SCHEDULE 14A INFORMATION

           Proxy Statement Pursuant to Section 14(a) of the Securities
                      Exchange Act of 1934 (Amendment No. )

Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )

Check the appropriate box:


( )  Preliminary Proxy Statement           (  )  Confidential, for Use of the
                                                 Commission Only (as permitted
                                                 by Rule 14a-6(e)(2))
(X)  Definitive Proxy Statement
( )  Definitive Additional Materials
( )  Soliciting Material Pursuant to Section 240.14a-12


                       TANGER FACTORY OUTLET CENTERS, INC.
                (Name of Registrant as Specified in its Charter)


      --------------------------------------------------------------------
      (Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

(X) No fee required

( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

     1)  Title of each class of securities to which transaction applies:

     2)  Aggregate number of securities to which transaction applies:

     3)  Per unit  price  or other  underlying  value  of  transaction  computed
         pursuant to  Exchange  Act Rule 0-11 (Set forth the amount on which the
         filing fee is calculated and state how it was determined):

     4)  Proposed maximum aggregate value of transaction:

     5)  Total fee paid:

( ) Fee paid previously with preliminary materials.

(    ) Check box if any part of the fee is offset as provided  by  Exchange  Act
     Rule  0-11(a)(2)  and identify the filing for which the  offsetting fee was
     paid  previously.  Identify the previous filing by  registration  statement
     number, or the Form or Schedule and the date of its filing.

     1) Amount Previously Paid:

     2) Form, Schedule, or Registration Statement No.:

     3) Filing Party:

     4) Date Filed:





                       TANGER FACTORY OUTLET CENTERS, INC.

                        3200 NORTHLINE AVENUE, SUITE 360
                        GREENSBORO, NORTH CAROLINA 27408
                               PHONE: 336-292-3010
                       E-MAIL: tangermail@tangeroutlet.com
                                    NYSE: SKT

                                  ------------

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                            to be held on May 9, 2003



Dear Shareholders:

          On behalf of the Board of Directors,  I cordially invite you to attend
the 2003 Annual Meeting of Shareholders  of Tanger Factory Outlet Centers,  Inc.
to be held on Friday,  May 9, 2003 at 10 o'clock a.m. at the O. Henry Hotel, 624
Green Valley Road, Greensboro, North Carolina, (336) 854-2000, for the following
purposes:

1.   To elect directors to serve for the ensuing year;

2.   To ratify  amendments  to the Share Option Plan and the Unit Option Plan to
     increase from 1,750,000 to 2,250,000 the aggregate  number of Common Shares
     and  Units  which may be issued  under the Share  Option  Plan and the Unit
     Option Plan; and,

3.   To transact such other  business as may properly come before the meeting or
     any adjournment(s) thereof.

          Only common  shareholders  of record at the close of business on March
31, 2003, will be entitled to vote at the meeting or any adjournment(s) thereof.

          Information  concerning the matters to be considered and voted upon at
the Annual Meeting is set out in the attached Proxy  Statement.  Our 2002 Annual
Report for the year ended December 31, 2002 is also enclosed.

          It is  important  that your shares be  represented  at the 2003 Annual
Meeting  regardless of the number of shares you hold and whether or not you plan
to attend the meeting in person.  Please  complete,  sign and date the  enclosed
proxy card and return it as soon as possible in the accompanying envelope.  This
will not  prevent  you from  voting  your  shares in person if you  subsequently
choose to attend the meeting.




                                          Sincerely,




                                          Stanley K. Tanger
                                          Chairman of the Board and
                                          Chief Executive Officer

April 9, 2003


                                       1


                       TANGER FACTORY OUTLET CENTERS, INC.

                        3200 NORTHLINE AVENUE, SUITE 360
                        GREENSBORO, NORTH CAROLINA 27408
                               PHONE: 336-292-3010
                       E-MAIL: tangermail@tangeroutlet.com
                                    NYSE: SKT

                                  ------------

                                 PROXY STATEMENT
                                       FOR
                         ANNUAL MEETING OF SHAREHOLDERS

                               GENERAL INFORMATION

          The Board of Directors of Tanger Factory Outlet Centers,  Inc., (NYSE:
SKT) a self-administered and self-managed real estate investment trust, referred
to as a REIT,  is  soliciting  your  proxy  for  use at the  Annual  Meeting  of
Shareholders of the Company to be held on Friday, May 9, 2003.

           Unless the context indicates otherwise,  the term "Company" refers to
Tanger Factory Outlet Centers,  Inc., the terms "Board" and "Directors" refer to
our Board of  Directors,  the term  "meeting"  refers to the  Annual  Meeting of
Shareholders  of the  Company  and the term  "Operating  Partnership"  refers to
Tanger  Properties  Limited  Partnership.  Our factory  outlet centers and other
assets are held by, and all of our  operations  are  conducted by, the Operating
Partnership.  Accordingly,  the  descriptions  of our  business,  employees  and
properties are also  descriptions  of the business,  employees and properties of
the Operating  Partnership.  The terms "we", "our" and "us" refer to the Company
or the Company and the Operating Partnership together, as the text requires.

          The  proxy  materials  are being  mailed on or about  April 9, 2003 to
shareholders of record on March 31, 2003. Any shareholder who does not receive a
copy of the proxy  materials  may obtain a copy at the meeting or by  contacting
Rochelle  Simpson,  Secretary of our Company (phone number:  336-834-6836).  Our
principal  executive  offices are located at 3200 Northline  Avenue,  Suite 360,
Greensboro, North Carolina 27408.

Date, Time and Place

          We will hold the meeting on Friday,  May 9, 2003 at 10 o'clock a.m. at
the O. Henry Hotel,  624 Green Valley Road,  Greensboro,  North Carolina,  (336)
854-2000, subject to any adjournments or postponements.

Who Can Vote; Votes per share

          All holders of record of the  Company's  Common  Shares  (the  "Common
Shares") as of the close of business on the record  date,  March 31,  2003,  are
entitled to attend and vote at the meeting.  The  outstanding  Common Shares are
the only class of securities entitled to vote at the meeting.  Each Common Share
entitles the holder  thereof to one vote.  At the close of business on March 21,
2003, there were 9,299,665 Common Shares issued and outstanding.

Quorum and Voting Requirements

          Under our By-Laws and North  Carolina law,  shares  represented at the
meeting by proxy for any purpose will be deemed present for quorum  purposes for
the  remainder  of the  meeting.  Directors  will be  elected  by the  vote of a
plurality  of the votes cast by the  shares  entitled  to vote in the  election,
provided that a quorum is present. Accordingly,  shares which are present at the
meeting  for any  other  purpose  but which  are not  voted in the  election  of
directors will not affect the election of the  candidates  receiving a plurality
of the votes cast by the shares entitled to vote in the election at the meeting.
All other  proposals to come before the meeting require a plurality of the votes
cast  regarding  the  proposal.  Accordingly,  shares  which are  present at the
meeting for any other  purpose but which are not voted on a particular  proposal
will not  affect  the  outcome  of the vote on the  proposal  unless  the  North
Carolina  Business  Corporation  Act requires that the proposal be approved by a
greater number of  affirmative  votes than a plurality of the votes cast.

                                       2


How to Vote

          Shares  represented  by a  properly  executed  proxy  will be voted as
directed  on the  proxy  card.  To be  voted,  proxies  must be  filed  with the
Secretary of the Company prior to voting.

          If your shares are held in a stock  brokerage  account or by a bank or
other nominee,  you are considered the beneficial  owner of those shares and you
have the right to instruct  your  broker,  bank or other  nominee how to vote on
your behalf.  Brokerage  firms and other nominees have the authority,  under New
York Stock Exchange rules at the time of this Proxy Statement, to vote shares on
certain "routine" matters for which you do not provide voting instructions.  The
election of directors is considered a routine matter and where no  specification
is made on the properly  executed and returned form of proxy, the shares will be
voted FOR the  election of all  nominees  for  director.  The  proposal  for the
ratification of the amendments to the Share Option Plan and the Unit Option Plan
to increase from  1,750,000 to 2,250,000  the aggregate  number of the Company's
Common  Shares and units of the Operating  Partnership  that may be issued under
the Share Option Plan and the Unit Option Plan is not considered "routine" under
the applicable  rules. When a proposal is not a routine matter and the broker or
nominee has not received specific voting  instructions from the beneficial owner
of the shares  with  respect to that  proposal,  the  brokerage  firm or nominee
cannot vote FOR or AGAINST the proposal. This is called a broker non-vote.

