Document:

EX-10.1

Exhibit 10.1

TRANSITION AGREEMENT AND GENERAL RELEASE

     THIS TRANSITION AGREEMENT AND GENERAL RELEASE (this “Agreement”) is made and entered into this
12th day of February, 2009 (the “Termination Date”), by and between Gregory L. Burns (hereinafter
referred to as “Mr. Burns”) and O’Charley’s Inc. and its subsidiaries, affiliates and related
entities, with a principal office of 3038 Sidco Drive, Nashville, Tennessee 37204 (as more fully
defined in Paragraph 2 below, “O’Charley’s”).

WITNESSETH:

     WHEREAS, Mr. Burns is the Chairman of the Board, President and Chief Executive Officer of
O’Charley’s Inc.; and

     WHEREAS, Mr. Burns has announced his intention to terminate his employment with O’Charley’s
Inc. and its subsidiaries and related entities; and

     WHEREAS, the O’Charley’s Inc. Board of Directors (“Board”) desires to provide for a smooth and
orderly transition of the Chief Executive Officer position and, to that end, has requested that Mr.
Burns continue to serve as Chairman of the Board, President and Chief Executive Officer until the
adjournment of the Board’s regularly scheduled meeting on February 12, 2009 (the “Termination
Date”), at which time he will resign as Chairman of the Board, President and Chief Executive
Officer, from all Board committees he is on, and from all of his positions with subsidiaries of
O’Charley’s Inc. and will continue to serve as a director of O’Charley’s Inc. and as a consultant
to O’Charley’s on the terms hereinafter set forth until the adjournment of the 2009 Annual Meeting
of Shareholders of O’Charley’s Inc. (the “2009 Annual Meeting”); and

     WHEREAS, pursuant to that certain Executive Employment Agreement (the “Employment Agreement”)
dated as of March 10, 2008, by and between Mr. Burns and O’Charley’s Inc., Mr. Burns has agreed to
execute and deliver to O’Charley’s an agreement releasing certain claims that Mr. Burns may have
against O’Charley’s in the case of a departure from O’Charley’s involving certain severance
payments; and

     WHEREAS, the parties desire to set forth all matters regarding Mr. Burns’ termination and
transitional services to O’Charley’s; and

     WHEREAS, the Board has determined that it is in the best interests of O’Charley’s Inc. and its
shareholders to enter into this Agreement with Mr. Burns.

     NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, and
for other good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, it is agreed as follows:

     1. Ending Directorship and Consulting Period. By executing this
Agreement, Mr. Burns hereby acknowledges that his employment at O’Charley’s will terminate on the
Termination Date and that he will cease to serve as Chairman of the Board, President and Chief
Executive Officer of O’Charley’s Inc. and from all Board Committees he is on, as well as his
positions with all of O’Charley’s Inc.’s subsidiaries and related entities on such date, and will
remain on the Board as a director until the adjournment of the 2009 Annual Meeting.

 

 

     During the period from the Termination Date until the expiration of the term of his
directorship at the adjournment of the 2009 Annual Meeting (the “Ending Directorship and Consulting
Period”), Mr. Burns will serve as a consultant to O’Charley’s, providing strategic advice and
analysis to O’Charley’s as reasonably requested by the Board or the interim Chief Executive
Officer. For such services, Mr. Burns will during the Ending Directorship and Consulting Period
receive a total of $175,000 payable in equal weekly installments, paid on the same dates as
O’Charley’s Inc. pays its regular payroll. The $175,000 total is inclusive of any fees or other
compensation to which Mr. Burns may be entitled for his services as director during the Ending
Directorship and Consulting Period.

     O’Charley’s Inc.’s agreement to utilize Mr. Burns’ services and to compensate him during the
Ending Directorship and the Consulting Period, the consideration paid to him during the Ending
Directorship and Consulting Period, and the consideration paid to Mr. Burns under Paragraph 13 will
constitute sufficient consideration for his covenants and agreements contained herein, including
the general release contained in Paragraph 2, the execution and delivery of the form of Final
General Release attached hereto as Exhibit A (the “Final General Release”) and his
compliance with the provisions described in Paragraphs 8, 10, 17 and 18. O’Charley’s will have no
other compensation obligations to Mr. Burns other than as set forth herein.

