Exhibit 10.1

EMPLOYMENT AND CONSULTING AGREEMENT

(Interim Chief Executive Officer)

THIS EMPLOYMENT AND CONSULTING AGREEMENT (“Agreement”) is made and entered into
as of September 25, 2008 by and among Strata Bank, a bank chartered under the
laws of Massachusetts with its headquarters located in Medway, Massachusetts
(the “Bank”), Service Bancorp, MHC, a mutual holding company chartered under the
laws of Massachusetts (the “MHC”), Service Bancorp, Inc., a corporation
chartered under the laws of Massachusetts (the “Company” and together with the
MHC, the “Holding Companies” and together with the MHC and the Bank, the
“Companies”) and Edward A. Hjerpe, III (the “Executive”).

In consideration of the mutual promises, terms, provisions and conditions set
forth in this Agreement, the parties hereby agree as follows:

1. Engagement. Subject to the terms and conditions set forth in this Agreement,
the Companies hereby engage the Executive to provide the services specified in
Section 3, and the Executive hereby accepts such engagement by the Companies.

2. Term. The Executive’s engagement to perform consulting services as described
in Section 3 shall commence effective September 23, 2008 and shall terminate on
the earlier to occur of (a) the date the Executive’s employment by the Companies
hereunder becomes permissible under FDIC regulations and (b) the date this
Agreement is terminated pursuant to Section 5. The Executive’s employment
hereunder shall commence on the date the Executive’s employment by the Companies
hereunder becomes permissible under FDIC regulations and continue until the
effective date of termination pursuant to Section 5. The term of this Agreement
(the “Term”) shall commence effective September 23, 2008 and continue until the
effective date of termination pursuant to Section 5.

3. Services.

(a) Duties. During the period in which the Executive is consulting to the
Companies, the Executive shall perform such strategic, management, financial and
other consulting services as the Boards of Directors of each of the Companies
(the “Boards”) shall determine; provided, however, that the Executive shall not
perform the duties of a senior executive officer until such time as such service
becomes permissible under FDIC regulations. During the period in which the
Executive is employed by the Companies, the Executive shall serve as a senior
executive officer of the Companies, initially with the title “Interim Chief
Executive Officer” of each Company. As Interim Chief Executive Officer, the
Executive shall have, subject to the authority of the Boards, general charge and
supervision of the business operations of the Companies and in general shall
perform all duties incident to the office of chief executive officer, and other
related and similar services as the Boards or any of them may request from time
to time. Notwithstanding anything else in this Agreement, if, during the Term,
the Companies’ President and Chief Executive Officer returns from leave and is
fit for duty, then Executive’s authority to act as Interim Chief Executive
Officer, if applicable, shall automatically cease, in which case the Executive
shall serve as Interim Chief Operating Officer of the Companies and have such
authority and responsibility as the Boards shall designate.

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(b) Other Clients and Responsibilities. The Companies acknowledge and agree that
the Executive performs consulting services for two existing clients (the “Other
Clients”) and serves on the board of directors of three companies (the “Board
Services”), which Other Clients and Board Services are listed on Exhibit A
hereto. During the Term, without the prior written consent of the Chairman of
the Board of the Board of Directors of the Company (the “Board Chair”), the
Executive agrees not to enter into or perform any other employment agreement, or
any consulting or similar arrangement except for this Agreement and any
agreement with the Other Clients. The Executive may continue to perform the
Board Services.

(c) Fulfillment of Duties. The Executive hereby agrees (i) to perform all
services hereunder in a professional and workmanlike manner, and (ii) to work
from the Company’s executive office an average of four days per week. Subject to
the foregoing, the Executive may also work from home as necessary or
appropriate. The Executive agrees to notify the Board Chair at least one
business day in advance if the Executive will be absent from the Company’s
offices for more than two consecutive business days.

(d) Board Observation. The Executive may be present at meetings of the Boards
and shall receive in such observer capacity a copy of all notices, minutes,
consents and other material that any of the Companies provides to the Boards,
subject to the provisions of Section 7 hereof. The Executive acknowledges and
agrees that the Executive shall not have the right to vote on any matter at any
meetings. Each of the Companies, in its sole discretion, reserves the right to
exclude the Executive from all or part of any meeting of the Boards and to limit
access of the Executive to any information made available to members of the
Boards with respect to the Executive’s performance hereunder or potential
appointment as a permanent executive, to maintain a legal privilege with respect
to information of any of the Companies, to preserve or protect the exercise of
any of the Board’s fiduciary duties or to avoid a possible conflict of interest.