Revocation of Proxies

          You may revoke  your proxy at any time  before it is voted by filing a
notice of such  revocation,  by filing a later dated proxy with the Secretary of
the Company or by voting in person at the meeting.  You cannot revoke your proxy
by merely attending the meeting. If you dissent, you will not have any rights of
appraisal with respect to the matters to be acted upon at the meeting.

Proxy Solicitation

          We will bear the costs of  soliciting  proxies from the holders of our
Common  Shares.  Proxies will  initially  be  solicited  by us by mail.  We have
retained the services of Georgeson  Shareholder to assist in the solicitation of
proxies for fee of $5,000, plus out-of-pocket expenses. Our Directors,  officers
and employees may also solicit proxies by telephone,  telegraph,  fax, e-mail or
personal  interview.   We  will  reimburse  banks,  brokerage  firms  and  other
custodians, nominees and fiduciaries for reasonable expenses incurred by them in
sending proxy material to shareholders.

                                   PROPOSAL 1

                              ELECTION OF DIRECTORS

          Our By-Laws  provide that  directors be elected at each Annual Meeting
of Shareholders.  Pursuant to such By-Laws, our current Directors have fixed the
number of directors to be elected at five.  The persons  named as proxies in the
accompanying  form of proxy  intend to vote in favor of the election of the five
nominees for director  designated below, all of whom are presently  directors of
the Company,  to serve until the next Annual Meeting of  Shareholders  and until
their  successors  are elected and shall  qualify.  It is expected  that each of
these nominees will be able to serve, but if any such nominee is unable to serve
for any reason,  the proxies  reserve  discretion to vote or refrain from voting
for a substitute  nominee or nominees.  All directors of the Company serve terms
of one year or until the election of their respective successors.


                                       3


Information Regarding Nominees (as of March 21, 2003):

                                  Present Principal Occupation or
     Name          Age       Employment and Five-Year Employment History

Stanley K. Tanger  79   Chairman of the Board of Directors and Chief Executive
                        Officer of the Company since May 1993.  Mr. Tanger
                        opened one of the country's first outlet shopping
                        centers in Burlington, N.C. in 1981.  He was the founder
                        and Chief Executive of the Company's predecessor formed
                        in 1981 until its business was acquired by the Company
                        in 1993.

Steven B. Tanger   54   Director of the Company since May 1993. President and
                        Chief Operating Officer since January 1995; Executive
                        Vice President from 1986 to 1994.  Mr.Tanger joined the
                        Company's predecessor in 1986 and is the son of
                        Stanley K.Tanger.

Jack Africk        74   Director of the Company since June 4, 1993.  Chairman
                        of the Board of Evolution Consulting Group, Inc. since
                        June 1993.  President and Chief Operating Officer of
                        North Atlantic Trading Company from January 1998 to
                        December 1998. Mr. Africk is also a director of Crown
                        Central Petroleum Corporation.

William G. Benton  57   Director of the Company since June 4, 1993.  Chairman of
                        the Board and Chief Executive Officer of Diversified
                        Senior Services, Inc. since May 1996.  Chairman of the
                        Board and Chief Executive Officer of Benton Investment
                        Company since 1982.  Chairman of the Board and Chief
                        Executive Officer of Health Equity Properties, Inc.
                        from 1987 to September 1994.

Thomas E. Robinson 55   Director of the Company since January 21, 1994.
                        Managing Director of Legg Mason Wood Walker, Inc. since
                        June 1997. Director (May 1994 to June 1997), President
                        (August 1994 to June 1997) and Chief Financial Officer
                        (July 1996 to June 1997) of Storage USA, Inc.
                        Mr. Robinson is also a director of CenterPoint
                        Properties Trust.

  THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINATIONS SET FORTH ABOVE.

Committees of the Board of Directors; Meetings

          The Board held five  regular and five  special  meetings  during 2002.
Each of the above  Directors  attended at least 75% of the meetings  held during
2002 by the Board and the committees of which he was a member. The Board has not
established a separate nominating committee.

          Executive  Compensation  Committee.   The  Board  has  established  an
Executive  Compensation  Committee  consisting  of  a  majority  of  Independent
Directors.  Independent  Directors are those directors who are not  concurrently
serving as officers of the Company and who currently have no  relationship to us
that may interfere with the exercise of their  independence  from management and
the Company.  The Executive  Compensation  Committee is charged with determining
compensation  for our  executive  officers.  Mr.  Africk,  Mr.  Benton,  and Mr.
Robinson  currently  serve on the  Executive  Compensation  Committee,  with Mr.
Africk serving as chairman.  During 2002, there was one meeting of the Executive
Compensation Committee.

          Share and Unit Option Committee. The Board has established a Share and
Unit Option  Committee  (referred to as the "Option  Committee")  consisting  of
three Independent  Directors.  The Option Committee administers our Share Option
Plan and the Operating  Partnership's  Unit Option Plan. Mr. Benton,  Mr. Africk
and Mr.  Robinson  currently  serve on the  Option  Committee,  with Mr.  Benton
serving  as  chairman.  During  2002,  there  were  no  meetings  of the  Option
Committee.

                                       4


          Audit  Committee.  The Board of  Directors  has  established  an Audit
Committee consisting of three Independent  Directors.  The Audit Committee makes
recommendations  concerning the engagement of independent auditors, reviews with
the independent auditors the plans and results of the audit engagement, approves
professional  services  provided  by  the  independent  auditors,   reviews  the
independence  of the  independent  auditors,  considers  the  range of audit and
non-audit fees and reviews the adequacy of our internal accounting controls. Mr.
Africk, Mr. Benton and Mr. Robinson currently serve on the Audit Committee, with
Mr. Africk  serving as chairman.  During 2002,  there were seven meetings of the
Audit Committee.


                          REPORT OF THE AUDIT COMMITTEE

         The Audit  Committee  is  appointed by the Board to assist the Board in
monitoring  the  integrity  of the  Company's  financial  reporting  process and
internal  controls  and the  independence  and  performance  of the  independent
auditors.  The Audit Committee has three directors,  each considered independent
under the New York Stock Exchange's listing standards.  The Audit Committee acts
under a written charter adopted by the Board.

         The 2002 financial  statements,  which were prepared  under  accounting
principles  generally  accepted  in the  United  States  of  America,  have been
approved by the Board at the  recommendation  of the Audit Committee.  The Audit
Committee  reviewed  the  2002  quarterly  and  annual  financial  results  with
management  and the  Company's  independent  auditors.  The Audit  Committee has
discussed with the independent auditors and received the written disclosures and
confirmation  from the  independent  auditors of their  independence as required
under  applicable  standards for auditors of public  companies and has discussed
the matters required to be discussed by Statement on Auditing  Standards No. 61.
Based on this  review  of the  financial  results  and  these  discussions  with
management and the independent auditors,  the Audit Committee has recommended to
the Board that the audited  financial  statements  be included in the  Company's
Annual Report on Form 10-K for 2002. The following is a summary of the fees paid
to the independent auditors for fiscal year 2002:

    Annual audit fees.................................................$142,000
    Financial Information Systems Design and Implementation fees......   ---
    Tax planning and preparation...................................... 180,128
    Audit related fees for SEC filings................................  43,000
    Fees for Sarbanes Oxley Advisory Services.........................   8,400
    Other audit related fees..........................................  11,400

         The Audit  Committee has considered and discussed with the  independent
auditors the  compatibility of the non-audit  services with maintaining  auditor
independence.

         The Audit  Committee  has  recommended  to the  Board  that the firm of
PricewaterhouseCoopers  LLP be  appointed  to audit the  accounts of the Company
with respect to its  operations  for the fiscal year ending on December 31, 2003
and to perform such other services as may be required. (See "General")

                                              THE AUDIT COMMITTEE

                                              Jack Africk (Chairman)
                                              William G. Benton
                                              Thomas E. Robinson

Compensation of Directors

          We pay our Independent Directors an annual compensation fee of $15,000
and a per meeting fee of $750 (for each Board meeting and each Committee meeting
attended).

