Exhibit 10.13

                        SEPARATION AND RELEASE AGREEMENT

      This  Separation and Release  Agreement is entered into as of December 31,
2004, by and between GREATER COMMUNITY  BANCORP, a New Jersey corporation having
its principal place of business at 55 Union Boulevard,  Totowa, New Jersey 07512
("Company"),  and ERWIN D. KNAUER,  residing at 10 Jay Street,  Old Tappan,  New
Jersey 07675 ("Employee").

      Employee has been employed by Company since 1999. For many months Employee
has been unable to perform the duties of his employment due to illness. Employee
and  Company  have  agreed  that it is in the mutual  interest  that  Employee's
employment with Company formally  terminate by reason of Employee's  disability.
In connection with such  termination,  Employee and Company wish to settle fully
and finally all  outstanding  matters  between  them,  including,  but in no way
limited  to,  any  outstanding  matters  that  might  arise  out  of  Employee's
employment with Company and the  termination  thereof and to release any and all
claims Employee may have arising from his employment with Company as follows:

      1. Employee  acknowledges  that his last date of  employment  was July 31,
2004 (the  "Termination  Date") and that Company has paid Employee's  salary and
all other monies due and owing to Employee  through the Termination  Date, which
payment  includes any sick pay and any accrued but unused  vacation and personal
leave through the Termination Date. Employee resigns, as of July 31, 2004, as an
officer  and as a  director  of  Company  and of each and every  subsidiary  and
affiliate  of  Company of which he was an officer  and/or  director  on July 31,
2004. As of the  Termination  Date,  Employee was entitled to elect COBRA health
insurance  continuation  coverage for the time period required by law.  Employee
understands  that under applicable law, any premium payments due with respect to
his COBRA health insurance  continuation coverage are his responsibility and not
the responsibility of Company.  Employee acknowledges that he has no entitlement
to, or any right to make any claim for, any additional payments or benefits from
Company  of any  kind  whatsoever  with  respect  to his  services  through  the
Termination  Date  except  as  may  otherwise  be  set  forth  herein.  Employee
understands  and agrees that,  effective as of the  Termination  Date,  he is no
longer authorized to incur any expenses, obligations or liabilities on behalf of
Company by virtue of his prior  employment.  Employee  further  understands  and
agrees that, effective as of the Termination Date, he is no longer authorized by
virtue of his prior employment with Company to conduct any business on behalf of
Company or to hold himself out to anyone as an employee, agent or representative
of Company, except as hereinafter stated.  Employee's rights with respect to any
amounts to which he may be entitled  under the terms of Company's  401(k)/profit
sharing plan and the Company's Group Long-Term Disability Benefits Plan shall be
as provided in such plans. With respect to Employee's stock options, Company and
Employee both acknowledge and agree as follows:  (a) Employee holds  unexercised
options granted to Employee under the 2001 Employee Stock Option Plan (the "2001
Option Plan") to purchase  34,749 shares of common stock of Company at an option
exercise price of $7.34 per share ("Employee's Options") (such number of options
and option price have been adjusted to reflect the Company's 2.5% stock dividend
paid on July 31,  2004);  (b) for purposes of the 2001 Option  Plan,  Employee's
employment "Terminated" on July 31, 2004 due to Employee's "Disability" (as such
quoted  terms are  defined  in the 2001  Option  Plan);  (c) as a result of such
Termination due to Disability,  Employee's  Options have all immediately  become
fully vested and  exercisable,  and the  performance  conditions  of exercise of
Employee's  Options no longer need to be satisfied as a condition of  Employee's
ability to exercise  Employee's  Options;  and (d) Employee's Options will lapse
and  become  forfeited  and no  longer  exercisable  if and to the  extent  that
Employee's Options are not exercised in the manner provided in the 2001 Employee
Plan on or before July 30, 2005.

