RESTRICTED SHARE AGREEMENT (2012 PERFORMANCE AWARD)

THIS RESTRICTED SHARE AGREEMENT (this “Agreement”) is made effective as of February 28, 2012, between Tanger Factory Outlet Centers, Inc., a corporation organized under the laws of the State of North Carolina (the “Company”), Tanger Properties Limited Partnership, a limited partnership organized under the laws of the State of North Carolina (the “Employer”), and Steven B. Tanger (the “Restricted Shareholder”).

WHEREAS, the Company has established the Amended and Restated Incentive Award Plan of Tanger Factory Outlet Centers, Inc. and Tanger Properties Limited Partnership (the “Plan”);

WHEREAS, the Company, the Employer and the Restricted Shareholder have entered into an Amended and Restated Employment Agreement dated as of February 28, 2012 (the “Amended and Restated Employment Agreement”);

WHEREAS, the Company wishes to carry out the Plan (the terms of which are hereby incorporated by reference and made a part of this Agreement) and satisfy the terms of the Amended and Restated Employment Agreement;

WHEREAS, the Plan provides for the issuance of the Company's common shares, no par value (the “Common Shares”), subject to certain restrictions thereon (“Restricted Shares”);

WHEREAS, the Committee, appointed to administer the Plan, has determined that it would be to the advantage and in the best interest of the Company and its shareholders to issue the Restricted Shares provided for herein to the Restricted Shareholder as an inducement to enter into or remain in the service of the Employer, the Company or any Subsidiary, and as an incentive for increased efforts during such service, and has advised the Company thereof and instructed the undersigned officer to issue said Restricted Shares; and

WHEREAS, all capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Plan.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:

Section 1.1 - Award of Restricted Shares

For good and valuable consideration, on the date hereof the Company hereby issues to the Restricted Shareholder 90,000 Common Shares upon the terms and conditions set forth in this Agreement at a purchase price of $0.00 per share. Notwithstanding anything to the contrary anywhere else in this Agreement, the Restricted Shares are subject to the terms, definitions and provisions of the Plan, which is incorporated herein by reference.

    

Section 1.2 - Consideration to Company

        

In consideration for the issuance of Restricted Shares by the Company, the Restricted Shareholder agrees to render faithful and efficient services to the Employer, the Company and/or any Subsidiary (as applicable), with such duties and responsibilities as shall from time to time be prescribed. Nothing in this Agreement or in the Plan shall confer upon the Restricted Shareholder any right to continue in the service of the Employer, the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Employer, the Company or any Subsidiary, which are hereby expressly reserved, to discharge the Restricted Shareholder at any time for any reason whatsoever, with or without cause, subject, in each case, to the terms and conditions of the Amended and Restated Employment Agreement.

(a)    Immediately upon the Restricted Shareholder's Termination of Employment, the Restricted Shareholder shall forfeit any and all Restricted Shares then subject to Restrictions and the Restricted Shareholder's rights in any Restricted Shares then subject to Restrictions shall lapse; provided, however, no such forfeiture shall exist in the event of Restricted Shareholder's Termination of Employment because of Restricted Shareholder's death or Disability (each, a “Selected Termination Event”); provided, further, that upon any such Selected Termination Event, any unvested Restricted Shares shall accelerate and become immediately vested pursuant to Section 2.3(e) hereof.

(b)    Immediately upon the 90th day following December 31, 2016 (but, for avoidance of doubt, after any vesting pursuant to Section 2.3(d) hereof), the Restricted Shareholder shall forfeit any and all Restricted Shares then subject to Restrictions and the Restricted Shareholder's rights in any Restricted Shares then subject to Restrictions shall lapse.

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO FORFEITURE, REACQUISITION AND CERTAIN RESTRICTIONS ON TRANSFERABILITY UNDER THE TERMS OF THAT CERTAIN RESTRICTED SHARE AGREEMENT BY AND BETWEEN TANGER FACTORY OUTLET CENTERS, INC., TANGER PROPERTIES LIMITED PARTNERSHIP AND THE REGISTERED OWNER OF SUCH SECURITIES, AND SUCH SECURITIES MAY NOT BE, DIRECTLY OR INDIRECTLY, OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNDER ANY CIRCUMSTANCES, EXCEPT PURSUANT TO THE PROVISIONS OF SUCH AGREEMENT.”

