So what is a character arc? Bell does the best job I've ever read of explaining it.
The character arc is a description of what happens to the inside of a character over the course of the story. He begins as one sort of person... things happen to and around him, gradually moving him in an "arc" that ends when the story is over.
Your lead character should be a different person at the other end of the arc.The character Bell uses as an example is Ebeneezer Scrooge from Dickens' A Christmas Carol.