      2. As  consideration  for the release of claims by Employee in paragraph 5
hereof,  Company  shall  pay  Employee  a  salary  continuation  benefit  in the
aggregate  amount of $49,969.15 to be paid in 35 equal monthly  installments  of
$1,427.69  each  commencing  with the Month of August  2004,  as  reduced by any
applicable tax withholding.  Provided Employee does not revoke this Agreement as
permitted by paragraph 12 hereof, Company will continue such salary continuation
payment.  If this  Agreement  is not  executed,  or is  revoked,  Employee  will
reimburse  Company for the salary  continuation  payments already received which
commenced 08/01/04. It is understood that this amount represents a reimbursement
to Employee,  of Employee's  current medical  insurance premium until Employee's
62nd birthday.

      3. Employee  acknowledges  the sufficiency of the  consideration  for this
Agreement,  both generally and specifically for the release of Employee's claims
in paragraph 5 hereof. Employee shall be solely responsible for any taxes on the
payments or benefits to be made or provided to him hereunder.

      4. Except for the  payments and  benefits  noted in  paragraphs 1 and 2 of
this Agreement,  Company shall not pay or provide any other payments or benefits
to Employee,  and Employee  acknowledges  that he has no entitlement  to, or any
right to


                                      E-3
<PAGE>
make any claim for,  any  payments,  fees,  expenses,  costs,  attorneys'  fees,
benefits,  bonus or  compensation  by  Company  and its  affiliates  of any kind
whatsoever.

      5. In consideration  for the promises  contained  herein,  Employee hereby
irrevocably and  unconditionally  releases,  acquits and forever  discharges for
himself  and his  heirs,  executors,  administrators,  successors  and  assigns,
Company and each of its stockholders, predecessors, successors, assigns, agents,
directors,   officers,   employees,   representatives,   attorneys,   divisions,
subsidiaries,   affiliates  (and  stockholders,   agents,  directors,  officers,
employees,  representatives  and attorneys of such divisions,  subsidiaries  and
affiliates), and all persons acting by, through, under or in concert with any of
them  (collectively,  "Company  Releasees"),  or any of  them,  from any and all
charges, complaints,  claims, liabilities,  obligations,  promises,  agreements,
controversies,  damages,  actions,  causes of action,  suits,  rights,  demands,
costs, losses, debts and expenses (including  attorneys' fees and costs actually
incurred) of any nature  whatsoever,  known or unknown,  foreseen or unforeseen,
suspected or unsuspected, including, but not limited to, claims arising directly
or indirectly out of Employee's  employment by Company,  and the  termination of
Employee's employment,  claims in equity or law for wrongful discharge, personal
injury,  defamation,  mental anguish,  injury to health and reputation,  workers
compensation,  compensation  or  benefits  of any kind or nature.  This  Release
includes  but is not limited to any claims or cause of action  Employee may have
under federal,  state or local  employment,  labor or  antidiscrimination  laws,
statutes and case law, including claims on account of discrimination due to age,
national origin, race, sex, handicap, religion and similar classifications,  and
further including claims under the federal Age Discrimination in Employment Act,
Title VII of the Civil Rights Acts of 1866 and 1964,  as amended,  the Americans
with  Disabilities  Act,  Executive Order 11246, the Employee  Retirement Income
Security Act of 1974 as amended  (ERISA),  the federal  Family and Medical Leave
Act,  the  Rehabilitation  Act of  1973,  the  Fair  Labor  Standards  Act,  the
Labor-Management  Relations  Act,  the  Equal  Pay Act,  the  Worker  Adjustment
Retraining and Notification Act, the New Jersey Law Against  Discrimination,  as
amended,  the New Jersey Equal Pay Act, the New Jersey  Smokers' Rights Law, the
New  Jersey  Family  Leave  Act,  the New  Jersey  Constitution,  the New Jersey
Conscientious  Employee  Protection Act (CEPA),  and/or any other Federal or New
Jersey  statute and/or common law,  including,  but not limited to any claim for
retaliation or  retaliatory  discharge,  breach of implied or express  contract,
breach of promise,  misrepresentation,  negligence, fraud, estoppel, defamation,
infliction of emotional  distress,  breach of an express or implied  covenant of
good faith and fair dealing,  violation of public policy or wrongful  discharge.
The provisions of any laws providing in substance that releases shall not extend
to claims which are unknown or unsuspected  at the time to the person  executing
such waiver or release are hereby  expressly  waived.  Employee hereby agrees to
forego  any  right to file  any  charges  or  complaints  with any  governmental
agencies or a lawsuit against Company Releasees under any of the laws referenced
in this paragraph or with respect to any matters  covered by the release in this
paragraph.  Notwithstanding  the  foregoing,  the  release by  Employee  in this
paragraph  shall  not  limit  the  right  of  Employee  to seek to  enforce  the
provisions  of this  Agreement  and/or to enforce  any and all rights and claims
arising out of his status as a shareholder of Company, a holder of stock options
issued under  Company's  2001 Employee Stock Option Plan, or as a participant in
Company's 401(k)/profit-sharing plan.