4. Compensation and Business Expenses. As compensation for all services
performed by the Executive for the Companies during the Term, and subject to
performance of the Executive’s duties and obligations, pursuant to this
Agreement and otherwise, the Bank shall pay to the Executive the following:

(a) Cash Compensation. For each two-week payroll cycle (each, a “Cycle”),
$18,461.54, subject to reduction as hereinafter described, except for the
Executive’s first and last Cycles, payment for which shall be based on the
number of days the Executive performed services under this Agreement during such
Cycle multiplied by $1,920. The Executive shall submit an invoice for each Cycle
indicating the number of Credits (as defined below) to be applied for such
Cycle. The Bank shall pay such invoice in accordance with its standard payroll
practice and procedure, which currently provides that if the Executive submits
the invoice on the last business day of a Cycle, the Bank will pay such invoice
on the Wednesday thereafter. If the Executive works on the Companies’ business,
in his capacity hereunder on any business day, for less than half of a standard
eight-hour business day because the Executive is working on Other Client
matters, the Executive shall credit the Companies $960 for each such half-day,
and if the Executive works a full standard business day on Other Client matters,
the Executive shall credit

 

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the Companies $1,920 for each such business day (each, a “Credit”, all of which
shall be reflected on the invoice for such Cycle).

(b) Expenses. The Companies shall pay or reimburse the Executive for all
reasonable and necessary business expenses, including mileage for traveling to
and from the Companies’ executive offices in Franklin according to the
Companies’ standard mileage reimbursement policies, incurred or paid by the
Executive in the performance of his duties and responsibilities hereunder,
subject to such reasonable substantiation and documentation as may be specified
by the Companies from time to time.

(c) Long Term Stock Award. The Company will grant to the Executive on the first
day of the Executive’s employment hereunder a Restricted Stock Award, pursuant
to the Company’s Amended and Restated 1999 Stock Option Plan (the “Plan”) and
subject to an award agreement entered into by the Company and the Executive, of
10,000 shares of the Company’s common stock (the “Long Term Award”). The Long
Term Award shall vest in twenty-four monthly installments, the first
twenty-three of which shall be 415 shares each, and the final installment of
which shall be 455 shares, with the first installment vesting on the first day
of the month following the month in which Executive’s employment shall commence
and succeeding installments vesting on the first day of each calendar month
thereafter, subject to the terms of the Long Term Award.

(d) Second Step Stock Award. If the MHC files a plan of reorganization providing
for the conversion of the MHC from mutual to stock form, and in connection
therewith, the resulting entity files a registration statement with respect to
its common stock with the Securities and Exchange Commission (“Second Step SEC
Filing”), the Company will grant to the Executive within 15 business days of the
Second Step SEC Filing a Restricted Stock Award, pursuant to the Plan and
subject to an award agreement entered into by the Company and the Executive, of
2,000 shares of Company common stock (the “Second Step Stock Award”). The Second
Step Stock Award shall vest in twenty-four monthly installments, the first
twenty-three of which shall be 83 shares each, and the final installment of
which shall be 91 shares, with the first installment vesting on the first day of
the first calendar month subsequent to the grant of the Second Step Stock Award
and succeeding installments vesting on the first day of each calendar month
thereafter, subject to the terms of the Second Step Stock Award.

(e) Exclusive Compensation. The Executive’s compensation as described in the
foregoing sections (a) through (d) shall be the exclusive form of compensation
to which the Executive shall be entitled in consideration of his services under
this Agreement. Without limiting the foregoing, the Executive shall not be
entitled to participate in any bonus or other incentive pay arrangement
maintained by the Companies. The Executive waives his rights, if any, to
participate in, and shall not participate or receive benefits under, any
qualified and non-qualified retirement, pension, savings, deferred compensation
and profit-sharing plans, any group life, health (including hospitalization,
medical and major medical), dental, accident and long-term disability insurance
plans, vacation pay, severance pay, or any other employee benefit and
compensation plan as may from time to time be maintained by, or cover employees
of, the Companies (“Benefit Plans”) notwithstanding any terms and conditions of
such Benefit Plans to the contrary. Without limiting the foregoing, the
Executive hereby waives all rights to

 

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participate in and accrue benefits under any and all Benefit Plans and agrees to
take all acts and execute all instruments that may be requested by the Companies
in connection with such waiver.

