SECTION 4. Right to Participate in Certain Dispositions. (a) If at any time prior to the third anniversary of the date first above written and subject to any applicable restriction in Section 3, any Stockholder (for purposes of this section, the...

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                                                                       EXHIBIT 4

                             STOCKHOLDERS' AGREEMENT

                  STOCKHOLDERS' AGREEMENT, dated as of July 27, 2001 (as
hereafter amended, supplemented, or otherwise modified from time to time, this
"AGREEMENT"), between GRILL CONCEPTS, INC., a corporation organized and existing
under the laws of the State of Delaware ("ISSUER"); STARWOOD HOTELS AND RESORTS
WORLDWIDE, INC., a corporation organized and existing under the laws of the
State of Maryland ("INVESTOR"); and THE STOCKHOLDERS OF ISSUER LISTED IN
SCHEDULE I HERETO (the "STOCKHOLDERS");

                              W I T N E S S E T H:

                  WHEREAS, pursuant to the subscription agreement, dated as of
May 16, 2001 (the "SUBSCRIPTION AGREEMENT"), between Issuer and Investor, Issuer
issued to Investor 666,667 shares (the "SHARES") of common stock of Issuer, par
value $0.00004 per share (the "COMMON STOCK"), and warrants to purchase 666,667
shares of Common Stock (the "INITIAL WARRANTS");

                  WHEREAS, pursuant to the development agreement, dated as of
July ___, 2001 (the "DEVELOPMENT AGREEMENT"), between Issuer and Investor,
Issuer has agreed to issue to Investor additional warrants to purchase shares of
Common Stock based on: (i) certain development thresholds (the "DEVELOPMENT
WARRANTS") and (ii) certain incentive thresholds (the "INCENTIVE WARRANTS" and
together with the Initial Warrants and the Development Warrants, the
"WARRANTS"); and

                  WHEREAS, it is a condition precedent to Investor's willingness
to consummate the transactions contemplated by the Subscription Agreement and
the Development Agreement that Issuer and each Stockholder shall have executed
and delivered this Agreement;

                  NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants, and agreements set forth herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby covenant and agree as follows:

                  SECTION 1. Certain Defined Terms. Capitalized terms used and
not otherwise defined in the body hereof are used herein as defined in the
Subscription Agreement.

                  SECTION 2. Board of Directors Representation. (a) Issuer and
each Stockholder (whether in its capacity as a stockholder, director, or officer
of Issuer or otherwise) shall take or cause to be taken all actions, do or cause
to be done all things, and execute and deliver or cause to be executed and
delivered all documents, instruments, certificates, further assurances, or other
papers, that may be necessary, appropriate, or
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desirable (including, without limitation, in the case of each Stockholder: (x)
by attending stockholder and board of directors meetings in person or by proxy
for purposes of obtaining a quorum at such meetings, and executing written
consents in lieu of meetings; and (y) by voting at every annual or special
meeting of the stockholders of Issuer and at every continuation or adjournment
thereof, and on every action or approval by written consent of the stockholders
of Issuer in lieu of any such meeting, all voting Securities then owned or
controlled, directly or indirectly, thereby) in order to ensure that, so long as
Investor holds, directly or indirectly by an Affiliate, not fewer than 333,333
shares of Common Stock (as adjusted for stock splits, stock dividends,
recapitalizations, and the like):

                           (i) not fewer than one nominee of Investor is at all
         times duly elected or appointed as a director of Issuer;

                           (ii) if the aggregate number of GCI Concept
         Facilities (as defined in the Development Agreement) equals or exceeds
         ten, not fewer than two nominees of Investor are at all times duly
         elected or appointed as directors of Issuer;

                           (iii) if the number of individuals Investor is
         entitled pursuant to this Section 2(a) to nominate to the board of
         directors of Issuer is one, the number of individuals comprising the
         entire board of directors of Issuer shall not exceed seven;

                           (iv) if the number of individuals Investor is
         entitled pursuant to this Section 2(a) to nominate to the board of
         directors of Issuer is two, the number of individuals comprising the
         entire board of directors of Issuer shall not exceed eight; and

                           (v) for a period of no less than three years, unless
         Xxxxxx Xxxxxx is physically unable to perform under the conditions of
         his current Employment Agreement as provided in the Disclosure
         Schedule, no new employment agreement will be entered into by Issuer
         with the chief executive officer of Issuer; and no employment agreement
         with the chief executive officer of Issuer will be unreasonably amended
         or otherwise modified during such three-year period.

