Document:

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS AGREEMENT (the “Agreement”) is entered into by and between FreightCar America, Inc., a
Delaware corporation (the “Company”), and Christopher L. Nagel (the “Executive”), effective as of
January 14, 2009 (the “Effective Date”).

     WHEREAS, the Executive and the Company have reached agreement concerning the terms and
conditions of his employment and wish to formalize that agreement;

     NOW, THEREFORE, in consideration of the mutual terms, covenants and conditions stated in this
Agreement, the Executive and the Company agree as follows:

     1. Employment, Position and Duties. The Company shall employ the Executive, and the
Executive hereby agrees to serve the Company, as its Vice President, Finance, Chief Financial
Officer and Treasurer, and the Executive shall have such responsibilities, duties and authority as
are customarily associated with such office. The Executive also hereby agrees to serve as an
officer of such of the Company’s subsidiaries (if any) as the Company’s Chief Executive Officer
shall reasonably request.

     2. Term. The employment of the Executive by the Company pursuant to this Agreement
will commence as of the Effective Date and will terminate three (3) years thereafter; provided,
however, that this Agreement shall remain in effect from year to year thereafter unless, not less
than ninety (90) days prior to the then termination of the term of this Agreement, either the
Executive or the Company shall deliver to the other written notice of his or its intention not to
continue in effect this Agreement, in which case this Agreement shall terminate as of December 31
of the year in which such notice is given (the “Term”); and provided further that, if a Change in
Control (as defined below) shall have occurred during the Term, this Agreement shall continue in
effect and the Term shall be extended until at least the second anniversary of such Change in
Control.

     3. Duties. During the Term:

     (a) The Executive shall report to the Company’s Chief Executive Officer.

     (b) The Executive will devote substantially all his full working time and best
efforts, talents, knowledge and experience to serving the Company. However, the Executive
may devote reasonable working time to activities such as supervision of personal
investments and activities involving professional, charitable, educational, religious and
similar types of activities, speaking engagements and membership on other boards of
directors, provided that such activities do not interfere in any substantial way with the
business of the Company; and provided further, that the Executive may not serve on the
board of directors of any other for-profit company without the prior written approval

 

 

of the Board or of a Board committee to which such approval shall have been delegated.
The time involved in such activities shall not be treated as vacation time. The Executive
shall be entitled to keep any amounts paid to him in connection with such activities (e.g.,
director fees and honoraria).

     (c) The Executive will perform his duties diligently and competently and shall act in
conformity with the Company’s written and oral policies and within the limits, budgets and
business plans set by the Board. The Executive will at all times during the Term adhere to
and obey all of the rules and regulations in effect from time to time relating to the
conduct of executives of the Company. Except as provided in (b) above, the Executive shall
not engage in consulting work or any trade or business for his own account or for or on
behalf of any other person, firm or company that competes, conflicts or interferes with the
performance of his duties hereunder in any way.

     4. Place of Performance. In connection with the Executive’s employment by the
Company, the Executive shall be based at the Company’s offices in Chicago, Illinois, except for
required travel on the Company’s business.

     5. Compensation and Related Matters. As compensation and consideration for the
performance by the Executive of the Executive’s duties, responsibilities and covenants pursuant to
this Agreement, the Company agrees to pay the Executive and the Executive agrees to accept in full
payment for such performance the amounts and benefits set forth below:

     (a) Salary. Commencing as of the Effective Date, the Company shall pay to the
Executive an annual base salary (“Base Salary”) of three hundred and fifty thousand dollars
($350,000). Thereafter, the Board, or such committee of the Board as is responsible for
setting the compensation of senior executive officers, shall review the Executive’s Base
Salary annually in January of each year, in light of competitive data, the Company’s
performance, and the Executive’s performance, and determine whether to increase the
Executive’s Base Salary on a prospective basis. The first review shall be in January 2010.
Such adjusted annual salary then shall become the Executive’s “Base Salary” for purposes
of this Agreement. The Executive’s annual Base Salary shall not be reduced at any time,
including after any increase, without the Executive’s consent. The Company shall pay the
Executive’s Base Salary according to payroll practices in effect for all senior executive
officers of the Company.

     (b) Annual Bonus. The Executive will be eligible for an annual cash bonus
(the “Bonus”) in accordance with the provisions of the Company’s annual bonus plan as then
in effect (“Bonus Plan”), based on performance, and calculated as a percentage of the
Executive’s Base Salary. Initially, the Executive will participate in the Bonus Plan at
the Group A, forty percent (40%) of Base Salary target level. In any plan adopted by the
Company to replace the current Bonus Plan, the Executive’s participation will have a
potential payout at least equal to his potential payout under the current Bonus Plan.

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     The Company shall pay the Executive’s Bonus, if any, at the same time as annual cash
bonus payments for such year are made to other participants with respect to such fiscal
year, and in all events within the two and one half (21/2) months following the end of the
fiscal year in which the Bonus is earned. The Bonus is intended to qualify for the
short-term deferral exception to Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”).

     (c) Equity Compensation. On the Effective Date, the Company shall award the
Executive ten thousand (10,000) shares of Restricted Stock in accordance with and subject
to the terms of the FreightCar America, Inc. 2005 Long Term Incentive Plan (the “2005
LTIP”), vesting in three annual installments beginning on the first anniversary of the
Effective Date, of 3333, 3333, and 3334 shares respectively. This Restricted Stock award
would become fully vested upon a Change in Control. During the Term the Executive shall be
eligible for future awards under the 2005 LTIP or any similar or successor plan, in the
sole discretion of the Board.

     (d) Make Whole Agreement. It is anticipated that as a result of the
Executive’s terminating his employment with The Wallick Companies (“Wallick”), Wallick may
not pay the Executive a bonus for the 2008 calendar year under Wallick’s annual incentive
bonus plan (the “Wallick Bonus”). Within thirty (30) days following the date as of which
Wallick makes bonus payments in respect of 2008 to participants under such plan, the
Executive will notify the Company’s Chief Executive Officer whether Wallick has paid him
the Wallick Bonus, provided that the Company’s Chief Executive Officer must receive such
notification by December 31, 2009. Subject to the preceding sentence, if the Executive
provides a reasonable written certification to the Company that, as a result of his
terminating his employment with Wallick, Wallick did not pay him the Wallick Bonus,
together with his best good-faith estimate of the amount of the forgone Wallick Bonus, then
the Company will pay such amount to the Executive within sixty (60) days of receiving such
written certification. The Company’s obligation under the foregoing provision shall,
however, be subject to the following:

     (i) upon the Company’s request, the Executive will provide the Company with such
supporting documentation as the Company may reasonably request concerning the
aforementioned matters;

     (ii) the maximum total amount the Company shall pay to the Executive under this
Section 5(d) shall not in any event exceed sixty thousand dollars ($60,000); and

     (iii) if the Executive voluntarily terminates his employment with the Company
before December 31, 2009, other than for Good Reason, then the Executive will repay
to the Company the full amount of the forgone Wallick Bonus which was so paid by the
Company.

     (e) Relocation. The Company will reimburse the Executive’s reasonable moving
expenses in relocating to the Chicago, Illinois metropolitan

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area. Until the Executive relocates, the Company will pay or reimburse commuting
expenses between the Executive’s home in Ohio and the Company’s offices in Chicago,
Illinois. Pursuant to this Section 5(e), the Company will also provide such other
relocation-related benefits as have been separately discussed with the Executive, including
without limitation reasonable assistance in marketing the Executive’s current residence in
Ohio and reimbursement of the reasonable expenses of the Executive and his family for:
(i) shipment of reasonable and customary household goods, with up to thirty (30) days
storage, from Ohio to the Chicago metropolitan area, (ii) shipment of up to two automobiles
from Ohio to the Chicago metropolitan area, (iii) round trip air fare, lodging, meals and
related expenses for up to two pre-move home-finding trips for the Executive and his
spouse, (iv) closing costs on the purchase of the new residence, and (vi) one-way air
transportation for the Executive and his family from Ohio to Chicago. If the Executive
voluntarily terminates his employment with the Company, other than for Good Reason, then
the Executive will reimburse the Company for the following portion of the expenses incurred
by the Company under this Section 5(e) (the “Relocation Expenses”): (A) if the termination
occurs on or prior to December 31, 2009, the total amount of the Relocation Expenses, (B)
if the termination occurs after December 31, 2009 but before December 31, 2010, an amount
equal to the total Relocation Expenses multiplied by a fraction, the numerator of which is
the number of days remaining in calendar year 2010 as of the date of such termination and
the denominator of which is 365, and (C) if the termination occurs on or after December 31,
2010, no reimbursement of Relocation Expenses shall be due from the Executive. All
reimbursements of expenses pursuant to this Section 5(e) shall be made to the Executive in
accordance with the policies and procedures established by the Company, provided that to
the extent any reimbursements are subject to Code Section 409A, such reimbursements will be
made in accordance with Treasury Regulation § 1.409A-3(i)(1)(iv) (or any similar or
successor provisions).