(f) Taxation of Payments and Benefits. The Companies shall undertake to make
deductions, withholdings and tax reports with respect to payments and benefits
under this Agreement to the extent that it reasonably and in good faith believes
that it is required to make such deductions, withholdings and tax reports.
Payments under this Agreement shall be in amounts net of any such deductions or
withholdings. Nothing in this Agreement shall be construed to require the
Companies to make any payments to compensate the Executive for any adverse tax
effect associated with any payments or benefits or for any deduction or
withholding from any payment or benefit.

(g) Allocation of Compensation Expense Among the Companies. The Companies shall
allocate among them the expense associated with the compensation and benefits
payable to the Executive hereunder, which allocation shall be made in accordance
with the Inter-Company Tax and Expense Allocation Policy, if any, then in
effect, or in the absence of such a policy, equitably as the Boards shall
reasonably determine.

5. Termination of Services. The Executive’s engagement hereunder shall terminate
under the following circumstances:

(a) Termination by Executive. The Executive may terminate his engagement
hereunder at any time upon thirty (30) days prior written notice to the Company.
In that event, the Companies shall pay to the Executive any fees and expenses
accrued through the date of termination and shall not have any further
obligation or liability to the Executive.

(b) Termination by the Companies without Cause. The Companies may terminate this
Agreement without Cause (as defined below) at any time upon fifteen (15) days
prior written notice to the Executive. In that event, the Companies shall pay to
the Executive the sum of (i) any fees and expenses accrued through the date of
termination, and (ii) $20,000, and shall not have any further obligation or
liability to the Executive.

(c) Termination by the Companies in the event of the Executive’s Death. In the
event of the Executive’s death during the term hereof, the Executive’s
engagement hereunder shall immediately and automatically terminate. In that
event, the Companies shall pay to the Executive’s estate any fees and
un-reimbursed business expenses accrued through the date of death that may be
payable to the Executive following his death pursuant to Section 4 herein.

(d) Termination by the Companies for Cause. The Companies may terminate the
Executive’s engagement hereunder for Cause at any time upon notice to the
Executive setting forth in reasonable detail the nature of such Cause. The
following, as determined by the Boards in their reasonable and good faith
judgment, shall constitute Cause for termination: (i) the commission by or
indictment of the Executive for (A) a felony, or (B) any misdemeanor involving
moral turpitude, deceit, dishonesty or fraud (“indictment” for these purposes,
meaning an indictment, probable cause hearing or any other procedure pursuant to
which an initial determination of probable or reasonable cause with respect to
such offense is made), (ii) failure to perform to the reasonable satisfaction of
any of the Boards a substantial portion of the

 

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Executive’s duties and responsibilities assigned or delegated under this
Agreement, which failure continues, in the reasonable judgment of such Board,
after written notice given to the Executive by such Board, (iii) gross
negligence, willful misconduct or insubordination of the Executive with respect
to the Companies, or (iv) material breach by the Executive of any of the
provisions of this Agreement. Upon the giving of notice of termination of the
Executive’s engagement hereunder for Cause, the Companies shall not have any
further obligation or liability to the Executive, other than for fees earned and
unpaid and un-reimbursed business expenses outstanding at the date of
termination.

6. Effect of Termination. Upon termination pursuant to Section 5, all
obligations and provisions of this Agreement shall terminate except with respect
to any accrued and unpaid monetary obligations, and except for the provisions of
Section 7 through (and inclusive of) Section 12 hereof, which shall survive
termination. Notwithstanding anything to the contrary in this Agreement, the
Executive shall not be entitled to any termination benefit under this Agreement
unless the Executive (i) enters into a valid and irrevocable release of all
claims against the Companies and any affiliate of the Companies, in a form then
reasonably acceptable to the Companies, (ii) resigns from any and all positions
that the Executive then holds with the Companies and any affiliate of the
Companies, and (iii) complies with the covenants set forth in Section 7.

