STOCKHOLDERS' AGREEMENT STOCKHOLDERS' AGREEMENT, dated as of June __, 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...

 STOCKHOLDERS' AGREEMENT

                  STOCKHOLDERS'  AGREEMENT,  dated  as  of  June  __,  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
June __, 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.  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 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 Transfer,  or take any action which could reasonably be expected to result
in any Transfer of, any Securities held thereby.

                                       2


                  (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. 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  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.

                                       3


     (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 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.

                                       4


     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) 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).

                                       5


     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.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       6


                  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


                                       7




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


                                    XXXXX REVOCABLE TRUST OF 1993


                                  By:
                                     -------------------------------
                                      Name:
                                      Title:





                                       8


                                                                      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