Section 2.3 - Lapse of Restrictions

(a)    Subject to Sections 2.1, 2.3(d), 2.3(e) and 3.4 hereof, the Restrictions shall lapse annually on the dates and with respect to the portions of Restricted Shares set forth in the following schedule, so long as (A) Restricted Shareholder remains in continuous employment to the last day of the Performance Year immediately prior to such date and (B) the Company's Total Shareholder Return (as described below) for the Performance Year immediately prior to such date was 8% or more:

(b)     “Total Shareholder Return” shall be determined by (i) subtracting the closing market price of a Common Share on the first day of the Performance Year (or, if not a business day, the first business day after such day) (the “initial share price”) from the closing market price of a Common Share on the last day of the Performance Year (or, if not a business day, the last business day prior to such day), (ii) adding the dividends paid with respect to a Common Share during the Performance Year and (iii) dividing the sum by the initial share price. “Performance Year” shall mean each of the five calendar years during the term of the Amended and Restated Employment Agreement, beginning January 1, 2012.

(c)    Dividends paid with respect to unvested shares under this award shall accumulate (without interest) and shall be paid to the Restricted Shareholder only if such shares become vested. Payment of the accumulated dividends shall be made in a single lump sum within thirty (30) days after the date on which the shares to which such dividends relate become vested.

(d)    Subject to Section 3.4 hereof, if any portion of the award remains unvested after the end of the fifth Performance Year, such unvested portion of this award shall, as of the 90th day following December 31, 2016, become fully vested if (A) the Restricted Shareholder has remained in continuous employment to the last day of such Performance Year and (B) the Company's cumulative Total Shareholder Return for the five Performance Years was 40% or more. The cumulative Total Shareholder Return shall be determined by (i) subtracting the closing market price of a Common Share on January 1, 2012 (or, if not a business day, the first business day after such day) (the “cumulative TSR initial share price”) from the closing market price of a Common Share on the last day of the fifth Performance Year (or, if not a business day, the last business day prior to such day), (ii) adding the dividends paid with respect to a Common Share during all Performance Years and (iii) dividing the sum by the cumulative TSR initial share price.

(e)    Notwithstanding any other provision hereof, all Restrictions shall, subject to Section 3.4 hereof, lapse with respect to any remaining Restricted Shares upon the occurrence of (i) a Selected Termination Event in accordance with Section 2.1(a) hereof or (ii) a Change of Control.

(f)    Upon the lapse of the Restrictions, the Company shall cause new certificates to be issued with respect to such shares and delivered to the Restricted Shareholder or his or her legal representative, free from the legend provided for in Section 2.2 hereof and any of the other Restrictions. Notwithstanding the foregoing, no such new certificate shall be delivered to the Restricted Shareholder or his or her legal representative unless and until the Restricted Shareholder or his or her legal representative shall have paid to the Company or the Employer, as applicable, in cash, the full amount of all federal and state withholding or other employment taxes applicable to the taxable income of the Restricted Shareholder resulting from the grant of Restricted Shares or the lapse of the Restrictions and all other conditions set forth in Section 3.2 hereof have been satisfied.

Section 2.4 - Restricted Shares Not Transferable

Until the Restrictions hereunder lapse or expire pursuant to this Agreement, neither the Restricted Shares (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) nor any interest or right therein or part thereof shall be liable for the debts, contracts, or engagements of the Restricted Shareholder or his or her 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; provided, however, that, subject to the Ownership Limit (as defined in the Articles of Incorporation of the Company, as amended from time to time), this Section 2.4 shall not prevent transfers by will or by the applicable laws of descent and distribution.

Section 2.5 - Restrictions on New Shares

In addition to and not limited by any provisions of the Plan, in the event that the outstanding Common Shares are changed into or exchanged for a different number or kind of capital shares or other securities of the Company or of another corporation (other than in connection with a Change of Control) by reason of merger, consolidation, recapitalization, reclassification, share split, share dividend or combination of shares, such new or additional or different shares or securities which are issued upon conversion of or in exchange or substitution for Restricted Shares which are then subject to Restrictions shall be considered to be Restricted Shares and shall be subject to all of the Restrictions, unless the Committee provides for the expiration of the Restrictions on the Restricted Shares underlying the distribution of the new or additional or different shares or securities.

