<PAGE>
                                                                    EXHIBIT 10.2

                     SEVERANCE AGREEMENT AND GENERAL RELEASE


         THIS SEVERANCE AGREEMENT AND GENERAL RELEASE ("Agreement") is made and
entered into this 1st day of January, 2006, by and between RICHARD D. MAY
(hereinafter referred to as "Mr. May") and O'CHARLEY'S INC. and its subsidiaries
and related entities (hereinafter collectively referred to as "O'Charley's").

                              W I T N E S S E T H:

         WHEREAS, Mr. May currently serves as Chief Strategy Officer for
O'Charley's and has expressed his desire to resign his employment, effective
January 1, 2006 (the "Effective Date");

         WHEREAS, O'Charley's has expressed its willingness to accept Mr. May's
resignation from employment upon the following terms and conditions; and

         WHEREAS, after a period of negotiations between them, the parties have
reached an agreement by which Mr. May will resign his employment on the
Effective Date.

         NOW, THEREFORE, in consideration of the premises and mutual promises
herein contained, it is agreed as follows:

1.       The recitals set forth above are true and accurate, and by signing this
         Agreement, Mr. May hereby resigns his employment effective January 1,
         2006 (the "Effective Date"). Between the date of this Agreement and the
         Effective Date, Mr. May will continue to serve at the direction of the
         Company's Chief Executive Officer in the area of strategic planning and
         implementation. During such time, Mr. May will continue to receive his
         base salary as currently in effect.

2.       This Agreement is not and shall not be construed as an admission by
         O'Charley's of any fact or conclusion of law. Without limiting the
         general nature of the previous sentence, this Agreement shall not be
         construed as an admission that O'Charley's, its subsidiaries, related
         entities, or any of its or their officers, directors, managers, agents,
         or employees have violated any law or regulation or have violated any
         contract, express or implied.

3.       Mr. May 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 behalf of Mr. May, Mr. May will request such agency or
         court to withdraw from the matter, and Mr. May will refuse any benefits
         derived therefrom. This Agreement will not affect Mr. May's right to
         hereafter file a charge with or otherwise participate in an
         investigation or proceeding conducted by the Equal Employment
         Opportunity Commission regarding matters which arose after the
         Effective Date and which are not the subject of this Agreement.


<PAGE>

4.       Mr. May represents and agrees that he is fully aware of his rights and
         is advised to discuss any and all aspects of this Agreement with his
         attorney, that Mr. May has consulted with his attorney regarding this
         Agreement, or has chosen voluntarily not to do so, that he has
         carefully read and fully understands all of the provisions of this
         Agreement, and that, in consideration of the provisions hereof, Mr. May
         agrees to enter into this Agreement. Mr. May represents and
         acknowledges that prior to the execution of this Agreement, he has been
         provided a period of twenty-one (21) days within which to consider the
         Agreement.

5.       Mr. May hereby irrevocably and unconditionally releases, acquits and
         forever discharges O'Charley's, its subsidiaries, and related entities,
         and each of their respective shareholders, successors, assigns, agents,
         directors, officers, employees, representatives, and attorneys, and all
         persons acting by, through, under or in concert with any of them
         (collectively, the "Released Parties"), or any of them, from any and
         all charges, complaints, claims, liabilities, obligations, promises,
         agreements, controversies, damages, actions, causes of action, suits,
         rights, demands, costs, losses, debts and expenses (including
         attorney's fees and costs actually incurred), of any nature whatsoever,
         known or unknown ("Claims"), which Mr. May now has, owns, holds, or
         claims to have, own, or hold, or which Mr. May at any time heretofore
         had, owned, or held, or claimed to have, own, or hold. Such Claims
         include those under local, state or federal law, Executive Order, or at
         common law including, but not limited to, the Age Discrimination in
         Employment Act (ADEA). This provision does not include the release of
         future charges before the Equal Employment Opportunity Commission
         regarding matters which arose after the Effective Date and which are
         not the subject of this Agreement. This provision further does not
         include the release of Claims with respect to any vested benefits under
         a plan governed by the Employee Retirement Income Security Act
         ("ERISA") or any Claim related to the rights and benefits granted by
         the express terms of this Agreement.