     (f) Automobile Allowance. During his employment hereunder, the Company shall
make payments to the Executive of five hundred dollars ($500.00) per month to defray costs
associated with the Executive’s automobile.

     (g) Other Benefits. The Executive shall be entitled to participate in or
receive benefits under any employee benefit plan, arrangement or perquisite made available
by the Company at any time during his employment hereunder to its executive employees
(collectively the “Benefit Plans”), including without limitation each retirement, 401(k)
and profit sharing plan, group life insurance and accident plan, medical and dental
insurance plan, and disability plan, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements. The Company reserves
the right to make changes to any plan, arrangement or perquisite in which the Executive
participates, including termination of any such plan or arrangement, in its sole
discretion, if such changes do not result in a proportionately greater reduction in

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the rights of or benefits to the Executive as compared with other executives of the
Company or if such changes are required by law or are technical changes.

     (h) Expenses. The Executive shall be entitled to receive an advance or prompt
reimbursement for all reasonable travel and entertainment expenses or other out-of-pocket
business expenses incurred by the Executive during the Term in fulfilling the Executive’s
duties and responsibilities under this Agreement, including all expenses of travel and
living expenses while away from home on business or at the request and in the service of
the Company, provided that such expenses are incurred and accounted for in accordance with
the policies and procedures established by the Company. All reimbursements of expenses
shall be made to the Executive in accordance with the policies and procedures established
by the Company and in all events within the two and one-half (21/2) months following the end
of the year in which the expense is incurred.

     (i) Vacation. During his employment hereunder, the Executive shall be
entitled to paid vacations in each calendar year, determined in accordance with the
Company’s vacation policy but not less than four weeks per year. The Executive shall also
be entitled to all paid holidays and personal days given by the Company to its executive
employees.

     6. Termination. The Company, upon action by the Board, may terminate the Executive’s
employment hereunder under the following circumstances:

     (a) Death. The Executive’s employment hereunder shall terminate upon his
death.

     (b) Disability. The Company may terminate the Executive’s employment
hereunder in the event of the Executive’s Disability. For purposes of this Agreement,
“Disability” shall mean, in the written opinion of a qualified physician selected by the
Company, the Executive is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, (i) unable to engage in any substantial
gainful activity, or (ii) receiving income replacement benefits for a period of not less
than 3 months under the Company’s disability plan.

     (c) Cause. The Company may terminate the Executive’s employment hereunder for
Cause. For purposes of this Agreement, the Company shall have “Cause” to terminate the
Executive’s employment hereunder upon the Executive’s (i) willful and continued failure
substantially to perform his material duties with Company (other than due to Disability),
or the commission of any activities constituting a material violation or material breach of
any federal, state or local law or regulation applicable to the activities of Company, in
each case, after notice thereof from the Board to the Executive and (where possible) a
reasonable opportunity for the Executive to cease and cure such failure, breach or
violation in all respects, (ii) fraud, breach of fiduciary

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duty, dishonesty, misappropriation or other act that causes material damage to the
Company’s property or business, (iii) repeated absences from work such that the Executive
is unable to perform his employment or other duties in all material respects, other than
due to Disability or a condition that with the passage of time would become a Disability,
(iv) admission or conviction of, or plea of nolo contendere to, any crime that, in the
reasonable judgment of the Board, adversely affects the Company’s reputation or the
Executive’s ability to carry out the obligations of his employment, (v) failure to
reasonably cooperate with the Company in any internal investigation or administrative,
regulatory or judicial proceeding, after notice thereof from the Board to the Executive and
a reasonable opportunity for the Executive to cure such non-cooperation or, (vi) act or
omission in violation or disregard of the Company’s policies, including but not limited to
the harassment and discrimination policies and Standards of Conduct of the Company then in
effect, in such a manner as to cause significant loss, damage or injury to the property,
reputation or employees of the Company. In addition, the Executive’s employment shall be
deemed to have terminated for Cause if, after the Executive’s employment has terminated,
facts and circumstances are discovered that would have justified a termination for Cause.
For purposes of this Agreement, no act or failure to act on the Executive’s part shall be
considered “willful” unless it is done, or omitted to be done, by him in bad faith or
without reasonable belief that his action or omission was in the best interests of the
Company. Any act or failure to act based upon authority given pursuant to a resolution
duly adopted by the Board or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, in good faith and in the best
interests of the Company.

     (d) For purposes of this Agreement, the Executive’s employment with the Company shall
be deemed to be terminated when the Executive has a “Separation from Service” within the
meaning of Code Section 409A, and references to termination of employment shall be deemed
to refer to a Separation from Service.

     7. Compensation Upon Termination, Death or During Disability.

     (a) Termination for any Reason. If the Executive’s employment terminates for
any reason, the Company shall pay to him (or his representative) within thirty (30) days
(i) the Executive’s earned but unpaid Base Salary through the date of termination, (ii) any
annual incentive plan bonus, or other form of incentive compensation, for which the
performance measurement period has ended and the payment amount earned, but which is unpaid
at the time of termination, (iii) any accrued but unpaid vacation, (iv) any amounts payable
under any of the Company’s employee benefit plans in accordance with the terms of those
plans, except as may be required under Code Section 401(a)(13), and (v) unreimbursed
business expenses incurred by the Executive on the Company’s behalf under Section 5(h).

     (b) Death or Disability. If the Executive’s employment is terminated due to
his death or Disability, the Company shall pay the Executive the benefits

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and amounts under Section 7(a), including life or long-term disability insurance
benefits, and the Company shall, thereafter, have no further obligations to the Executive
under this Agreement.

     (c) Cause or By Executive Other than for Good Reason. If the Executive’s
employment is terminated by the Company for Cause or by the Executive for other than Good
Reason, the Company shall pay the Executive the benefits and amounts under Section 7(a),
and the Company shall, thereafter, have no further obligations to the Executive under this
Agreement. For purposes of this Agreement, “Good Reason” shall mean, without the
Executive’s written consent, the occurrence of any of the following conditions: (i) a
Change in Control pursuant to which the buyer does not either assume this Agreement or
otherwise agree to employ the Executive at or after the acquisition date on terms
substantially comparable in the aggregate to this Agreement, or (ii) unless such condition
is fully corrected within 60 days after written notice thereof, the Company (A) permanently
and materially diminishes the Executive’s authority, duties, or responsibilities, including
without limitation reporting responsibilities, (B) materially reduces the Executive’s
overall compensation, including Base Salary, Bonus opportunity and equity award
participation, (C) requires the Executive to relocate his principal business office to a
location not within 50 miles of the Company’s principal business office located in the
Chicago, Illinois metropolitan area, or (D) materially breaches the terms of this
Agreement. Notwithstanding anything in this Agreement to the contrary, a separation from
service due to Good Reason must occur, if at all, within 120 days after the Company
receives written notice of any one or more of the conditions set forth in this Section
7(c). The Executive must provide the Company with written notice of any one or more of the
conditions set forth in this Section 7(c) within 90 days of the initial existence of the
condition in order for such condition to constitute Good Reason under this Agreement.

     For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred
if the conditions set forth in any one of the following paragraphs shall have been
satisfied:

     (i) any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including any securities beneficially owned by such
Person that were acquired directly from the Company or its affiliates) representing
fifty percent (50%) or more of the combined voting power of the Company’s then
outstanding securities; or

     (ii) the shareholders of the Company approve a merger or consolidation of the
Company with any other corporation and such shareholder approval results in
consummation of said merger or consolidation, other than (A) a merger or
consolidation that would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity), in
combination with the ownership of any trustee or other fiduciary holding

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securities under an employee benefit plan of the Company, at least sixty
percent (60%) of the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person
acquires more than fifty percent (50%) of the combined voting power of the
Company’s then outstanding securities; or

     (iii) the shareholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all or
substantially all the Company’s assets and such shareholder approval results in
consummation of said liquidation, sale or disposition.

     For purposes of this Agreement, “Beneficial Owner” shall have the meaning
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). For purposes of this Agreement, “Person” shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used herein; however,
a Person shall not include (A) the Company or any of its subsidiaries, (B) a
trustee or other fiduciary holding securities under an employee benefit plan of the
Company or any of its subsidiaries, (C) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (D) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company.

