Document:

Exhibit 10.1

                              EMPLOYMENT AGREEMENT

THIS  EMPLOYMENT  AGREEMENT  (the  "Agreement")  is made effective as of March 3
2006,  by  and  between  GRILL  CONCEPTS,  INC.,  a  Delaware  corporation  (the
"Company")  and  PHILIP  GAY  ("Employee').

                                    RECITALS

WHEREAS,  the  Company  and  Employee  have  heretofore  entered into Employment
Agreements  dated,  July  2004  (collectively the "Previous Agreement"), setting
forth  the  terms  and conditions of the Company's employment of Employee as its
EVP  and  Chief  Financial  Officer;  and

WHEREAS, the Company and Employee have heretofore entered into Change of Control
Agreement  dated,  September  30,  2005  (collectively  the  "Change  In Control
Agreement"),  setting forth certain benefits that the employee would be entitled
in  the  event  of  a  change  in  control  (as defined in the Change in Control
Agreement);  and

WHEREAS,  the  Company and Employee desire that Employee continue his employment
with  the  Company  and employ the Employee as its President and Chief Executive
Officer  and  have  a seat on its Board Of Directors and to replace its Previous
Agreement,  which  shall  have  no  force  and  effect  to the Change In Control
Agreement,  pursuant  to  and  in  accordance  with  the  terms  and  conditions
hereinafter  set  forth  in  this  agreement;

NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  and  agreements
contained  in  this  Agreement,  the  parties  hereby  agree  as  follows:

1.   EMPLOYMENT.
     -----------

     1.1  The  Company  hereby  employs  Employee  as  its  President  and Chief
Executive  Officer  for a term of three and one-half (31/2) years, commencing as
of  June  22,  2006  and  ending as of December 31, 2009 (the "Term"); provided,
however,  that the Term may be extended for one year by mutual written agreement
of  the  parties.  Employee  hereby  accepts  such  position, upon the terms and
conditions  set  forth  in  the  Agreement.

     1.2  During  the  Term,  Employee  shall devote his full-time, energies and
skills  to the performance of his duties hereunder, which shall include, but not
limited  to,  the  active development, management and operation of the Company's
business,  provided, that the foregoing shall not prohibit employee from serving
on the boards of directors of any other (non competitive, which for this purpose
shall  include  restaurant  companies)  company,  up  to  a  limit of three such
companies,  whether  for  profit  or  not  for  profit

     1.3  During  the Term, Employee shall not, directly or indirectly, alone or
as a member of a partnership or other association, or as an officer, director or
stockholder,  be  engaged in or concerned with any other duties or pursuits in a
business  activity  which  compete, directly or indirectly, with the business of
the  Company  without  written  consent  with  the  Company,  other  than owning
securities  in  a  publicly  traded  company,  provided  that  such ownership by
Employee  does  not  exceed ten percent (10%) of any class of securities of such
company.

<PAGE>

     1.4  In  the  course  of Employee's employment hereunder, it is anticipated
that  Employee  may  from  time  to  time  be  allowed  access  to  confidential
information  and  trade  secrets  (collectively  the "Confidential Information")
owned  by  the  Company  and  used  in  the  course of its business. The parties
acknowledge  and agree that there is a competitive value and confidential nature
with  respect  to  the  Confidential  Information, and that material damage will
result  to  the  Company if the Confidential Information is disclosed to a third
party.  Employee  therefore agrees that during the Term, and for a period of ten
(10) years thereafter, Employee will not, directly or indirectly disclose or use
any of the Confidential Information except as required in the ordinary course of
the  Company's business and Employee's employment hereunder. All records, files,
documents  and  materials  relating to the Company's business which the Employee
shall  prepare, use or be provided with during the Term shall be and remain sole
property  of the Company and shall not be removed form the Company's presence or
otherwise  utilized  by  the  Employee for other than the benefit of the Company
without  the  Company's  written  consent.

     1.5  Employee  acknowledges  and  agrees  that  in the event of a breach by
Employee  of  any  of  the  provisions  of paragraphs 1.3 and 1.4 above, that in
addition  to  any  other  remedies  it may have at law or in equity, the Company
shall  be  entitled  to  injunctive  relief without the necessity of proving the
inadequacy  of  such  other  remedies.