      6. In  consideration  for the promises  contained  herein,  Company hereby
irrevocably and  unconditionally  releases,  acquits and forever  discharges for
itself and its  successors  and  assigns,  Employee  and his  heirs,  executors,
administrators,  assigns (collectively,  "Employee Releasees"),  or any of them,
from  any  and  all  charges,  complaints,  claims,  liabilities,   obligations,
promises, agreements,  controversies, damages, actions, causes of action, suits,
rights,  demands,  costs, losses, debts and expenses (including  attorneys' fees
and  costs  actually  incurred)  of any  nature  whatsoever,  known or  unknown,
suspected or unsuspected, including, but not limited to, claims arising directly
or indirectly out of Employee's employment by Company, which Company now has, or
ever  claimed  to  have,  or could  claim  against  each or any of the  Employee
Releasees as of the date of this Agreement.  Notwithstanding the foregoing,  the
release by Company in this paragraph  shall not limit  Company's right to assert
any claim it may have against  Employee  arising from  Employee's  fraudulent or
criminal act with respect to Company of which Company's  executive  officers are
not actually aware on the date on which Company executes this Agreement.

      7. (a)  Employee  agrees  not to file any charge or  complaint  on his own
behalf, in the future based upon claims arising from, or attributable in any way
to, his employment or interactions with Company,  to the extent the same relates
to any matter or event occurring prior to the date of this Agreement, before any
federal,  state or local court, or  administrative  agency, or to participate in
any  such  charge  or  complaint  which  may be  made  by any  other  person  or
organization on his behalf;  and if any court or agency assumes  jurisdiction of
the same, he will direct the court or agency to dismiss or withdraw it. Employee
also agrees to withdraw  and/or dismiss any such pending  charges or complaints.
Employee  further agrees that he will not encourage or participate in any action
against  Company brought by any other current or former employee unless Employee
is required by law to do so.  However,  if by no action of his own, he becomes a
mandatory member of any class from which he cannot, by operation of law or order
of court,  opt out, such mandatory class membership will not constitute a breach
of this release.

      (b) Nevertheless,  this release does not prevent Employee from cooperating
with the Equal Employment  Opportunity
                                      E-4
<PAGE>

Commission or any similar State or local agency in an  investigation  of alleged
discrimination  or  testifying  in any cause of action when required to do so by
law.  However,  except where  prohibited  by law,  Employee  waives his right to
recover any damages or other  relief in any claim or suit  brought by or through
the Equal Employment Opportunity Commission or any similar state or local agency
on his behalf under the Age  Discrimination  in Employment Act, Title VII of the
Civil Rights Act of 1964, as amended,  or the Americans with  Disabilities  Act,
and under  any claim or suit on his  behalf  under any other  federal,  state or
local law.