     (d) By Company Without Cause or By Executive for Good Reason. If the Company
terminates the Executive’s employment without Cause, or the Executive terminates his
employment for Good Reason, then the Company shall provide the following payments and
benefits, in addition to the payments and benefits under Section 7(a):

     (i) The Company shall pay the Executive’s Base Salary for twelve (12) months
following the date of termination; provided that, notwithstanding anything in this
paragraph 7(d)(i) to the contrary, if the Executive terminates his employment for
Good Reason due to a Change in Control, the Company shall pay the Executive’s Base
Salary for twenty-four (24) months following the date of termination;

     (ii) The Company shall make a payment to the Executive, equal to the
Executive’s target level Bonus under the Bonus Plan, for the year of termination,
with the payment made on the first March 15 following the year of the Executive’s
termination; provided that, notwithstanding anything in this paragraph 7(d)(ii) to
the contrary, if the Executive terminates his employment for Good Reason due to a
Change in Control, the Company shall pay the Executive the bonus payment amount
referred to in this paragraph multiplied by two (2);

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     (iii) The Company shall make available continued participation in the
Company’s group health benefit plan to the Executive, and such members of his
family who participated in the group health plan at the time of the Executive’s
termination, for a period of twelve (12) months at the same costs and coverage
levels and under the same general terms and provisions of such plan as apply to
active employees after the Executive’s termination; provided that, notwithstanding
anything in this paragraph 7(d)(iii) to the contrary, if the Executive terminates
his employment for Good Reason due to a Change in Control, the period referred to
in this paragraph shall be extended to twenty-four (24) months; and provided
further that, to the extent such continued coverage extends beyond the COBRA
continuation period, such coverage will be provided in accordance with the
requirements of Code Section 409A and Treasury Regulation §1.409A-3(i)(1)(iv) (or
any similar or successor provisions); and

     (iv) No payments or benefits provided to the Executive hereunder shall be
reduced by any amount the Executive may earn or receive from employment with
another employer or from any other source.

     (e) The obligations of the Company to make payments and provide benefits under this
Section 7 shall survive the termination of this Agreement.

     8. Restrictive Covenants

     (a) Confidential Information. The Executive understands that the Company
possesses and will possess Confidential Information that is important to its business. The
Company devotes significant financial, human and other resources to the development of its
products, its customer base and the general goodwill associated with its business and the
Company diligently maintains the secrecy and confidentiality of its Confidential
Information. For purposes of this Agreement, “Confidential Information” is information
that was or will be developed, created, or discovered by or on behalf of the Company, or
that became or will become known by, or was or is conveyed to the Company, which has
commercial value in the Company’s business. Confidential Information is sufficiently secret
to derive economic value from its not being generally known to other persons. Confidential
Information also includes any and all financial, technical, commercial or other information
concerning the business and affairs of the Company that is confidential and proprietary to
the Company, including without limitation, (i) information relating to the Company’s past
and existing customers and vendors and development of prospective customers and vendors,
including without limitation specific customer product requirements, pricing arrangements,
payments terms, customer lists and other similar information; (ii) inventions, designs,
methods, discoveries, works of authorship, creations, improvements or ideas developed or
otherwise produced, acquired or used by the Company; (iii) the Company’s proprietary
programs, processes or software, consisting of but not limited to, computer programs in
source or object code and

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all related documentation and training materials, including all upgrades, updates,
improvements, derivatives and modifications thereof and including programs and
documentation in incomplete stages of design or research and development; (iv) the subject
matter of the Company’s patents, design patents, copyrights, trade secrets, trademarks,
service marks, trade names, trade dress, manuals, operating instructions, training
materials, and other industrial property, including such information in incomplete stages
of design or research and development; and (v) other confidential and proprietary
information or documents relating to the Company’s products, business and marketing plans
and techniques, sales and distribution networks and any other information or documents
which the Company reasonably regards as being confidential.

     The Executive understands that the Company possesses or will possess “Company
Materials” that are important to its business. For purposes of this Agreement, “Company
Materials” are documents or other media or tangible items that contain or embody
Confidential Information or any other information concerning the business, operations or
future/strategic plans of the Company, whether such documents have been prepared by the
Executive or by others. In consideration of the Executive’s employment by the Company, the
compensation received by the Executive from the Company, and the Company’s agreement to
give the Executive access to certain Confidential Information, the Executive agrees as
follows:

     (i) All Confidential Information and trade secret rights, and other
intellectual property and rights (collectively “Rights”) in connection therewith
will be the sole property of the Company. At all times, both during the
Executive’s employment by the Company and after its termination for any reason, the
Executive will keep in confidence and trust and will not use or disclose any
Confidential Information or anything relating to it without the prior written
consent of a then current officer of the Company except as may be necessary and
appropriate in the ordinary course of performing Executive’s duties to the Company.

     (ii) All Company Materials will be the sole property of the Company. The
Executive agrees that during the Executive’s employment by the Company, the
Executive will not remove any Company Materials from the business premises of the
Company or deliver any Company Materials to any person or entity outside the
Company, except as the Executive is required to do so in connection with performing
the duties of his employment. The Executive further agrees that, immediately upon
the termination of the Executive’s employment by the Executive or by the Company
for any reason, or during the Executive’s employment if so requested by the
Company, the Executive will return all Company Materials, apparatus, equipment and
other physical property, or any reproduction of such property, excepting only the
Executive’s copy of this Agreement.

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     (b) Noncompetition and Nonsolicitation. While employed by the Company and for
a period of twelve (12) consecutive months thereafter, the Executive will not, directly or
indirectly:

     (i) Contact, solicit, interfere with, or divert, or induce or attempt to
contact, solicit, interfere with or divert, any of the Company’s customers;

     (ii) Participate or engage in (as an owner, partner, employee, officer,
director, independent contractor, consultant, advisor or in any other capacity
calling for the rendition of services, advice, or acts of management, operation or
control) any business engaged in the manufacture of railcars in North America; and

     (iii) Solicit or induce or attempt to solicit or induce, by or for himself, or
as the agent of another, or through others as an agent in any way, any person who
is employed by the Company for the purpose of encouraging that employee to join the
Executive as a partner, agent, employee or otherwise in any business activity which
is competitive with the Company.

     (c) Forfeitures. In the event that the Executive materially breaches any of
the restrictions in this Section 8, he shall forfeit all of the applicable payments and
benefits under this Agreement, including but not limited to such payments and benefits
pursuant to Section 7, and the Company shall have the right to recapture and seek repayment
of any such applicable payments and benefits under this Agreement.

     (d) Intellectual Property. “Inventions” includes all improvements,
inventions, designs, formulas, works of authorship, trade secrets, technology, computer
programs, compositions, ideas, processes, techniques, know-how and data, whether or not
patentable, made or conceived or reduced to practice or developed by the Executive, either
alone or jointly with others, during the term of the Executive’s employment, including
during any period prior to the date of this Agreement. Except as defined in this
Agreement, all Inventions that the Executive makes, conceives, reduces to practice or
develops (in whole or in part, either alone or jointly with others) during his employment
will be the sole property of the Company to the maximum extent permitted by law. The
Executive agrees to assign such Inventions and all Rights in them to the Company.
Exemptions from this agreement to assign may be authorized in those circumstances where the
mission of the Company is better served by such action, provided that overriding
obligations to other parties are met and such exemptions are not inconsistent with other
Company policies. Further, the Executive may petition the Company for license to make,
market or sell a particular Invention.

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     (e) Injunction. The Executive acknowledges that monetary damages will not be
an adequate remedy for the Company in the event of a breach of this Section 8, and that it
would be impossible for the Company to measure damages in the event of such a breach.
Therefore, the Executive agrees that, in addition to other rights and remedies that the
Company may have, the Company is entitled to an injunction preventing the Executive from
any breach of this Section 8, and the Executive hereby waives any requirement that the
Company post any bond in connection with any such injunction. The Executive further agrees
that injunctive relief is reasonable and necessary to protect a legitimate, protectible
interest of the Company.

     (f) Blue Pencil. If any court determines that the covenants contained in this
Section 8, or any part hereof, are unenforceable because of the duration or geographic
scope of such provision, such court shall have the power to reduce the duration or scope of
such provision, as the case may be, to as close to the terms hereof as shall be enforceable
and, in its reduced form, such provision shall then be enforceable.

     (g) Survival. The restrictive covenants contained in this Section 8 shall
survive the termination of this Agreement.

     9. Code Section 409A.

     (a) This Agreement is intended to comply with Code Section 409A and the
interpretative guidance thereunder, including the exceptions for short-term
deferrals, separation pay arrangements, reimbursements, and in-kind distributions,
and shall be administered accordingly. This Agreement shall be construed and
interpreted with such intent.

     (b) Each payment under this Agreement or any Company benefit plan is intended
to be treated as one of a series of separate payments for purposes of Code Section
409A and Treasury Regulation §1.409A-2(b)(2)(iii) (or any similar or successor
provisions).

     (c) To the extent that payments under this Agreement are subject to Code
Section 409A and are on account of a Separation from Service and the Executive is
a “Specified Employee” (as defined below) as of the date of termination,
distributions to the Executive may not be made before the date that is six (6)
months after the date of Separation from Service or, if earlier, the date of the
Executive’s death (the “Six Month Delay Rule”). Payments to which the Executive
would otherwise be entitled during the first six (6) months following the date of
termination (the “Six Month Delay”) will be accumulated and paid on the first day
of the seventh month following the date of termination (or the Executive’s death,
if earlier).

