2009 by and among
TANGER PROPERTIES LIMITED
PARTNERSHIP
(the “Partnership”), a North Carolina limited partnership,
TANGER FACTORY OUTLET CENTERS,
INC.
(the “Company”), a North Carolina corporation and
STEVEN B. TANGER
(the
“Executive”).
RECITALS:
A.
The
Executive is the Chief Operating Officer of the Partnership and an officer and
director of the Company under the terms of an Amended and Restated Employment
Agreement dated as of January 1, 2004 between the Executive, the
Partnership and the Company (the “Existing Employment Contract”).
B.
The
Company, the Partnership and the Executive intend to modify and amend the
Existing Employment Contract as provided herein.
NOW,
THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements set forth below the parties hereto agree as follows:
1.
Certain
Definitions
.
(a)
“
Annual Base Salary
”
is defined in Section 7(a).
(b)
“
Annual Bonus
” is
defined in Section 7(d).
(c)
“
Benefits
” is defined
in Section 7(b)(iii).
(d)
“
Cause
” For purposes
of this Agreement, the Partnership or the Company shall have “Cause” to
terminate the Executive’s employment hereunder upon (i) the Executive
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 the Partnership 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 the
Company or the Partnership does not survive as an independent, publicly
owned corporation or the Company ceases to be the sole general partner of the
Partnership; or (C) the acquisition of securities of the Company 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 twenty-five (25%)
percent or more of the number of Common Shares of the
Company
(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 the Company if, immediately
following the merger, the holders of the Company’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 the Executive from the Executive’s duties to the
Partnership and/or the Company 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 Partnership or the Company and acceptable to the
Executive or the Executive’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
”: The Executive 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; provided,
however, that effective January 1, 2009, the Executive shall have Good Reason to
terminate his employment pursuant to this Section (h)(1) upon the occurrence of
any material adverse change in his title as President and Chief Executive
Officer or the duties, responsibilities or authority related thereto without his
consent;
(2)
if, after
a Change of Control, either (i) the principal duties of the Executive
are required to be performed at a location other than New York, New York without
his consent or (ii) the Executive no longer reports directly to the Board
of Directors;
(3)
a
material breach of this Employment Agreement by the Partnership or 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 and the Partnership of the Executive’s written demand for payment
thereof;
(4)
if the
Executive elects to terminate his employment by written notice to the
Company and the Partnership within the 180 day period following a Change of
Control; or
(5)
if the
Executive is removed, or is not re-elected as a Director of
the Company.
(i)
“
Contract Term
” is
defined in Section 2(b).
(j)
“
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 date of this
amendment and restatement.
2.
Employment
.
(a)
The
Partnership and the Company shall continue to employ the Executive and the
Executive shall remain in the employ of the Partnership and the Company during
the Contract Term (as defined in this Section 2) in the positions set forth in
Section 3 and upon the other terms and conditions herein provided, unless the
Executive’s employment is terminated earlier as provided in Section 8
hereof.
(b)
The
initial Contract Term of the Existing Employment Contract began as of January 1,
2004 (the “Commencement Date”) and ended on December 31, 2006 (the “Initial
Contract Term”). On each January 1 for the calendar years 2005
through 2008, the Contract Term was automatically extended by one year, 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) the Executive’s employment has been earlier terminated as provided in
Section 8 or (ii) either the Partnership or the Company gives written
notice to the Executive one hundred eighty (180) days prior to the Extension
Date that the Contract Term shall not be automatically extended. For
purposes of illustration, if the Executive’s employment has not been terminated
as provided in Section 8 and if neither the Company nor the Partnership has
given written notice to the Executive at least 180 days prior to January 1, 2010
that the Contract Term will not be extended, on January 1, 2010, the Contract
Term will be extended to and including December 31, 2012.
If the
Contract Term is extended as provided herein, the Executive’s employment may be
terminated (other than upon expiration) only as provided in Section
8. References herein to the “Contract Term” shall refer to the
Initial Contract Term as extended pursuant to this Section 2.
3.
Position and
Duties
.
During
the Executive’s employment hereunder, he shall serve as:
(a)
an
executive employee of the Partnership and shall have such
duties, functions, responsibilities and authority as are consistent with
the Executive’s position,
(b)
the
President and Chief Operating Officer of the Company and shall have such
duties, functions, responsibilities and authority as are consistent with the
Executive’s position as an executive officer with respect to the general
management, business and affairs of the Company (and the Partnership, through
the Company’s capacity as general partner of the Partnership), and
(c)
if
elected or appointed thereto, as a Director of the Company;
Provided,
however, that effective December 31, 2008, the Executive shall resign as Chief
Operating Officer of the Company and thereafter will have the title of President
and Chief Executive Officer of the Company and will have the duties, functions,
responsibilities and authority as are consistent with the Executive’s position
as the senior executive officer in
charge of
the general management, business and affairs of the Company (and the
Partnership, through the Company’s capacity as general partner of the
Partnership). The Executive’s position, duties and responsibilities
may not be changed and the Executive’s Annual Base Salary may not be
reduced during his employment hereunder without the Executive’s written
consent.
4.
Competition
.
(a)
Subject
to the limitations and conditions in Section 4(e) hereof, the Executive
shall be prohibited from engaging in Competition (as defined in subsection 4(b)
below) with the Partnership or the Company during the following described
periods: (i) during the period beginning on the date hereof and
extending through the date on which the Executive’s employment hereunder is
terminated; (ii) if the Executive’s employment is terminated by the Company
for Cause or by the Executive without Good Reason, from the date of such
termination through the date of the first anniversary of such termination date
and (iii) if the Executive receives the Severance Payment described in
Section 9(a) because of a termination of his employment by the Company without
Cause or by the Executive 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 the Executive’s
employment hereunder, the term “Competition” for purposes of this Agreement
shall mean the Executive’s management, development or construction of any
factory outlet centers or competing retail commercial property outside the
Partnership and the Company or any other active or passive investment in
property connected with a factory outlet center or a competing retail commercial
property outside the Partnership and Company, with the exception of
(1)
the
development or ownership of properties (or replacement properties) which
were owned collectively or individually by the Executive, by members of his
family or by any entity in which any of them owned an interest or which was for
the benefit of any of them prior to June 30, 1993 (including the three factory
outlet centers in which Stanley K. Tanger is a 50% partner, the shopping center
on West Market Street in Greensboro, North Carolina (such four properties
defined herein as the “Excluded Properties”) and the interests of the Tanger
Family Limited Partnership),
(2)
the
ownership of up to 1% of any class of securities of any publicly traded
company, and
(3)
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
Provided
however, for any period following the termination of the Executive’s employment,
the Executive shall be considered as engaging in “Competition” prohibited by
this Section only if the Executive 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 the Company and/or the
Partnership on the date the Executive’s employment terminated or with respect to
a property that is within a fifty (50) mile radius of any commercial property
which the Company and/or Partnership actively negotiated to acquire, lease or
operate within the six (6) month period ending on the date of the termination of
the Executive’s employment.
(c)
The
Executive covenants that a breach of subsection 4(a) above
would immediately and irreparably harm the Partnership and the Company and
that a remedy at law would be inadequate to compensate the Partnership and the
Company for their losses by reason of such breach and therefore that the
Partnership and/or the Company 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 the Executive from committing any violation of subsection 4(a)
above, and the Executive hereby consents to the issuance of such
injunction.
5.
Registration
Rights
.