                  (b) Concurrently with the execution of this Agreement, each
Stockholder shall deliver to Investor a proxy in the form attached hereto as
Exhibit A, which proxy shall be irrevocable to the fullest extent permitted by
law and shall state the total number of shares of capital stock of Issuer
beneficially owned by such Stockholder.

                  SECTION 3. Stockholder Transfer Restrictions. (a) During the
one-year period commencing on the Closing Date and ending immediately prior to
the first anniversary of the Closing Date, neither Investor nor any of the
Stockholders shall
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Transfer, or take any action which could reasonably be expected to result in any
Transfer of, any Securities held thereby.

                  (b) Without limiting the applicability of the foregoing,
neither Investor nor any Stockholder shall Transfer, or take any action which
could reasonably be expected to result in any Transfer of, any Securities held
thereby, except in compliance with all applicable securities Laws and the other
terms and conditions of this Agreement.

                  (c) Notwithstanding anything to the contrary contained herein,
Investor and any Stockholder may at any time Transfer any or all Securities held
thereby to any Permitted Transferee; provided that, prior to the consummation of
any Transfer to any Permitted Transferee, such Permitted Transferee shall: (i)
execute and deliver to Issuer and each Stockholder a counterpart to this
Agreement; and (ii) deliver to Issuer and each Stockholder an opinion of
counsel, in form and substance reasonably satisfactory to Issuer, to the effect
that the agreements executed and delivered by such Permitted Transferee in
accordance with the immediately preceding clause (i) are legal, valid, and
binding obligations of such Permitted Transferee, enforceable against such
Permitted Transferee in accordance with their terms.

                  SECTION 4. Right to Participate in Certain Dispositions. (a)
If at any time prior to the third anniversary of the date first above written
and subject to any applicable restriction in Section 3, any Stockholder (for
purposes of this section, the "SELLING HOLDER") wishes to sell for cash more
than 50,000 shares (which number shall be adjusted for stock splits, stock
dividends, recapitalizations and the like) held thereby to a Third Party in a
bona fide, fully financed transaction the terms of which have been negotiated
directly between the Selling Holder (or its agent) and one or more prospective
purchasers (or its/their agent), rather than through an open-market transaction
with an unidentified purchaser executed over a securities exchange or quotation
service (for purposes of this section, the "PROPOSED TRANSACTION"), the Selling
Holder shall give Investor and each transferee of Investor of not fewer than
100,000 shares (which number shall be adjusted for stock splits, stock
dividends, recapitalizations and the like) of Common Stock or Securities
convertible into or exercisable or exchangeable for not fewer than 100,000
shares (which number shall be adjusted for stock splits, stock dividends,
recapitalizations and the like) of Common Stock (together with Investor, the
"RIGHTS HOLDERS") written notice thereof (for purposes of this section, a
"TAG-ALONG NOTICE") not fewer than forty-five days prior to the date (for
purposes of this section, the "SALE DATE") on which the Selling Holder wishes to
consummate the Proposed Transaction; provided that Xxxxxxx Xxxxxxxxx shall not
be subject to this Section 4 from the first date as of which he is neither a
member of the board of directors of Issuer nor an employee of Issuer. The
Tag-Along Notice shall describe in reasonable detail: (i) the class of
Securities, and the number of shares or units or the face amount, as the case
may be, of such Securities, the Selling Holder wishes to sell (for purposes of
this section, the "TAG-ALONG SECURITIES"); and (ii) the price per share, unit,
or face amount, as the case may be, at which, and all other material terms and
conditions (including the expected Sale Date) upon which, the Selling Holder
wishes to sell the Tag-Along Securities. The Tag-Along Notice shall constitute
an offer by the Selling Holder to permit each Rights
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Holder to sell in the Proposed Transaction, upon the terms and subject to the
conditions set forth in the Tag-Along Notice, the number of shares or units or
the face amount, as the case may be, of Securities equal to the product of: (i)
the aggregate number of shares or units or the aggregate face amount, as the
case may be, of Tag-Along Securities proposed to be sold in the Proposed
Transaction; multiplied by (ii) the quotient of: (A) the number of Fully Diluted
Shares held by such Rights Holder as of the date of the Tag-Along Notice;
divided by (B) the total number of Fully Diluted Shares outstanding as of the
date of the Tag-Along Notice.