- 12 -

 

     (d) During the Six-Month Delay, the Company will pay to the Executive any
applicable payments to the extent any of the following exceptions to the Six-Month
Delay Rule apply:

	 	(i)	 	the short-term deferral rule of Code Section 409A
and Treasury Regulation §1.409A-1(b)(4) (or any similar or successor
provisions),
	 
	 	(ii)	 	payments permitted under the separation pay
exception of Code Section 409A and Treasury Regulation
§1.409A-1(b)(9)(iii) (or any similar or successor provisions), and
	 
	 	(iii)	 	payments permitted under the limited payments
exception of Code Section 409A and Treasury Regulation
§1.409A-1(b)(9)(v)(D) (or any similar or successor provisions),

provided that the amount paid under this paragraph will count toward, and will not
be in addition to, the total payment amount required to be made to the Executive
by the Company on account of the Separation from Service and any applicable
Company benefit plan.

     (e) For purposes of this Agreement, the term “Specified Employee” has the
meaning given to that term in Code Section 409A and Treasury Regulation
§1.409A-1(i) (or any similar or successor provisions).

     (f) The Executive agrees that the Company may amend this Agreement to the
minimum extent necessary to satisfy the applicable provisions of Code Section 409A
and the Treasury Regulations or other guidance issued thereunder. The Company
cannot guarantee that the payments and benefits that may be paid or provided
pursuant to this Agreement will satisfy all applicable provisions of Code Section
409A.

     10. Miscellaneous.

     (a) Representations of the Executive. The Executive represents and warrants
to the Company that this Agreement when executed by the Executive will not conflict with
any other agreement or obligation of the Executive and that the Executive is not bound by
any agreement with any third party which would prohibit the Executive from his involvement
with the Company or result in any liability to the Executive or to the Company.

     (b) Binding Agreement. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the Executive’s personal or
legal representatives, executors, administrators, successors, heirs, distributees, devisees
and legatees. If the Executive should die while any amounts would still be payable to him
hereunder if he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in

- 13 -

 

accordance with the terms of this Agreement to the Executive’s devisee, legatee, or
other designee or, if there be no such designee, to the Executive’s estate.

     (c) Notice. Notices, demands and all other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given when
delivered, if delivered personally, or (unless otherwise specified) mailed by United States
certified or registered mail, return receipt requested, postage prepaid, and when received
if delivered otherwise, addressed as follows:

If to the Executive:

Christopher L. Nagel

7065 Timberview Drive

Dublin, Ohio 43017

If to the Company:

c/o FreightCar America, Inc.

Two North Riverside Plaza

Chicago, IL 60606

Attention: President and Chief Executive Officer

or to such other address as any party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective only upon
receipt.

     (d) Amendments, Waivers, Governing Law, Validity, Counterparts and Entire
Agreement. No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing, signed by the Executive and
such officers of the Company as may be specifically designated by the Board. No waiver by
either party hereto (the Company on one hand, and the Executive, on the other hand) at any
time of any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time. The validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Illinois without regard to its conflicts of law
principles. The invalidity or enforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument. This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained herein and
supersedes all other agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee or
representative of any party

- 14 -

 

hereto; and any prior agreement of the parties hereto with respect to the subject
matter contained herein is hereby terminated and canceled.

     (e) Injunctive Relief. The Executive agrees that in addition to any other
remedy provided at law or in equity or in this Agreement, the Company shall be entitled to
a temporary restraining order and both preliminary and permanent injunctions restraining
the Executive from violating any provision of Section 8 of this Agreement.

     (f) Dispute Resolution. In the event of any dispute or claim relating to or
arising out of this Agreement, the Executive and the Company agree that all such disputes
shall be fully and finally resolved by binding arbitration conducted by the American
Arbitration Association (“AAA”) in Chicago, Illinois in accordance with the AAA’s National
Rules for the Resolution of Employment Disputes, provided, however, that this arbitration
provision shall not apply to, and the Company shall be free to seek, injunctive or other
equitable relief with respect to any actual or threatened breach or violation by the
Executive of his obligations under Section 8 hereof in any court having appropriate
jurisdiction. The Executive acknowledges that by accepting this arbitration provision he
is waiving any right to a jury trial in the event of a covered dispute. The arbitrator
may, but is not required to, order that the prevailing party shall be entitled to recover
from the losing party its attorneys’ fees and costs incurred in any arbitration arising out
of this Agreement. The Company and the Executive agree that the jurisdiction and venue for
any disputes arising under, or any action brought to enforce (or otherwise relating to),
Section 8 of this Agreement shall be exclusively in the courts in the State of Illinois,
Cook County, including the Federal Courts located therein (should Federal jurisdiction
exist), and the Company and the Executive hereby submit and consent to said jurisdiction
and venue.

     (g) Withholding. All payments made to the Executive pursuant to this
Agreement shall be subject to applicable withholding taxes, if any, and any amount so
withheld shall be deemed to have been paid to the Executive for purposes of amounts due to
the Executive under this Agreement.

     (h) Removal from any Boards and Positions. If the Executive’s employment is
terminated for any reason under this Agreement, he shall be deemed to resign (i) if a
member, from the Board or board of directors of any affiliate or any other board to which
he has been appointed or nominated by or on behalf of the Company and (ii) from any
position with the Company or any affiliate, including, but not limited to, as an officer of
the Company or any of its affiliates.

     (i) Insurance; Indemnification. During the Term and through at least the
fifth anniversary of the Executive’s termination of employment from the Company, the
Company agrees to maintain the Executive as an insured party on all directors’ and
officers’ insurance maintained by the Company for the benefit of its directors and officers
on at least the same basis as all other covered

- 15 -

 

individuals and to indemnify the Executive to the maximum extent permitted under
applicable law.

     (j) Voluntary Agreement. The Executive and the Company represent and agree
that each has reviewed all aspects of this Agreement, has carefully read and fully
understands all provisions of this Agreement, and is voluntarily entering into this
Agreement. Each party represents and agrees that such party has had the opportunity to
review any and all aspects of this Agreement with the legal, tax and other advisor and
advisors of such party’s choice before executing this Agreement, and have been fully
advised as to the same. This Agreement has been fully and freely negotiated by the parties
hereto, shall be considered as having been drafted jointly by the parties hereto, and shall
be interpreted and construed as if so drafted, without construction in favor of or against
any party on account of its or his participation in the drafting hereof.

     (k) Counterparts. The parties may execute this Agreement in one or more
counterparts, all of which together shall constitute but one Agreement.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year
written by the Executive below.

	 	 	 	 	 	 	 
	 	 	FREIGHTCAR AMERICA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Christian Ragot
	 	 
	 

	 	 	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	CHRISTOPHER L. NAGEL	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 

- 16 -EX-4.1

Exhibit 4.1

WARRANT TO PURCHASE COMMON STOCK

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS
OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED
TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS
INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY
SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.

WARRANT

to purchase

561,343

Shares of Common Stock

of LNB Bancorp, Inc.

Issue Date: December 12, 2008

     1. Definitions. Unless the context otherwise requires, when used herein the following
terms shall have the meanings indicated.

     “Affiliate” has the meaning ascribed to it in the Purchase Agreement.

     “Appraisal Procedure” means a procedure whereby two independent appraisers, one chosen by the
Company and one by the Original Warrantholder, shall mutually agree upon the determinations then
the subject of appraisal. Each party shall deliver a notice to the other appointing its appraiser
within 15 days after the Appraisal Procedure is invoked. If within 30 days after appointment of the
two appraisers they are unable to agree upon the amount in question, a third independent appraiser
shall be chosen within 10 days thereafter by the mutual consent of such first two appraisers. The
decision of the third appraiser so appointed and chosen shall be given within 30 days after the
selection of such third appraiser. If three appraisers shall be appointed and the determination of
one appraiser is disparate from the middle determination by more than twice the amount by which the
other determination is disparate from the middle determination, then the determination of such
appraiser shall be excluded, the remaining two determinations shall be averaged and such average
shall be binding and conclusive upon the Company and the Original Warrantholder; otherwise, the
average of all three determinations shall be binding upon the Company and the Original
Warrantholder. The costs of conducting any Appraisal Procedure shall be borne by the Company.

 

 

     “Board of Directors” means the board of directors of the Company, including any duly
authorized committee thereof.

     “Business Combination” means a merger, consolidation, statutory share exchange or similar
transaction that requires the approval of the Company’s stockholders.

     “business day” means any day except Saturday, Sunday and any day on which banking institutions
in the State of New York generally are authorized or required by law or other governmental actions
to close.