6.       Mr. May agrees that he will not, without O'Charley's prior written
         consent, for a period ending on December 31, 2006, directly or
         indirectly, (i) solicit to hire or hire (or cause to leave the employ
         of O'Charley's) any salaried employee of O'Charley's or its
         subsidiaries or (ii) for himself or through, on behalf of or in
         conjunction with any person, persons or entity, own, consult with,
         maintain, operate, engage in, or have any financial or beneficial
         interest in (other than as a holder of not more than one percent of the
         outstanding stock of any corporation, which stock is publicly traded),
         advise, assist or make loans to, any business that is of a character
         and concept similar to the O'Charley's, Ninety-Nine Restaurant & Pub or
         Stoney River Legendary Steaks concepts operated by O'Charley's,
         including, without limitation, a full service varied menu casual dining
         restaurant which serves alcoholic beverages through a full-service bar,
         and which business is located within the United States. In the event
         Mr. May desires to engage in any of the activities set forth in (i) or
         (ii) of this paragraph 6, he shall deliver to O'Charley's Inc., Attn:
         President, his request in writing for O'Charley's consent, setting
         forth in detail the activity in which Mr. May proposes to engage and
         will supply such other information as O'Charley's shall request in
         connection therewith. O'Charley's will consider such request and in
         determining whether to consent to any such request, O'Charley's will
         take into consideration the potential impact of such proposed activity
         on the business interests of O'Charley's. The agreements set forth in
         this paragraph 6,


                                       2

<PAGE>

         together with those contained in paragraph 7 are sometimes hereinafter
         collectively referred to as the "Restrictive Agreements."

7.       Mr. May also recognizes that, as Chief Strategy Officer he has had
         access to, was provided in detail with, and used throughout his
         employment with O'Charley's, certain confidential and proprietary
         business information. Such information includes but is not limited to
         business strategy, pricing information, branding strategy, budgets,
         site location, vendor information, market analysis and evaluation, and
         other such proprietary and confidential business information as defined
         under Tennessee law as a trade secret (hereinafter "Confidential and
         Proprietary Business Information"). Mr. May agrees that, without
         O'Charley's prior written consent, he will not divulge, disclose,
         publish or disseminate in any manner, directly or indirectly, any such
         Confidential and Proprietary Business Information to any other person
         or entity.

8.       Mr. May agrees that the Restrictive Agreements are reasonable and
         supported by adequate consideration, which but for his agreement
         herein, Mr. May would not be entitled to receive. Mr. May further
         agrees that the Restrictive Agreements are necessary for the protection
         of O'Charley's, its business and its employees, and properly balance
         his personal interest in future employment and the various interests
         related to O'Charley's, its business and its employees. Mr. May further
         agrees that if he breaches any of the Restrictive Agreements, such
         breach likely will not have an adequate remedy at law and that
         O'Charley's shall be entitled, in addition to all other legal remedies
         available to it, to cease making the payments provided under paragraph
         9 and 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 shall be cumulative and not
         alternative.

9.       Following the Effective Date, O'Charley's will provide to Mr. May the
         following:

         (a)      Twelve months of base salary continuation at the rate of
                  $3,846.16 per week, plus car allowance at the rate in
                  existence for Mr. May on the date of this Agreement, to be
                  paid weekly, for the period from the Effective Date to
                  December 31, 2006, and from which O'Charley's will make
                  applicable legal withholdings.

         (b)      If Mr. May elects to continue health insurance coverage
                  pursuant to his "COBRA" right after the Effective Date,
                  O'Charley's will pay the premiums for such coverage during the
                  twelve month period following the Effective Date ending
                  December 31, 2006.

