O'CHARLEY'S INC.

                  2005 EXECUTIVE OFFICERS' CASH INCENTIVE PLAN

 

         1.       PURPOSE OF THE PLAN. The purpose of the Plan is to advance the

interests of the Company and its shareholders by providing incentives in the

form of cash bonus awards to certain executives of the Company and its

Subsidiaries. The Plan is intended to enable the Company to attract and retain

appropriate executive talent and to motivate such executives to manage and grow

the Company's business and to attain the performance goals articulated under the

Plan.

 

         2.       DEFINITIONS. The following capitalized terms used in the Plan

have the respective meanings set forth in this Section:

 

         (a)      "AWARD" means a cash bonus award granted pursuant to the Plan.

 

         (b)      "BOARD" means the Board of Directors of the Company.

 

         (c)      "CODE" means the Internal Revenue Code of 1986, as amended, or

any successor thereto.

 

         (d)      "COMMITTEE" means the Compensation and Human Resources

Committee of the Board, or any successor thereto or any other committee

designated by the Board to assume the obligations of the Committee hereunder.

 

         (e)      "COMPANY" means O'Charley's Inc., a Tennessee corporation, and

its Subsidiaries.

 

         (f)      "EFFECTIVE DATE" means the date on which the Plan takes effect

in accordance with Section 13 of the Plan.

 

         (g)      "EXECUTIVE OFFICER" means those officers defined in Rule 3b-7

promulgated pursuant to the Securities Exchange Act of 1934.

 

         (h)      "PARTICIPANT" means an Executive Officer of the Company or any

of its Subsidiaries who is selected by the Committee to participate in the Plan

pursuant to Section 4 of the Plan.

 

         (i)      "PERFORMANCE PERIOD" means the Company's 2005 fiscal year or

any portion thereof designated by the Committee.

 

         (j)      "PLAN" means the O'Charley's Inc. 2005 Executive Officers'

Cash Incentive Plan.

 

         (k)      "SUBSIDIARY" means a subsidiary corporation, as defined in

Section 424(f) of the Code (or any successor section thereto).

 

         3.       ADMINISTRATION. The Plan shall be administered by the

Committee. The Committee shall have the authority to select the Executive

Officers to be granted Awards under

 

 

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the Plan, to determine the size and terms of an Award (subject to the

limitations imposed on Awards in Section 5 below), to modify the terms of any

Award that has been granted, to determine the time when Awards will be made, the

amount of any payments pursuant to such Awards, and the Performance Period to

which they relate, to establish performance objectives in respect of such

Performance Periods and to determine whether such performance objectives were

attained. The Committee is authorized to interpret the Plan, to establish, amend

and rescind any rules and regulations relating to the Plan, and to make any

other determinations that it deems necessary or desirable for the administration

of the Plan. The Committee may correct any defect or omission or reconcile any

inconsistency in the Plan in the manner and to the extent the Committee deems

necessary or desirable. Any decision of the Committee in the interpretation and

administration of the Plan, as described herein, shall lie within its sole and

absolute discretion and shall be final, conclusive and binding on all parties

concerned. Determinations made by the Committee under the Plan need not be

uniform and may be made selectively among Participants, whether or not such

Participants are similarly situated. The Committee shall have the right to

deduct from any payment made under the Plan any federal, state, local or foreign

income or other taxes required by law to be withheld with respect to such

payment.

 

         4.       ELIGIBILITY AND PARTICIPATION. The Committee shall determine

the Executive Officers who shall be Participants for the Performance Period.

 

         5.       AWARDS.

 

         (a)      Performance Goals. Awards under the Plan shall be conditioned

on the attainment of specified corporate, division (O'Charley's, Ninety-Nine,

Stoney River or Commissary) and/or individual performance goals. The corporate

goal for each Participant (if applicable) shall be a specified Company earnings

per share target for 2005 as determined by the Committee. The division goal for

each Participant (if applicable) shall be a specified division operating income

target with respect to the specified division for 2005 as determined by the

Committee. The applicable performance goals for each Participant shall be

recommended by the Chief Executive Officer and determined and approved by the

Committee for the Performance Period. With respect to each corporate and/or

division goal, the Committee shall establish the threshold, target and superior

levels of performance. After the end of the Performance Period, the Committee

shall determine whether and to what extent each performance goal has been met.

In determining whether and to what extent a performance goal has been met, the

Committee shall consider the recommendation of the Chief Executive Officer

(other than with respect to his or her Award) and may consider such other

matters as the Committee deems appropriate.

 

         (b)      Target Bonus. The target bonus amount (as a percentage of base

salary) to be payable pursuant to an Award for each Participant with respect to

each performance goal is set forth on Schedule A attached hereto.