     2. Release. In consideration of the payment described in Paragraph 13 below, Mr.
Burns does hereby irrevocably and unconditionally release, acquit and discharge O’Charley’s Inc.,
any parent, related or affiliated companies and all other subsidiaries, assigns, predecessors or
transferees, all present and former directors, officers, insurers, employees, servants and agents
of any of them (together individually and collectively, “O’Charley’s”), from any and all manner of
actions, charges, complaints, suits, proceedings, claims, liabilities, obligations, agreements,
controversies, demands, costs, losses, debts and expenses whatsoever of any kind or nature, at law
or in equity, arising before and through the Termination Date, whether known or unknown, fixed or
contingent, choate or inchoate, arising out of or in any way connected with the employment of Mr.
Burns by O’Charley’s and with his termination from employment with O’Charley’s, including but not
limited to any and all claims for pay, benefits, damages, or any other relief that were, might or
could have been asserted in any court, before any arbitrator, or before any administrative agency,
including without limitation, the Civil Rights Act of 1991; Title VII of the Civil Rights Act of
1964; the Civil Rights Act of 1866; the Americans with Disabilities Act; the Rehabilitation Act of
1973; the Age Discrimination in Employment Act; the Older Workers Benefit Protection Act; the
Family and Medical Leave Act; the Employee Retirement Income Security Act of 1974; the Equal Pay
Act; the Fair Labor Standards Act; the Vietnam Era Veteran’s Readjustment Assistance Act; the
Uniformed Service Employment and Reemployment Rights Act of 1994; the Worker Adjustment and
Retraining Notification Act; the Fair Credit Reporting Act; the Immigration Reform and Control Act
of 1986; the Occupational Safety and Health Act of 1970; the Employee Polygraph Protection Act; any
and all “whistle blower” employee statutes or regulations (i.e., those providing protection to an
employee who raises charges of illegality, impropriety, workplace misconduct, failure to adhere to
policies and procedures, etc.) any amendments to any of the foregoing, and any other federal,
state, or local statute, regulation, ordinance, or common law, including without limitation any law
related to discrimination (i.e., those pertaining generally to race, color, sex, age, religion,
national origin, sexual orientation, worker’s compensation or disability), retaliatory discharge
(whether actual or constructive, and as and to the extent related to any of the foregoing), terms
and conditions of employment, or termination of

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employment, to the full extent that such a release is allowed by law. This provision does not
include the release of claims with respect to any vested benefits under a plan governed by the
Employee Retirement Income Security Act, including any vested benefits under the Company’s 401(k)
or deferred compensation plans, or any claim related to the rights and benefits granted by the
express terms of this Agreement.

     3. Waiver. Mr. Burns acknowledges that he is aware of his rights under the laws
specifically and generally described above and that he waives those rights to the full extent that
waiver is allowed by law; although the provisions of such waiver are not intended to be, nor will
the same be construed as, an indication that Mr. Burns has any legitimate causes of action under
such provisions nor that O’Charley’s has taken any actions in violation of such provisions.

     4. No Admission. Mr. Burns also expressly acknowledges that the payment described
below will not be considered an admission of liability or an admission that O’Charley’s has
violated any law, regulation or contract (express or implied). Mr. Burns further acknowledges that
the payment also represents payment in full satisfaction and resolution of all potential and/or
disputed claims for back pay, bonuses, equity grants/options, compensatory, punitive, and/or
liquidated damages, and damages or relief of any kind including costs, attorneys’ fees, and
expenses arising out of or pertaining to the unasserted claims described above.

     5. No Pending Complaints. Mr. Burns represents and warrants that he has not filed any
complaint(s) or charge(s) against O’Charley’s with the Equal Employment Opportunity Commission or
the state commission empowered to investigate claims of employment discrimination, the United
States Department of Labor, the Office of Federal Contract Compliance Programs, or with any other
local, state or federal agency or court, and that if any such agency or court assumes jurisdiction
of any complaint(s) or charge(s) against O’Charley’s on Mr. Burns’ behalf, Mr. Burns will request
such agency or court to withdraw from the matter, Mr. Burns will refuse any benefits derived
therefrom, and the release contained in this Agreement will apply to such claim. This Agreement
will not affect Mr. Burns’ right to hereafter file a charge with or otherwise participate in an
investigation or proceeding conducted by any such agency or court regarding matters that arise
after the Termination Date and which are not the subject of this Agreement. Mr. Burns represents
and warrants that he has no knowledge of any practice engaged in by O’Charley’s that is or was a
violation in any material respect of any applicable state law or regulations or of any federal law
or regulations including, but not by way of limitation, the Securities Act of 1933, as amended, and
the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder (the
“Exchange Act”).

     6. Tax Liability. Mr. Burns further acknowledges and agrees that any tax consequence
that he may personally incur that arises from or is attributable to the payments described in
Paragraphs 1 and 13 is solely his responsibility, although O’Charley’s agrees to continue making
withholdings and deductions from such payments in accordance with Mr. Burns’ most current W-4 on
file with O’Charley’s. With respect to the $175,000 in aggregate payments to be made during the
Ending Directorship and Consulting Period as contemplated in Paragraph 1, Mr. Burns will be paid as
an independent contractor and, therefore, the Company will not make tax withholdings with respect
to such related payments.

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     7. Civil Action Waiver. In consideration of the payments described in Paragraph 13
below, Mr. Burns further agrees to neither institute nor in any manner voluntarily participate in,
as a class member or otherwise, any civil action or arbitration against O’Charley’s which is now
pending or may hereafter be brought that concerns any matter encompassed by this release.

     8. Confidentiality. Mr. Burns agrees that he will comply with the provisions of
Section 5.3 of the Employment Agreement, which remains in full force and effect.