10.      Attached as Schedule A is a listing of all stock options and restricted
         stock awards held by Mr. May as of the Effective Date which are
         exercisable in whole or in part on the Effective Date. Mr. May agrees
         that Schedule A accurately reflects all equity awards and their
         respective terms held by him as of the date hereof and which are
         exercisable in whole or in part on the Effective Date. All such awards
         were granted pursuant to the terms of the O'Charley's 2000 Stock
         Incentive or the O'Charley's 1990 Employee Stock Plan. Pursuant to such
         plans, upon the Effective Date, each of the stock options and


                                       3
<PAGE>

         restricted stock awards would automatically terminate; however,
         notwithstanding the provisions of such plans, O'Charley's agrees to
         extend until March 31, 2006 the time within which Mr. May shall have
         the right to exercise any and all stock options listed on Schedule A to
         the extent they are exercisable as of the Effective Date (it being
         understood that all or any portion of any stock options, restricted
         stock awards or other equity based awards which are not exercisable or
         vested as of the Effective Date shall terminate as of such date in
         accordance with their terms).

11.      Mr. May represents that he has not heretofore assigned or transferred,
         or purported to assign or transfer to any person or entity, any claim
         or any portion thereof or interest therein.

12.      Mr. May represents and acknowledges that in executing this Agreement he
         does not rely and has not relied upon any other representation or
         statement made by any of the Released Parties or by any of the Released
         Parties' agents, representatives or attorneys, except as set forth
         herein, with regard to the subject matter, basis or effect of this
         Agreement.

13.      Mr. May agrees to maintain absolute confidentiality and secrecy
         concerning the terms of this Agreement, and he will not reveal, or
         disseminate by publication in any manner whatsoever, this document or
         any matter pertaining to it to any other person, including, but not
         limited to, any past or present employees of O'Charley's or any media
         representative except as required by legal process. This
         confidentiality provision does not apply to communications necessary
         between legal and financial planners or tax preparers or spouse so long
         as Mr. May requires those persons to accept the terms of this
         confidentiality agreement before being provided the information
         contained herein.

14.      This Agreement shall be binding upon O'Charley's, Mr. May and upon Mr.
         May's heirs, administrators, representatives, executors, successors,
         and assigns, and shall inure to the benefit of the Released Parties and
         each of them, and to their heirs, administrators, representatives,
         executor, successors and assigns.

15.      This Agreement shall in all respects be interpreted, enforced and
         governed under the laws of the State of Tennessee. If either party
         files suit to enforce the terms of this Agreement, the prevailing party
         shall be entitled to its reasonable attorneys' fees and costs.

16.      Mr. May shall have seven (7) days following the execution of this
         Agreement during which to revoke the Agreement. This Agreement shall
         become effective and irrevocable only after the seven (7) day period
         has expired and only absent a timely and effective revocation.

17.      Should any provision of this Agreement be declared or be determined by
         any court to be illegal or invalid, the validity of the remaining
         parts, terms, or provisions shall not be affected thereby and said
         illegal or invalid part, term or provision shall be deemed not to be a
         part of this Agreement.



                                       4
<PAGE>


18.      This Agreement sets forth the entire agreement between the parties
         hereto.


                                       O'CHARLEY'S INC.


                                       By:         /s/ Randall C. Harris
                                          --------------------------------------
                                          Title:  Chief Human Resources Officer
                                                 -------------------------------


                                       RICHARD D. MAY


                                                  /s/ Richard D. May
                                       -----------------------------------------

                                       Date:      January 1, 2006
                                            ------------------------------------











                                       5
<PAGE>



                                   Schedule A


                              LIST OF EQUITY AWARDS


<Table>
<Caption>
                                                                                                  NUMBER OF
                                                                          SHARES SUBJECT            SHARES
                                       GRANT               EXERCISE         TO AWARD ON         EXERCISABLE ON
    TYPE OF AWARD                      DATE                  PRICE        EFFECTIVE DATE        EFFECTIVE DATE
--------------------------    ------------------------    ------------    ----------------     -----------------
<S>                           <C>                         <C>             <C>                  <C>
Stock Option                       July 27, 1998               $12.75          10,000                10,000
Stock Option                      August 30, 2000             $12.813          15,000                 5,025
Stock Option                     February 19, 2003             $21.19           6,480                 6,480
Restricted Stock Award           February 19, 2003                N/A           3,240                     0
Restricted Stock Award             May 12, 2004                   N/A           4,027                     0
Restricted Stock Award           January 21, 2005                 N/A           7,848                     0
</Table>