     “Capital Stock” means (A) with respect to any Person that is a corporation or company, any and
all shares, interests, participations or other equivalents (however designated) of capital or
capital stock of such Person and (B) with respect to any Person that is not a corporation or
company, any and all partnership or other equity interests of such Person.

     “Charter” means, with respect to any Person, its certificate or articles of incorporation,
articles of association, or similar organizational document.

     “Common Stock” has the meaning ascribed to it in the Purchase Agreement.

     “Company” means the Person whose name, corporate or other organizational form and jurisdiction
of organization is set forth in Item 1 of Schedule A hereto.

     “conversion” has the meaning set forth in Section 13(B).

     “convertible securities” has the meaning set forth in Section 13(B). “CPP” has the meaning
ascribed to it in the Purchase Agreement.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

     “Exercise Price” means the amount set forth in Item 2 of Schedule A hereto. “Expiration Time”
has the meaning set forth in Section 3.

     “Fair Market Value” means, with respect to any security or other property, the fair market
value of such security or other property as determined by the Board of Directors, acting in good
faith or, with respect to Section 14, as determined by the Original Warrantholder acting in good
faith. For so long as the Original Warrantholder holds this Warrant or any portion thereof, it may
object in writing to the Board of Director’s calculation of fair market value within 10 days of
receipt of written notice thereof. If the Original Warrantholder and the Company are unable to
agree on fair market value during the 10-day period following the delivery of the Original
Warrantholder’s objection, the Appraisal Procedure may be invoked by either party to determine Fair
Market Value by delivering written notification thereof not later than the 30th day after delivery
of the Original Warrantholder’s objection.

     “Governmental Entities” has the meaning ascribed to it in the Purchase Agreement. “Initial
Number” has the meaning set forth in Section 13(B).

2

 

     “Issue Date” means the date set forth in Item 3 of Schedule A hereto.

     “Market Price” means, with respect to a particular security, on any given day, the last
reported sale price regular way or, in case no such reported sale takes place on such day, the
average of the last closing bid and ask prices regular way, in either case on the principal
national securities exchange on which the applicable securities are listed or admitted to trading,
or if not listed or admitted to trading on any national securities exchange, the average of the
closing bid and ask prices as furnished by two members of the Financial Industry Regulatory
Authority, Inc. selected from time to time by the Company for that purpose. “Market Price” shall be
determined without reference to after hours or extended hours trading. If such security is not
listed and traded in a manner that the quotations referred to above are available for the period
required hereunder, the Market Price per share of Common Stock shall be deemed to be (i) in the
event that any portion of the Warrant is held by the Original Warrantholder, the fair market value
per share of such security as determined in good faith by the Original Warrantholder or (ii) in all
other circumstances, the fair market value per share of such security as determined in good faith
by the Board of Directors in reliance on an opinion of a nationally recognized independent
investment banking corporation retained by the Company for this purpose and certified in a
resolution to the Warrantholder. For the purposes of determining the Market Price of the Common
Stock on the “trading day” preceding, on or following the occurrence of an event, (i) that trading
day shall be deemed to commence immediately after the regular scheduled closing time of trading on
the New York Stock Exchange or, if trading is closed at an earlier time, such earlier time and (ii)
that trading day shall end at the next regular scheduled closing time, or if trading is closed at
an earlier time, such earlier time (for the avoidance of doubt, and as an example, if the Market
Price is to be determined as of the last trading day preceding a specified event and the closing
time of trading on a particular day is 4:00 p.m. and the specified event occurs at 5:00 p.m. on
that day, the Market Price would be determined by reference to such 4:00 p.m. closing price).

     “Ordinary Cash Dividends” means a regular quarterly cash dividend on shares of Common Stock
out of surplus or net profits legally available therefor (determined in accordance with generally
accepted accounting principles in effect from time to time), provided that Ordinary Cash Dividends
shall not include any cash dividends paid subsequent to the Issue Date to the extent the aggregate
per share dividends paid on the outstanding Common Stock in any quarter exceed the amount set forth
in Item 4 of Schedule A hereto, as adjusted for any stock split, stock dividend, reverse stock
split, reclassification or similar transaction.

     “Original Warrantholder” means the United States Department of the Treasury. Any actions
specified to be taken by the Original Warrantholder hereunder may only be taken by such Person and
not by any other Warrantholder.

     “Permitted Transactions” has the meaning set forth in Section 13(B).

     “Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act.

     “Per Share Fair Market Value” has the meaning set forth in Section 13(C).

3

 

     “Preferred Shares” means the perpetual preferred stock issued to the Original Warrantholder on
the Issue Date pursuant to the Purchase Agreement.

     “Pro Rata Repurchases” means any purchase of shares of Common Stock by the Company or any
Affiliate thereof pursuant to (A) any tender offer or exchange offer subject to Section 13(e) or
14(e) of the Exchange Act or Regulation 14E promulgated thereunder or (B) any other offer available
to substantially all holders of Common Stock, in the case of both (A) or (B), whether for cash,
shares of Capital Stock of the Company, other securities of the Company, evidences of indebtedness
of the Company or any other Person or any other property (including, without limitation, shares of
Capital Stock, other securities or evidences of indebtedness of a subsidiary), or any combination
thereof, effected while this Warrant is outstanding. The “Effective Date” of a Pro Rata Repurchase
shall mean the date of acceptance of shares for purchase or exchange by the Company under any
tender or exchange offer which is a Pro Rata Repurchase or the date of purchase with respect to any
Pro Rata Repurchase that is not a tender or exchange offer.

     “Purchase Agreement” means the Securities Purchase Agreement — Standard Terms incorporated
into the Letter Agreement, dated as of the date set forth in Item 5 of Schedule A hereto, as
amended from time to time, between the Company and the United States Department of the Treasury
(the “Letter Agreement”), including all annexes and schedules thereto.

     “Qualified Equity Offering” has the meaning ascribed to it in the Purchase Agreement.

     “Regulatory Approvals” with respect to the Warrantholder, means, to the extent applicable and
required to permit the Warrantholder to exercise this Warrant for shares of Common Stock and to own
such Common Stock without the Warrantholder being in violation of applicable law, rule or
regulation, the receipt of any necessary approvals and authorizations of, filings and registrations
with, notifications to, or expiration or termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder.

     “SEC” means the U.S. Securities and Exchange Commission.

     “Securities Act” means the Securities Act of 1933, as amended, or any successor statute, and
the rules and regulations promulgated thereunder.

     “Shares” has the meaning set forth in Section 2.

     “trading day” means (A) if the shares of Common Stock are not traded on any national or
regional securities exchange or association or over-the-counter market, a business day or (B) if
the shares of Common Stock are traded on any national or regional securities exchange or
association or over-the-counter market, a business day on which such relevant exchange or quotation
system is scheduled to be open for business and on which the shares of Common Stock (i) are not
suspended from trading on any national or regional securities exchange or association or
over-the-counter market for any period or periods aggregating one half hour or longer; and (ii)
have traded at least once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the shares of Common Stock.

4

 

     “U.S. GAAP” means United States generally accepted accounting principles.

     “Warrantholder” has the meaning set forth in Section 2.

     “Warrant” means this Warrant, issued pursuant to the Purchase Agreement.

     2. Number of Shares; Exercise Price. This certifies that, for value received, the
United States Department of the Treasury or its permitted assigns (the “Warrantholder”) is
entitled, upon the terms and subject to the conditions hereinafter set forth, to acquire from the
Company, in whole or in part, after the receipt of all applicable Regulatory Approvals, if any, up
to an aggregate of the number of fully paid and nonassessable shares of Common Stock set forth in
Item 6 of Schedule A hereto, at a purchase price per share of Common Stock equal to the Exercise
Price. The number of shares of Common Stock (the “Shares”) and the Exercise Price are subject to
adjustment as provided herein, and all references to “Common Stock,” “Shares” and “Exercise Price”
herein shall be deemed to include any such adjustment or series of adjustments.

     3. Exercise of Warrant; Term. Subject to Section 2, to the extent permitted by
applicable laws and regulations, the right to purchase the Shares represented by this Warrant is
exercisable, in whole or in part by the Warrantholder, at any time or from time to time after the
execution and delivery of this Warrant by the Company on the date hereof, but in no event later
than 5:00 p.m., New York City time on the tenth anniversary of the Issue Date (the “Expiration
Time”), by (A) the surrender of this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal executive office of the Company
located at the address set forth in Item 7 of Schedule A hereto (or such other office or agency of
the Company in the United States as it may designate by notice in writing to the Warrantholder at
the address of the Warrantholder appearing on the books of the Company), and (B) payment of the
Exercise Price for the Shares thereby purchased:

     (i) by having the Company withhold, from the shares of Common Stock that would otherwise be
delivered to the Warrantholder upon such exercise, shares of Common stock issuable upon exercise of
the Warrant equal in value to the aggregate Exercise Price as to which this Warrant is so exercised
based on the Market Price of the Common Stock on the trading day on which this Warrant is exercised
and the Notice of Exercise is delivered to the Company pursuant to this Section 3, or

     (ii) with the consent of both the Company and the Warrantholder, by tendering in cash, by
certified or cashier’s check payable to the order of the Company, or by wire transfer of
immediately available funds to an account designated by the Company.