          Pursuant to the Share Option Plan for  Directors and Executive and Key
Employees of Tanger  Factory  Outlet  Centers,  Inc.  (referred to as the "Share
Option  Plan"),  on the date of his or her initial  election to the Board and on
each of the first two anniversaries  thereof, each Independent Director received
an option to purchase 3,000 Common Shares at an exercise price equal to the Fair
Market Value (as defined in the Share Option Plan) of a Common Share on the date
of the option grant  (except for the initial  grant of options to Mr. Africk and

                                       5


Mr.  Benton);  20% of such options become  exercisable on each of the first five
anniversaries  of the  date of  grant,  subject  to the  Independent  Director's
continued  service as such.  On June 4, 1993,  we granted to Mr.  Africk and Mr.
Benton  options to purchase  3,000 Common  Shares with an exercise  price set at
$22.50 per Common Share, the initial public offering price of the Common Shares.
Our employees who are also Directors will not be paid any director fees and will
not receive any options for their services as Directors of the Company.

          Upon  approval  of the  entire  Board,  we may from time to time grant
additional  options to purchase Common Shares to the Independent  Directors.  On
January 6, 1998,  January 8, 1999 and March 8, 2000,  the Board  granted to each
Independent  Director  options to purchase  5,000  Common  Shares at an exercise
price equal to the Fair Market Value as of such dates. On each of the first five
anniversaries  of the date of grant,  20% of these  options  become  exercisable
subject to the Independent Director's continued service as such.

Security Ownership of Certain Beneficial Owners and Management

          The  following  table sets forth certain  information  as of March 21,
2003,  available  to us with  respect to our Common  Shares,  $.01 par value per
share,  and of units  of  partnership  interests  in the  Operating  Partnership
(referred  to as the "Units")  (i) held by those  persons  known by us to be the
beneficial  owners (as determined under the rules of the Securities and Exchange
Commission)  of more  than 5% of such  shares,  (ii)  held  individually  by the
Directors and our executive officers named elsewhere in this document, and (iii)
held by our Directors and all of our executive officers as a group.




                                                            Number of                                     Percent of
                                                             Common       Percent of       Number of          All
                                                             Shares           All            Units          Common
Name and Business Address of Beneficial Owners            Beneficially      Common       Beneficially       Shares
----------------------------------------------
                                                           Owned (1)        Shares         Owned (2)       And Units
                                                                                                
Stanley K. Tanger (3)                                         171,146          1.8%         3,377,305          26.9%
    Tanger Factory Outlet Centers, Inc.
    3200 Northline Avenue, Suite 360
    Greensboro, NC  27408
Steven B. Tanger (4)                                              ---          ---            269,000           2.0%
    Tanger Factory Outlet Centers, Inc.
    110 East 59th Street
    New York, NY  10022
Jack Africk (5)                                                22,000           *                 ---            *
William G. Benton (6)                                          18,939           *                 ---            *
Thomas E. Robinson (7)                                         21,195           *                 ---            *
Rochelle G. Simpson (8)                                         2,149           *              50,000            *
Willard A. Chafin (8)                                             ---           *              12,500            *
Frank C. Marchisello, Jr. (8)                                     500           *              42,500            *
Directors and Executive Officers as a Group                   237,522          2.5%         3,822,365          30.8%
(13 persons) (9)

-------------------
*    Less than 1%

(1)  The ownership of Common Shares  reported  herein is based upon filings with
     the Securities and Exchange Commission and is subject to confirmation by us
     that such  ownership  did not violate  the  ownership  restrictions  in our
     Articles of Incorporation.

(2)  Units  in the  Operating  Partnership  held by the  Tanger  Family  Limited
     Partnership  ("TFLP")  and Units that may be acquired  upon the exercise of
     options to  purchase  Units may be  exchanged  for our  Common  Shares on a
     one-for-one basis.

(3)  Includes  139,031  Common Shares and 3,033,305  Units owned by the TFLP, of
     which Stanley K. Tanger is the general  partner and may be deemed to be the
     beneficial  owner. Also includes 31,115 Common Shares and 344,000 presently
     exercisable   options  to  purchase   Units  owned  by  Stanley  K.  Tanger
     individually  and 1,000 Common Shares owned by Stanley K. Tanger's  spouse.
     Does not include  30,000  options to purchase  Units,  which are  presently
     unexercisable, owned by Stanley K. Tanger individually.

                                       6


(4)  Includes 269,000 presently  exercisable options to purchase Units. Does not
     include  139,031  Common  Shares  and  3,033,305  Units  owned by the TFLP,
     (Steven B. Tanger is a limited  partner of the Tanger  Investments  Limited
     Partnership,  which is a limited partner of TFLP).  Does not include 21,000
     options to  purchase  Units  which are  presently  unexercisable.  Does not
     include 31,115 Common Shares  actually owned or 140,031 Common Shares which
     may be deemed  beneficially owned by Steven B. Tanger's father,  Stanley K.
     Tanger.

(5)  Includes  18,000  presently  exercisable  options  to  purchase  our Common
     Shares.

(6)  Includes  16,800  presently  exercisable  options  to  purchase  our Common
     Shares.

(7)  Includes  21,000  presently  exercisable  options  to  purchase  our Common
     Shares.

(8)  Amounts shown as Units beneficially owned represent  presently  exercisable
     options to purchase Units.

(9)  Includes 55,800 presently exercisable options to purchase Common Shares and
     789,060 presently  exercisable  options to purchase Units. Does not include
     9,000  options to  purchase  Common  Shares and 94,540  options to purchase
     Units which are presently unexercisable.




Executive Compensation

         The following table sets forth the  compensation  earned for the fiscal
years ended  December 31, 2002,  2001,  and 2000 with respect to our CEO and our
four (4) most  highly  compensated  executives  other  than our CEO  whose  cash
compensation exceeded $100,000 during such year.



                           SUMMARY COMPENSATION TABLE
                                                                                           Long Term
                                                                                         Compensation
                                                     Annual Compensation                    Awards
                                          ------------------------------------------    ----------------
                                                                                          Securities
                                                                                          Underlying
                                                                     Other Annual          Options/          All Other
Name and Principal Position        Year   Salary($)   Bonus($)     Compensation ($)       SARS(#) (7)     Compensation($)
---------------------------        ----   --------    ---------    ----------------      -----------      ---------------

                                                                                           
Stanley K. Tanger,                2002    429,975    729,497 (2)            ---                 ---           20,000 (4)
   Chairman of the Board of       2001    409,500    163,391                ---                 ---           19,625 (4)
   Directors and Chief            2000    390,000    275,086 (2)            ---              50,000           19,275 (4)
   Executive Officer (1)

Steven B. Tanger,                 2002    363,825    418,268 (3)            ---                 ---           15,470 (5)
   President and Chief            2001    346,500    147,484                ---                 ---           15,095 (5)
   Operating Officer (1)          2000    330,000    174,572 (3)            ---              35,000           15,095 (5)

Rochelle G. Simpson,              2002    231,525       3,000               ---                 ---            2,500 (6)
   Secretary, Executive Vice      2001    220,500         ---               ---                 ---            2,125 (6)
   President-Administration       2000    210,000         ---               ---              12,500            2,125 (6)
   And Finance

Willard A. Chafin, Jr.            2002    242,550       3,000               ---                 ---              ---
   Executive Vice President-      2001    231,000         ---               ---                 ---              654 (6)
   Leasing, Site Selection,       2000    220,000         ---               ---              12,500            2,125 (6)
   Operations and Marketing


Frank C. Marchisello, Jr.         2002    231,525      10,000               ---                 ---            2,500 (6)
    Senior Vice President-        2001    220,500         ---               ---                 ---            2,125 (6)
    Chief Financial Officer       2000    210,000         ---               ---              10,000            2,125 (6)

---------------


(1)  A portion of the  salaries  of Stanley K.  Tanger and Steven B.  Tanger are
     paid by the Company for services to the Company and the  remainder are paid
     by the Operating Partnership.