                  (b) During the fifteen-day period immediately following its
receipt of the Tag-Along Notice (for purposes of this section, the "NOTICE
PERIOD"), each Rights Holder may accept the offer made thereby, in whole or in
part, by giving the Selling Holder written notice of acceptance (for purposes of
this section, an "ACCEPTANCE NOTICE"), which notice shall state the number of
shares or units or the face amount, as the case may be, of Securities which such
Rights Holder wishes to sell in the Proposed Transaction, and delivering to the
Selling Holder in trust for the benefit of such Rights Holder: (i) certificates
evidencing the Securities which such Rights Holder wishes to sell in the
Proposed Transaction (for purposes of this section, the "PARTICIPATING
SECURITIES"), duly endorsed in blank or accompanied by written instruments of
transfer in form reasonably satisfactory to the Selling Holder duly executed by
such Rights Holder; (ii) an instrument of assignment assigning such Rights
Holder's rights and delegating its obligations hereunder in respect of the
Participating Securities; and (iii) a special irrevocable power-of-attorney
authorizing the Selling Holder, on behalf of such Rights Holder, to sell the
Participating Securities upon the terms and subject to the conditions set forth
in the Tag-Along Notice. An Acceptance Notice shall constitute an irrevocable
agreement by such Rights Holder to sell the number of shares or units or the
face amount, as the case may be, of Securities with respect to which such notice
was given, at the price and upon the other terms and subject to the conditions
set forth in the Tag-Along Notice. Notwithstanding the delivery of an Acceptance
Notice by any Rights Holder, the Selling Holder may revoke its offer pursuant to
the corresponding Tag-Along Notice at any time prior to consummation of the
Proposed Transaction; provided that the Selling Holder shall not thereafter: (i)
sell any of the Tag-Along Securities with respect to which it gave such
Tag-Along Notice unless it again complies with the requirements of Sections
4(a), (b), and (c); or (ii) deliver another Tag-Along Notice for a period of
ninety days after the effective date of such revocation.

                  (c) The Selling Holder shall consummate the Proposed
Transaction within sixty days after the expiration of the Notice Period.
Immediately after the closing of the Proposed Transaction the Selling Holder
shall deliver to each Rights Holder, by wire transfer of immediately available
fund to the bank account or accounts specified in the Acceptance Notice, the
purchase price for the Participating Securities, if any, sold thereby.

                  (d) During the ninety-day period immediately following the
expiration of the Notice Period, the Selling Holder may consummate the Proposed
Transaction without the participation of any particular Rights Holder if such
Rights Holder did not
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timely deliver an Acceptance Notice in accordance herewith or otherwise timely
comply with the requirements hereof, upon terms and subject to conditions no
less favorable to the Third Party purchaser than the terms and conditions set
forth in the Tag-Along Notice. If the Proposed Transaction contemplated by such
Tag-Along Notice is not consummated within such ninety-day period, or the
Selling Holder proposes to consummate such transaction upon terms or subject to
conditions more favorable to the Selling Holder than those set forth in the
Tag-Along Notice, the Selling Holder may not consummate such transaction unless
it again complies with the requirements of Sections 4(a), (b), and (c), and the
Selling Holder shall immediately return to each Rights Holder all certificates
evidencing the unsold Participating Securities that such Rights Holder delivered
for sale pursuant to this Section 4, and the related instruments of assignment
and power-of-attorney.

                  SECTION 5. Notice of Certain Developments. If Issuer or any
Stockholder receives from any Third Party any offer, proposal, or other
indication of interest (a "TRANSACTION PROPOSAL") relating to: (i) any issuance
or other Transfer of shares of Common Stock or any other Securities; (ii) any
merger, consolidation, or other business combination with or into Issuer; (iii)
any acquisition of all or any substantial portion of the assets of Issuer; or
(iv) any other extraordinary business transaction involving or otherwise
relating to Issuer; Issuer or such Stockholder, as the case may be, shall
promptly give each Rights Holder written notice of its receipt of such
Transaction Proposal, which notice shall describe in reasonable detail: (A) the
identity of the Third Party making such Transaction Proposal; and (B) all
material terms and conditions of such Transaction Proposal.