The
Executive shall have registration rights pursuant to the Registration Rights
Agreement attached hereto as Exhibit A.
6.
Place of
Performance
.
During
his employment hereunder, the Executive shall be based at the Partnership’s
principal executive offices and the Company’s principal executive offices
located in Greensboro, North Carolina or New York City, at the Executive’s
choice.
7.
Compensation and Related
Matters
.
During
the Executive’s employment hereunder, the Executive shall be paid the
compensation and shall be provided with the benefits described
below:
(a)
Annual Base
Salary
. The Executive’s annual base compensation
(“Annual Base Salary”) payable with respect to the Contract Year ending
December 31, 2004 shall be $400,000. The amount of Annual Base Salary
payable to the Executive with respect to each Contract Year thereafter shall be
an amount negotiated between and agreed upon by the Executive and the Board of
Directors of the Company (in its capacity as general partner and in its own
behalf) but in no event less than the Executive’s Annual Base Salary for the
prior Contract Year.
(b)
Benefits
. The
Executive shall be entitled to
(1)
receive
stock options (incentive or nonqualified) under the Company’s Stock Option
Plan and the Partnership’s Unit Option Plan;
(2)
participate
in the Partnership’s 401(k) Savings Plan, and
(3)
participate
in or receive benefits under any employee benefit plan or other arrangement
made available by the Partnership or the Company to any of its employees
(collectively “Benefits”), on terms at least as favorable as those on which
any other employee of the Partnership or the Company shall participate;
provided, however, that the Executive shall be entitled to four weeks of paid
vacation during each Contract Year, exclusive of Partnership
holidays.
Without
the Executive’s prior written consent, the Company and/or the Partnership will
not terminate or reduce any benefits paid to the Executive under this Section
7(b) unless the Executive is furnished with a benefit that is substantially
equivalent.
(c)
Automobile
. In
addition to the other compensation and benefits described in this Section
7, the Executive shall be entitled to receive a fixed monthly automobile
allowance of $800, payable at the same times that Base Salary is payable
hereunder. The allowance shall be in lieu of reimbursement by the
Company of any expense incurred by Executive to
purchase
or lease a vehicle that will be available for use by the Executive on Company
business. The Executive shall not be required to provide the Company
with supporting documentation to substantiate any such expenses and the
allowance shall be payable whether or not the Executive actually incurs such
automobile expenses in the amount of the allowance. The Executive
shall be responsible for the expenses of leasing or purchasing an
automobile which are in excess of the allowance provided hereunder.
(d)
Annual
Bonus
. As additional compensation for services rendered,
the Executive 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; provided that any Annual Bonus shall
be payable on or prior to the fifteenth (15
th
) day of
the third (3
rd
)
calendar month following the end of the calendar year with respect to which such
Annual Bonus relates.
(e)
Expenses
. Subject
to Section 23(b)(v), the Partnership and the Company shall promptly reimburse
the Executive for all reasonable travel and other business expenses
incurred by the Executive in the performance of his duties to the Partnership
and the Company, respectively hereunder.
(f)
Payment of
Compensation
. For each Contract Year or portion
thereof covered by this Agreement, the Company shall be liable for the
percentage described below (the “Company Percentage”) of the cost of the
Executive’s Annual Base Salary, and for any awards granted by the Company to the
Executive pursuant to the Incentive Award Plan of the Company and the
Partnership (the “Incentive Award Plan”), and the Partnership shall be liable
for the remainder of the cost of the Executive’s total compensation (including
any awards granted by the Partnership pursuant to the Incentive Award
Plan).
The
Company Percentage for each Contract Year shall be determined by the Board of
Directors of the Company (in its capacity as sole owner of the general partner
and in its own behalf), excluding the Executive, as the reasonable allocation of
the benefits for the Executive’s services.
8.
Termination
.
The
Executive’s employment hereunder may be terminated prior to the end of the
Contract Term by the Partnership, 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
. If
the Disability of the Executive has occurred during the Contract Term, the
Partnership or the Company, respectively, may give the Executive written notice
in accordance with Section 8(g) of its intention to terminate the Executive’s
employment. In such event, the Executive’s employment with the
Partnership and the Company shall terminate effective on the 30th day after
receipt of such notice by the Executive, provided that within the 30 days after
such receipt, the Executive shall not have returned to full-time performance of
his duties.
(c)
Cause
. The
Partnership or 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 Partnership or the Company may terminate the
Executive’ s employment hereunder without Cause 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 Partnership and the
Company.
(g)
Notice of
Termination
. Any termination of the Executive’s
employment hereunder by the Partnership, the Company or the Executive
(other than by reason of the Executive’s death) shall be communicated by a
notice of termination to the other parties 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 the Executive’s employment under
the provision indicated and (iii) specifies the effective date of the
termination.
9.
Severance
Benefits
.
(a)
Termination without Cause or
for Good Reason
: Subject to Section 23(b), if the
Executive’s employment shall be terminated (i) by the Company or the
Partnership other than for Cause (as defined above) or (ii) by the
Executive for Good Reason (as defined above), the Partnership and the Company
shall pay a lump sum cash payment (the “Severance Payment”) to the Executive
within thirty (30) days after such termination of the Executive’s employment in
an amount equal to 300% of the sum of (A) his Annual Base Salary,
(B) his Deemed Annual Bonus for the Contract Year in which the termination
occurs and (C) his annual automobile allowance under Section 7(c)
hereof. In addition, subject to Section 23(b), the Partnership and
the Company shall continue to provide all Benefits to the Executive under this
Agreement for each Contract Year through the end of the Contract
Term. For these purposes, the Executive’s Deemed Annual Bonus for any
Contract Year shall be the greater of (i) the Executive’s Average Annual
Bonus for that Contract Year and (ii) Executive’s Annual Bonus for the
prior Contract Year. The Executive’s Average Annual Bonus for a
Contract Year shall be an amount equal to the sum of all Annual Bonuses earned
by the Executive 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 the
Executive’s Annual Bonus or Average Annual Bonus for a Contract Year, the
amount of any share-based award under the Incentive Award Plan that the
Executive is required to recognize as income for federal income tax purposes in
a Contract Year shall be included as part of the Executive’s Annual Bonus for
that Contract Year.
(b)
Termination by Death or
Disability
. Subject to Section 23(b), 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 the amount of Annual Base Salary that would have been due through the
end of the Contract Term assuming no early termination had occurred and assuming
no increases or decreases in Annual Base Salary and (ii) on or before the
day on which the Executive’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 the Executive 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 the
Executive, his estate or beneficiaries to any disability or other benefits then
available to the Executive under any life, disability insurance or other benefit
plan or policy which is maintained by the Partnership or 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 all Annual Base Salary and all Benefits accrued
through the date of termination and to any accrued but unpaid Annual Bonus for a
Contract Year prior to the Contract Year in which the Executive’s employment was
terminated. 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 (15
th
) day of
the third (3
rd
)
calendar month following the end of the calendar year in which the date of
termination occurs.
(d)
Assignment of Life
Insurance
. Upon any termination of the
Executive’s employment hereunder, the Partnership and the Company shall, at
Executive’s option (exercisable at any time during the period commencing upon
the termination of his employment and ending 90 days thereafter), transfer the
life insurance policy described in such Section 11(b) to Executive, for no
consideration. In addition, notwithstanding any provision of the
Partnership’s Executive Deferred Compensation Plan to the contrary but subject
to Section 23(b), all amounts in the Executive’s account under such Plan (if
there is such a Plan) shall be immediately payable to him.