     In connection therewith, and except to the extent otherwise agreed by Mr. Burns and
O’Charley’s Inc., Mr. Burns agrees to return upon request all copies of confidential and
proprietary O’Charley’s Inc.’s information and property in his possession or control (these
include, without limitation, all documents, manuals, coupons, letterhead/stationary, business
cards, computers, computer programs, phones, compact discs, diskettes, emails, customer lists,
notebooks, reports and other written or graphic materials, including all copies thereof, in any way
relating to O’Charley’s’ business and prepared by Mr. Burns or obtained from O’Charley’s during the
course of Mr. Burns’ service to O’Charley’s).

     9. Termination of Employment / Benefits. Mr. Burns acknowledges that his employment
with O’Charley’s, together with his rights to continue to participate in (and O’Charley’s
corresponding obligation to provide, make contributions to or fund) certain O’Charley’s related
benefits, car allowances, deferred compensation plans (including bonus plans), stock purchase
plans, long term incentive plans, 401(k) plans, ambassador card programs, or any other O’Charley’s
monitored or provided benefit plan or program, except with respect to insurance and COBRA coverage
as more fully provided below, will cease effective the close of business on the Termination Date;
provided that, Mr. Burns will be entitled to compensation until the adjournment of the 2009 Annual
Meeting as set forth in Paragraph 1 above. Additionally, unless otherwise specified herein, Mr.
Burns’ distribution of any vested deferred compensation balances, vested 401(k) balances, vested
O’Charley’s Inc. shares or options, etc. will be made expressly in accordance with the terms and
conditions of the O’Charley’s Inc. plans governing the same and elections thereunder, all in
accordance with applicable law.

     Mr. Burns will be advised of his right to continue health, vision, and dental coverages with
O’Charley’s Inc. (collectively, the “Insurance Coverages”). To the extent that Mr. Burns wishes to
continue with any or all of the Insurance Coverages, then Mr. Burns will be entitled to continue
with the Insurance Coverages so elected through the second anniversary of the Termination Date, as
set forth in Section 3.2(a)(ii) of the Employment Agreement; provided that, all such Insurance
Coverages will terminate on the date or dates that Mr. Burns receives substantially similar
coverage and benefits, without waiting period or pre-existing condition limitations, under the
plans and programs of a subsequent employer or spouse’s employer (such coverage and benefits to be
determined on a coverage-by-coverage or benefit-by-benefit basis) (and Mr. Burns will notify
O’Charley’s upon obtaining such subsequent coverage and benefits).

     All such Insurance Coverages will be offered to Mr. Burns on a level equivalent to that had
Mr. Burns continued his employment with O’Charley’s during such period, with such benefits provided
to Mr. Burns at no less than the same coverage level and at no more of a cost to Mr. Burns than
that which existed on the date immediately before the Termination Date (subject in all instances to
any reduction in coverage or increases in

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cost as will become generally effective for O’Charley’s Inc.’s executive officers). Mr. Burns
will remain responsible for Mr. Burns’ employee premium portion of the Insurance Coverages so
elected, and to the extent of any such election, Mr. Burns hereby agrees to pay O’Charley’s such
employee premiums in cash on the first day of each month. The costs of the Company’s portion of
any insurance premiums paid hereunder shall be included in Mr. Burns’ gross income to the extent
the provision of such benefits is deemed to be discriminatory under Section 105(h) of the Internal
Revenue Code of 1986, as amended (the “Code”).

     Additionally, where the Insurance Coverages are not sooner terminated as provided in this
Paragraph 9, Mr. Burns will be responsible for the entire cost of any COBRA coverage (to the extent
that Mr. Burns has elected or continues to elect COBRA health, vision or dental coverage), with the
understanding that the period of calculating COBRA eligibility will commence on the second
anniversary of the Termination Date. Mr. Burns acknowledges that the making of timely premium
payments (both before and subsequent to the second anniversary of the Termination Date, if
applicable) is solely Mr. Burns’ obligation; although O’Charley’s Inc. agrees to timely and
properly remit any and all premium payments paid to it by Mr. Burns to the applicable insurer.

     10. Non-Disparagement. In consideration of the payments described in Paragraph 13
below and the release provided in Paragraph 2 above, each of Mr. Burns and O’Charley’s further
agrees to refrain from making any negative or disparaging comments regarding the other.

     11. Validity. If any term, condition, section or provision of this release will be
held to be invalid or unenforceable, such invalidity will not affect any other term, condition,
section or provision hereof, and this release will be construed and enforced as if such term,
condition, section or provision had not been included.

     12. Arbitration Agreement. Mr. Burns acknowledges that any action for breach of this
Agreement or of any term of this Agreement is subject to the Arbitration Agreement in effect
between Mr. Burns and O’Charley’s Inc. Mr. Burns reaffirms the enforceability of the Arbitration
Agreement and agrees not to challenge the enforceability of the same.