     If the Warrantholder does not exercise this Warrant in its entirety, the Warrantholder will be
entitled to receive from the Company within a reasonable time, and in any event not exceeding three
business days, a new warrant in substantially identical form for the purchase of that number of
Shares equal to the difference between the number of Shares subject to this Warrant and the number
of Shares as to which this Warrant is so exercised. Notwithstanding anything in this Warrant to the
contrary, the Warrantholder hereby acknowledges and agrees that

5

 

its exercise of this Warrant for Shares is subject to the condition that the Warrantholder
will have first received any applicable Regulatory Approvals.

     4. Issuance of Shares; Authorization; Listing. Certificates for Shares issued upon
exercise of this Warrant will be issued in such name or names as the Warrantholder may designate
and will be delivered to such named Person or Persons within a reasonable time, not to exceed three
business days after the date on which this Warrant has been duly exercised in accordance with the
terms of this Warrant. The Company hereby represents and warrants that any Shares issued upon the
exercise of this Warrant in accordance with the provisions of Section 3 will be duly and validly
authorized and issued, fully paid and nonassessable and free from all taxes, liens and charges
(other than liens or charges created by the Warrantholder, income and franchise taxes incurred in
connection with the exercise of the Warrant or taxes in respect of any transfer occurring
contemporaneously therewith). The Company agrees that the Shares so issued will be deemed to have
been issued to the Warrantholder as of the close of business on the date on which this Warrant and
payment of the Exercise Price are delivered to the Company in accordance with the terms of this
Warrant, notwithstanding that the stock transfer books of the Company may then be closed or
certificates representing such Shares may not be actually delivered on such date. The Company will
at all times reserve and keep available, out of its authorized but unissued Common Stock, solely
for the purpose of providing for the exercise of this Warrant, the aggregate number of shares of
Common Stock then issuable upon exercise of this Warrant at any time. The Company will (A) procure,
at its sole expense, the listing of the Shares issuable upon exercise of this Warrant at any time,
subject to issuance or notice of issuance, on all principal stock exchanges on which the Common
Stock is then listed or traded and (B) maintain such listings of such Shares at all times after
issuance. The Company will use reasonable best efforts to ensure that the Shares may be issued
without violation of any applicable law or regulation or of any requirement of any securities
exchange on which the Shares are listed or traded.

     5. No Fractional Shares or Scrip. No fractional Shares or scrip representing
fractional Shares shall be issued upon any exercise of this Warrant. In lieu of any fractional
Share to which the Warrantholder would otherwise be entitled, the Warrantholder shall be entitled
to receive a cash payment equal to the Market Price of the Common Stock on the last trading day
preceding the date of exercise less the pro-rated Exercise Price for such fractional share.

     6. No Rights as Stockholders; Transfer Books. This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a stockholder of the Company prior to the
date of exercise hereof The Company will at no time close its transfer books against transfer of
this Warrant in any manner which interferes with the timely exercise of this Warrant.

     7. Charges, Taxes and Expenses. Issuance of certificates for Shares to the
Warrantholder upon the exercise of this Warrant shall be made without charge to the Warrantholder
for any issue or transfer tax or other incidental expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company.

6

 

     8. Transfer/Assignment.

     (A) Subject to compliance with clause (B) of this Section 8, this Warrant and all rights
hereunder are transferable, in whole or in part, upon the books of the Company by the registered
holder hereof in person or by duly authorized attorney, and a new warrant shall be made and
delivered by the Company, of the same tenor and date as this Warrant but registered in the name of
one or more transferees, upon surrender of this Warrant, duly endorsed, to the office or agency of
the Company described in Section 3. All expenses (other than stock transfer taxes) and other
charges payable in connection with the preparation, execution and delivery of the new warrants
pursuant to this Section 8 shall be paid by the Company.

     (B) The transfer of the Warrant and the Shares issued upon exercise of the Warrant are subject
to the restrictions set forth in Section 4.4 of the Purchase Agreement. If and for so long as
required by the Purchase Agreement, this Warrant shall contain the legends as set forth in Sections
4.2(a) and 4.2(b) of the Purchase Agreement.

     9. Exchange and Registry of Warrant. This Warrant is exchangeable, upon the surrender
hereof by the Warrantholder to the Company, for a new warrant or warrants of like tenor and
representing the right to purchase the same aggregate number of Shares. The Company shall maintain
a registry showing the name and address of the Warrantholder as the registered holder of this
Warrant. This Warrant may be surrendered for exchange or exercise in accordance with its terms, at
the office of the Company, and the Company shall be entitled to rely in all respects, prior to
written notice to the contrary, upon such registry.

     10. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and in the case of any such loss, theft or destruction, upon receipt of a bond, indemnity
or security reasonably satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall make and deliver, in lieu of such
lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same aggregate number of Shares as provided for in such lost, stolen,
destroyed or mutilated Warrant.

     11. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not be a business day,
then such action may be taken or such right may be exercised on the next succeeding day that is a
business day.

     12. Rule 144 Information. The Company covenants that it will use its reasonable best
efforts to timely file all reports and other documents required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations promulgated by the SEC thereunder
(or, if the Company is not required to file such reports, it will, upon the request of any
Warrantholder, make publicly available such information as necessary to permit sales pursuant to
Rule 144 under the Securities Act), and it will use reasonable best efforts to take such further
action as any Warrantholder may reasonably request, in each case to the extent required from time
to time to enable such holder to, if permitted by the terms of this Warrant and the Purchase
Agreement, sell this Warrant without registration under the Securities Act within the limitation

7

 

of the exemptions provided by (A) Rule 144 under the Securities Act, as such rule may be
amended from time to time, or (B) any successor rule or regulation hereafter adopted by the SEC.
Upon the written request of any Warrantholder, the Company will deliver to such Warrantholder a
written statement that it has complied with such requirements.

     13. Adjustments and Other Rights. The Exercise Price and the number of Shares issuable
upon exercise of this Warrant shall be subject to adjustment from time to time as follows;
provided, that if more than one subsection of this Section 13 is applicable to a single event, the
subsection shall be applied that produces the largest adjustment and no single event shall cause an
adjustment under more than one subsection of this Section 13 so as to result in duplication:

     (A) Stock Splits, Subdivisions, Reclassifications or Combinations. If the Company
shall (i) declare and pay a dividend or make a distribution on its Common Stock in shares of Common
Stock, (ii) subdivide or reclassify the outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify the outstanding shares of Common Stock into a smaller number
of shares, the number of Shares issuable upon exercise of this Warrant at the time of the record
date for such dividend or distribution or the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the Warrantholder after such date shall
be entitled to purchase the number of shares of Common Stock which such holder would have owned or
been entitled to receive in respect of the shares of Common Stock subject to this Warrant after
such date had this Warrant been exercised immediately prior to such date. In such event, the
Exercise Price in effect at the time of the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall be adjusted to the number
obtained by dividing (x) the product of (1) the number of Shares issuable upon the exercise of this
Warrant before such adjustment and (2) the Exercise Price in effect immediately prior to the record
or effective date, as the case may be, for the dividend, distribution, subdivision, combination or
reclassification giving rise to this adjustment by (y) the new number of Shares issuable upon
exercise of the Warrant determined pursuant to the immediately preceding sentence.

     (B) Certain Issuances of Common Shares or Convertible Securities. Until the earlier of
(i) the date on which the Original Warrantholder no longer holds this Warrant or any portion
thereof and (ii) the third anniversary of the Issue Date, if the Company shall issue shares of
Common Stock (or rights or warrants or other securities exercisable or convertible into or
exchangeable (collectively, a “conversion”) for shares of Common Stock) (collectively, “convertible
securities”) (other than in Permitted Transactions (as defined below) or a transaction to which
subsection (A) of this Section 13 is applicable) without consideration or at a consideration per
share (or having a conversion price per share) that is less than 90% of the Market Price on the
last trading day preceding the date of the agreement on pricing such shares (or such convertible
securities) then, in such event:

(A) the number of Shares issuable upon the exercise of this Warrant immediately prior to the
date of the agreement on pricing of such shares (or of such convertible securities) (the
“Initial Number”) shall be increased to the number obtained by multiplying the Initial
Number by a fraction (A) the numerator of which shall be the sum of (x) the number of shares
of Common Stock of the Company outstanding on such date and (y) the

8

 

number of additional shares of Common Stock issued (or into which convertible securities may
be exercised or convert) and (B) the denominator of which shall be the sum of (I) the number
of shares of Common Stock outstanding on such date and (II) the number of shares of Common
Stock which the aggregate consideration receivable by the Company for the total number of
shares of Common Stock so issued (or into which convertible securities may be exercised or
convert) would purchase at the Market Price on the last trading day preceding the date of
the agreement on pricing such shares (or such convertible securities); and

(B) the Exercise Price payable upon exercise of the Warrant shall be adjusted by multiplying
such Exercise Price in effect immediately prior to the date of the agreement on pricing of
such shares (or of such convertible securities) by a fraction, the numerator of which shall
be the number of shares of Common Stock issuable upon exercise of this Warrant prior to such
date and the denominator of which shall be the number of shares of Common Stock issuable
upon exercise of this Warrant immediately after the adjustment described in clause (A)
above.