(2)  For the year 2002,  Stanley K. Tanger  received an annual bonus of $323,450
     and a special award related to the sale of two of our operating  properties
     during such year of $406,047.  For the year 2000,  Mr.  Tanger  received an
     annual bonus of $131,611 and a special  award related to the sale of two of
     our operating properties during such year of $143,475.


                                       7


(3)  For the year 2002,  Steven B. Tanger  received an annual  bonus of $282,919
     and a special award related to the sale of two of our operating  properties
     during such year of $135,349.  For the year 2000,  Mr.  Tanger  received an
     annual bonus of $126,747 and a special  award related to the sale of two of
     our operating properties during such year of $47,825.

(4)  We  reimbursed  Stanley K.  Tanger  $17,500 in 2002 and 2001 and $17,150 in
     2000 for premiums paid towards a term life insurance  policy.  In addition,
     the Company  provided $2,500 during 2002 and $2,125 during 2001 and 2000 as
     a Company match under the employee 401(k) plan.

(5)  We provide term life insurance to Steven B. Tanger. Annual premiums paid by
     us in 2002,  2001 and 2000 were $12,970.  In addition,  we provided  $2,500
     during 2002 and $2,125  during  2001 and 2000 as a Company  match under the
     employee 401(k) plan.

(6)  Company match under employee 401(k) plan.

(7)  Number of Units in the Operating Partnership under option grant.




                      OPTION/SAR GRANTS IN LAST FISCAL YEAR

         There were no options or share  appreciation  rights granted to our CEO
or our other four (4) most highly compensated executives during 2002.


               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                      AND FISCAL YEAR END OPTION/SAR VALUES

     The following table provides information on option exercises in 2002 by our
CEO and our other four (4) most highly compensated executives,  and the value of
each such officer's unexercised options at December 31, 2002.



                                                                                                    Value of
                                Number of                       Number of Securities        Unexercised In-the-Money
                                  Shares                       Underlying Unexercised              Options at
                               Acquired on        Value      Options at Fiscal Year End           Year-End (1)
            Name                 Exercise       Realized     Exercisable  Unexercisable    Exercisable Unexercisable
            ----                 --------       --------     -----------  -------------    ----------- -------------
                                                                                          
Stanley K. Tanger                  1,000          $8,425         404,000        60,000     $2,895,750       $557,500
Steven B. Tanger                    ---             ---          338,000        42,000      2,506,625        390,250
Rochelle G. Simpson               16,000          94,562          52,500        15,000        289,375        139,375
Willard A. Chafin, Jr.            29,000         101,453          10,000        15,000          8,750        139,375
Frank C. Marchisello, Jr.          4,600          30,350          36,500        12,000        207,438        111,500
------------

(1) Based  upon the  closing  price of our  Common  Shares on the New York Stock
Exchange on December 31, 2002 of $31.00 per share.



Report of the Executive Compensation Committee on Executive Compensation

         Except as expressly  described  below,  references to compensation  (or
policies with respect thereto) paid by the Company refer to compensation paid by
both the Company and the Operating Partnership.

         The Compensation  Committee of the Board of Directors (the "Committee")
believes  that the  Company's  success  is  attributable  in  large  part to the
management  and  leadership  efforts of its  executive  officers.  The Company's
management  team has  substantial  experience  in owning,  operating,  managing,
developing and acquiring interests in factory outlet centers. Stanley K. Tanger,
Chairman  of the  Board and  Chief  Executive  Officer,  and  Steven B.  Tanger,
President  and Chief  Operating  Officer,  provide  us with  strategic  business
direction.  Under the  guidance of the  committee,  the Company is  committed to
develop  and  maintain  compensation  policies,  plans and  programs  which will
provide   additional   incentives  for  the  enhancement  of  cash  flows,   and
consequently  real property and  shareholder  values,  by aligning the financial
interests of the Company's senior management with those of its shareholders.

                                       8


         The primary components of the Company's executive  compensation program
are: (1) base salaries,  (2) performance  based annual bonuses and (3) share and
unit  options.  The  Company's  business is most  competitive  and the Committee
believes that it is extremely  desirable for the Company to maintain  employment
contracts  with its senior  executives.  The Company  currently  has  employment
contracts  with  each  of the  named  executives  on  page  7  (See  "Employment
Contracts").

         Base salaries for each of the named executive  officers are approved by
the Committee and are determined after taking into account several factors which
include (1) salaries paid to officers by companies in the Company's  select peer
group and other REITS,  (2) the nature of the position and (3) the  contribution
and experience of the officer.  Under their  employment  agreements,  the annual
base salaries of Stanley K. Tanger and Steven B. Tanger are determined  annually
by  agreement  between  each of them and the  Board;  provided  however,  if the
Company's per share Fund From  Operations  ("FFO") for the previous year equaled
or exceeded a targeted  level,  the annual base salary will not be less than the
annual base salary for the  previous  year  increased to reflect any increase in
the Consumer  Price Index (the "CPI").  The  employment  agreements of the other
three most  highly  compensated  executive  officers  provide  for  annual  base
salaries in fixed dollar amounts through  calendar year 2002 and thereafter will
be set by the  Executive  Compensation  Committee  in amounts  not less than the
salary for 2002.

         The employment  contracts for Stanley and Steven Tanger,  the Company's
two most  senior  executives,  provide for annual  cash  bonuses  based upon the
Company's  performance  as measured by FFO per share.  FFO is a widely  accepted
financial  indicator  used by certain  investors  and  analysts  to analyze  and
compare one equity REIT with  another.  FFO is  generally  defined as net income
(loss),  computed in accordance with generally accepted  accounting  principles,
before extraordinary items and gains (losses) on sale or disposal of depreciable
operating properties, plus depreciation and amortization uniquely significant to
real estate and after  adjustments  for  unconsolidated  partnerships  and joint
ventures.  The Company may also consider the award of cash bonuses and awards to
any  executive  officers and key employees if certain  performance  criteria are
met.

         Share-based  compensation is also an important element of the Company's
compensation  program.  In contrast  to  bonuses,  which are paid for prior year
accomplishments,  grants of options to  purchase  the  Company's  Common  Shares
represent  incentives tied to future share  appreciation.  The Company maintains
the Share Option Plan and the  Operating  Partnership  maintains the Unit Option
Plan  (collectively  with the Share Option Plan, the "Plans") for the purpose of
attracting  and retaining our  Directors,  executive  officers and certain other
employees.  The Option Committee of the Board determines in its sole discretion,
subject to the terms and  conditions  of the Plans,  the specific  terms of each
option granted to an employee of the Company or Operating Partnership based upon
its subjective  assessment of the individual's  performance,  responsibility and
functions and how this performance may have contributed or may contribute in the
future to the Company's performance.  The Compensation Committee believes awards
pursuant to the Plans align the interests of the Directors and  management  with
those of the  Company's  shareholders  since  optionees  will benefit under such
options only if shareholders of the Company also benefit.  Options granted under
the Plans are generally granted at the Fair Market Value of the Company's Common
Shares on the date of grant and thus will provide value only if the price of the
Common Shares exceeds the exercise price of the options.

         Under his employment agreement,  Stanley K. Tanger, the Company's Chief
Executive Officer, receives an annual base salary and may receive a bonus if the
Company achieves a targeted FFO amount for the fiscal year:

o    Mr.  Tanger's  annual base  salary for 2002 was  $429,975.  His  employment
     contract  provides  that the annual  base  salary will be fixed each fiscal
     year by agreement between Mr. Tanger and the Board;  provided  however,  if
     the  Company's  FFO per share for the  previous  year equaled or exceeded a
     targeted level,  the annual base salary is not to be less than Mr. Tanger's
     annual base salary for that  previous year adjusted to reflect any increase
     in the CPI. The  Company's FFO per share for 2001 exceeded the targeted FFO
     amount  in Mr.  Tanger's  contract.  For  this  reason  and in  view of Mr.
     Tanger's  key  contributions  to  the  Company's  continued  success  in an
     increasingly competitive environment, the Committee approved an annual base
     salary of $429,975 for fiscal 2002.

o    Mr.  Tanger  was paid an  annual  bonus of  $323,450  for  2002.  Under his
     employment  agreement,  a minimum bonus of $125,000 was payable for 2002 if
     the Company's FFO per share reached  targeted  levels and additional  bonus
     payments  were due based on the  percentage  by which  actual FFO per share
     exceeded  the  targeted  levels.  No bonus was  payable  unless the minimum
     targeted FFO was achieved.  The Company's FFO for 2002 exceeded the minimum
     target level at which a bonus was payable.