     13. Consideration. In return for Mr. Burns’ execution and delivery of this Agreement,
and the Final General Release, and for his faithful and strict adherence and compliance to the
terms hereof and thereof, O’Charley’s Inc. agrees to pay Mr. Burns the payments and benefits
described in Section 3.2(a) of the Employment Agreement as if the term of his employment expired as
a result of a Termination for Good Reason (as that term is defined in the Employment Agreement), as
well as the payments for consulting and director services described in Paragraph 1. It is
understood and agreed that Mr. Burns will not earn or accrue any bonus with respect to the 2009
fiscal year. Notwithstanding the provisions of Section 3.2(a) of the Employment Agreement, such
payment amounts shall be payable in a lump sum in cash on March 16, 2009 (except for payments
during the Ending Directorship and Consulting Period as described in Paragraph 1). For avoidance
of doubt, the payments to be made by the Company to Mr. Burns on March16, 2009 will include the
following: $1,290,000 (two times annual base salary); plus $257,812.67 (two times the average of
Mr. Burns bonus from the preceding three fiscal years); and at Mr. Burns’ election, a distribution
to him of amounts vested under the Company’s 401(k) and deferred compensation plans. In the event
of Mr.

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Burns’ death prior to receipt of such payments, O’Charley’s will pay any unpaid amounts to his
surviving spouse as his beneficiary.

     Additionally, attached as Schedule A is a listing of all stock option grants and
restricted stock awards held by Mr. Burns as of the Termination Date and the portions of such
awards that are and are not vested and/or exercisable as of the Termination Date. Mr. Burns agrees
that Schedule A accurately reflects all such awards. All such awards were granted pursuant
to the terms of the O’Charley’s 2000 Stock Incentive Plan or the O’Charley’s 1990 Employee Stock
Plan. Mr. Burns and the Company agree that, upon the Termination Date, the total amount of vested
and/or exercisable shares under each such award shall be as listed under the final column on
Schedule A, “Total Number of Shares Vested/Exercisable Under Award After Giving Effect to
Vesting on Termination Date.” Any stock options listed in such final column shall be exercisable
for the remaining term of the award. Mr. Burns acknowledges and agrees that to the extent he holds
any equity-based award not listed on Schedule A, such award shall terminate as of the
Termination Date and shall be of no further force or effect.

     14. Revocation. Mr. Burns has consulted with his attorney before his execution of
this Agreement. He has been advised that he had twenty-one (21) days from the date this Agreement
was first presented to him to consider executing it and that his decision to execute it was
knowingly and voluntarily made. Mr. Burns further acknowledges that this Agreement has been
individually negotiated and is not part of a group exit incentive or other separation package.

     By signing and returning this Agreement, Mr. Burns acknowledges that he has read carefully and
fully understands the terms of this Agreement, has had an opportunity to consult with his attorney
before signing it and is signing it knowingly and voluntarily and has not been coerced or
threatened into signing it or promised anything else in exchange for signing it (other than the
consideration provided in Paragraph 13 above).

     Furthermore, Mr. Burns is aware that he has the right for a period of seven (7) days following
his execution of this Agreement (the “Revocation Period”) to revoke this Agreement. His receipt,
however, of any severance benefits under this Agreement is contingent on (1) his execution and
delivery of this Agreement, (2) upon request of the Company, the return of all company property
including, but not limited to, items listed in Paragraph 8 above and (3) the expiration of the
Revocation Period without this Agreement being revoked by Mr. Burns.

     15. Termination of Severance Payments. Any severance payments or other payments or
benefits payable to Mr. Burns under this Agreement will immediately cease, without notice, if Mr.
Burns breaches any term of this Agreement. Mr. Burns agrees that if he breaches any of the
provisions of Paragraphs 8, 10, 17 and 18, such breach likely will not have an adequate remedy at
law and that O’Charley’s will be entitled, in addition to all other legal and/or equitable remedies
available to it, to cease making the payments provided under Paragraph 13 and to apply to and
obtain from a court of competent jurisdiction an injunction against any violation thereof with the
prevailing party entitled to recover all costs of such action, including reasonable attorneys’
fees. These rights and remedies will be cumulative and not alternative. Without limiting the
generality of the foregoing, the prevailing party in any action brought to enforce the terms and
conditions of this Agreement (not just those of Paragraphs 8,

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10, 17 and 18) will be entitled to recoup their reasonable attorneys’ fees in enforcing this
Agreement.

     16. Indemnification. Anything contained in this Agreement or in the Final General
Release to the contrary notwithstanding, the parties expressly agree that nothing in this Agreement
is intended to abrogate, diminish or amend O’Charley’s Inc.’s continued indemnification obligations
to Mr. Burns pursuant to Section 6.7 of the Employment Agreement, which indemnification obligations
are restated in their entirety as follows: It is understood and agreed that O’Charley’s Inc. will
indemnify Mr. Burns (including advancing expenses) to the fullest extent permitted by Tennessee law
and O’Charley’s Inc.’s Charter and Bylaws for any judgments, amounts paid in settlement and
reasonable expenses, including reasonable attorneys’ fees, incurred by Mr. Burns in connection with
the defense of any lawsuit or other claim to which Mr. Burns is made a party by reason of being (or
having been) an officer, director or employee of O’Charley’s Inc., its parent (if applicable) or
any of its subsidiaries.