7. Executive’s Covenants.

(a) Confidential Information. The Executive understands and agrees that the
Executive’s engagement hereunder creates a relationship of confidence and trust
between the Executive, on the one hand, and the Companies, on the other hand,
with respect to all Confidential Information (as defined below). At all times,
both during the Term and after the termination of the Executive’s engagement
hereunder for any reason, the Executive shall keep in confidence and trust all
such Confidential Information and, except as required by law, shall not use or
disclose any such Confidential Information other than for the benefit of the
Companies, as the case may be, without the written consent of the Companies.

(b) Documents and Records. All documents, records, data, apparatus, equipment
and other physical property, whether or not pertaining to Confidential
Information, that are furnished to the Executive by the Companies or are
produced by the Executive in connection with the Executive’s engagement
hereunder will be and remain the sole property of the Companies. The Executive
will return to the Companies all such materials and property as and when
requested by either of them. In any event, the Executive will return all such
materials and property immediately upon termination of the Executive’s
engagement hereunder for any reason.

(c) Nonsolicitation. At all times while the Executive is consulting to or
employed by the Companies, and for a period of six (6) months after termination
for any reason, the Executive (i) shall refrain from, directly or indirectly,
recruiting or otherwise actively soliciting, inducing or influencing any person
to leave employment with any of the Companies or any of their respective
affiliates and (ii) shall refrain from actively soliciting or encouraging any
customer or supplier to terminate or otherwise modify adversely its business
relationship with

 

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the Companies or any of their respective affiliates other than actions taken by
the Executive in good faith in the ordinary course of business during the course
of the Executive’s engagement hereunder. Nothing contained in this Section 7(c)
shall restrict the Executive from advertising employment opportunities to the
general public or from hiring individuals who have not been directly or
indirectly actively solicited, induced or influenced by the Executive to leave
employment with the Companies or any of their respective affiliates.

(d) Non-Disparagement. During and after the Term, the Executive agrees that he
shall not make any false, defamatory or disparaging statements about any of the
Companies, any of their affiliates or any of their officers or directors.

(e) Acknowledgement. The Executive acknowledges and further agrees that the
restrictions set forth in this Section 7 are intended to protect the Companies’
interest in its Confidential Information and established employee, customer and
supplier relationships and goodwill, and agrees that such restrictions are
reasonable and appropriate for this purpose. The Executive further acknowledges
and agrees that any breach of this Section 7 shall warrant and justify any
remedy available to the Companies at law or in equity.

8. Conflicting Agreements. The Executive hereby represents and warrants that the
execution of this Agreement and the performance of his obligations hereunder
will not breach or be in conflict with any other agreement to which the
Executive is a party or is bound and that the Executive is not subject to any
covenants against competition or similar covenants that would affect the
performance of his obligations hereunder. The Executive will not disclose or use
any proprietary information of a third party without such party’s consent.

9. Definitions. Words or phrases which are initially capitalized or are within
quotation marks shall have the meanings provided in this Section 9 and as
provided elsewhere herein. For purposes of this Agreement, the following
definitions apply:

(a) “Confidential Information” means information belonging to any of the
Companies or any of their affiliates that is of value to the Companies in the
course of conducting their business and the disclosure of which could result in
a competitive or other disadvantage to any of them. Confidential Information
includes, without limitation, financial information, reports, and forecasts;
inventions, improvements and other intellectual property; trade secrets;
know-how; designs, processes or formulae; software; market or sales information
or plans; customer lists; and business plans, prospects and opportunities (such
as possible acquisitions or dispositions of businesses or facilities) that have
been discussed or considered by the management of the Companies. Confidential
Information includes information developed by the Executive in the course of the
Executive’s engagement hereunder, as well as other information to which the
Executive may have access in connection with the Executive’s engagement.
Confidential Information also includes the confidential information of others,
including suppliers and customers, with which any of the Companies has a
business relationship. Notwithstanding the foregoing, Confidential Information
does not include information in the public domain, unless due to breach of the
Executive’s duties under Section 7(a) of this Agreement.

 

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(b) “Person” means an individual, a corporation, an association, a partnership,
an estate, a trust and any other entity or organization.