Section 2.6 - Section 83(b)

Notwithstanding the Plan, the Restricted Shareholder may make an election under Section 83(b) of the Code with respect to the receipt of the Restricted Shares. If the Restricted Shareholder makes such an election, he or she shall deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service along with proof of the timely filing thereof with the Internal Revenue Service.

Section 3.1 - Holding Period and Additional Restrictions as to Ownership and Transfer

(a)    Notwithstanding any provision of this Agreement to the contrary, if the Restricted Shareholder is subject to Section 16 of the Exchange Act on the date on which the Restricted Shares are granted, the Restricted Shares may not be sold, assigned or otherwise transferred or exchanged until at least six months and one day have elapsed from the date on which the Restricted Shares were granted.

(b)    The Restricted Shares (whether or not the Restrictions have lapsed with respect to such Restricted Shares) shall be subject to the restrictions on ownership and transfer set forth in the Articles of Incorporation of the Company and any other applicable written policies of the Company and the Employer (including, without limitation, any applicable insider trading policy or policies).

Section 3.2 - Conditions to Issuance of Share Certificates

Restricted Shares may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. Such shares shall be fully paid and nonassessable. Neither the Company nor the Employer shall be required to issue or deliver any certificate or certificates for shares pursuant to this Agreement prior to fulfillment of all of the following conditions:

(a)    The admission of such shares to listing on all stock exchanges on which such 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 rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Committee 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 Committee shall, in its sole discretion, determine to be necessary or advisable;

(d)    The lapse of such reasonable period of time as the Committee may from time to time establish for reasons of administrative convenience; and

(e)    The receipt by the Company of full payment for such shares, including payment of any applicable withholding tax to the Company or the Employer, as applicable.

Section 3.3 - Escrow

(a)    The Restricted Shareholder hereby authorizes and directs the Secretary of the Company, or such other person designated by the Company, to transfer the Restricted Shares which are subject to the Restrictions from the Restricted Shareholder to the Company or the Employer, as applicable, in the event of forfeiture of such shares pursuant to Section 2.1 hereof.

(b)    To insure the availability for delivery of the Restricted Shares upon forfeiture pursuant to Section 2.1 hereof, the Restricted Shareholder hereby appoints the Secretary of the Company, or any other person designated by the Company as escrow agent, as his or her attorney-in-fact to sell, assign and transfer unto the Company, such shares, if any, forfeited pursuant to this Agreement and shall, upon execution of this Agreement, deliver and deposit with the Secretary of the Company, or such other person designated by the Company, the share certificates representing the Restricted Shares, together with the share assignment duly endorsed in blank, attached hereto as Exhibit A. The Restricted Shares and share assignment shall be held by the Secretary of the Company in escrow, pursuant to the Joint Escrow Instructions of the Company and the Restricted Shareholder attached hereto as Exhibit B, until all of the Restrictions expire or shall have been removed. Upon the lapse of the Restrictions on the Restricted Shares, the escrow agent shall promptly deliver to the Restricted Shareholder the certificate or certificates representing such shares in the escrow agent's possession belonging to the Restricted Shareholder, and the escrow agent shall be discharged of all further obligations hereunder; provided, however, that the escrow agent shall nevertheless retain such certificate or certificates as escrow agent if so required pursuant to other restrictions imposed pursuant to this Agreement.

(c)    The Company, or its designee, shall not be liable for any act it may do or omit to do with respect to holding the Restricted Shares in escrow and while acting in good faith and in the exercise of its judgment.

Section 3.4 - Ownership Limit and REIT Status.

Notwithstanding anything contained herein, the Restrictions on the Restricted Shares shall not lapse:

(a)    to the extent the lapsing of such Restrictions could cause the Restricted Shareholder to be in violation of the Ownership Limit; or

(b)    if, in the discretion of the Administrator, the lapsing of such Restrictions could impair the Company's status as a REIT.