     17. Noncompetition. Mr. Burns agrees that he will comply with the provisions of
Section 5.1 of the Employment Agreement, which remain in full force and effect.

     18. Non-Solicitation. Mr. Burns agrees that he will comply with the provisions of
Section 5.2 of the Employment Agreement, which remain in full force and effect.

     19. Standstill. Mr. Burns agrees that until the end of the Non-compete Period (as
defined in the Employment Agreement), without the prior written consent of the board of directors
of O’Charley’s Inc., specifically expressed in a written resolution adopted by a majority vote of
the entire board of directors, that he will not, and will cause each of his affiliates or other
Persons acting on its behalf not to:

          (i) enter into any arrangements, understandings or agreements (whether written or oral) with,
or advise, finance, assist or encourage, any other Person in connection with any acquisition, offer
or proposal to acquire, or agreement to acquire (except by way of stock dividends or other
distributions or offerings made available to holders of Voting Securities generally on a pro rata
basis, provided that any such securities so received will be subject to the provisions hereof),
directly or indirectly, whether by purchase, tender or exchange offer, through the acquisition of
control of another Person, by joining a partnership, limited partnership, syndicate or other
“group” (within the meaning of Section 13(d)(3) of the Exchange Act or otherwise), any Voting
Securities; provided, however, that nothing herein shall restrict Mr. Burns from purchasing for
investment purposes for his own or family accounts up to an aggregate of 5% of the then
outstanding shares of any class of the Company’s publicly traded Voting Securities;

          (ii) make any proposal (including to publicly disclose or discuss any proposal) or enter into
any discussion regarding any of the foregoing, or make any proposal, statement or inquiry, or
disclose any intention, plan or arrangement (whether written or oral) inconsistent with the
foregoing, or make or publicly disclose any request to amend, waive or terminate any provision of
this Paragraph 19; or

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          (iii) take or cause or induce others to take any action inconsistent with any of the
foregoing.

          (iv) For purposes of this Paragraph 19: “Voting Securities” means any securities of the
Company entitled, or which may be entitled, to vote in the election of directors, or securities
convertible into or exercisable or exchangeable for such securities, whether or not subject to
passage of time or other contingencies; and “Person” means any individual, partnership,
corporation, group, syndicate, trust, government or agency, or any other organization, entity or
enterprise.

     20. Expenses. O’Charley’s Inc. will reimburse Mr. Burns for his reasonable documented
out-of-pocket legal expenses incurred on or before the date hereof in connection with the
negotiation and execution of this Agreement and related activities and matters; provided, that the
reimbursement of such amount will not exceed $25,000.

     21. Section 409A Provisions. It is intended that (i) each payment or installment of
payments provided under this Agreement is a separate “payment” for purposes of Section 409A of the
Code and (ii) that the payments satisfy, to the greatest extent possible, the exemptions from the
application of Code Section 409A, including those provided under Treasury Regulations
1.409A-1(b)(4) (regarding short-term deferrals), 1.409A-1(b)(9)(iii) (regarding the two-times, two
year exception), and 1.409A-1(b)(9)(v) (regarding reimbursements and other separation pay).
Notwithstanding anything to the contrary in this Agreement, if O’Charley’s determines (i) that on
the Termination Date or at such other time that O’Charley’s determines to be relevant, Mr. Burns is
a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of
O’Charley’s and (ii) that any payments to be provided to Mr. Burns pursuant to this Agreement are
or may become subject to the additional tax under Code Section 409A(a)(1)(B) or any other taxes or
penalties imposed under Code Section 409A (“Section 409A Taxes”) if provided at the time otherwise
required under this Agreement, then (A) such payments will be delayed until the date that is six
(6) months after the date of the Executive’s termination of employment with O’Charley’s, or such
shorter period that, as determined by O’Charley’s, is sufficient to avoid the imposition of Section
409A Taxes (the “Payment Delay Period”). Any payments delayed pursuant to this Paragraph 20 will be
made in a lump sum on the first day of the seventh month following Mr. Burns’ termination of
employment, or such earlier date that, as determined by O’Charley’s, is sufficient to avoid the
imposition of any Section 409A Taxes. Notwithstanding the foregoing, the Company does not warrant
that any payments provided herein will qualify for favorable treatment under Section 409A of the
Code, and the Company shall not be liable to Mr. Burns for any tax, interest or penalties that Mr.
Burns might owe as a result of any payments hereunder.

     22. Governing Law. This Agreement will be construed in accordance with the laws of
the State of Tennessee, without regard to its conflict of laws or choice of laws provisions. Each
and every term of this Agreement will be binding upon and inure to the benefit of the successors
and assigns of the parties hereto.

     23. Integration. Mr. Burns acknowledges and agrees that this Agreement, except to the
extent it expressly refers to provisions in the Employment Agreement, contains the parties’ entire
understanding and is not executed in reliance upon any statement or representation made by
O’Charley’s outside of this Agreement.

