<PAGE>

                                                                    EXHIBIT 10.1

                     SEVERANCE AGREEMENT AND GENERAL RELEASE

         THIS SEVERANCE AGREEMENT AND GENERAL RELEASE ("Agreement") is made and
entered into this 29th day of October, 2004, by and between A. CHAD FITZHUGH
(hereinafter referred to as "Mr. Fitzhugh") 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. Fitzhugh currently serves as Chief Financial Officer,
Secretary and Treasurer for O'Charley's and has expressed his desire to resign
his employment, effective October 29, 2004 (the "Effective Date");

         WHEREAS, O'Charley's has expressed its willingness to accept Mr.
Fitzhugh'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. Fitzhugh 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. Fitzhugh hereby resigns his employment effective October
         29, 2004 (the "Effective Date").

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. Fitzhugh represents and warrants that he has no actual knowledge of
         any practice engaged in by O'Charley's, its subsidiaries or related
         entities 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.

4.       Mr. Fitzhugh 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

<PAGE>

         Mr. Fitzhugh, Mr. Fitzhugh will request such agency or court to
         withdraw from the matter, and Mr. Fitzhugh will refuse any benefits
         derived therefrom. This Agreement will not affect Mr. Fitzhugh'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 this date
         and which are not the subject of this Agreement.

5.       Mr. Fitzhugh represents and agrees that Mr. Fitzhugh is fully aware of
         his rights and is advised to discuss any and all aspects of this
         Agreement with his attorney, that Mr. Fitzhugh 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. Fitzhugh agrees to enter into this Agreement.
         Mr. Fitzhugh 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.

6.       Mr. Fitzhugh 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. Fitzhugh now has,
         owns, holds, or claims to have, own, or hold, or which Mr. Fitzhugh 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 this 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.

7.       O'Charley's hereby irrevocably and unconditionally releases, acquits
         and forever discharges Mr. Fitzhugh 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 O'Charley's now has, owns, holds, or claims
         to have, own, or hold, or which O'Charley's at any time heretofore had,
         owned, or held, or claimed to have, own, or hold; provided, the
         provisions of this paragraph 7 shall not apply to any Claim (i) arising
         out of the commission by Mr. Fitzhugh of any act of fraud, embezzlement
         or material dishonesty, or

                                       2
<PAGE>

         (ii) any Claim related to any breach of the representations, warranties
         or covenants of Mr. Fitzhugh provided for by the express terms of the
         Agreement.

8.       Mr. Fitzhugh agrees that, as of the date of the signing of this
         Agreement, Mr. Fitzhugh will not, without O'Charley's prior written
         consent, directly or indirectly, solicit to hire or hire (or cause to
         leave the employ of O'Charley's) (i) for a period ending on April 30,
         2006, any salaried employee of O'Charley's or its subsidiaries. The
         agreements set forth in this paragraph 8, together with those contained
         in paragraphs 9 and 10, are sometimes hereinafter collectively referred
         to as the "Restrictive Agreements."

9.       Mr. Fitzhugh also recognizes that, as Chief Financial Officer,
         Secretary and Treasurer 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.
         Fitzhugh 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.

10.      Mr. Fitzhugh agrees that, as of the date of the signing of this
         Agreement and for a period ending on April 30, 2006, Mr. Fitzhugh shall
         not, directly or indirectly, for himself or through, on behalf of or in
         conjunction with any person, persons or entity, own, 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 or Ninety-Nine Restaurant & Pub 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.

11.      Mr. Fitzhugh agrees that the Restrictive Agreements are reasonable and
         supported by adequate consideration, which but for his agreement
         herein, Mr. Fitzhugh would not be entitled to receive. Mr. Fitzhugh
         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.
         Fitzhugh 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 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.