(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 Partnership or 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 Partnership or the Company to the
Executive under this Agreement.
10.
L
imitation on Severance
Benefits
.
(a)
Notwithstanding
any other provision of this Agreement, and except as provided in paragraph
10(b) below, payments and benefits to which 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 date of this
Agreement.
(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 paragraph 10(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 subparagraph 10(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.
11.
Insurance
.
(a)
Officers and Directors
Fiduciary Liability Insurance
: During the Executive’s
employment hereunder, the Company shall maintain, at its expense, officers and
directors fiduciary liability insurance that would cover the Executive in an
amount of no less than $3 million per year.
(b)
Term Life
Insurance
: During the Executive’s employment hereunder
and for a period of ninety (90) days thereafter, the Company shall maintain in
force a term life insurance policy on the Executive in the face amount of $10
million. If the Executive’s employment is terminated prior to the
expiration of the Contract Term (other than by reason of the Executive’s death,
a termination by the Company for Cause or a termination by the Executive without
Good Reason), the Company shall pay, prior to the expiration of the ninety (90)
period described in the preceding sentence, either to the Executive or, on
behalf of the Executive, to the issuer(s) of such life insurance policy(ies), an
amount sufficient to pay the premiums to maintain such policy(ies) in force for
the remainder of the Contract Term.
The
Company shall be liable for the Company Percentage (as described in Section
7(f)) of the annual premium for such term life insurance policy and the
Partnership shall be liable for the remainder of such premium. The
beneficiary of such insurance shall be designated, from time to time, by the
Executive in his sole and absolute discretion.
12.
Disputes and
Indemnification
.
(a)
Any
dispute or controversy arising under, out of, in connection with or
in relation to this Agreement shall, at the election and upon written
demand of any party to this Agreement, be finally determined and settled by
arbitration in the City of New York, New York in accordance with the rules and
procedures of the American Arbitration Association, and judgment upon the award
may be entered in any court having jurisdiction thereof.
(b)
The
Partnership and/or the Company shall promptly pay pursuant to Section 7(e)
as incurred, to the full extent permitted by law, all legal fees and expenses
which the Executive may reasonably incur as a result of any contest (regardless
of the outcome thereof) by the Partnership, the Company, the Executive or others
of the validity or enforceability of, or liability under, any provision of this
Agreement.
(c)
The
Company and the Partnership agree that if the Executive is made a party, or
is threatened to be made a party, to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a “Proceeding”), by reason of
the fact that he is or was a director, officer or employee of the Company or the
Partnership or is or was serving at the
request
of the Company or the Partnership as a director, officer, member, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether or
not the basis of such Proceeding is the Executive’s alleged action in an
official capacity while serving as a director, officer, member, employee or
agent, the Executive shall be indemnified and held harmless by the Company and
the Partnership to the fullest extent legally permitted, against all cost,
expense, liability and loss (including, without limitation, attorney’s fees,
judgements, fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement) reasonably incurred or suffered by the Executive in
connection therewith, and such indemnification shall continue as to the
Executive even if he has ceased to be a director, officer, member, employee or
agent of the Company or the Partnership or other entity and shall inure to the
benefit of Executive’s heirs, executors and administrators. The
Company and/or the Partnership shall advance to the Executive all reasonable
costs and expenses incurred by him in connection with a Proceeding within 20
days after receipt by them of a written request for such
advance. Such request shall include an undertaking by the Executive
to repay the amount of such advance, without interest, if it shall ultimately be
determined that he is not entitled to be indemnified against such costs and
expenses.
13.
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.
14.
Governing
Law
.
This
Agreement shall be governed, construed, interpreted and enforced in accordance
with the substantive laws of the State of North Carolina, without reference to
principles of conflicts or choice of law under which the law of any other
jurisdiction would apply.
15.
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.
16.
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 Partnership, to:
|
|
Tanger
Properties Limited Partnership
|
|
3200
Northline Avenue, Suite 360
|
Attn: General
Counsel
(b)
|
If
to the Company, to:
|
|
Tanger
Factory Outlets Centers, Inc.
|
|
3200
Northline Avenue, Suite 360
|
Attn: General
Counsel
(c)
|
If
to the Executive, to:
|
or at any
other address as any party shall have specified by notice in writing to the
other parties.
17.
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.
18.
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.
19.
Amendments;
Waivers
.
This
Agreement may not be modified, amended, or terminated except by an instrument in
writing, signed by the Executive, a member of the Partnership and a
disinterested director of the Company. By an instrument in writing
similarly executed, the Executive or the Company and the Partnership may waive
compliance by the other party or parties 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.
20.
No Effect on Other
Contractual Rights
.
Notwithstanding
Section 8, the provisions of this Agreement, and any other payment provided for
hereunder, shall not reduce any amounts otherwise payable to the Executive under
any other agreement between the Executive and the Partnership and the Company,
or in any way diminish the Executive’s rights under any employee benefit plan,
program or arrangement of the Partnership or the Company to which he may be
entitled as an employee of the Partnership or the Company.
21.
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.
22.
Legal
Fees
.
The
Company and/or the Partnership agree to pay all legal fees and expenses incurred
by the Executive in negotiating this Agreement promptly upon receipt of
appropriate statements therefor.
23.
Section
409A
.
(a)
The
parties acknowledge and agree that, to the extent applicable, this Agreement
shall be interpreted in accordance with, and the parties agree to use their best
efforts to achieve timely compliance with Section
409A. Notwithstanding any provision of this Agreement to
the contrary, in the event that the Company and/or the Partnership determines
that any compensation or benefits payable or provided under this Agreement may
be subject to Section 409A, the Company and/or the Partnership 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 and/or the Partnership 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. No provision of this Agreement
shall be interpreted or construed to transfer any liability for failure to
comply with the requirements of Section 409A from the Executive or any other
individual to the Company and/or the Partnership or any of their respective
affiliates, employees or agents.
(b)
Separation
from Service under 409A. Notwithstanding any provision to the
contrary in this Agreement:
(i) No
amount shall be payable pursuant to Sections 9(a) or (b) 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 with
respect to both the Company and the Partnership; and
(ii) 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 (any such delayed commencement, a “
Payment
Delay
”) 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 Section 9 and Section 11, 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 (A) 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 (B) the date of the Executive’s death. Upon the
earlier of such dates (the “
Delayed Payment
Date
”), all payments deferred pursuant to this Section 23(b)(ii) 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. Any payment subject to the Payment Delay shall be credited with
interest for the period during which such payment is delayed pursuant to the
Payment Delay at a rate equal to the then current borrowing rate on the
Company’s unsecured line of credit that is used for daily cash management by the
Company as in effect on the date of the Executive’s “separation from service”
(the “
Daily Cash
Rate
”) and, to the extent any payment subject to the Payment Delay is not
paid on the Delayed Payment Date, such payment shall be credited with
interest at a rate equal two times the Daily Cash Rate for the period commencing
with the day after the Delayed Payment Date and ending on the date such payment
is made (unless such non-payment is required by applicable law, rule or
regulation, in which case such payment shall continue to be credited with
interest at the Daily Cash Rate); and
(iii) 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 of the Code and applicable guidance thereunder (including without
limitation Section 1.409A-1(i) of the Department of Treasury Regulations and any
successor provision thereto); and
(iv) For
purposes of Section 409A of the Code, the Executive’s right to receive
installment payments shall be treated as a right to receive a series of separate
and distinct payments; and
(v) The
reimbursement of any expense under Section 7 or Section 9 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. The amount of any Benefits provided in one year shall not
affect the amount of Benefits provided in any other year.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
EXECUTIVE
/s/ Steven B.