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     24. Binding Effect/No Oral Modification. This Agreement will be binding upon
O’Charley’s, Mr. Burns and upon Mr. Burns’ heirs, administrators, representatives, executors,
successors, and assigns. The provisions of this Agreement may not be modified orally, but only in
a writing signed by the parties to be charged.

[Signature page(s) follow]

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     I HAVE READ THE FOREGOING TRANSITION AGREEMENT AND GENERAL RELEASE, I FULLY UNDERSTAND ITS
TERMS, I HAVE BEEN GIVEN 21 DAYS OR REASONABLE TIME TO CONSULT WITH AN ATTORNEY ABOUT IT, AND I
HAVE SIGNED IT VOLUNTARILY THIS THE 12th DAY OF FEBRUARY, 2009.

	 	 	 	 	 
	/s/ Gregory L. Burns	 	 
	 	 	 
	Gregory L. Burns	 	 
	 
	 	 	 	 
	O’Charley’s Inc.	 	 
	 
	 	 	 	 
	By:
	 	/s/ Richard Reiss Jr.	 	 
	Name:
	 	Richard Reiss Jr.	 	 
	Title:
	 	Chairman, Compensation Committee	 	 

 

 

SCHEDULE A

Gregory L. Burns

Equity Awards

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Total Number of
	 	 	 	 	 	 	 	 	 	 	Number	 	 	 	 	 	Shares Vested/
	 	 	 	 	 	 	 	 	 	 	of	 	Number of	 	Exercisable
	 	 	 	 	 	 	 	 	 	 	Shares	 	Shares	 	Under Award
	 	 	 	 	 	 	 	 	 	 	Subject	 	Unvested/	 	After Giving
	 	 	 	 	 	 	Exercise	 	to Award	 	Unexercisable	 	Effect to Vesting
	 	 	Grant	 	Price Per	 	on Grant	 	on Termination	 	on Termination
	 	 	Date	 	Share	 	Date	 	Date	 	Date
	 
	Stock Option Award
	 	 	02/17/1999	 	 	$	15.25	 	 	 	40,000	 	 	 	0	 	 	 	40,000	 
	 
	Stock Option Award
	 	 	02/15/2000	 	 	$	11.88	 	 	 	30,000	 	 	 	9,240	 	 	 	30,000	 
	 
	Stock Option Award
	 	 	02/19/2003	 	 	$	21.19	 	 	 	79,200	 	 	 	0	 	 	 	79,200	 
	 
	Restricted Stock
Award
	 	 	02/19/2003	 	 	 	N/A	 	 	 	39,600	 	 	 	39,600	 	 	 	39,600	 
	 
	Restricted Stock
Award
	 	 	02/24/2006	 	 	 	N/A	 	 	 	54,169	 	 	 	18,057	 	 	 	54,169	 
	 
	Restricted Stock
Award
	 	 	02/07/2007	 	 	 	N/A	 	 	 	45,191	 	 	 	22,597	 	 	 	45,191	 
	 
	Restricted Stock
Award1
	 	 	03/10/2008	 	 	 	N/A	 	 	 	45,833	 	 	 	45,833	 	 	 	45,833	 
	 
	Restricted Stock
Award2
	 	 	03/10/2008	 	 	 	N/A	 	 	 	45,833	 	 	 	45,833	 	 	 	0	 

 

			
	1	 	Represents time-based vesting portion of 2008
restricted stock award, all of which is to vest hereunder.
	 
	2	 	Represents performance-based vesting portion of 2008
restricted stock award, all of which is to terminate
hereunder.

 

 

Exhibit A

Final General Release

[see attached]

 

 

FINAL GENERAL RELEASE

     THIS FINAL RELEASE (this “Agreement”) is made and entered into this       day of
May3, 2009 (the “Termination Date”), by and between Gregory L. Burns (hereinafter
referred to as “Mr. Burns”) and O’Charley’s Inc. and its subsidiaries, affiliates and related
entities, with a principal office of 3038 Sidco Drive, Nashville, Tennessee 37204 (as more fully
defined in Paragraph 2 below, “O’Charley’s”).

WITNESSETH:

     WHEREAS, Mr. Burns and O’Charley’s Inc. previously entered into that certain Transition
Agreement and General Release dated as of February      , 2009 (the “Transition Agreement”); and

     WHEREAS, the execution and delivery of this Agreement to O’Charley’s Inc. is a condition
precedent to Mr. Burns’ receipt of certain payments set forth in Paragraph 13 of the Transition
Agreement; and

     WHEREAS, capitalized terms not defined herein have the meanings given in the Transition
Agreement.

     NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, and
for other good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, it is agreed as follows:

     1. Resignation. By executing this Agreement, Mr. Burns hereby acknowledges his
resignation from all of his remaining positions with O’Charley’s as of the date hereof. Mr. Burns
also acknowledges that O’Charley’s has fulfilled all of its obligations to him under the Transition
Agreement to the extent that any of such obligations are required to have been performed by
O’Charley’s before and through the date hereof.