                                       3
<PAGE>

12.      Mr. Fitzhugh agrees to indemnify and hold each and all of the Released
         Parties harmless from and against any and all loss, costs, damage, or
         expense, including, without limitation, attorneys fees, incurred by the
         Released Parties, or any of them, arising out of Mr. Fitzhugh's breach
         of the representations, warranties and covenants made by Mr. Fitzhugh
         in paragraphs 1, 3, 4, 5, 6, 8, 9, 10, 11, 13, 15, 16, 17, and 18 of
         this Agreement or the fact that any representation made by him herein
         was false when made; provided that Mr. Fitzhugh's maximum liability
         under this paragraph shall be the amount of the consideration paid by
         O'Charley's to Mr. Fitzhugh pursuant to this Agreement.

13.      Given the nature of his position with O'Charley's, Mr. Fitzhugh likely
         has been privy to information and events during his tenure with
         O'Charley's that may not be documented. Mr. Fitzhugh agrees to provide
         such information and assistance as O'Charley's and its legal counsel
         shall reasonably request regarding matters related to his
         responsibilities while employed by O'Charley's, it being understood
         that such assistance shall not unreasonably interfere with Mr.
         Fitzhugh's other business responsibilities following the date hereof.

14.      O'Charley's will provide to Mr. Fitzhugh the following:

         (a)      Eighteen months of salary continuation, including car and gas
                  allowance at the existing rate, at the rate of $4,903.08 per
                  week, to be paid weekly, for the period from the Effective
                  Date to April 30, 2006, and from which O'Charley's will make
                  applicable legal withholdings.

         (b)      If Mr. Fitzhugh 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
                  October 31, 2005.

         (c)      O'Charley's will reimburse Mr. Fitzhugh for the fees of legal
                  counsel engaged by Mr. Fitzhugh to review the terms of this
                  Agreement, not to exceed $3,500.

15.      Attached as Schedule A is a listing of all stock options and restricted
         stock awards held by Mr. Fitzhugh as of the Effective Date which are
         exercisable in whole or in part on the Effective Date. Mr. Fitzhugh
         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 O'Charley's 1990 Employee Stock Plan. Pursuant to such
         plans, upon the Effective Date, each of the stock options and
         restricted stock awards would automatically terminate; however,
         notwithstanding the provisions of such plans, O'Charley's agrees that
         4,444 of the 10,580 shares subject to the Restricted Stock Award dated
         February 19, 2003 shall vest as of the Effective Date and O'Charley's
         agrees to extend until October 31, 2005 the time within which Mr.
         Fitzhugh 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

                                       4
<PAGE>

         are not exercisable or vested as of the Effective Date shall terminate
         as of such date in accordance with their terms).

16.      Mr. Fitzhugh 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.

17.      Mr. Fitzhugh 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.

18.      Mr. Fitzhugh 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. Fitzhugh requires those persons to accept the terms of this
         confidentiality agreement before being provided the information
         contained herein.

19.      This Agreement shall be binding upon O'Charley's, Mr. Fitzhugh and upon
         Mr. Fitzhugh'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.

20.      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.

21.      Mr. Fitzhugh 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.

22.      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.

                                       5
<PAGE>

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

                               O'CHARLEY'S INC.

                               By:      /s/ Gregory L. Burns
                                   -----------------------------------
                                 Title: CEO

                               A. CHAD FITZHUGH

                                        /s/ A. Chad Fitzhugh
                               ---------------------------------------
                               Date: 10/29/04

                                       6
<PAGE>

                                   Schedule A

                              LIST OF EQUITY AWARDS

<TABLE>
<CAPTION>
                                                                                                             NUMBER OF
                                                                                                               SHARES
                                                                                        SHARES              EXERCISABLE
                                                GRANT               EXERCISE          SUBJECT TO            ON EFFECTIVE
      TYPE OF AWARD                              DATE                PRICE               AWARD                  DATE
--------------------------                    ----------            --------          ----------            ------------
<S>                                           <C>                   <C>               <C>                   <C>
Non-Qualified Stock Option                    02/18/1998             $12.08              37,500                35,719
Non-Qualified Stock Option                    02/17/1999             $15.25              25,000                17,563
Non-Qualified Stock Option                    02/15/2000             $11.88              10,000                 4,900
Non-Qualified Stock Option                     2/19/2003             $21.19              21,160                 5,290
Restricted Stock Award                         2/19/2003                N/A              10,580                 4,444
</TABLE>