Tanger
STEVEN B.
TANGER
TANGER FACTORY OUTLET CENTERS,
INC.
, a North Carolina Corporation
By:
/s/ Frank
C. Marchisello
Jr.
Frank C. Marchisello, Jr.
Executive Vice President, Chief Financial Officer and
Secretary
TANGER PROPERTIES LIMITED
PARTNERSHIP
a North Carolina Limited Partnership
By: TANGER
GP TRUST, its sole General Partner
By:
/s/ Frank C. Marchisello
Jr.
Frank C. Marchisello, Jr.
Vice President, Treasurer and
Assistant Secretary
The
Partnership and the Company hereby jointly and severally guarantee to the
Executive the prompt payment in full of the compensation owed hereunder by the
other.
TANGER FACTORY OUTLET CENTERS,
INC.
, a North Carolina Corporation
By:
/s/ Frank
C. Marchisello
Jr.
Frank C. Marchisello,
Jr.
Executive Vice President, Chief Financial Officer and Secretary
TANGER PROPERTIES LIMITED
By: TANGER
GP TRUST, its sole General Partner
By:
/s/ Frank C.
Marchisello Jr.
Frank C. Marchisello, Jr.
Vice President, Treasurer and
Assistant Secretary
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into and made effective as
of December
29
, 2008 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 January 1,
2004 (the “Existing Employment Contract”).
B.
The
Company and Marchisello wish to modify and amend the Existing Employment
Contract 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).
(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).
(j)
“
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 date of this
amendment and restatement.
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 the Existing Employment Contract began as of
January 1, 2004 (the “Commencement Date”) and ended on December 31,
2006 (the “Initial Contract Term”). On each January 1 for the
calendar years 2005 through 2008, the Contract Term was automatically extended
by one year, 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, 2010 that the Contract Term will not be
extended, on January 1, 2010, the Contract Term will be extended to and
including December 31, 2012.
If the
Contract Term is extended as provided herein, Marchisello’s employment may be
terminated (other than upon expiration) only as provided in
Section 6. References herein to the “Contract Term” shall refer
to the Initial Contract Term as extended pursuant to this
Section 2.
3.
Position and
Duties
. Marchisello
shall serve in the following manner:
(a)
During
Marchisello’s employment hereunder, he shall serve as:
(1)
an
executive employee of the Company and shall report to a designated senior
executive officer of the Company, and
(2)
the
Executive Vice President and Chief Financial Officer of TFOC and shall have
such duties, functions, responsibilities and authority as are consistent with
those positions.
4.
Competition
(a)
Marchisello
shall be prohibited from engaging in Competition (as defined in subsection
4(b) below) with the Company or TFOC during the following described
periods: (i) during the period beginning on the date hereof and
extending through the date on which Marchisello’s employment hereunder is
terminated; (ii) if Marchisello’s employment is terminated by the Company
for Cause or by Marchisello without Good Reason, from the date of such
termination through the date of the first anniversary of such termination date
and (iii) if Marchisello receives the Severance Payment described in
Section 7(a) because of a termination of his employment by the Company without
Cause or by Marchisello for Good Reason, from the date of such termination
through the date of the third anniversary of such termination date.
(b)
During
the period prior to the termination of Marchisello’s employment hereunder,
the term “Competition” for purposes of this Agreement shall mean Marchisello’s
management, development or construction of any factory outlet centers or
competing retail commercial property outside the Company and TFOC or any other
active or passive investment in property connected with a factory outlet center
or a competing retail commercial property outside the Company and TFOC, with the
exception of
(1)
the
ownership of up to 1% of any class of securities of any publicly traded
company, and
(2)
service
on the board of directors of any publicly traded company, whether or not
such company engages in Competition as defined in this subsection
4(b
Provided
however, for any period following the termination of Marchisello’s employment,
Marchisello shall be considered as engaging in “Competition” prohibited by this
Section only if Marchisello engages in the prohibited activities with respect to
a property that is within a fifty (50) mile radius of the site of any commercial
property owned, leased or operated by TFOC and/or the Company on the date
Marchisello’s employment terminated or with respect to a property that is within
a fifty (50) mile radius of any commercial property which TFOC and/or Company
actively negotiated to acquire, lease or operate within the six (6) month period
ending on the date of the termination of Marchisello’s employment.
(c)
Marchisello
covenants that a breach of subsection 4(a) above would immediately and
irreparably harm the Company and TFOC and that a remedy at law would be
inadequate to compensate the Company and TFOC for their losses by reason of such
breach and therefore that the Company and/or TFOC shall, in addition to any
other rights and remedies available under this Agreement, at law or otherwise,
be entitled to an injunction to be issued by any court of competent jurisdiction
enjoining and restraining Marchisello from committing any violation of
subsection 4(a) above, and Marchisello hereby consents to the issuance of such
injunction.
5.
Compensation and Related
Matters
. During
Marchisello’s employment hereunder, Marchisello shall be paid the compensation
and shall be provided with the benefits described below:
(a)
Annual Base
Salary
. Marchisello’s annual base compensation
(“Annual Base Salary”) payable with respect to the Contract Year ending
December 31, 2004 shall be $275,000.00. The amount of Annual
Base Salary payable to Marchisello with respect to each Contract Year thereafter
shall be an amount negotiated between and agreed upon by Marchisello and the
Company but in no event less than Marchisello’s Annual Base Salary for the prior
Contract Year.
(b)
Annual
Bonus
. As additional compensation for services
rendered, Marchisello shall receive such bonus or bonuses as the Company’s
Board of Directors may from time to time approve including without limitations
awards under the Company’s Incentive Award Plan;
provided
that any
Annual Bonus shall be payable on or prior to the fifteenth (15
th
) day of
the third (3
rd
)
calendar month following the end of the calendar year with respect to which such
Annual Bonus relates.
(c)
Benefits
. Marchisello
shall be entitled to (i) receive stock options (incentive or
nonqualified) under the Company’s Unit Option Plan; (ii) participate in the
Company’s 401(k) Savings Plan; (iii) receive vacation during each Contract
Year in accordance with the policy of the Company; and (iv) participate in
or receive benefits under any employee benefit plan or other arrangement made
available by the Company to any of its employees generally and for which
Marchisello is eligible (collectively “Benefits”).
(d)
Expenses
. Subject
to Section 10(b)(v), 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.
T
ermination
. 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), then subject to
Section 10(b), the Company shall pay Marchisello an amount equal to 300% of the
sum of (x) his Annual Base Salary and (y) (B) his Deemed Annual
Bonus for the Contract Year in which the termination occurs. Such
amount shall be paid in equal consecutive installments, in accordance with the
Company’s
regular pay schedule and subject to Section 10(b)(iv), 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
. Subject to Section 10(b), 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 7(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. Such accrued compensation shall be
paid in accordance with the Company’s ordinary pay practices and, in any event,
on or prior to the fifteenth (15
th
) day of
the third (3
rd
)
calendar month following the end of the calendar year in which the date of
termination occurs.
(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.
L
imitation 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 Marchisello would otherwise be
entitled under the provisions of this Agreement will be reduced (or
Marchisello shall make reimbursement of amounts previously paid) to the extent
necessary to prevent Marchisello from having any liability for the federal
excise tax levied on certain “excess parachute payments” under section 4999 of
the Internal Revenue Code as it exists as of the date of this
Agreement.