 

         (c)      Amount Payable. The amount payable pursuant to an Award shall

be determined by the Committee in its sole discretion based on the Committee's

determination of whether and to what extent each applicable performance goal has

been met consistent with the performance calibration scale approved by the

Committee. No amounts shall be paid for performance at or below the threshold

level with respect to a particular corporate and/or division

 

 

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performance goal. For performance at the threshold level with respect to a

particular corporate and/or division performance goal, a Participant shall be

entitled to 50% of the target bonus amount (as set forth on Schedule A)

applicable to such performance goal. For performance at the target level with

respect to a particular corporate and/or division performance goal, a

Participant shall be entitled to 100% of the target bonus amount (as set forth

on Schedule A) applicable to such performance goal. For performance at or above

the superior level with respect to a particular corporate and/or division

performance goal, a Participant shall be entitled to 200% of the target bonus

amount (as set forth on Schedule A) applicable to such performance goal. For

performance between the threshold and target levels of performance or between

the target and superior levels of performance with respect to a particular

corporate and/or division performance goal, a Participant shall be entitled to a

pro rata portion of the target (or superior) bonus amount applicable to such

performance goal. If applicable, a Participant who is determined to have

achieved his or her individual performance goal shall be entitled to 100% of the

target bonus amount (as set forth on Schedule A) applicable to such performance

goal.

 

         (d)      Payment. The amount of the Award payable as determined by the

Committee for the Performance Period shall be paid to the Participant at such

time as determined by the Committee in its sole discretion after the end of the

Performance Period.

 

         (e)      Termination of Employment. If a Participant dies, retires, is

assigned to a different position or is granted a leave of absence, or if the

Participant's employment is otherwise terminated during a Performance Period,

the right of such Participant to any Award hereunder shall be forfeited;

provided, the Committee may in its sole discretion direct the Company to pay to

such Participant (or his or her estate, if applicable) after the end of the

Performance Period a pro rata share of the Participant's Award based on the

period of actual participation if it would have become earned and payable had

the Participant's employment status not changed.

 

         6.       AMENDMENTS OR TERMINATION. The Committee may amend, alter or

discontinue the Plan, but no amendment, alteration or discontinuation shall be

made which would impair any of the rights or obligations under any Award

theretofore granted to a Participant under the Plan without such Participant's

consent; provided, however, that the Committee may amend the Plan in such manner

as it deems necessary to permit the granting of Awards meeting the requirements

of any applicable law, rule or regulation.

 

         7.       NO RIGHT TO EMPLOYMENT. Neither the Plan nor any action taken

hereunder shall be construed as giving any Participant or other person any right

to continue to be employed by or perform services for the Company or any

Subsidiary, and the right to terminate the employment of or performance of

services by any Participant at any time and for any reason is specifically

reserved to the Company and its Subsidiaries.

 

         8.       NONTRANSFERABILITY OF AWARDS. An Award shall not be

transferable or assignable by the Participant other than by will or by the laws

of descent and distribution.

 

         9.       OFFSET OF AWARDS. Notwithstanding anything to the contrary

herein, the Committee, in its sole discretion, may reduce any amounts otherwise

payable to any Participant hereunder in order to satisfy any liabilities owed to

the Company or any of its Subsidiaries by the Participant.

 

 

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         10.      ADJUSTMENTS UPON CERTAIN EVENTS. In the event of any material

change in the business, assets, liabilities or prospects of the Company, any

division or any Subsidiary, the Committee in its sole discretion and without

liability to any person may make such adjustment, if any, as it deems to be

equitable as to any affected terms of outstanding Awards. In addition, in the

event that the Committee determines that an event has occurred during the

Performance Period which has impacted the Company's (or any division's)

operating results for such period, the Committee shall have the right, in its

sole and absolute discretion, to adjust any performance goals (including,

without limitation, by adjusting the threshold, target and superior levels of

performance) to reflect such event for purposes of calculating the amounts

payable to any Participant pursuant to an Award.

 

         11.      MISCELLANEOUS PROVISIONS. The Company is the sponsor and legal

obligor under the Plan and shall make all payments hereunder, other than any

payments to be made by any of the Subsidiaries (in which case payment shall be

made by such Subsidiary, as appropriate). The Company shall not be required to

establish any special or separate fund or to make any other segregation of

assets to ensure the payment of any amounts under the Plan, and the

Participants' rights to the payment hereunder shall be no greater than the

rights of the Company's (or Subsidiary's) unsecured creditors. All expenses

involved in administering the Plan shall be borne by the Company.

 

         12.      CHOICE OF LAW. The Plan shall be governed by and construed in

accordance with the laws of the State of Tennessee applicable to contracts made

and to be performed in the State of Tennessee.

 

         13.      EFFECTIVENESS OF THE PLAN. The Plan shall be effective as of

the date of its adoption by the Committee.

 

 

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                                   SCHEDULE A

 

<TABLE>

<CAPTION>

                                                               CORPORATE            DIVISION          INDIVIDUAL

                                                                 GOAL                 GOAL               GOAL

                                                              (% OF BASE           (% OF BASE         (% OF BASE

                                                               SALARY AT           SALARY AT           SALARY AT

               TITLE                                            TARGET)             TARGET)             TARGET)

<S>                                                           <C>                  <C>                  <C>

Chairman and Chief Executive Officer                              90%                  0%                  0%

President and Chief Operating Officer                             62%                  0%                 10%

Chief Financial Officer                                           57%                  0%                 10%

Concept President - Ninety Nine                                    0%                 53%                  0%

President - Commissary Operations                                 15%                 30%                 10%

Chief Support Officer                                             10%                 25%                 10%

Chief Strategy Officer                                            27%                  0%                 10%

Principal Accounting Officer and Corporate Controller             18%                  0%                 10%

</TABLE>

 

 

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