     For purposes of the foregoing, the aggregate consideration receivable by the Company in
connection with the issuance of such shares of Common Stock or convertible securities shall be
deemed to be equal to the sum of the net offering price (including the Fair Market Value of any
non-cash consideration and after deduction of any related expenses payable to third parties) of all
such securities plus the minimum aggregate amount, if any, payable upon exercise or conversion of
any such convertible securities into shares of Common Stock; and “Permitted Transactions” shall
mean issuances (i) as consideration for or to fund the acquisition of businesses and/or related
assets, (ii) in connection with employee benefit plans and compensation related arrangements in the
ordinary course and consistent with past practice approved by the Board of Directors, (iii) in
connection with a public or broadly marketed offering and sale of Common Stock or convertible
securities for cash conducted by the Company or its affiliates pursuant to registration under the
Securities Act or Rule 144A thereunder on a basis consistent with capital raising transactions by
comparable financial institutions and (iv) in connection with the exercise of preemptive rights on
terms existing as of the Issue Date. Any adjustment made pursuant to this Section 13(B) shall
become effective immediately upon the date of such issuance.

     (C) Other Distributions. In case the Company shall fix a record date for the making of
a distribution to all holders of shares of its Common Stock of securities, evidences of
indebtedness, assets, cash, rights or warrants (excluding Ordinary Cash Dividends, dividends of its
Common Stock and other dividends or distributions referred to in Section 13(A)), in each such case,
the Exercise Price in effect prior to such record date shall be reduced immediately thereafter to
the price determined by multiplying the Exercise Price in effect immediately prior to the reduction
by the quotient of (x) the Market Price of the Common Stock on the last trading day preceding the
first date on which the Common Stock trades regular way on the principal national securities
exchange on which the Common Stock is listed or admitted to trading without the right to receive
such distribution, minus the amount of cash and/or the Fair Market Value of the securities,
evidences of indebtedness, assets, rights or warrants to be so distributed in respect of one share
of Common Stock (such amount and/or Fair Market Value, the “Per Share Fair Market Value”) divided
by (y) such Market Price on such date specified in clause (x); such adjustment shall be made
successively whenever such a record date is fixed. In such event, the

9

 

number of Shares issuable upon the exercise of this Warrant shall be increased to the number
obtained by dividing (x) the product of (1) the number of Shares issuable upon the exercise of this
Warrant before such adjustment, and (2) the Exercise Price in effect immediately prior to the
distribution giving rise to this adjustment by (y) the new Exercise Price determined in accordance
with the immediately preceding sentence. In the case of adjustment for a cash dividend that is, or
is coincident with, a regular quarterly cash dividend, the Per Share Fair Market Value would be
reduced by the per share amount of the portion of the cash dividend that would constitute an
Ordinary Cash Dividend. In the event that such distribution is not so made, the Exercise Price and
the number of Shares issuable upon exercise of this Warrant then in effect shall be readjusted,
effective as of the date when the Board of Directors determines not to distribute such shares,
evidences of indebtedness, assets, rights, cash or warrants, as the case may be, to the Exercise
Price that would then be in effect and the number of Shares that would then be issuable upon
exercise of this Warrant if such record date had not been fixed.

     (D) Certain Repurchases of Common Stock. In case the Company effects a Pro Rata
Repurchase of Common Stock, then the Exercise Price shall be reduced to the price determined by
multiplying the Exercise Price in effect immediately prior to the Effective Date of such Pro Rata
Repurchase by a fraction of which the numerator shall be (i) the product of (x) the number of
shares of Common Stock outstanding immediately before such Pro Rata Repurchase and (y) the Market
Price of a share of Common Stock on the trading day immediately preceding the first public
announcement by the Company or any of its Affiliates of the intent to effect such Pro Rata
Repurchase, minus (ii) the aggregate purchase price of the Pro Rata Repurchase, and of which the
denominator shall be the product of (i) the number of shares of Common Stock outstanding
immediately prior to such Pro Rata Repurchase minus the number of shares of Common Stock so
repurchased and (ii) the Market Price per share of Common Stock on the trading day immediately
preceding the first public announcement by the Company or any of its Affiliates of the intent to
effect such Pro Rata Repurchase. In such event, the number of shares of Common Stock issuable upon
the exercise of this Warrant shall be increased to the number obtained by dividing (x) the product
of (1) the number of Shares issuable upon the exercise of this Warrant before such adjustment, and
(2) the Exercise Price in effect immediately prior to the Pro Rata Repurchase giving rise to this
adjustment by (y) the new Exercise Price determined in accordance with the immediately preceding
sentence. For the avoidance of doubt, no increase to the Exercise Price or decrease in the number
of Shares issuable upon exercise of this Warrant shall be made pursuant to this Section 13(D).

     (E) Business Combinations. In case of any Business Combination or reclassification of
Common Stock (other than a reclassification of Common Stock referred to in Section 13(A)), the
Warrantholder’s right to receive Shares upon exercise of this Warrant shall be converted into the
right to exercise this Warrant to acquire the number of shares of stock or other securities or
property (including cash) which the Common Stock issuable (at the time of such Business Combination
or reclassification) upon exercise of this Warrant immediately prior to such Business Combination
or reclassification would have been entitled to receive upon consummation of such Business
Combination or reclassification; and in any such case, if necessary, the provisions set forth
herein with respect to the rights and interests thereafter of the Warrantholder shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably be, to the
Warrantholder’s right to exercise this Warrant in exchange for any shares of stock or other
securities or property pursuant to this paragraph. In determining the kind and amount of

10

 

stock, securities or the property receivable upon exercise of this Warrant following the
consummation of such Business Combination, if the holders of Common Stock have the right to elect
the kind or amount of consideration receivable upon consummation of such Business Combination, then
the consideration that the Warrantholder shall be entitled to receive upon exercise shall be deemed
to be the types and amounts of consideration received by the majority of all holders of the shares
of common stock that affirmatively make an election (or of all such holders if none make an
election).

     (F) Rounding of Calculations; Minimum Adjustments. All calculations under this Section
13 shall be made to the nearest one-tenth (1/10th) of a cent or to the nearest one- hundredth
(1/100th) of a share, as the case may be. Any provision of this Section 13 to the contrary
notwithstanding, no adjustment in the Exercise Price or the number of Shares into which this
Warrant is exercisable shall be made if the amount of such adjustment would be less than $0.01 or
one-tenth (1/10th) of a share of Common Stock, but any such amount shall be carried forward and an
adjustment with respect thereto shall be made at the time of and together with any subsequent
adjustment which, together with such amount and any other amount or amounts so carried forward,
shall aggregate $0.01 or 1/10th of a share of Common Stock, or more.

     (G) Timing of Issuance of Additional Common Stock Upon Certain Adjustments. In any
case in which the provisions of this Section 13 shall require that an adjustment shall become
effective immediately after a record date for an event, the Company may defer until the occurrence
of such event (i) issuing to the Warrantholder of this Warrant exercised after such record date and
before the occurrence of such event the additional shares of Common Stock issuable upon such
exercise by reason of the adjustment required by such event over and above the shares of Common
Stock issuable upon such exercise before giving effect to such adjustment and (ii) paying to such
Warrantholder any amount of cash in lieu of a fractional share of Common Stock; provided, however,
that the Company upon request shall deliver to such Warrantholder a due bill or other appropriate
instrument evidencing such Warrantholder’s right to receive such additional shares, and such cash,
upon the occurrence of the event requiring such adjustment.

     (H) Completion of Qualified Equity Offering. In the event the Company (or any
successor by Business Combination) completes one or more Qualified Equity Offerings on or prior to
December 31, 2009 that result in the Company (or any such successor ) receiving aggregate gross
proceeds of not less than 100% of the aggregate liquidation preference of the Preferred Shares (and
any preferred stock issued by any such successor to the Original Warrantholder under the CPP), the
number of shares of Common Stock underlying the portion of this Warrant then held by the Original
Warrantholder shall be thereafter reduced by a number of shares of Common Stock equal to the
product of (i) 0.5 and (ii) the number of shares underlying the Warrant on the Issue Date (adjusted
to take into account all other theretofore made adjustments pursuant to this Section 13).