(b)
The
Company may determine the amount (if any) of reduction for each payment or
benefit that Marchisello would otherwise be entitled to receive. The
extent to which the payments or benefits to Marchisello are to be reduced
pursuant to paragraph 8(a) will be determined by the accounting firm servicing
the Company on the date that Marchisello’s employment is
terminated. The Company shall pay the cost of such
determination.
(c)
If the
final determination of any reduction in any benefit or payment pursuant to
this Section has not been made at the time that Marchisello is entitled to
receive such benefit or payment, the Company shall pay or provide an estimated
amount based on a recommendation by the accounting firm making the determination
under subparagraph 8(b). When the final determination is made, the
Company shall pay Marchisello any additional amounts that may be due or
Marchisello shall reimburse the Company for any estimated amounts paid to
Marchisello that were in excess of the amount payable hereunder.
9.
Miscellaneous
9.1
Binding on
Successors
. This Agreement shall be binding upon and
inure to the benefit of the Company and Marchisello and their respective
successors, assigns, personal and legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees, as
applicable.
9.2
Governing
Law
. This Agreement is being made and executed in and is
intended to be performed in the State of North Carolina, and shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of North Carolina without any reference to principles of conflicts or
choice of law under which the law of any other jurisdiction would
apply.
9.3
Validity
. The
invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
9.4
Notices
. Any
notice, request, claim, demand, document and other communication hereunder
to any party shall be effective upon receipt (or refusal of receipt) and shall
be in writing and delivered personally or sent by telex, telecopy, or certified
or registered mail, postage prepaid, as follows:
(a)
|
If
to the Company, to:
|
|
Tanger
Properties Limited Partnership
|
|
3200
Northline Avenue, Suite 360 or
|
(b)
|
If
to Marchisello, to:
|
|
Mr.
Frank C. Marchisello, Jr.
|
or at any
other address as any party shall have specified by notice in writing to the
other parties.
9.5
Counterparts
. This
Agreement may be executed in several counterparts, each of which shall be
deemed to be an original, but all of which together will constitute one and the
same Agreement.
9.6
Entire
Agreement
. The terms of this Agreement are intended by
the parties to be the final expression of their agreement with respect to the
employment of Marchisello by the Company and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend
that this Agreement shall constitute the complete and exclusive statement of its
terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding to vary the terms of this
Agreement.
9.7
Amendments;
Waivers
. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, signed by Marchisello and the
Company. By an instrument in writing similarly executed, Marchisello
or the Company may waive compliance by the other party with any provision of
this Agreement that such other party was or is obligated to comply with or
perform, provided, however, that such waiver shall not operate as a waiver of,
or estoppel with respect to, any other or subsequent failure. No
failure to exercise and no delay in exercising any right, remedy, or power
hereunder preclude any other or further exercise of any other right, remedy, or
power provided herein or by law or in equity.
9.8
No Effect on Other
Contractual Rights
. Notwithstanding Section 6, the
provisions of this Agreement, and any other payment provided for hereunder,
shall not reduce any amounts otherwise payable to Marchisello under any other
agreement between Marchisello and the Company, or in any way diminish
Marchisello’s rights under any employee benefit plan, program or arrangement of
the Company to which he may be entitled as an employee of the
Company.
9.9
No Inconsistent
Actions
. The parties hereto shall not voluntarily
undertake or fail to undertake any action or course of action inconsistent with
the provisions or essential intent of this Agreement. Furthermore, it
is the intent of the parties hereto to act in a fair and reasonable manner with
respect to the interpretation and application of the provisions of this
Agreement.
10.
Section
409A
.
(a)
The
parties acknowledge and agree that, to the extent applicable, this Agreement
shall be interpreted in accordance with, and the parties agree to use their best
efforts to achieve timely compliance with 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
Marchisello 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. No provision of this Agreement shall be interpreted or
construed to transfer any liability for failure to comply with the requirements
of Section 409A from Marchisello or any other individual to the Company or any
of its affiliates, employees or agents.
(b)
Separation
from Service under 409A. Notwithstanding any provision to the
contrary in this Agreement:
(i) No
amount shall be payable pursuant to Sections 7(a) or (b) unless the termination
of Marchisello’s employment constitutes a “separation from service” within the
meaning of Section 1.409A-1(h) of the Department of Treasury Regulations with
respect to the Company; and
(ii) If
Marchisello 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 Marchisello 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 Section 7, is required in order to avoid a prohibited
distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of
Marchisello’s termination benefits shall not be provided to Marchisello prior to
the earlier of (A) the expiration of the six-month period measured from the date
of Marchisello’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 (B) the date of Marchisello’s death. Upon the earlier of
such dates, all payments deferred pursuant to this Section 10(b)(ii) shall be
paid in a lump sum to Marchisello, and any remaining payments due under the
Agreement shall be paid as otherwise provided herein; and
(iii) The
determination of whether Marchisello 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 of the Code and applicable guidance thereunder (including without
limitation Section 1.409A-1(i) of the Department of Treasury Regulations and any
successor provision thereto); and
(iv) For
purposes of Section 409A of the Code, Marchisello’s right to receive installment
payments pursuant to Sections 7(a) or (b) shall be treated as a right to receive
a series of separate and distinct payments; and
(v) The
reimbursement of any expense under Section 5 or Section 7 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. The amount of any Benefits provided in one year shall not
affect the amount of Benefits provided in any other year.
IN
WITNESS WHEREOF, the parties have executed or caused this Agreement to be
executed as of the day and year first above written.
TANGER PROPERTIES LIMITED
PARTNERSHIP
, a North Carolina Limited Partnership
By: TANGER
GP TRUST, its sole General Partner
By:
/s/ Stanley K.
Tanger
Stanley
K. Tanger, Chief Executive Officer
and
Chairman of the Board
/s/ Frank C. Marchisello
Jr
(SEAL)
FRANK C.
MARCHISELLO, JR.
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
Effective
as of December 29, 2008
This
Agreement is entered into and made effective as of December
29
, 2008 (the “Effective Date”)
between
Tanger Properties
Limited Partnership
(the “Company”) and
LISA J. MORRISON
(the
“Executive”). The Company and the Executive are sometimes referred to
individually as a “Party” and collectively as the “Parties”.
RECITALS
A. The
Company and the Executive have agreed upon the terms and conditions of the
Executive’s employment by the Company. Company and Executive entered
into an Employment Agreement dated June 1, 2001 which was amended and restated
as of January 1, 2002, January 1, 2005, January 1, 2006, and January 1, 2008
(the “Prior Agreement”).
B. The
Parties intend to set forth herein the entire agreement between them with
respect to Executive’s employment by the Company. The Parties intend
to modify, amend and restate their Prior Agreement upon the terms and conditions
set forth herein.
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
. Executive
has been elected and is currently serving as Senior Vice
President-Leasing. During the Executive’s employment hereunder, her
primary duties, functions, responsibilities and authority will include
overseeing the Company’s leasing activities. Further, Executive shall
perform such other duties as are assigned to her by the Chief Executive Officer,
Chief Operating Officer and/or the Board of Directors.
1.3
Time and
Effort
. During
the Contract Term, Executive shall be employed on a full-time basis and shall
devote her best efforts and substantially all of her 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 the Prior Agreement began on January 1, 2008
(the “Commencement Date”) and shall extend through December 31, 2010 (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, 2008 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 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
or an Extended Term. An Extended Term shall be upon the same terms
and conditions as were applicable to the Initial 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 Term as extended
pursuant to this Section.