     2. Release. In consideration of the payments described in Paragraph 13 of the
Transition Agreement, Mr. Burns does hereby irrevocably and unconditionally release, acquit and
discharge O’Charley’s Inc., any parent, related or affiliated companies and all other subsidiaries,
assigns, predecessors or transferees, all present and former directors, officers, insurers,
employees, servants and agents of any of them (together individually and collectively,
“O’Charley’s”), from any and all manner of actions, charges, complaints, suits, proceedings,
claims, liabilities, obligations, agreements, controversies, demands, costs, losses, debts and
expenses whatsoever of any kind or nature, at law or in equity, arising out of or in anyway
connected with the employment of Mr. Burns by O’Charley’s and with his termination from employment
with O’Charley’s before and through the date hereof, whether known or unknown, fixed or contingent,
choate or inchoate, arising out of or in any way connected with the employment of Mr. Burns by
O’Charley’s and with his termination from employment with O’Charley’s, including but not limited to
any and all claims for pay, benefits, damages, or any other relief which were, might or could have
been asserted in any court, before any arbitrator, or before any administrative agency, including
without limitation, the Civil Rights Act of 1991; Title VII of the Civil Rights Act of 1964; the
Civil Rights Act of 1866; the Americans

 

			
	3	 	To be executed and delivered by Mr. Burns at
adjournment of 2009 Annual Meeting.

 

 

with Disabilities Act; the Rehabilitation Act of 1973; the Age Discrimination in Employment
Act; the Older Workers Benefit Protection Act; the Family and Medical Leave Act; the Employee
Retirement Income Security Act of 1974; the Equal Pay Act; the Fair Labor Standards Act; the
Vietnam Era Veteran’s Readjustment Assistance Act; the Uniformed Service Employment and
Reemployment Rights Act of 1994; the Worker Adjustment and Retraining Notification Act; the Fair
Credit Reporting Act; the Immigration Reform and Control Act of 1986; the Occupational Safety and
Health Act of 1970; the Employee Polygraph Protection Act; any and all “whistle blower” employee
statutes or regulations (i.e., those providing protection to an employee who raises charges of
illegality, impropriety, workplace misconduct, failure to adhere to policies and procedures, etc.)
any amendments to any of the foregoing, and any other federal, state, or local statute, regulation,
ordinance, or common law, including without limitation any law related to discrimination (i.e.,
those pertaining generally to race, color, sex, age, religion, national origin, sexual orientation,
worker’s compensation or disability), retaliatory discharge (whether actual or constructive, and as
and to the extent related to any of the foregoing), terms and conditions of employment, or
termination of employment, to the full extent that such a release is allowed by law. This
provision does not include the release of claims with respect to any vested benefits under a plan
governed by the Employee Retirement Income Security Act, including any vested benefits under the
Company’s 401(k) or deferred compensation plans, or any claim related to the rights and benefits
granted by the express terms of this Agreement or the Transition Agreement, including the
indemnification rights set forth in Paragraph 16 of the Transition Agreement.

     3. Waiver. Mr. Burns acknowledges that he is aware of his rights under the laws
specifically and generally described above and that he waives those rights to the full extent that
waiver is allowed by law; although the provisions of such waiver are not intended to be, nor will
the same be construed as, an indication that Mr. Burns has any legitimate causes of action under
such provisions nor that O’Charley’s has taken any actions in violation of such provisions.

     4. No Admission. Mr. Burns also expressly acknowledges that the payments described in
Paragraph 13 of the Transition Agreement will not be considered an admission of liability or an
admission that O’Charley’s has violated any law, regulation or contract (express or implied). Mr.
Burns further acknowledges that the payment also represents payment in full in satisfaction and
resolution of all potential and/or disputed claims for back pay, bonuses, equity grants/options,
compensatory, punitive, and/or liquidated damages, and damages or relief of any kind including
costs, attorneys’ fees, and expenses arising out of or pertaining to the unasserted claims
described above.

     5. No Pending Complaints. Mr. Burns represents and warrants that he has not filed any
complaint(s) or charge(s) against O’Charley’s with the Equal Employment Opportunity Commission or
the state commission empowered to investigate claims of employment discrimination, the United
States Department of Labor, the Office of Federal Contract Compliance Programs, or with any other
local, state or federal agency or court, and that if any such agency or court assumes jurisdiction
of any complaint(s) or charge(s) against O’Charley’s on Mr. Burns’ behalf, Mr. Burns will request
such agency or court to withdraw from the matter, Mr. Burns will refuse any benefits derived
therefrom, and the release contained in this Agreement will apply to such claim. This Agreement
will not affect Mr. Burns’ right to hereafter file a charge with or otherwise participate in an
investigation or proceeding conducted by any such agency or court

 

 

regarding matters that arise after the date hereof and which are not the subject of this
Agreement. Mr. Burns represents and warrants that he has no knowledge of any practice engaged in by
O’Charley’s that is or was a violation in any material respect of any applicable state law or
regulations or of any federal law or regulations including, but not by way of limitation, the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder.