                                       9


         The Company  paid 20% of Mr.  Tanger's  2002 annual  base  salary.  The
Operating  Partnership  paid the  remainder of his  compensation  including  the
bonus.

         During 1993, the Internal Revenue Code of 1986 (the "Code") was amended
to add Section 162(m), which denies an income tax deduction to any publicly held
corporation for compensation  paid to a "covered  employee" (which is defined as
the Chief  Executive  Officer and each of the  Company's  other four most highly
compensated  officers) to the extent that such  compensation in any taxable year
of the employee exceeds $1 million. In addition to salaries,  bonuses payable to
the  Company's   executives  under  their  present   employment   contracts  and
compensation  attributable  to the exercise of options  granted  under the Share
Option Plan and Unit Option Plan constitute  compensation subject to the Section
162(m)  limitation.   It  is  the  Company's  policy  to  take  account  of  the
implications of Section 162(m) among all factors reviewed in making compensation
decisions.  The Plans  permit  the  grant of  options  intended  to  qualify  as
"performance-based compensation" which is exempt from application of the Section
162(m) limitation.  The Company expects that it will not be denied any deduction
under  Section  162(m)  for  compensation  paid  during its  taxable  year ended
December 31, 2002, although it is possible that in some future year some portion
of the  compensation  paid to a Company  executive will not be tax deductible by
the Company under Section 162(m).

                                     THE COMPENSATION COMMITTEE

                                     Jack Africk (Chairman)
                                     William G. Benton
                                     Thomas E. Robinson

Compensation Committee Interlocks and Insider Participation

          The Executive  Compensation  Committee of the Board, which is required
to have a  majority  of  Independent  Directors,  is  charged  with  determining
compensation for our executive officers. Mr. Africk, Mr. Benton and Mr. Robinson
currently serve on the Executive Compensation Committee, with Mr. Africk serving
as chairman.

          Stanley K. Tanger is Chief Executive Officer and Chairman of the Board
of Directors of the Company.

          Stanley K. Tanger is an investor in certain real estate joint ventures
owning three properties  managed by us. (See "Certain  Relationships and Related
Transactions").

Share Price Performance

         The following share price performance chart compares our performance to
the S&P 500, the index of equity real estate  investment  trusts prepared by the
National  Association of Real Estate  Investment Trusts ("NAREIT") and the index
prepared by SNL  Financial  LC of other  publicly  traded  factory  outlet REITs
("Tanger Peer Group"). Equity real estate investment trusts are defined as those
which  derive  more than 75% of their  income from  equity  investments  in real
estate  assets.  The NAREIT equity index  includes all tax qualified real estate
investment trusts listed on the New York Stock Exchange, American Stock Exchange
or the NASDAQ National Market System.  The Tanger Peer Group consists of Chelsea
Property Group, Inc. (formerly Chelsea GCA Realty,  Inc).,  Prime Retail,  Inc.,
and Horizon Group, Inc. (which during 1998 merged with Prime Retail, Inc.).

                                       10


         All share price  performance  assumes an initial  investment of $100 at
the beginning of the period and assumes the  reinvestment  of  dividends.  Share
price performance,  presented for the five years ended December 31, 2002, is not
necessarily indicative of future results.



[Graph appears here with the following plot points]

                                                            Period Ending
----------------------------------------  -------  -------  -------  -------  -------  -------
Index                                     Dec. 97  Dec. 98  Dec. 99  Dec. 00  Dec. 01  Dec. 02
----------------------------------------  -------  -------  -------  -------  -------  -------
                                                                      
Tanger Factory Outlet Centers, Inc.        100.00    75.44    81.81   100.12   102.25   166.58
S&P 500                                    100.00   128.55    155.6   141.42   124.63    96.95
NAREIT All Equity REIT Index               100.00     82.5    78.69    99.44   113.29   118.08
Tanger Factory Outlet Centers Peer Group   100.00    89.85    72.81    66.85    92.04   132.05



Employment Contracts

         Each of Stanley K. Tanger and Steven B. Tanger will receive annual cash
compensation in the form of salary and bonus pursuant to a three year employment
contract.  The  employment  contracts  will be  automatically  extended  for one
additional year on January 1 of each year unless the  executive's  employment is
terminated,  or we give written notice to the executive within 180 days prior to
such January 1 that the contract term will not be  automatically  extended.  The
base salary  provided for in such  contracts  may be increased  each year.  Upon
termination of  employment,  Stanley K. Tanger has agreed not to compete with us
for the  remainder of his life.  Steven B. Tanger has agreed not to compete with
us for one year (or three years if severance  compensation is received) within a
50 mile radius of the site of any commercial  property owned, leased or operated
by us or within a 50 mile radius of any commercial  property which we negotiated
to acquire,  lease or operate within the six month period prior to  termination.
The covenant not to compete  mandates that,  during the term of the contract and
during the  effective  period of the  covenant,  such  executives  direct  their
commercial real estate activities through us, with exceptions for development of
properties which were owned  collectively or individually by them, by members of
their  families or by any entity in which any of them owned an interest or which
was  for the  benefit  of any of  them  prior  to the  initial  public  offering
(including  the three factory outlet centers in which Stanley K. Tanger is a 50%
partner  and a  single  shopping  center  in  Greensboro,  North  Carolina  (the
"Excluded  Properties")).  In no event will either of the Tangers  engage in the
development,  construction or management of factory outlet  shopping  centers or
other  competing  retail  commercial  property  outside  of the  Company  or the
Operating  Partnership  during the  effective  period of the covenant  (with the
exception  of the Excluded  Properties  and as  described  above).  See "Certain
Relationships and Related  Transactions." In addition,  such executives will not
engage in any active or  passive  investment  in  property  relating  to factory
outlet centers or other competing retail commercial property, with the exception
of the ownership of up to one percent of the  securities of any publicly  traded
company.

         The  contracts  for Stanley K. Tanger and Steven B. Tanger  provide for
annual  bonuses  based upon our  performance  as measured by FFO per share.  The
minimum bonus in each calendar year period for Stanley K. Tanger is $125,000 and
for Steven B.  Tanger is  $115,000.  The  minimum  bonus will be paid if FFO per
share  (after  payment of such  bonuses)  equals or exceeds  the annual  minimum
target for such year.  The annual minimum target for each year is the greater of
$1.552 per share,  or the average FFO per share for the five  previous  calendar
years.  The  Tangers  will  receive  additional  bonus  payments  based  on  the
percentage by which actual FFO per share exceeds the annual minimum  target.  If
the employment of either of Tangers  terminates without Cause, as defined in the
agreement,  or such  employment is terminated by the executive with Good Reason,
as defined in the agreement,  the terminated executive shall receive a severance
benefit equal to 300% of the sum of (a) his annual base salary (b) the higher of
(i) the prior  year's  annual  bonus or (ii) the  average  annual  bonus for the
preceding three years, and (c) his automobile allowance for the current year. If


                                       11


employment  terminates  by reason of death or  disability,  the executive or his
estate  shall  receive a lump sum amount  equal to his annual  base  salary that
would  have been paid for the  remaining  contract  term if  employment  had not
terminated,  and in addition,  will  receive an amount equal to the  executive's
annual bonus which would have been paid during the year of  termination  had the
executive not terminated, multiplied by a fraction the numerator of which is the
number of days in the year prior to termination  and the denominator of which is
365.

         The  employment  contracts  with Stanley K. Tanger and Steven B. Tanger
also grant them certain  registration  rights with respect to the Common  Shares
that they beneficially own.