3.
COMPENSATION
.
3.1
Base
Salary
. As
compensation for Executive’s services performed pursuant to this Agreement,
Employer will pay Executive an “Annual Base Salary” of $231,500 for the Contract
Year beginning January 1, 2008 and, with respect to each Contract Year
thereafter an amount agreed upon by Executive and the Company but not less than
$231,500. The Annual Base Salary shall be paid in equal installments
in arrears in accordance with Employer’s regular pay schedule.
3.2
Bonus
Compensation
. For
the Contract Year beginning January 1, 2008 and, if approved by the Company’s
Board of Directors, for each Contract Year thereafter, in addition to her Annual
Base Salary, Executive will be paid an annual bonus (“Annual Bonus”) in an
amount equal to the lesser of (i) one hundred percent (100%) of Executive’s
Annual Base Salary in effect on the last day of such Contract Year and (ii) an
amount equal to nine and sixteen one- hundredths percent (9.16%) of the total
the commissions of Qualified Leasing Representatives (as defined below) with
respect to that Contract Year computed as a percentage of average annual tenant
rents (net of tenant allowances) in accordance with the Company’s leasing team
bonus plan in effect for that Contract Year; provided however, that such Annual
Bonus shall be payable on or prior to the fifteenth (15
th
) day of
the third (3
rd
)
calendar month following the end of the calendar year with respect to which such
Annual Bonus relates. Notwithstanding the foregoing, if the amount
determined under clause (ii) above is greater than 100% of Executive’s Annual
Base Salary, such excess amount shall be carried over to the next succeeding
Contract Year and added to the amount determined under clause (ii) in the
calculation of her Annual Bonus for that succeeding Contract Year; provided,
however, that such excess amount shall be payable on or prior to the fifteenth
(15
th
) day of
the third (3
rd
)
calendar month following the end of the succeeding Contract Year
[
; and provided, further, that
the payment of such excess amount shall be subject to the continued employment
of the Executive through December 31 of such succeeding Contract Year
]
1
.
For
purposes of this Agreement, “Qualified Leasing Representative”, with respect to
any Contract Year, shall mean any person, including Executive, who is entitled
to participate in the Company’s leasing team bonus plan for that Contract
Year.
For
purposes of illustration only, applying the bonus formula for the calendar year
2007, Executive’s Annual Bonus for that calendar year would have been as
follows:
A
|
B
|
C
|
D
|
E
|
Year
|
Annual
Base Salary
|
Total
2007 Commissions of Qualifying Leasing Representatives
|
Executive’s
Potential 2007 Annual Bonus (C x 9.16% plus any carryover from
preceding Contract Year)
|
Executive’s
Maximum 2007 Annual Bonus
(B x
100%)
|
2007
|
$220,500
|
$2,116,012
|
$193,827
|
$220,500
|
4.
EMPLOYEE
BENEFITS
.
4.1
Executive Benefit
Plans
. Executive
shall participate in the employee benefit plans (including 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
. Subject
to Section 10.2(e), the Company shall promptly reimburse the Executive for all
reasonable travel and other business expenses incurred by the Executive in the
performance of her duties to the Company hereunder. 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,
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
. 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 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
. 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
. Executive’s
employment hereunder shall terminate upon her death.
(b)
Disability
. The
Company may terminate Executive’s employment upon her Disability.
(c)
Cause
. The
Company may terminate the Executive’s employment hereunder for
Cause.
(d)
Good
Reason
. Executive may terminate her employment for Good
Reason.
(e)
Without
Cause
. The Company may terminate 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 her employment without Good
Reason upon 90 days’ written notice to the Company.
(g)
Resignation following a
Change of Control
. The Executive may terminate her employment
during the period commencing on the date of the first Change of Control to occur
following the Effective Date and ending on the 75
th
day
following such Change of Control (the “Cessation Date”) by written notice
provided to the Company on or prior to the 60
th
day
following such Change of Control.
Except as
may otherwise be expressly provided in Section 7.1(a) or in any written
agreement between the Company and Executive with respect to the issuance of
awards under the Company’s Incentive Award Plan, upon termination of 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 shall not be entitled to additional compensation. 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 (15
th
) day of
the third (3
rd
)
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 (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 the Executive’s employment under the provision
indicated and (iii) specifies the effective date of the
termination.
6.
AGREEMENT NOT TO
COMPETE
.
6.1
Covenant Against
Competition
. Executive
agrees that during the term of Executive’s employment hereunder and (i) if
Executive’s employment is terminated by the Company for Cause or by Executive
without Good Reason, for one hundred eighty (180) days after the date of such
termination or (ii) if Executive receives the Severance Payment described in
Section 7.1(a) if this Agreement because of a termination of her employment by
the Company without Cause or by Executive for Good Reason, from the date of such
termination
through the first anniversary of such termination date, Executive shall not,
directly or indirectly, as an employee, employer, shareholder, proprietor,
partner, principal, agent, consultant, advisor, director, officer, or in any
other capacity,
(1)
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 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;
(2)
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
Executive’s employment hereunder, the Company or its affiliate negotiated to
acquire and/or lease for the development or operation of a retail shopping
facility;
(3)
engage in
activities involving the development or operation of a full price retail
shopping facility which is located within a radius of five (5) miles of, and
competes directly for tenants with, a full price retail shopping facility which,
within the 365-day period ending on the date of the termination of Executive’s
employment hereunder, was (i) under development by the Company or its affiliate;
(ii) owned (with an effective ownership interest of 50% or more), directly or
indirectly, by the Company; or (iii) operated by the Company.
6.2
Disclosure of
Information
. Executive
acknowledges that in and as a result of her employment hereunder, she 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. Executive covenants and agrees that she
shall not, at any time during or following the term of her employment, directly
or indirectly, divulge or disclose for any purpose whatsoever any such
confidential information that has been obtained by, or disclosed to her as a
result of her employment by Company.
6.3
Reasonableness of
Restrictions
.
(a)
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
. Executive
promises in this Section not to compete with the Company and not to disclose
information obtained during her 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
Executive constitute the material inducement to Company to employ Executive for
the 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 Executive.
6.5
Company’s
Remedies
. Executive
covenants and agrees that if she shall violate any of her 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 Executive:
(a)
The
Company shall be relieved of any further obligation to Executive under the terms
of this agreement;
(b)
The
Company shall be entitled to an accounting and repayment of all profits,
compensation, commissions, remunerations or other benefits that 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)
Company
shall be entitled to a permanent injunction to prevent or restrain the breach or
violation of the agreements contained herein by Executive or by Executive’s
partners, agents, representatives, servants, employees and/or any and all
persons directly acting for or with Executive.
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 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 Executive an amount
equal to one hundred percent (100%) of the sum of (x) her Annual Base Salary and
(y) her Average Annual 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 Executive’s employment. For
these purposes, Executive’s Average Annual Bonus shall be the average of the
Annual Bonuses earned by Executive for the three consecutive Contract Years (or
if Executive has not been employed for three full Contract Years, such fewer
number of full Contract Years she has been employed by the Company) immediately
preceding the Contract Year in which 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 her death or Disability, the Company
shall pay to the Executive or to the personal representatives of her 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 Contract Year in
which the termination occurs and (ii) on or before the day on which the
Executive’s Annual Bonus for the Contract Year in which the termination occurs
would have been payable pursuant to Section 3.2 if the termination had not
occurred, an amount equal to the Annual Bonus the Executive 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 7.1(b) shall not limit the entitlement of
the Executive, her estate or beneficiaries to any disability or other 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 in accordance with the
Company’s ordinary payment practices and, in any event, on or prior to the
fifteenth (15
th
) day of
the third (3
rd
)
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 her
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) her Annual Base Salary and
(y) her Average Annual Bonus (as defined above). 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 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 for 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 paragraph
7.2(b) below, payments and benefits to which 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 date of this
Agreement.