                  SECTION 6. Improper Transfer. Any attempt by any Stockholder
to make any Transfer other than in accordance with this Agreement shall be null
and void, and neither Issuer nor any transfer agent thereof shall give any
effect in Issuer's share records to such attempted Transfer.

                  SECTION 7. Certain Interests. Except as described in the
Disclosure Schedule, neither Issuer nor any Subsidiary shall knowingly cause or
permit any stockholder, director, officer, employee of Issuer or any Subsidiary,
or relative or spouse (or relative of such spouse) who resides with, or is a
dependent of, any such stockholder, director, officer, or employee, or any
Affiliate of any such Person: (i) to have any direct or indirect financial
interest in any competitor, customer, or supplier of Issuer or any Subsidiary;
provided, however, that the ownership of securities representing no more than
one percent of the outstanding voting power of any competitor, supplier, or
customer, and which are also listed on any national securities exchange or
traded actively in the national over-the-counter market, shall not be deemed to
be a "financial interest" so long as the person owning such securities has no
other connection or relationship with such competitor, supplier or customer;
(ii) to own, directly or indirectly, in whole or in part, or to have any other
interest in, any tangible or intangible property belonging to or used, held for
use, or intended to be used by Issuer or any Subsidiary or forming a part of or
used, held for use, or intended to be used in connection with, necessary for, or
otherwise material to the conduct of, the business and operations of Issuer or
any Subsidiary; or (iii)
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to have outstanding at any time any Indebtedness to Issuer or any Subsidiary.
Neither Issuer nor any Subsidiary shall knowingly undertake or assume any
liability or any other obligation of any kind, nature, or description whatsoever
to or on behalf of any stockholder, director, officer, or employee of Issuer or
any Subsidiary, to any relative or spouse (or relative of such spouse) who
resides with, or is a dependent of, any such stockholder, director, officer, or
employee, or to any Affiliate of any such Person; except for liabilities
relating to: (A) the payment of salary for services rendered; (B) the
reimbursement of reasonable and necessary business expenses incurred on behalf
of Issuer or any Subsidiary; and (C) the payment or grant of other standard
employee benefits made generally available to all employees of Issuer or such
Subsidiary (including stock option agreements outstanding under any employee
stock option plan approved by the board of directors of Issuer or such
Subsidiary).

                  SECTION 8. Miscellaneous. The terms and provisions set forth
in Sections 16 and 17 of the Subscription Agreement are incorporated in this
Agreement by reference and made a part hereof mutatis mutandis.


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                  IN WITNESS WHEREOF, each party hereto has executed and
delivered this Agreement as of the date first written above.

                                   GRILL CONCEPTS, INC.


                                   By:
                                         Name:
                                         Title:


                                   STARWOOD HOTELS AND RESORTS WORLDWIDE, INC.


                                   By:
                                         Name:
                                         Title:






                                   --------------------------------
                                   XXXXXX XXXXXX





                                   --------------------------------
                                   XXXXXXX XXXXXXXXX





                                   --------------------------------
                                   XXXXX XXXXX
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                                   --------------------------------
                                   XXXXX XXXXX

                                   XXXXX REVOCABLE TRUST OF 1993


                                   By:
                                         Name:
                                         Title:
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                                                                      SCHEDULE I

                                  STOCKHOLDERS

            Name                                 Address
            ----                                 -------

Xxxxxx Xxxxxx                         00000 Xxx Xxxxxxx Xxxx.
                                      Xxxxx 000
                                      Xxx Xxxxxxx, Xxxxxxxxxx 00000

Xxxxxxx Xxxxxxxxx                     00000 Xxx Xxxxxxx Xxxx.
                                      Xxxxx 000
                                      Xxx Xxxxxxx, Xxxxxxxxxx 00000

Xxxxx Xxxxx                           00000 Xx Xxxxxx Xxxxxx
                                      Xxx Xxxxxxx, Xxxxxxxxxx 00000

Xxxxx Xxxxx                           00000 Xx Xxxxxx Xxxxxx
                                      Xxx Xxxxxxx, Xxxxxxxxxx 00000

Xxxxx Revocable Trust of 1993         00000 Xx Xxxxxx Xxxxxx
                                      Xxx Xxxxxxx, Xxxxxxxxxx 00000