          Rochelle G. Simpson,  Willard A. Chafin and Frank C. Marchisello,  Jr.
each have an employment contract expiring December 31, 2004. Ms. Simpson and Mr.
Chafin's  contracts may be extended by an additional three year period by mutual
written agreement between the executive and us.

          These  contracts  established  base salaries for calendar year 2002 of
$231,525 for Ms. Simpson and Mr.  Marchisello  and $242,550 for Mr. Chafin.  The
base salaries for  subsequent  years will be set by the  Executive  Compensation
Committee in amounts not less than the 2002 salary.

          If the employment of Ms. Simpson or Mr. Chafin is terminated by reason
of death or disability or if we materially breach the employment agreement,  Ms.
Simpson or Mr. Chafin will be paid as additional compensation an amount equal to
the annual base salary for the contract  year in which the  termination  occurs.
Further,  if we elect not to extend the term of employment  for Ms.  Simpson and
Mr. Chafin for an  additional  one or more years,  the executive  will receive a
severance  payment  equal to the greater of $125,000,  or one-half of the annual
base salary payable for the last contract year of the contract term.

         If Mr.  Marchisello's  employment  is  terminated by reason of death or
disability,  by us for no reason or without  good cause,  or by Mr.  Marchisello
because of our material  breach of the  contract,  he will receive as additional
compensation  an amount equal to his annual base salary for the contract year in
which the  termination  occurs.  Further,  if we elect not to extend the term of
employment  for  Mr.  Marchisello  for an  additional  one or  more  years,  the
executive  will receive a severance  payment equal to the greater of one-half of
the annual base salary payable for the last contract year of the contract term.

         During the term of employment  and for a period of one year  thereafter
(six months in the case of Mr. Marchisello), each of Ms. Simpson, Mr. Chafin and
Mr. Marchisello is prohibited from engaging directly or indirectly in any aspect
of the factory outlet  business  within a radius of 100 miles of, or in the same
state as, any factory outlet center owned or operated by us.

         Stanley K. Tanger and Steven B. Tanger are employed and  compensated by
both the Operating  Partnership and the Company. The Committee believes that the
allocation  of  such  persons'  compensation  as  between  the  Company  and the
Operating  Partnership  reflects  the  services  provided by such  persons  with
respect to each entity.  The remainder of the  employees are employed  solely by
the Operating Partnership.

                                   PROPOSAL 2

      AMENDMENT TO INCREASE THE NUMBER OF COMMON SHARES AND UNITS AVAILABLE
                UNDER THE SHARE OPTION PLAN AND UNIT OPTION PLAN

         It is proposed  that the  Company's  Share  Option Plan and Unit Option
Plan be amended to increase the number of the Company's  Common Shares which may
be issued under the Share  Option Plan and the number of units of the  Operating
Partnership which may be issued under the Unit Option Plan from 1,750,000 in the
aggregate to 2,250,000 in the aggregate.

THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE RATIFICATION OF THE AMENDMENT
TO  INCREASE  THE NUMBER OF COMMON  SHARES AND UNITS  AVAILABLE  UNDER THE SHARE
OPTION PLAN AND UNIT OPTION PLAN.

                                       12


         The following  table provides  information as of December 31, 2002 with
respect to compensation  plans under which the Company's  equity  securities are
authorized for issuance:



                                               (a)                       (b)                        (c)
                                                                                                 Number of
                                                                                            Securities Remaining
                                                                                                Available for Future
                                     Number of Securities to     Weighted Average             Issuance Under Equity
                                     be Issued Upon Exercise    Exercise Price of            Compensation Plans
                                     of Outstanding Options,   Outstanding Options,            (Excluding Securities
Plan Category                          Warrants and Rights     Warrants and Rights        Reflected in Column (a))
-------------                          -------------------     --------------------       ---------------------------

                                                                                         
Equity compensation plans approved          1,318,700                  $23.89                     230,200
by security holders

Equity compensation plans not
approved by security holders                   ---                       ---                        ---

Total                                       1,318,700                  $23.89                     230,200


         The following  information  summarizes  the material  provisions of the
Share Option Plan and the Unit Option Plan, each as amended and restated, and is
qualified in its  entirety by  reference  to the full text of the Plans.  Unless
otherwise  defined,  capitalized terms used herein have the meanings ascribed to
them in the Plans.

Shares and Units Available under the Plans

         Without  giving effect to the proposed  increase to the number of Units
and Common Shares  reserved for issuance in the aggregate  under the Plans,  the
number of Units and  Common  Shares  reserved  for  issuance  under the Plans is
1,750,000,  in the aggregate (subject to certain antidilution  provisions).  The
maximum  number of Units or Common  Shares  subject  to  Options  granted to one
individual  in any  calendar  year may not exceed  60,000 and the Plans  further
provide  that the grant and  exercise of Options  shall not cause the Company to
fail to qualify as a REIT for federal income tax purposes. As of March 21, 2003,
the market value of our Common Shares was $31.01 per share.

General Nature and Purpose

         The Plans were  adopted to (i)  provide  incentives  to  directors  and
executive  and key employees of the Company and the  Operating  Partnership  and
(ii) enable the Company and the Operating  Partnership  to obtain and retain the
services of the type of directors and  executive  and key  employees  considered
essential to the long-range  success of the Company.  Options  granted under the
Share Option Plan to Company  employees  may be either  incentive  share options
within the  meaning  of  Section  422(b) of the  Internal  Revenue  Code of 1986
("Incentive Share Options") or non-qualified share options ("Non-Qualified Share
Options").  Options granted under the Unit Option Plan and options granted under
the  Share  Option  Plan  to  persons  other  than  Company  employees  will  be
Non-Qualified Share Options.

Amendment and Termination of the Plans

         The Plans may be amended or otherwise modified, suspended or terminated
at any time or from time to time by the Board or the Option  Committee,  subject
to  shareholder  approval if such approval is then required by applicable law or
in order for  options  granted  under  the  Plans to  continue  to  satisfy  the
requirements  of Rule 16b-3 under the Exchange Act, Code Section  162(m) or Code
Section  422.  No  Option  may be  granted  under a Plan  during  any  period of
suspension or after  termination of such Plan, and in no event may any Incentive
Share Option be granted under the Plans after May 28, 2003.

Administration of the Plans; Terms of Options

         The Option  Committee  administers  the Plans  with  respect to Options
granted to employees of the Company and the Operating Partnership,  and the full
Board  administers  the Share  Option  Plan with  respect to Options  granted to
Independent  Directors.  Subject to the terms and  conditions of the Plans,  the
Option  Committee  (the Board with  respect to  Independent  Directors)  has the
authority to select the  employees  (or  Independent  Directors) to whom Options

                                       13


will be granted, to determine the number of shares to be subject thereto and the
terms and conditions thereof. The Board may, in its discretion,  exercise any of
the  rights or duties of the  Option  Committee  under the  Plans,  except  with
respect to  matters  which  under  Rule 16b-3 or Section  162(m) of the Code are
required to be determined at the sole discretion of the Option Committee.

Eligibility and Participation

         Any employee  designated by the Option Committee as an executive or key
Company  employee  or as an  employee  of the  Operating  Partnership  shall  be
eligible to be granted  Options,  as determined  by the Option  Committee in its
discretion.  Each  Independent  Director of the Company  shall be eligible to be
granted  Options  as  determined  by the  full  Board in its  discretion.  Our 5
directors, 8 executive officers and approximately 149 key employees are eligible
to be granted Options under the Plans.

Vesting of Options

         Options granted under the Plans shall become  exercisable at such times
and in such installments  (which may be cumulative) as the Option Committee (the
Board with respect to Options granted to Independent  Directors) provides in the
terms of each individual Option  Agreement.  The Option Committee (or Board with
respect  to  Options  granted  to  Independent  Directors),  on such  terms  and
conditions as it deems  appropriate,  may accelerate the time at which an Option
or any portion  thereof may be  exercised.  Notwithstanding  the  foregoing,  no
portion of an Option which is  unexercisable  at  Termination  of  Employment or
Termination of Directorship shall thereafter become  exercisable,  except as may
otherwise  be provided by the Option  Committee  (or Board,  where  applicable).
Further,  to the extent the aggregate fair market value of the Company's  Common
Shares with respect to which  Incentive  Share Options are  exercisable  for the
first time by an Optionee  during any calendar year (under the Share Option Plan
and all other  incentive  share option plans of the Company and any  Subsidiary)
exceeds $100,000, such options shall be treated as Non-Qualified Options.