     6. Revocation. Mr. Burns has consulted with his attorney before his execution of this
Agreement. He has been advised that he has twenty-one (21) days from the date this Agreement was
first presented to him to consider executing it and that his decision to execute it was knowingly
and voluntarily made. Mr. Burns further acknowledges that this Agreement has been individually
negotiated and is not part of a group exit incentive or other separation package.

     By signing and returning this Agreement, Mr. Burns acknowledges that he has read carefully and
fully understand the terms of this Agreement, has had an opportunity to consult with his attorney
before signing it and is signing it knowingly and voluntarily and has not been coerced or
threatened into signing it or promised anything else in exchange for signing it (other than the
consideration provided in Paragraph 13 of the Transition Agreement).

     Furthermore, Mr. Burns is aware that he has the right for a period of seven (7) days following
his execution of this Agreement (the “Revocation Period”) to revoke this Agreement. His receipt,
however, of any severance benefits under this Agreement is contingent on (1) his execution and
delivery of this Agreement, (2) upon request of the Company, the return of all company property
including, but not limited to, items listed in Paragraph 8 of the Transition Agreement and (3) the
expiration of the Revocation Period without this Agreement being revoked by Mr. Burns.

     7. Governing Law. This Agreement will be construed in accordance with the laws of the
State of Tennessee, without regard to its conflict of laws or choice of laws provisions. Each and
every term of this Agreement will be binding upon and inure to the benefit of the successors and
assigns of the parties hereto.

     8. Integration. Mr. Burns acknowledges and agrees that this Agreement, and the
Transition Agreement (including any portions of the Employment Agreement incorporated therein),
contains the parties’ entire understanding and is not executed in reliance upon any statement or
representation made by O’Charley’s outside of this Agreement.

     9. Binding Effect / No Oral Modification. This Agreement will be binding upon
O’Charley’s, Mr. Burns and upon Mr. Burns’ heirs, administrators, representatives, executors,
successors, and assigns. The provisions of this Agreement may not be modified orally, but only in
a writing signed by the parties to be charged.

[Signature page(s) follow]

 

 

     I HAVE READ THE FOREGOING FINAL GENERAL RELEASE, I FULLY UNDERSTAND ITS TERMS, I HAVE BEEN
GIVEN 21 DAYS OR REASONABLE TIME TO CONSULT WITH AN ATTORNEY ABOUT IT, AND I HAVE SIGNED IT
VOLUNTARILY THIS THE ___ DAY OF MAY, 2009.

	 	 	 	 	 
	 
	 	 	 
	Gregory L. Burns	 	 
	 
	 	 	 	 
	O’Charley’s Inc.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Title: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

260,962

Shares of Common Stock

of MONARCH COMMUNITY BANCORP, INC.

Issue Date: February 6, 2009

     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

UST NO. 447

 

 

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

2

 

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).

     “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.

3

 

     “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).

     “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

4

 

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.

     “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.

5

 

     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 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.

6

 

     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.

     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

7

 

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 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:

8

 

(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 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

9

 

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
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

10

 

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 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

11

 

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
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.

12

 

     (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 (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

13

 

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
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

 

Date:                     

TO: Monarch Community 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:
	 	 

	 	 
	 

	 	 	 	 

	 	 

UST NO. 447

15

 

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

Dated: February 6, 2009

	 	 	 	 	 
	 	COMPANY: MONARCH COMMUNITY BANCORP, INC.

 	 
	 	By:  	/s/ Donald L. Denney
 	 
	 	 	Name:  	Donald L. Denney 	 
	 	 	Title:  	President & CEO 	 
	 
	 	Attest:

 	 
	 	By:  	/s/ Andrew J. Van Doren
 	 
	 	 	Name:  	Andrew J. Van Doren 	 
	 	 	Title:  	Vice President and Secretary 	 

[Signature Page to Warrant]

16

 

SCHEDULE A

Item 1

	 	 	 
	Name:

	 	Monarch Community Bancorp, Inc.
	Corporate or other organizational form:

	 	Corporation
	Jurisdiction of organization:

	 	Maryland

Item 2

			
	Exercise Price:1	 	$3.90

Item 3

			
	Issue Date:	 	February 6, 2009

Item 4

Amount of last dividend declared prior to the Issue Date: $.09 share, ($184,149.18) paid December
19, 2008, Declared November 20, 2008, Record Date December 8, 2008

Item 5

Date of Letter Agreement between the Company and the United States Department of the Treasury:
February 6, 2009

Item 6

		
	Number of shares of Common Stock: 	260,962

Item 7

		
	Company’s address: 	375 North Willowbrook Road, Coldwater, MI 49036

Item 8

			
	Notice information:	 	Monarch Community Bancorp, Inc.

Attn: Chief Executive Officer

375 North Willowbrook Road

Coldwater, MI 49036

 

			
	1	 	Initial exercise price to be calculated based on the average of closing prices of the Common
Stock on the 20 trading days ending on the last trading day prior to the date the Company’s
application for participation in the Capital Purchase Program was approved by the United
States Department of the Treasury.

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