      8. Employee  represents  that he does not have  possession of any, and has
returned to Company all,  tangible personal property of Company and all business
records or other records of Company, including any records related in any way to
the clients and customers of Company, in any form. Employee confirms that he has
not and agrees that he will not disclose to any person  outside  Company,  or to
any unauthorized person within Company, any business, financial, or confidential
information  relating to the  business of Company or any  employees,  clients or
customers  thereof,  except to the extent that such  disclosure is in connection
with (a) Employee's  current status as a shareholder of Company,  (b) any future
status  of  Employee  as an  employee,  independent  contractor,  agent or other
relationship to Company, and/or (c) a privileged  client-attorney  relationship.
Employee and Company shall keep the terms of this Agreement confidential, except
that the  parties  may  disclose  the  terms to their  accountants  or other tax
preparers and their counsel,  or as required by law and in the case of Employee,
to his immediate  family.  As used in this  paragraph,  and as used elsewhere in
this Agreement  where the context so requires,  the word "Company"  includes all
subsidiaries and affiliates of Company.

      9.  Employee  covenants  and agrees that he will refrain from  voluntarily
making  written or oral  statements  to any person or entity with whom either of
the parties has had or has a business or social relationship or to the press, or
to any other person or entity,  which may  reasonably  be expected to impugn the
character,  integrity or ethics of Company and its  affiliates and their clients
or damage the business, image or reputation of Company and its affiliates.

      10. Employee agrees to direct any prospective employers who wish to verify
Employee's  employment with Company to communicate  directly in writing with the
head of Company's human resources department.  Upon inquiry from any prospective
employer,  Company, in conformance with its standard practice, will only confirm
the  date  Employee  commenced   employment,   the  date  Employee's  employment
terminated and his final position held, and, with the express written consent of
Employee, his most recent base salary.

      11. Employee  acknowledges  that he has had more than twenty-one (21) days
to consider the terms of this Agreement.

      12. This  Agreement  is  revocable by Employee for seven (7) days after he
signs  it.  This  Agreement   shall  be  binding,   effective  and   enforceable
automatically  on the  eighth day after it is signed by the  Employee  unless he
delivers to Company's  counsel,  Genova,  Burns & Vernoia,  (to the attention of
John C. Petrella, Esq. Eisenhower Plaza II, 354 Eisenhower Parkway,  Livingston,
New Jersey  07039),  written  notice of his  revocation of this  Agreement on or
before the end of business on the seventh day after he signs the Agreement.

      13.  Employee  acknowledges  that he has hereby been advised in writing of
his right to consult with an attorney  prior to signing this  Agreement and that
sufficient  opportunity  has  been  made  available  to him to  consult  with an
attorney and to consider the terms of this Agreement. Employee acknowledges that
he is  entering  into  this  Agreement  voluntarily  and  that he has  read  and
understands the provisions of this Agreement.  The parties acknowledge that this
Agreement  constitutes the entire  understanding of the parties,  supersedes all
prior or oral  written  agreements  or  understandings  between the parties with
respect to its subject  matter and may be modified  only by a writing  signed by
both parties.

      14.This Agreement shall be governed by and construed under the laws of the
State of New Jersey. Any disputes arising under this Agreement shall be resolved
in the Federal and state courts located in the State of New Jersey.  Company and
Employee  agree not to assert  that any action  brought in such  courts has been
brought in an inconvenient  forum.  The parties agree that in the event that any
provision of this  Agreement is determined to be invalid or  unenforceable,  the
remaining  provisions  of the Agreement are intended to remain in full force and
effect.

      15. This  Agreement  shall be binding upon and inure to the benefit of the
parties  hereto  and  their   respective   heirs,   executors,   administrators,
successors, and assigns.


                                      E-5
<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.

ATTEST:                                 GREATER COMMUNITY BANCORP


/s/ Jeannette Chardavoyne               By: /s/ C. Mark Campbell
    ---------------------                      -----------------
    Jeannette Chardavoyn                        C. Mark Campbell
    Corporate Secretary                         President and Chief Operating
                                                Officer

WITNESS:                                EMPLOYEE


                                        By: /s/ Erwin D. Knauer
                                                ---------------
                                                Erwin D. Knauer


                                      E-6