10. Indemnification; Insurance.

(a) Indemnification. To the maximum extent permitted under applicable law, the
Companies shall indemnify the Executive against and hold him harmless from any
costs, liabilities, losses and exposures that may be incurred by the Executive
in his capacity as an employee of the Companies or arising from his consulting
services to the Companies as described in this Agreement. The provisions of this
Section 10 shall survive the termination of this Agreement.

(b) Insurance. During the Term, the Companies shall cause the Executive to be
covered by and named as an insured under any policy or contract of insurance
obtained by the Companies to insure the Companies’ directors and officers
against personal liability for acts or omissions in connection with service as
an officer or director of the Companies or service in other capacities at the
request of the Companies. The coverage provided to the Executive pursuant to
this Section 10 shall be of the same scope and on the same terms and conditions
as the coverage (if any) provided to other officers or directors of the
Companies or any successors.

11. Limitation on Payments. It is the intention of the Companies and the
Executive that no payments by the Companies to or for the Executive’s benefit
under this Agreement or any other agreement or plan pursuant to which the
Executive is or has been entitled to receive payments or benefits of any kind or
nature in the past, now or in the future from the Companies shall be
non-deductible to the applicable Company by reason of the operation of
Section 280G of the Internal Revenue Code of 1986, as amended, relating to
parachute payments. Accordingly, notwithstanding any other provision of this
Agreement or any such other agreement or plan, if by reason of the operation of
said Section 280G, any such payments exceed the amount which can be deducted by
the applicable Company, such payments shall be reduced to the maximum amount
which can be deducted by the applicable Company.

12. Miscellaneous. Neither the Companies nor the Executive may make any
assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other; provided, however,
that the Companies may assign their rights and obligations under this Agreement
without the consent of the Executive in the event that the Companies shall
hereafter effect a reorganization, consolidate with, or merge into, any other
Person or transfer all or substantially all of its properties or assets to any
other Person. This Agreement shall inure to the benefit of and be binding upon
the Companies and the Executive, and their respective successors, executors,
administrators, heirs and permitted assigns. If any portion or provision of this
Agreement shall to any extent be declared illegal or unenforceable by a court of
competent jurisdiction, then the remainder of this Agreement, or the application
of such portion or provision in circumstances other than those as to which it is
so declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law. Any and all notices, requests, demands and
other communications provided for by this Agreement shall be in writing and
shall be effective when delivered in person or deposited in the United States
mail, postage prepaid, registered or certified, and addressed to the Executive
at his last known address

 

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on the books of the Companies or, in the case of the Companies, at the Bank’s
principal place of business, to the attention of the Board Chair, or to such
other address as either party may specify by notice to the other actually
received. This Agreement constitutes the entire agreement between the parties
with respect to its subject matter and supersedes all prior communications,
agreements and understandings, written or oral, with respect to the terms and
conditions of the Executive’s consulting relationship with the Companies. This
Agreement may be amended or modified, and provisions herein waived, only by a
written instrument signed by the Executive and by an expressly authorized
representative of each of the Companies. The headings and captions in this
Agreement are for convenience only and in no way define or describe the scope or
content of any provision of this Agreement. This Agreement may be executed in
two or more counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument. This Agreement shall be
construed and enforced under and be governed in all respects by the laws of the
Commonwealth of Massachusetts and in accordance with applicable federal law.

[Remainder of Page Intentionally Blank; Signature Page Follows]

 

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IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by
the parties as of the date first above written.

 

EXECUTIVE   STRATA BANK

/s/ Edward A. Hjerpe, III

  By:  

/s/ Eugene R. Liscombe

Edward A. Hjerpe, III     Eugene R. Liscombe   SERVICE BANCORP, INC.   By:  

/s/ Eugene R. Liscombe

    Eugene R. Liscombe   SERVICE BANCORP, MHC   By:  

/s/ Eugene R. Liscombe

    Eugene R. Liscombe

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Exhibit A

Other Clients

1. Federal Home Loan Bank of Seattle

2. Smith Breeden Associates

Board Services

1. St. Anselm College

2. Dental Service of Massachusetts Inc. (d/b/a Delta Dental of Massachusetts)

3. United Way of Greater Fall River, MA