(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 paragraph 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
subparagraph 10(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.
“
Annual Bonus
” is
defined in Section 3.
“
Cause
” For
purposes of this Agreement, the Company shall have “Cause” to terminate the
Executive’s employment hereunder upon (i) the Company’s determination that she
has embezzled money or property, (ii) the Executive’s willful refusal to perform
reasonable duties incident to her employment after ten (10) days’ written notice
to Executive from the Chief Executive Officer, Chief Operating Officer or Board
of Directors of the company of the specific duties to be performed, or (iii)
commission of a felony which, in the judgment of the Board of Directors of the
Company, 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 Company or Tanger Factory Outlet Centers,
Inc. (“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 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 Executive or any of her lineal descendants, lineal
ancestors or siblings) which results in their ownership of fifty (50%) 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; or (C) 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.
“
Contract Term
” is
defined in Section 2.
“
Contract Year
” is
defined in Section 2.
“
Disability
” shall
mean 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
her 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
her employment hereunder if (i) the Company materially fails to make payment of
amounts due to Executive hereunder; (ii) Company commits a material breach of
its obligations under this Agreement; or (iii) the principal duties of Executive
are required to be performed at a location other than the Greensboro, North
Carolina metropolitan area without her consent following the occurrence of (A) a
Change of Control, (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) 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 her employment unless (x) she provides the Company with
Notice of Termination within 90 days after the occurrence of the act purported
to constitute Good Reason, (y) 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 (z) 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 date of this
amendment and restatement.
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
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, to:
|
Tanger
Properties Limited Partnership
3200
Northline Avenue
Suite
360
Greensboro,
NC 27408
Attention:
|
With
a copy to:
|
|
If
to Executive, to:
|
LISA
J. MORRISON
9
Teal Court
Greensboro,
NC 37455
|
With
a copy to:
|
|
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 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 in which the Center is
located are not generally open for the conduct of banking business during normal
business hours.
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
The
parties acknowledge and agree that, to the extent applicable, this Agreement
shall be interpreted in accordance with, and the parties agree to use their best
efforts to achieve timely compliance with Section 409A of the Internal Revenue
Code of 1986, as amended and the Department of Treasury Regulations and other
interpretive guidance promulgated thereunder (collectively, “Section 409A”),
including without limitation any such regulations or other guidance that may be
issued after the Effective Date. 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. No
provision of this Agreement shall be interpreted or construed to transfer any
liability for failure to comply with the requirements of Section 409A from the
Executive or any other individual to the Company or any of its affiliates,
employees or agents.
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) or (b) 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) or (b), 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 (A) 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 (B) 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
(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 of the Code and applicable guidance thereunder (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 of the Code, the Executive’s right to receive
installment payments pursuant to Section 7.1(a) shall be treated as a right to
receive a series of separate and distinct payments; and
(e)
The
reimbursement of any expense under Section 4.2 or Section 7.1 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.
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
(Company)
By:
/s/ Frank C. Marchisello
Jr.
Print
Name: Frank C. Marchisello,
Jr.
Print
Title: Vice President, Treasurer and Assistant Secretary
of Tanger GP Trust
its sole general
partner
/s/ Lisa J.
Morrison
(SEAL)
Executive
Print
Name:
LISA J.
MORRISON
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
Effective
as of December 29, 2008
This
Agreement is entered into and made effective as of December 29, 2008 (the
“Effective Date”) between
Tanger Properties Limited
Partnership
(the “Company”) and
JOSEPH NEHMEN
(the
“Executive”). The Company and the Executive are sometimes referred to
individually as a “Party” and collectively as the “Parties”.
RECITALS
A. The
Company and the Executive have agreed upon the terms and conditions of the
Executive’s employment by the Company. Company and Executive entered
into an Employment Agreement dated January 1, 1995 which was amended and
restated as of January 1, 1999, July 1, 2003, and January 1, 2008 (the “Prior
Agreement”).
B. The
Parties intend to set forth herein the entire agreement between them with
respect to Executive’s employment by the Company. The Parties intend
to modify, amend and restate their Prior Agreement upon the terms and conditions
set forth herein.
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
. Executive
has been elected and is currently serving as Senior Vice President of
Operations. During the Executive’s employment hereunder, his primary
duties, functions, responsibilities and authority will include overseeing the
operations of the Company’s retail facilities. Further, Executive
shall perform such other duties as are assigned to him by the Chief Executive
Officer, Chief Operating Officer and/or the Board of Directors.
1.3
Time and
Effort
. During
the Contract Term, 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.
Notwithstanding
the foregoing provisions of this Section, Executive may perform consulting or
employment services which do not materially interfere with the performance of
his duties as a full time employee of the Company as follows:
(a)
For a
purchaser of any of the assets or capital stock of Merchants Wholesalers of
Missouri, Inc. (the company in which he was formerly a part owner and
with whom he was employed) in connection with the purchaser’s conduct of a
business for the wholesale and retail sale of cigarettes, candy, tobacco and
similar items and so long as the purchaser is not engaged in activities which
are in competition with the business currently conducted by the Company;
and
(b)
For
Dolgin & Associates (a firm in which Executive owns an interest) in
connection with that firm’s conduct of the business of providing tax
consultation and advice and so long as that firm is not engaged in activities
which are in competition with the business currently conducted by the
Company.
2.
PERIOD OF
EMPLOYMENT
.
2.1
Initial Contract
term
. The
period of employment pursuant to the Prior Agreement began on January 1, 2008
(the “Commencement Date”) and shall extend through December 31, 2010 (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, 2008 and each calendar year thereafter during the Contract Term is
sometimes herein referred to as a “Contract Year”.
2.2
Extended Contract
Term
. On
January 1, 2009, the Contract Term shall be automatically extended by one year,
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)
Executive’s employment has been earlier terminated as provided in Section 5 or
(ii) the Company gives written notice to Executive one hundred eighty (180) days
prior to the Extension Date that the Contract Term shall not be automatically
extended. For purposes of illustration, if Executive’s employment has
not been terminated as provided in Section 5 and if the Company has not given
written notice to Executive at least 180 days prior to January 1, 2010 that the
Contract Term will not be extended, on January 1, 2010, the Contract Term will
be extended to and including December 31, 2012.
If the
Contract Term is extended as provided herein, Executive’s employment may be
terminated (other than upon expiration) only as provided in Section
5. References herein to the “Contract Term” shall refer to the
Initial Contract Term as extended pursuant to this Section 2.
3.
COMPENSATION
.
3.1
Base
Salary
. As
compensation for Executive’s services performed pursuant to this Agreement,
Employer will pay Executive an “Annual Base Salary” of $295,470 for the Contract
Year beginning January 1, 2008 and, with respect to each Contract Year
thereafter an amount agreed upon by Executive and the Company but not less than
$295,470. 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 receive such
bonus or bonuses as the Company’s Board of Directors may from time to time
approve including without limitation awards under the Company’s Incentive Award
Plan. 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 Incentive
Award Plan, provided, however, that any Cash Bonus shall be payable on or prior
to the fifteenth (15
th
) day of
the third (3
rd
)
calendar month following the end of the calendar year with respect to which such
Cash Bonus relates.