     (I) Other Events. For so long as the Original Warrantholder holds this Warrant or any
portion thereof, if any event occurs as to which the provisions of this Section 13 are not strictly
applicable or, if strictly applicable, would not, in the good faith judgment of the Board of
Directors of the Company, fairly and adequately protect the purchase rights of the Warrants in

11

 

accordance with the essential intent and principles of such provisions, then the Board of
Directors shall make such adjustments in the application of such provisions, in accordance with
such essential intent and principles, as shall be reasonably necessary, in the good faith opinion
of the Board of Directors, to protect such purchase rights as aforesaid. The Exercise Price or the
number of Shares into which this Warrant is exercisable shall not be adjusted in the event of a
change in the par value of the Common Stock or a change in the jurisdiction of incorporation of the
Company.

     (J) Statement Regarding Adjustments. Whenever the Exercise Price or the number of
Shares into which this Warrant is exercisable shall be adjusted as provided in Section 13, the
Company shall forthwith file at the principal office of the Company a statement showing in
reasonable detail the facts requiring such adjustment and the Exercise Price that shall be in
effect and the number of Shares into which this Warrant shall be exercisable after such adjustment,
and the Company shall also cause a copy of such statement to be sent by mail, first class postage
prepaid, to each Warrantholder at the address appearing in the Company’s records.

     (K) Notice of Adjustment Event. In the event that the Company shall propose to take
any action of the type described in this Section 13 (but only if the action of the type described
in this Section 13 would result in an adjustment in the Exercise Price or the number of Shares into
which this Warrant is exercisable or a change in the type of securities or property to be delivered
upon exercise of this Warrant), the Company shall give notice to the Warrantholder, in the manner
set forth in Section 13(J), which notice shall specify the record date, if any, with respect to any
such action and the approximate date on which such action is to take place. Such notice shall also
set forth the facts with respect thereto as shall be reasonably necessary to indicate the effect on
the Exercise Price and the number, kind or class of shares or other securities or property which
shall be deliverable upon exercise of this Warrant. In the case of any action which would require
the fixing of a record date, such notice shall be given at least 10 days prior to the date so
fixed, and in case of all other action, such notice shall be given at least 15 days prior to the
taking of such proposed action. Failure to give such notice, or any defect therein, shall not
affect the legality or validity of any such action.

     (L) Proceedings Prior to Any Action Requiring Adjustment. As a condition precedent to
the taking of any action which would require an adjustment pursuant to this Section 13, the Company
shall take any action which may be necessary, including obtaining regulatory, New York Stock
Exchange, NASDAQ Stock Market or other applicable national securities exchange or stockholder
approvals or exemptions, in order that the Company may thereafter validly and legally issue as
fully paid and nonassessable all shares of Common Stock that the Warrantholder is entitled to
receive upon exercise of this Warrant pursuant to this Section 13.

     (M) Adjustment Rules. Any adjustments pursuant to this Section 13 shall be made
successively whenever an event referred to herein shall occur. If an adjustment in Exercise Price
made hereunder would reduce the Exercise Price to an amount below par value of the Common Stock,
then such adjustment in Exercise Price made hereunder shall reduce the Exercise Price to the par
value of the Common Stock.

     14. Exchange. At any time following the date on which the shares of Common Stock of
the Company are no longer listed or admitted to trading on a national securities exchange

12

 

(other than in connection with any Business Combination), the Original Warrantholder may cause
the Company to exchange all or a portion of this Warrant for an economic interest (to be determined
by the Original Warrantholder after consultation with the Company) of the Company classified as
permanent equity under U.S. GAAP having a value equal to the Fair Market Value of the portion of
the Warrant so exchanged. The Original Warrantholder shall calculate any Fair Market Value required
to be calculated pursuant to this Section 14, which shall not be subject to the Appraisal
Procedure.

     15. No Impairment. The Company will not, by amendment of its Charter or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in taking of all such action
as may be necessary or appropriate in order to protect the rights of the Warrantholder.

     16. Governing Law. This Warrant will be governed by and construed in accordance with
the federal law of the United States if and to the extent such law is applicable, and otherwise in
accordance with the laws of the State of New York applicable to contracts made and to be performed
entirely within such State. Each of the Company and the Warrantholder agrees (a) to submit to the
exclusive jurisdiction and venue of the United States District Court for the District of Columbia
for any civil action, suit or proceeding arising out of or relating to this Warrant or the
transactions contemplated hereby, and (b) that notice may be served upon the Company at the address
in Section 20 below and upon the Warrantholder at the address for the Warrantholder set forth in
the registry maintained by the Company pursuant to Section 9 hereof. To the extent permitted by
applicable law, each of the Company and the Warrantholder hereby unconditionally waives trial by
jury in any civil legal action or proceeding relating to the Warrant or the transactions
contemplated hereby or thereby.

     17. Binding Effect. This Warrant shall be binding upon any successors or assigns of
the Company.

     18. Amendments. This Warrant may be amended and the observance of any term of this
Warrant may be waived only with the written consent of the Company and the Warrantholder.

     19. Prohibited Actions. The Company agrees that it will not take any action which
would entitle the Warrantholder to an adjustment of the Exercise Price if the total number of
shares of Common Stock issuable after such action upon exercise of this Warrant, together with all
shares of Common Stock then outstanding and all shares of Common Stock then issuable upon the
exercise of all outstanding options, warrants, conversion and other rights, would exceed the total
number of shares of Common Stock then authorized by its Charter.

     20. Notices. Any notice, request, instruction or other document to be given hereunder
by any party to the other will be in writing and will be deemed to have been duly given (a) on the
date of delivery if delivered personally, or by facsimile, upon confirmation of receipt, or (b) on
the second business day following the date of dispatch if delivered by a recognized next day

13

 

courier service. All notices hereunder shall be delivered as set forth in Item 8 of Schedule A
hereto, or pursuant to such other instructions as may be designated in writing by the party to
receive such notice.

     21. Entire Agreement. This Warrant, the forms attached hereto and Schedule A hereto
(the terms of which are incorporated by reference herein), and the Letter Agreement (including all
documents incorporated therein), contain the entire agreement between the parties with respect to
the subject matter hereof and supersede all prior and contemporaneous arrangements or undertakings
with respect thereto.

[Remainder of page intentionally left blank]

14

 

[Form of Notice of Exercise]

Date:                          

	TO:	 	LNB Bancorp, Inc.
	 
	RE:	 	Election to Purchase Common Stock

     The undersigned, pursuant to the provisions set forth in the attached Warrant, hereby agrees
to subscribe for and purchase the number of shares of the Common Stock set forth below covered by
such Warrant. The undersigned, in accordance with Section 3 of the Warrant, hereby agrees to pay
the aggregate Exercise Price for such shares of Common Stock in the manner set forth below. A new
warrant evidencing the remaining shares of Common Stock covered by such Warrant, but not yet
subscribed for and purchased, if any, should be issued in the name set forth below.

Number of Shares of Common Stock                                         

Method of Payment of Exercise Price (note if cashless exercise pursuant to Section 3(i) of the
Warrant or cash exercise pursuant to Section 3(ii) of the Warrant, with consent of the Company and
the Warrantholder)                                         

Aggregate Exercise Price:                                         

Holder: 
__________________________________

By:
_____________________________________

Name: 
________________________________

Title:   
________________________________

15

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a duly
authorized officer.

Dated: December 12, 2008

	 	 	 	 	 
	 	COMPANY: LNB BANCORP, INC.

 	 
	 	By:  	/s/ Daniel E. Klimas
 	 
	 	 	Name:  	Daniel E. Klimas 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 
	 	Attest:

 	 
	 	By:  	/s/ Sharon L. Churchill
 	 
	 	 	Name:  	Sharon L. Churchill 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

[Signature Page to Warrant]

16

 

SCHEDULE A

Item 1

Name: LNB Bancorp, Inc.

Corporate or other organizational form: Corporation

Jurisdiction of organization: Ohio

Item 2

Exercise Price: $6.74

Item 3

Issue Date: December 12, 2008

Item 4

Amount of last dividend declared prior to the Issue Date: $0.09

Item 5

Date of Letter Agreement between the Company and the United States Department of the Treasury:
December 12, 2008

Item 6

Number of shares of Common Stock: 561,343

Item 7

Company’s address: 457 Broadway, Lorain, OH 44052

Item 8

Notice information:

     If to the Company:

LNB Bancorp, Inc.

457 Broadway

Lorain, OH 44052

Attention: Daniel E. Klimas

Telephone: (440) 244-7314

Facsimile: (440) 244-4815

     with a copy to:

Calfee, Halter & Griswold LLP

1400 KeyBank Center

800 Superior Avenue

Cleveland, OH 44114

Attention: John J. Jenkins

Facsimile: (216) 241-0816

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