Expiration of Options

         The Option  Committee  (the Board  with  respect to Options  granted to
Independent  Directors)  shall  provide in the terms of each  individual  Option
Agreement when such Option expires and becomes unexercisable; provided, however,
that in no event will an Incentive  Share Option be  exercisable  following  the
tenth  anniversary from the date such Incentive Share Option is granted,  or the
fifth  anniversary from such date if the Incentive Share Option is granted to an
individual  then  owning  more than 10% of the  Company or any  Subsidiary.  The
Option  Committee  (the Board with  respect  to Options  granted to  Independent
Directors) may provide, in the terms of individual Option Agreements,  that said
Options  expire  immediately  upon a Termination of Employment or Termination of
Directorship.

Consideration for Granting Options

         In  consideration  of the  granting of an Option,  the  Optionee  shall
agree, in a written Option Agreement, to remain in the employ of (or to serve as
an  Independent  Director  of) the  Company  or the  Operating  Partnership,  as
applicable,  for a period of at least  one year  after  the  Option is  granted.
Nothing in the Plans or in any Option  Agreement  will confer upon any  Optionee
any right to continue in the employ of the Company or the Operating Partnership.

Purchase Price of Shares Subject to Options

         The price of the shares  subject to each Option granted under the Plans
shall be set by the Option  Committee (the Board with respect to Options granted
to Independent Directors);  provided, however, that such price shall be not 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.


                                       14


Manner of Option Exercise

         Options are  exercisable  in whole or in part by written  notice to the
Company,   specifying  the  number  of  shares  or  Units  being  purchased  and
accompanied by payment (to the Operating Partnership for Unit Options and to the
Company  for Share  Options)  of the  exercise  price for such  shares or Units.
Payment of the exercise price may be made in cash which, with the consent of the
Option Committee (or of the Board, in the case of Options granted to Independent
Directors),  may include  (except with respect to  Incentive  Share  Options) an
assignment  of the right to receive  the cash  proceeds  from the sale of Common
Shares  subject to the Option (or  exchangeable  for Units) or by  surrender  of
Common  Shares or Units  issuable  upon  exercise of the option  (pursuant  to a
"cashless exercise" procedure) or, with the consent of the Option Committee,  by
delivery of then held Units or Common  Shares or by delivery of other  property,
or by a recourse  promissory note payable to the Company, or by a combination of
the  foregoing.  As a  condition  to the  exercise  of any  Option,  the  Option
Committee  may  require  that the  Optionee  deliver  such  representations  and
documents as it deems necessary to effect compliance with applicable federal and
state securities laws and  regulations.  Units received upon exercise of Options
under the Unit Option Plan are exchangeable for Common Shares.

Transfer Restrictions

         No Option or interest or right  therein or part thereof shall be liable
for the debts,  contracts or  engagements  of the Optionee or his  successors in
interest or shall be subject to  disposition  by transfer,  alienation,  pledge,
encumbrance, assignment or any other means, whether voluntary, involuntary or by
operation  of law  (other  than as  security  for a  promissory  note  given  as
consideration for full or partial payment for such Option);  provided,  however,
that  Options  may  be  transferred  by  will  or by the  laws  of  descent  and
distribution  and, with the consent of the  Committee,  may be  transferred to a
member of the Optionee's  immediate  family or to a trust,  partnership or other
entity the sole beneficiaries, partners or other members of which are members of
the Optionee's  immediate  family.  During an Optionee's  lifetime,  Options are
exercisable  only by the  Optionee  unless such  Options  have been  disposed of
pursuant  to  the  foregoing  sentence.  The  Option  Committee,   in  its  sole
discretion,  may impose such other  restrictions on the  transferability  of the
Common Shares and Units  purchasable  upon the exercise of an Option as it deems
appropriate.

No 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 to any Common Shares or
Units  purchasable  upon the exercise of any part of an Option  unless and until
certificates  representing such Common Shares have been issued by the Company to
such holders.

Extraordinary Corporate Events

         The Plan  provides  the Option  Committee  (the  Board with  respect to
options granted to Independent Directors) discretion to amend the terms (such as
exercise price,  number of shares and vesting) of outstanding Options and future
grants   that  may  be  made   under  the  Plans  upon  the   occurrence   of  a
recapitalization,    stock   split,   reorganization,   merger,   consolidation,
liquidation,  dissolution,  or sale, transfer,  exchange or other disposition of
all or substantially all of the assets of the Company or other similar corporate
event.  In  addition,  the Option  Committee  (or Board with  respect to options
granted to Independent Directors) has discretion under the Plans to provide that
Options will expire at specified times following,  or become exercisable in full
upon, the occurrence of certain specified extraordinary corporate events; and in
such event the Option  Committee  may also  accelerate  the  vesting of Options.
Notwithstanding  the above,  upon a change in control,  all  options  granted to
Independent Directors shall become immediately exercisable in full.

Certain Federal Income Tax Consequences

         The following  discussion is a general summary of the material  federal
income tax  consequences  to the Company,  the  Partnership and Optionees and is
intended for general  information  only.  The  discussion  is based on the Code,
regulations thereunder and rulings and decisions now in effect, all of which are
subject to change.

         Non-Qualified  Options.  Holders of Non-Qualified  Options generally do
not  recognize  income as a result of the grant of  Non-Qualified  Options,  but

                                       15


normally recognize compensation income taxable at ordinary income rates upon the
Non-Qualified Options' exercise, to the extent that the fair market value of the
shares (or Units) on the date of the exercise  exceeds the exercise  price paid.
The Company (or the Operating  Partnership)  will generally be entitled to a tax
deduction  in an amount  equal to the amount  that the  Optionee  is required to
include in ordinary  income at the time of such inclusion and may be required to
withhold taxes on such ordinary  income.  The  Optionee's  initial tax basis for
shares  acquired upon the exercise of a  Non-Qualified  Share Option will be the
option exercise price paid plus the amount  recognized as ordinary  income.  Any
subsequent  appreciation  in the value of such  shares may  qualify  for capital
gains treatment depending upon the applicable holding period.

         The tax consequences resulting from the exercise of Non-Qualified Share
Options  through  delivery of  already-owned  Common  Shares are not  completely
certain.  In  published  rulings,  the  Internal  Revenue  Service has taken the
position  that,  to the extent an  equivalent  value of shares is acquired,  the
employee will recognize no gain on the  already-owned  shares and the employee's
basis in the shares  acquired upon such exercise will be equal to the employee's
basis in the surrendered  shares;  that any additional shares acquired upon such
exercise are  compensation  to the employee  taxable  under the rules  described
above and that the employee's basis in any such additional  shares is their then
fair market value.

         Incentive Share Options.  Holders of Incentive Share Options  generally
do not  recognize  income upon either the grant of an Incentive  Share Option or
its exercise.  Upon the sale or other taxable  disposition  of the Common Shares
acquired by Option  exercise,  the  Optionee  will  generally  recognize  income
taxable at capital gains rates  (depending  on the  applicable  holding  period)
equal to the difference  between the amount  realized upon such  disposition and
the option exercise price, provided no disposition of the shares has taken place
within either (a) two years from the date of grant of the Incentive Share Option
or (b) one year from the date of transfer of Common  Shares to the Optionee upon
exercise.  If the Common Shares are sold or otherwise disposed of before the end
of the one-year or two-year periods,  the difference between the Incentive Share
Option exercise price and the fair market value of the shares on the date of the
Option's  exercise will be taxable as ordinary income;  the balance of the gain,
if any,  will be taxed as capital  gain.  If the Common  Shares are  disposed of
before the expiration of the one-year or two-year  periods in a sale or exchange
on which a loss would be permitted to be recognized  and the amount  realized is
less  than the fair  market  value of the  shares at the date of  exercise,  the
Optionee's  ordinary  income  would be limited to the amount  realized  less the
option  exercise  price paid.  The Company  will  generally be entitled to a tax
deduction  with  respect to an  Incentive  Share  Option  only to the extent the
Optionee recognizes ordinary income upon sale or other disposition of the Common
Shares. The difference between the fair market value of the Common Shares on the
exercise date and the exercise  price of an Incentive  Share Option is deemed to
be a "tax preference" under the alternative minimum tax rules of the Code.