Section 3.5 - Notices

Any notice to be given by the Restricted Shareholder under the terms of this Agreement shall be addressed to the Secretary of the Company. Any notice to be given to the Restricted Shareholder shall be addressed to him or her at the address given beneath his or her signature hereto. By a notice given pursuant to this Section 3.5, either party may hereafter designate a different address for notices to be given to him or her. Any notice which is required to be given to the Restricted Shareholder shall, if Restricted Shareholder is then deceased, be given to the Restricted Shareholder's personal representative if such representative has previously informed the Company of his or her status and address by written notice under this Section 3.5. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed as set forth above.

Section 3.6 - Rights as Shareholder

Except as otherwise provided herein, upon the delivery of Restricted Shares to the escrow holder pursuant to Section 3.3 hereof, the holder of the Restricted Shares shall have all the rights of a shareholder with respect to the Restricted Shares, including the right to vote the Restricted Shares and the right to receive all dividends or other distributions paid or made with respect to the Restricted Shares.

Section 3.7 - Conformity to Securities Laws and Section 162(m) of the Code

(a)     The Restricted Shareholder acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of all applicable federal and state laws, rules and regulations (including, but not limited to the Securities Act of 1933, as amended, and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, including without limitation the applicable exemptive conditions of Rule 16b-3) and to such approvals by any listing, regulatory or other governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Restricted Shares are granted, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan, this Agreement and the Restricted Shares shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

    

(b)    The Restricted Shareholder acknowledges that the Committee may determine that the Restricted Shares are intended to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code and, to the extent the Committee makes such determination, (i) the Restricted Shares shall be subject to the provisions of Section 3.2 of the Plan and (ii) notwithstanding any other provision of this Agreement, the Restricted Shares shall be subject to any additional limitations set forth in Section 162(m) of the Code and/or any regulations or rulings issued thereunder that are required for qualification as performance-based compensation as described in Section 162(m)(4)(C) of the Code and the Agreement shall be deemed amended to the extent necessary to conform to such requirements. In accordance with the foregoing, the Committee has determined that Total Shareholder Return is a Performance Criteria based on, among other things, the appreciation in the Fair Market Value of a Common Share within the meaning of Section 1.32 of the Plan.

Section 3.8 - Amendments

This Agreement and the Plan may be amended without the consent of the Restricted Shareholder; provided, however, that no such amendment shall, without the consent of the Restricted Shareholder, impair any rights of the Restricted Shareholder under this Agreement.

Section 3.9 - Tax Withholding

The Company or the Employer, as applicable, shall be entitled to require payment in cash or deduction from other compensation payable to the Restricted Shareholder of any sums required by federal, state or local tax law to be withheld with respect to the issuance, vesting, or payment of the Restricted Shares. The Committee may in its discretion and in satisfaction of the foregoing requirement allow the Restricted Shareholder to elect to have the Company or the Employer, 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 or this Agreement, the number of Common Shares which may be withheld with respect to the issuance, vesting or payment of the Restricted Shares (or which may be repurchased from the Restricted Shareholder within six months after such Common Shares were acquired by the Restricted Shareholder from the Company or the Employer) in order to satisfy the Restricted Shareholder's federal and state income and payroll tax liabilities with respect to the issuance, vesting or payment of the Restricted Shares shall be limited to the number of 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.

Section 3.10 - Governing Law

This Agreement shall be administered, interpreted and enforced under the internal laws of the state of North Carolina without regard to conflicts of laws thereof.

Section 3.11 - Stop Transfer Instructions

To ensure compliance with the Restrictions, the Company may issue appropriate “stop transfer” instructions to its transfer agent with respect to the Restricted Shares.

Section 3.12 - Claw-back policies

The award under this Agreement (including, without limitation, any proceeds, gains or other economic benefit actually or constructively received by the Restricted Shareholder upon the receipt, vesting or sale of the Restricted Shares) shall be subject to the provisions of any claw-back policy implemented by the Company and/or the Employer, including, without limitation, any claw-back policy adopted to comply with the requirements of applicable law, including without limitation the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy.