EX-10.16


    Exhibit
      10.16

     

    EMPLOYMENT
      AGREEMENT

    


    This
      Employment Agreement (“Agreement”) made as of the 1st
      day of
      January, 2005, between Greater Community Bank, a New Jersey corporation with
      a
      business address of 55 Union Boulevard, Totowa, New Jersey, (the “Company”) and
      Mary Smith (“Executive”).

     

    WHEREAS,
      the Company desires to employ the Executive upon the terms and conditions
      hereinafter set forth; and 

     

    WHEREAS,
      the Executive is willing to enter into this Agreement with respect to her
      employment and services upon the terms and conditions hereinafter set
      forth.

    


    WITNESSETH:

    


    NOW,
      THEREFORE, in consideration of the mutual promises set forth herein, the parties
      hereto, intending to be legally bound, agree as follows:

    


    1. Employment.
      The
      Company hereby employs Executive, and Executive hereby accepts such employment
      and agrees to perform Executive’s duties and responsibilities hereunder, in
      accordance with the terms and conditions hereinafter set forth.

    


    2. Term.
      The
      term of this Agreement (the “Employment Term”) shall commence on the date of the
      execution of this Agreement by both parties and shall continue from that date
      for three (3) years. The Employment Term shall be subject to one (1) year
      extensions at the mutual agreement of the Executive and the Highland Capital
      Corp. Board of Directors. The one (1) year extension must be exercised within
      forty-five (45) days of the expiration of each contract year.

    


    3. Position
      and Duties.
      During
      the Employment Term, Executive shall serve as the President and Chief Executive
      Officer of Highland Capital Corp. (“HCC”), reporting to the President of Greater
      Community Bank (the “President”). Executive shall perform all duties and accept
      all responsibility for the general management and operation of HCC. Executive
      shall at all times be subject to the direction and control of the President.
      Executive shall use her best efforts in the business of HCC, and shall devote
      her full time, attention and energy to the business and affairs of HCC and
      its
      subsidiaries. 

    


    4. Compensation,
      Benefits and Expense Reimbursement

    


    (a) Salary.
      The
      Company shall pay Executive an annual salary of $137,800.00 (“Annual Salary”)
      payable in the manner consistent with the payroll practices for the executive
      officers of the Company. Effective July 1, 2005 the Company shall adjust the
      Annual Salary of Executive to $162,800.00. The Annual Salary shall be subject
      to
      review and increase by the President of Company, in his sole discretion, with
      such review to be conducted at least annually at such time as it reviews the
      salaries of the HCC’s officers.

    


    (b) Bonus.
      The
      Company shall pay Executive a Bonus, if earned in accordance with this
      paragraph in
      addition to Annual Salary. The Bonus shall be based upon the pre-tax profit
      as
      defined in schedule “A”, attached hereto and made a part hereof, for all current
      and subsequent business of HCC. The bonus due Executive will be 6.42% of the
      total annual pre-tax profit of HCC which shall be calculated based upon
      generally accepted accounting principals and will be determined prior to any
      extra ordinary charges and/or disbursements. The Bonus, if any, due Executive
      from HCC shall
      be
      paid on or before March 31 of the calendar year following the year for which
      HCC
      has a pre-tax profit.


    
      
        
        

      

      
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    (c) Fringe
      Benefits.
      The
      Company shall provide to Executive such fringe benefits as are accorded to
      other
      executive officers of the Company.

    


    (d) Expense
      Reimbursement.
      The
      Company shall reimburse Executive for all ordinary and necessary business
      expenses incurred by her in the performance of her duties hereunder, which
      shall
      be accounted for in accordance with the reimbursement policies of the
      Company.

    


    5. Confidentiality
      and Non-compete.

    


    (a) Executive
      recognizes and acknowledges that by reason of her employment by the Company
      and
      service to HCC, she has had and will continue to have (both during the
      Employment Term and at any time thereafter during which she may service HCC,
      access to confidential information of the Company and its affiliates, including,
      without limitation, information and knowledge deemed confidential under New
      Jersey Law pertaining to products and services offered, inventions, innovations,
      designs, ideas, plans, trade secrets, proprietary information, manufacturing,
      packaging, advertising, distribution and sales methods and systems, sales and
      profit figures, customer and client lists, and relationships between the Company
      and its affiliates and dealers, distributors, wholesalers, customers, clients,
      suppliers and others who have business dealings with the Company and its
      affiliates (“Confidential Information”). Executive acknowledges that such
      Confidential Information is a valuable and unique asset and covenants that
      she
      will not, either during or at any time after the Employment Term, disclose
      any
      such Confidential Information to any person for any reason whatsoever (except
      as
      her duties described herein may require) without the prior written authorization
      of the Board, unless such information is in the public domain through no fault
      of Executive or except as may be required by law.

    


    (b) Non-Competition.
      During
      the Employment Term and for the twelve (12) month period following the
      termination of employment of Executive from the Company or any of its affiliates
      has ended (whether or not such employment is pursuant to this Agreement),
      Executive will not, unless acting pursuant hereto or with the prior written
      consent of the Board, directly or indirectly, own, manage, operate, join,
      control, finance or participate in the ownership, management, operation, control
      or financing of, or be connected as an officer, director, Executive, partner,
      principal, agent, representative, consultant, employee or otherwise with or
      use
      or permit her name to be used in connection with, any business or enterprise
      engaged within any portion of the medical market or such other markets in which
      HCC does business in the leasing industry. 

    


    (c) Non-Solicit.
      During
      the Employment Term and for the twelve (12) month period following the
      termination of employment of Executive with the Company, Executive will not,
      hire or cause to be hired as an employee any person who was employed by the
      Company or any of its affiliates on a full or part-time basis at any time during
      the course of Executive’s employment for those services HCC has previously
      provided. 

    


    


    (d) Equitable
      Relief.
      Executive acknowledges that the restrictions contained in this paragraph 5
      hereof are reasonable and necessary to protect the legitimate interests of
      the
      Company and its affiliates, that the Company would not have entered into this
      Agreement in the absence of such restrictions. 

    


    6. Arbitration
      Clause.
      Any
      claim, dispute or other matter in question arising out of or related to this
      Agreement shall be subject to binding arbitration by three (3) neutral
      arbitrators in accordance with the Banking Industry Arbitration rules of the
      American Arbitration Association in effect. The demand for arbitration shall
      be
      filed in writing with the other party to this Agreement and with the American
      Arbitration Association.

    A
      demand
      for arbitration shall be made within a reasonable time after the claim, dispute
      or other matter in question has arisen. In no event shall the demand for
      arbitration be made after the date when institution of legal or equitable
      proceedings based on such claim, dispute or other matter in question would
      be
      barred by the applicable statute of limitations.

    No
      arbitration arising out of or relating to this
      Agreement shall include, by consolidation or joinder or in any other manner,
      an
      additional person or entity not a party to this Agreement, except by written
      consent containing a specific reference to this Agreement and signed by the
      Executive and the Company, and any other person or entity sought to be joined.
      Consent to arbitration involving an additional person or entity shall not
      constitute consent to arbitration of any claim, dispute or other matter in
      question not described in the written consent or with a person or entity not
      named or described therein. The foregoing agreement to arbitrate and other
      agreements to arbitrate with an additional person or entity duly consented
      to by
      parties to this Agreement shall be specifically enforceable in accordance with
      applicable law in any court having jurisdiction thereof. The award rendered
      by
      the arbitrator or arbitrators shall be final, and judgment may be entered upon
      it in accordance with applicable law in any court having jurisdiction



    
      
        
        

      

      
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    7. Termination.

    


    (a) Voluntary.
      In
      the
      event the Executive’s employment with the Company is voluntarily terminated
      within the Employment Term, except in the event of change of control, the
      Company at its sole discretion may elect to pay the executive in accordance
      with
      Paragraph 7
      (b) and
      the
      terms and conditions of Paragraph 5 will apply, in the event the Company does
      not elect to pay the executive the terms and conditions of Paragraph 5 shall
      not
      apply and the Executive shall not be entitled to Bonus or any future Salary.
      The
      executive will be required to provide one hundred eighty (180) days notice
      except in the event of change of control. Executive cannot provide notice or
      terminate employment if James Rickenberg or Mathew Rough have provided notice
      in
      accordance with their employment agreement until such a time that they have
      fulfilled their obligation of notice. 

    


    (b) Involuntary.
      In the
      event the Executive’s employment is terminated by the Company for any reason
      exclusive of Cause (as hereinafter defined), Executive shall receive either
      twice her annual base salary at the time of her termination, or, the sum of
      6.42% of the total annual pre-tax profit, as defined in “Schedule A”, of HCC
      based upon generally accepted accounting principles and determined prior to
      extra ordinary charges and/or disbursements, otherwise due but for Executive’s
      termination for the next five (5) calendar years including the year of
      termination and upon the Portfolio that existed at the termination, whichever
      Executive selects at her exclusive option. In the event Executive is to receive
      twice her annual base salary, HCC shall pay same at the time of her termination.
      In the event Executive is to receive the sum of 6.42% of the total annual
      pre-tax profit of HCC based upon generally accepted accounting principles and
      determined prior to any extra ordinary charges and/or disbursements for the
      next
      five (5) calendar years including the year of Executive’s termination, otherwise
      due but for Executive’s termination, HCC shall pay same in yearly installments
      on or before March 31 of the calendar year following the years for which HCC
      had
      a pre-tax profit based upon generally accepted accounting principles and
      determined prior to extra ordinary charges and/or disbursements.

    


    (c) Notwithstanding
      all preceding paragraph(s) of this agreement, in the event Company transfers
      its
      controlling interest in HCC to any other person, or, the controlling interest
      of
      Company is transferred to any other person(s), Executive shall have within
      ninety (90) days of such transfer of the applicable controlling interest the
      exclusive option to terminate employment and receive compensation and benefits
      in accordance with the terms and conditions of this Agreement. Severance shall
      be selected at the exclusive option of Executive in the amount of either: (1)
      two times Executive’s annual salary at the time Executive exercises her
      exclusive option to terminate employment with the Company; or (2) the 6.42%
      of
      the HCC’s adjusted sale price as defined in “Schedule B”, payable within one
      hundred twenty (120) days after the sale. If the person(s) who purchase the
      controlling interest requests Executive to continue employment and receive
      benefits and compensation in accordance with the terms and conditions of this
      Agreement Executive must provide written notice of same to the Company, HCC
      and
      Purchaser more than 60 days prior to the transfer of the applicable controlling
      interest this Agreement shall remain binding on Executive, HCC, the Company
      and
      their representative affiliates, purchasers, successors and/or assigns.


    (d) In
      the
      event Company and HCC are sold as a combined entity, the determination of the
      “sale price” for HCC will be based on the then current market valuation of HCC.
      HCC’s valuation will be determined by an agreed upon third party investment
      banker who has knowledge of similar sales within HCC’s industry. It is further
      agreed that a calculation of how a valuation will be done and mutually agreed
      to
      by both the Executive and Company within six (6) months of the date of this
      contract. 
      (e) As
        used
        in this Agreement, “Cause” shall be determined by an objective standard and
        mean: (i) Executive’s willful failure to substantially perform her duties for
        HCC; (ii) Executive’s conviction of a felony or crime for fraud, embezzlement or
        willful dishonesty relative to HCC; (iii) Executive’s willful violation of any
        HCC policy of which she has been given prior written notice and which violation
        is demonstrably detrimental to the best interests of HCC.


    


    
      
        
        

      

      
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    7.1 Death
      and Disability.
      If
      Executive dies during the employment term, the Executive’s heirs, executors,
      administrators, assignees will be entitled to the same payout benefits as the
      Executive as if the Executive had been terminated without cause. If Executive
      becomes disabled (as defined below), the Employment Term may be terminated
      by
      the Company and the Company shall pay the Executive the same payout benefits
      as
      if the Executive had been terminated without cause as outlined in paragraph
      7(b)
      of this Agreement. For purposes of this Agreement, “Disability” means a physical
      or mental infirmity which impairs the Executive’s ability to substantially
      perform her duties under this Agreement and which results in the Executive’s
      becoming eligible for long-term disability benefits under Company’s long-term
      disability plan. The executive shall be entitled to such benefits and any other
      benefits provided under the terms of employee benefit plans in effect at such
      time to which the Executive may be entitled under the terms of such plans given
      the Executive’s disabled status.

    


    8. Notices.
      Any
      notices to Executive or Company shall be deemed given if delivered personally
      or
      mailed by certified mail to the address set forth below.

    


    9. Applicable
      Law.
      The
      interpretation, validity and effect of this Agreement shall be governed in
      accordance with the laws of the State of New Jersey.

    


    10. Entire
      Agreement.
      The
      terms of this Agreement set forth the entire agreement and understanding between
      Executive and Company. This Agreement completely supersedes and nullifies all
      prior agreements, discussions, negotiations and agreements between Executive
      and
      Company. No changes in this Agreement shall be valid unless made in writing
      and
      signed by Executive and person authorized by Company to sign on their respective
      behalf. This Agreement supersedes all prior agreements and sets forth the entire
      understanding of the parties with respect to the terms of Executive’s employment
      with the HCC, except that Executive shall further be bound by the terms of
      all
      employee manuals, handbooks and guidelines generally applicable to employees,
      officers, or directors of the HCC.

    


    


    IN
      WITNESS WHEREOF, the parties hereof have executed this Employment Agreement
      as
      of the day and year first above written.

    

      
        	
                Mary
                  E. Smith

              	
                Greater
                  Community Bank

              
	 	 	 
	
                By:
                  /s/
                  Mary E. Smith

              	
                By:

              	
                 /s/
                  Anthony M. Bruno, Jr.

              
	 	 	
                Anthony
                  M. Bruno, Jr.

              
	 	 	
                Chairman
                  and CEO

              
	 	 	 
	
                Date:
                  June 29, 2005

              	Date:
                June 29, 2005
	 	 	 


      



    


    

      
        
          
          

        

        
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    Schedule
      A

    


    The
      following parameters will be used to calculate the pretax profit of Highland
      Capital Corp. for the purpose of calculating the Sr. Management Bonus
      Pool.

    


    Paid
      in Capital:
      Will be
      adjusted on a monthly basis to reflect a 9 to 1 debit to paid in capital ratio.
      The adjusted debit outstanding will be used to calculate the monthly interest
      expense to be used in preparing the pretax profit or loss. The adjusted pretax
      profit or loss will be used in calculating the Sr. Management bonus pool.


    


    Interest
      Expense:
      Actual
      Interest Expense on the HCC Line of Credit shall be one-half percent over the
      floating three month Federal Funds Index. The actual Interest Expense for each
      Term Loan secured by HCC with GCB shall be fixed ten days prior to the closing
      date for the sixty month term to the Federal Home Loan Bank Amortizing Advance
      Indications Index Rate based upon a five year balance term, or such other rate
      as secured by GCB for like term financing. Should HCC seek funding outside
      Greater Community Bank the actual interest will be based upon costs of funds
      charged to HCC by outside parties. The interest expense for each month will
      be
      adjusted based on the new debit to paid in capital ratio. The recalculated
      interest expense will replace the actual interest expense for the purposes
      of
      calculating HCC monthly pretax profit. The Interest rate utilized will be based
      on the weighted average interest rates as related the total HCC
      portfolio.

    


    Sr.
      Management Pool:
      Each
      month 15% of the calculated Pretax Profit or Loss at HCC will be accrued to
      the
      Sr. Management bonus pool. The bonus pool accrual will be recorded below the
      Pretax Profit or Loss calculation for each month. 

    


    Example:

    
      	 	 	 	 
	
              Pre-Tax
                Earnings 05/31/05

            	 	
              $

            	
              82,727.00

            	 
	
              Less:
                Current interest exp.

            	 	 	
              ($117,920.63

            	
              )

            
	
              Add:
                Adj. Int. Exp. for 9 to 1

            	 	 	
              ($118,387.55

            	
              )

            
	
              Adjusted
                Pre-Tax Earnings

            	 	 	 	 
	
              As
                of 05/31/05

            	 	
              $

            	
              82,259.61

            	 
	 	 	 	 	 
	
              Sr.
                Mgt. Pool Multiplier

            	 	 	
              15

            	
              %

            
	 	 	 	 	 
	
              Total
                Accrual contribution 05/31/05

            	 	
              $

            	
              12,338.95

            	 
	 	 	 	 	 
	
              Current
                Debt to Equity as of 05/31/05

            	 	 	
              8.66
                to 1

            	 


    

    


    Schedule
      B

    


    The
      following will be used to calculate the Adjusted Sale Price of Highland Capital
      Corp. The total Sale Price, Less the Adjustment below will be in used to
      determine the Adjusted Sale Price for the purpose calculating the Sr. Mgt.
      Sale
      Pool. The Sale Pool will be distributed in accordance with the Sr. Management
      contract.

    
 

    
      	
              Paid
                in Capital: 

            	 	
              $

            	
              440,000.00

            	 
	 	 	
              $

            	
              5,000,000.00

            	 
	 	 	 	 	 
	
              Less:
                Losses

            	 	 	 	 
	
              12/31/04
                to 03/31/98 

            	 	 	
              ($2,172,289.00

            	
              )

            
	
              Add:
                Recoveries

            	 	
              $

            	
              137,528.00

            	 
	 	 	 	 	 
	
              Adjustment
                to Sale

            	 	 	 	 
	
              Price

            	 	
              $

            	
              3,405,239.00

            	 


    

     

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