4.
EMPLOYEE
BENEFITS
.
4.1
Executive Benefit
Plans
. Executive
shall participate in the employee benefit plans (including 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
. Subject
to Section 10.2(e), the Company shall promptly reimburse the Executive for all
reasonable travel and other business expenses incurred by the Executive in the
performance of his duties to the Company hereunder. 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,
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
. 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 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
. 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
. Executive’s
employment hereunder shall terminate upon his death.
(b)
Disability
. The
Company may terminate Executive’s employment upon his Disability.
(c)
Cause
. The
Company may terminate the Executive’s employment hereunder for
Cause.
(d)
Good
Reason
. Executive may terminate his employment for Good
Reason.
(e)
Without
Cause
. The Company may terminate 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.
Except as
may otherwise be expressly provided in Section 7.1(a) or in any written
agreement between the Company and Executive with respect to the issuance of
awards under the Company’s Incentive Award Plan, upon termination of 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 shall not be entitled to additional compensation. 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 (15
th
) day of
the third (3
rd
)
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 (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 the Executive’s employment under the provision
indicated and (iii) specifies the effective date of the
termination.
6.
AGREEMENT NOT TO
COMPETE
.
6.1
Covenant Against
Competition
. Executive
agrees that during the term of Executive’s employment hereunder and (i) if
Executive’s employment is terminated by the Company for Cause or by Executive
without Good Reason, for one hundred eighty (180) days after the date of such
termination or (ii) if Executive receives the Severance Payment described in
Section 7.1(a) if this Agreement because of a termination of his employment by
the Company without Cause or by Executive for Good Reason, from the date of such
termination through the first anniversary of such termination date, Executive
shall not, directly or indirectly, as an employee, employer, shareholder,
proprietor, partner, principal, agent, consultant, advisor, director, officer,
or in any other capacity,
(1)
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 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;
(2)
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
Executive’s employment hereunder, the Company or its affiliate negotiated to
acquire and/or lease for the development or operation of a retail shopping
facility;
(3)
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 Executive’s employment
hereunder, was (i) under development by the Company or its affiliate; (ii) owned
(with an effective ownership interest of 50% or more), directly or indirectly,
by the Company; or (iii) operated by the Company.
6.2
Disclosure of
Information
. Executive
acknowledges that in and as a result of his employment hereunder, he 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. 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)
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
. 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
Executive constitute the material inducement to Company to employ Executive for
the 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 Executive.
6.5
Company’s
Remedies
. 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 Executive:
(a)
The
Company shall be relieved of any further obligation to Executive under the terms
of this agreement;
(b)
The
Company shall be entitled to an accounting and repayment of all profits,
compensation, commissions, remunerations or other benefits that 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)
Company
shall be entitled to a permanent injunction to prevent or restrain the breach or
violation of the agreements contained herein by Executive or by Executive’s
partners, agents, representatives, servants, employees and/or any and all
persons directly acting for or with Executive.
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
: If 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 hereof, the Company shall pay
Executive an amount equal to three hundred percent (300%) of his Annual Base
Salary. Subject to Section 10.2, such amount shall be paid in equal
consecutive installments in accordance with the Company’s regular pay schedule
over a twelve (12) month period beginning on the effective date of the
termination of Executive’s employment.
(b)
Termination by Death or
Disability
. Subject to Section 10.2, 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 one
hundred percent (100%) of the Executive’s Annual Base Salary for the Contract
Year in which the termination occurs and (ii) on or before the day on which the
Executive’s Cash 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 Cash Bonus the Executive 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 the Executive, his estate or beneficiaries to any disability or
other 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 all Annual Base Salary and all Benefits accrued
through the date of termination, payable in accordance with the Company’s
ordinary payment practices and, in any event, on or prior to the fifteenth
(15
th
) day of
the third (3
rd
)
calendar month following the end of the calendar year in which the date of
termination occurs.
(d)
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.
(e)
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.
7.2
Limitation on Severance
Benefits
.
(a)
Notwithstanding
any other provision of this Agreement, and except as provided in paragraph
7.2(b) below, payments and benefits to which 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 date of this
Agreement.
(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 paragraph 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
subparagraph 10(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.
“
Cash Bonus
” is
defined in Section 3.
“
Cause
” For purposes
of this Agreement, the Company shall have “Cause” to terminate Executive’s
employment hereunder upon (i) a finding by the Board of Trustees of the
Company’s general partner, Tanger GP Trust that Executive has materially harmed
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) a finding by Tanger GP Trust’s Board of Trustees
that Executive has willfully failed 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).
“
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. (“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 Executive 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.
“
Contract Term
” is
defined in Section 2.
“
Contract Year
” is
defined in Section 2.
“
Disability
” shall
mean the absence of Executive from Executive’s duties to the Company 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 Executive or Executive’s legal representative (such agreement as to
acceptability not to be withheld unreasonably).
“
Good Reason
” The
Executive shall have “Good Reason” to terminate his employment hereunder if (i)
the Company fails to make payment of amounts due to Executive hereunder within
thirty (30) days after Executive has made written demand therefor upon Company;
(ii) Company commits a material breach of its obligations under this Agreement
and fails to cure such breach after a thirty (30) day written notice thereof;
(iii) if, after a Change of Control, the principal duties of Executive are
required to be performed at a location other than the Greensboro, North Carolina
metropolitan area without his consent; (iv) if Executive elects to terminate his
employment by written notice to the Company within the 180 day period following
a Change of Control; (v) there is a material adverse change in Executive’s job
titles, duties, responsibilities, perquisites granted hereunder or authority
without his consent; and (vi) the Company’s headquarters are relocated outside
of the Greensboro, North Carolina Metropolitan area without Executive’s
consent.
“
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 guidance that may be issued after the date of this amendment and
restatement.
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
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, to:
|
Tanger
Properties Limited Partnership
|
If
to Executive, to:
|
JOSEPH
NEHMEN
|
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 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
in which the Center is located are not generally open for the conduct of banking
business during normal business hours.
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
The
parties acknowledge and agree that, to the extent applicable, this Agreement
shall be interpreted in accordance with, and the parties agree to use their best
efforts to achieve timely compliance with Section 409A of the Internal Revenue
Code of 1986, as amended and the Department of Treasury Regulations and other
interpretive guidance promulgated thereunder (collectively, “Section 409A”),
including without limitation any such regulations or other guidance that may be
issued after the Effective Date. 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. No
provision of this Agreement shall be interpreted or construed to transfer any
liability for failure to comply with the requirements of Section 409A from the
Executive or any other individual to the Company or any of its affiliates,
employees or agents.
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) or (b) 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) or (b), 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 (A) 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 (B) 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
(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 of the Code and applicable guidance thereunder (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 of the Code, the Executive’s right to receive
installment payments pursuant to Section 7.1(a) shall be treated as a right to
receive a series of separate and distinct payments; and
(e)
The
reimbursement of any expense under Section 4.2 or Section 7.1 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.
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
(Company)
By:
/s/ Frank C. Marchisello
Jr.
Print
Name: Frank C. Marchisello,
Jr.
Print
Title: Vice President, Treasurer
and Assistant Secretary of Tanger GP Trust
its sole
general partner
/s/ Joseph
Nehmen
(SEAL)
Executive
Print
Name:
JOSEPH
NEHMEN