         The tax consequences  resulting from the exercise of an Incentive Share
Option  through  delivery  of  already-owned  Common  Shares are not  completely
certain.  In published  rulings and proposed  regulations,  the Internal Revenue
Service has taken the position that  generally  the Optionee  will  recognize no
income upon such  share-for-share  exercise  (subject to the discussion  above),
that,  to the extent an  equivalent  number of Common  Shares is  acquired,  the
Optionee's  basis in the Common  Shares  acquired upon such exercise is equal to
the Optionee's  basis in the surrendered  shares  increased by any  compensation
income  recognized by the Optionee,  that the Optionee's basis in any additional
Common  Shares  acquired  upon such  exercise is zero and that any sale or other
disposition  of the  acquired  shares  within the  one-year or two-year  periods
described  above will be viewed as a  disposition  of the shares with the lowest
basis first.


Certain Relationships and Related Transactions

         We  manage  for a fee  three  factory  outlet  centers  owned  by joint
ventures, in which Stanley K. Tanger and a third party each have a fifty percent
interest.  As a result,  certain  conflicts  of interest  may arise  between Mr.
Tanger's duties and  responsibilities to us and his duties and  responsibilities
to the joint  ventures  in ensuring  the  adequate  provision  of  services.  In
addition,  conflicts of interest  may arise over the  allocation  of  management
resources between our properties and the joint venture properties.  However, the
arrangement  under  which we  provide  services  to the  joint  ventures  can be
terminated  by either party,  with or without  cause,  upon 30 days' notice.  To
minimize potential conflicts of interest,  all significant  transactions between
us and the joint  ventures,  including  continuing the arrangement for providing
management services,  will be approved by a disinterested majority of the Board.
As a general matter,  we do not expect to engage in any other  transactions with
any  member of  management  in his or her  individual  capacity.  Revenues  from
managing the joint ventures  accounted for less than one-tenth of one percent of
our revenues in 2002.

                                       16


         During 2002,  Stanley K. Tanger, our Chairman of the Board of Directors
and Chief Executive  Officer,  paid in full,  through  accelerated  payments and
together with interest at LIBOR plus 1.75%, a demand note payable to the Company
that had a balance  on  January  1, 2002 of  $797,000.  The note was  originally
scheduled to mature in May 2005.


General -

         Appointment of Independent  Auditors.  Upon the  recommendation  of the
Audit Committee, the Board has appointed the firm of PricewaterhouseCoopers  LLP
to audit the  accounts of the Company  with  respect to its  operations  for the
fiscal year ending on December  31, 2003 and to perform  such other  services as
may be  required.  Should the firm be unable to perform  these  services for any
reason,  the Board will  appoint  other  independent  auditors to perform  these
services.  PricewaterhouseCoopers LLP served as our independent auditors for the
fiscal year ended December 31, 2002.  Representatives of  PricewaterhouseCoopers
LLP are expected to be present at the meeting,  will have an opportunity to make
a  statement  if they  desire  to do so and  will be  available  to  respond  to
appropriate questions from shareholders.

         Section  16(a)  Compliance.  Section 16(a) of the Exchange Act requires
our  officers  and  directors,  and  persons  who own more than ten percent of a
registered class of our equity securities,  to file reports of the ownership and
changes in the  ownership  (Forms 3, 4 and 5) with the  Securities  and Exchange
Commission and the New York Stock Exchange.  Officers,  directors and beneficial
owners of more than ten  percent of our shares are  required by  Securities  and
Exchange  Commission's  regulations  to furnish us with copies of all such forms
which they file.

         Based  solely on our  review of the  copies of Forms 3, 4 and 5 and the
amendments  thereto  received by us for the period ended  December 31, 2002,  or
written  representations from certain reporting persons, no Forms 3, 4 or 5 were
filed delinquently by those persons.

         Shareholders' Proposals. This Proxy Statement and form of proxy will be
sent to shareholders in an initial mailing on or about April 9, 2003.  Proposals
of  shareholders  intended to be presented at our Annual Meeting of Shareholders
to be held in 2004 must be received by us no later than December 10, 2003.  Such
proposals must comply with the requirements as to form and substance established
by the  Securities  and Exchange  Commission  for such  proposals in order to be
included in the proxy statement.

         Other Business.  All shares  represented by the accompanying proxy will
be voted in accordance  with the proxy.  We know of no other business which will
come  before the  meeting  for action.  However,  as to any such  business,  the
persons designated as proxies will have discretionary  authority to act in their
best judgment.


                                       17



                              [FRONT SIDE OF CARD]

                                      PROXY

                       TANGER FACTORY OUTLET CENTERS, INC.

             Appointment of Proxy for Annual Meeting on May 9, 2003

           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The  undersigned  shareholder of TANGER FACTORY  OUTLET  CENTERS,  INC., a North
Carolina  corporation,  hereby  constitutes  and appoints  Stanley K. Tanger and
Rochelle G. Simpson,  and each of them,  proxies with full power of substitution
to act for the  undersigned  and to vote the shares which the undersigned may be
entitled to vote at the Annual Meeting of the  Shareholders of such  corporation
on May 9, 2003, and at any adjournment or adjournments thereof, as instructed on
the reverse side upon the proposals  which are more fully set forth in the Proxy
Statement of Tanger Factory Outlet Centers, Inc. dated April 9, 2003 (receipt of
which is  acknowledged)  and in their  discretion  upon any other matters as may
properly come before the meeting,  including but not limited to, any proposal to
adjourn or postpone the meeting. Any appointment of proxy heretofore made by the
undersigned for such meeting is hereby revoked.

Tanger Factory Outlet Centers, Inc. recommends a vote FOR all Nominees listed in
Proposal 1 and FOR Proposal 2.



(SEE REVERSE        CONTINUED AND TO BE SIGNED ON REVERSE SIDE      (SEE REVERSE
   SIDE)                                                                SIDE)






                               [BACK SIDE OF CARD]

            DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL

[X] Please mark
    votes as
    in this example.

The shares  represented  hereby will be voted in accordance  with the directions
given in this  appointment of proxy. If not otherwise  directed  herein,  shares
represented  by this proxy  will be voted FOR  Proposal  1 AND for  Proposal  2,
provided  however;  shares  held by a broker  or  nominee  who has not  received
specific voting  instruction  from the beneficial owner will not be voted FOR or
AGAINST the ratification of the Amendments to the Option Plans.


                                                                                                        
1. To elect  Directors to serve for the ensuing year.     2. To ratify amendments to the Share Option Plan    FOR  AGAINST ABSTAIN
   Nominees: (1) Stanley K. Tanger, (2) Steven B. Tanger,    and the Unit Option Plan to increase from        [  ]   [  ]   [  ]
             (3) Jack Africk, (4) William G. Benton and      1,750,000 to 2,250,000 the aggregate number of
             (5) Thomas E. Robinson                          Common  Shares and Units which may be issued
                                                             under the Share Option Plan and the Unit Option
           FOR     [   ]            [   ]  WITHHELD          Plan.
           ALL                             FROM ALL
         NOMINEES                          NOMINEES

   [   ] __________________________________________
          For all nominees except as noted above

                                                          MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT     [  ]

                                                          PLEASE SIGN, DATE AND MAIL PROMPTLY IN THE POSTAGE-PAID ENVELOPE ENCLOSED.

                                                          Please sign exactly as name appears hereon.  When shares are held by joint
                                                          tenants, both should sign. When signing as an attorney, executor,
                                                          administrator, trustee or guardian, give full title as such.  If a
                                                          corporation, sign in full corporate name by president or other authorized
                                                          officer. If a partnership, sign in partnership name by authorized person.


Signature:                                  Date:                 Signature:                                       Date:
          ----------------------------------     -----------------          ---------------------------------------     ------------