2.   SALARY.     Employee shall receive an annual base salary during each year
     -------
of the Term of this agreement as follows:

     June 23, 2006 to June 22, 2007               $275,000
     June 23, 2007 to June 22, 2008:              $300,000
     June 23, 2008 to June 22, 2009:              $325,000
     June 23, 2009 to December 31, 2009:          $350,000

3.   OTHER COMPENSATION.     Employee shall be entitled to the following
     ------------------
benefits and other compensation during the Term:

     3.1     Vacation.     Five (5) weeks vacation during each year of the Term,
             ---------
at such  times as shall  be mutually  agreed  upon  between  he Employee and the
Company; provided, however, that Employee may not accumulate any unused vacation
time form one employment year to the next during the Term.

     3.2     Automobile.     Unlimited use of an automobile of a make and model
             -----------
commensurate with Employee's position as Chief Executive Officer of the Company.
The Company  shall pay all  expenses  for repair,  maintenance and insurance for
such automobile in an amount not to exceed Ten Thousand Dollars per year.

     3.3     Travel and Entertainment.     Unlimited reimbursement by the
             ------------------------
Company  of Employee for entertainment,  dining and travel  expenses incurred by
Employee in the course of performing his duties hereunder.

     3.4     Intentionally Omitted.
             ----------------------

     3.5     Health Benefits.          During the Term and any extension
             ----------------
thereof,  unless the  Employee is terminated for cause, each of the Employee and
his spouse (or widow) shall be  entitle to receive,  at the sole  expense of the
Company, such benefits,  including  without  limitation,  participation in group

<PAGE>

life,  health,  accident,  disability,  liability or  hospitalization  insurance
plans,  pension  plans, severance  plans  or  retirement  plans,  as the Company
currently makes available to its highest level of executive employees as a group
or as such programs and benefits are amended.

     3.6     Life Insurance.     Term life insurance in  the face of One Million
             --------------
Dollars  ($1,000,000), the premiums  and all other costs for which shall be paid
in full by the Company.

     3.7     Stock Options.          Company hereby grants to Employee fifty
             -------------
thousand  (50,000) shares of stock at  a price of $3.19 per share, in accordance
with provisions of  the Company's Stock  Option plan  (the "Plan").  The options
will  vest one-third (1/3) June 22,2007,  one-third  June 22, 2008 and the final
one-third on June 22, 2009.

     3.8     Bonus Plan.     Employee shall be eligible for a performance-based
             ----------
bonus  of  a  maximum  of  fifty  percent (50%) of  salary.   Metrics  shall  be
established  by the Compensation  Committee of the Board of Directors each year.

     3.9     Other Benefits.     Such other benefits as Employee may be eligible
             --------------
to receive in accordance with  the Company's announced employee benefit programs
in effect from time to time.   Nothing  contained  in  this  paragraph  shall be
deemed to  restrict, limit or  affect any stock options that may have previously
been granted to Employee.

4.   TERMINATION.     This Agreement shall terminate upon commencement of any
     ------------
of the following:

     4.1     The  expiration  of  the  Term  hereof.

     4.2     The  mutual  written  consent  of  the  parties  hereto.

     4.3     The  death  of  the  employee.

     4.4     The permanent  disability of  the Employee, as such term is defined
             in  paragraph  6  below.

     4.5     For cause, at the option of the Company, as provided in paragraph 5
             below.

     Nothing  contained  in  this  paragraph  4  shall be construed, however, to
abrogate  the  payment  by  the  Company  to  Employee  or  Employee's  personal
representative  or  heirs,  as  the case may be, of any benefits or compensation
that had accrued and was due to Employee prior to termination of this Agreement.

5.     TERMINATION FOR CAUSE.     The Company shall have the right, at its sole
       ---------------------
election,  to  terminate Employee's  employment hereunder at any time during the
Term for cause,  which, for  purposes of this  Agreement shall be constituted by
any of the following events:

     5.1     Employee is convicted by any federal, state or local authority with
(i) an act of dishonesty;  or (ii) an act involving moral turpitude; or (iii) an
act  constituting  a  felony; or  (iv)  narcotics  addiction;  or  (v)  habitual
intemperance.

     5.2     The  continued  failure  by Employee, following written notice from
the  Company, to  fulfill Employee's obligations under or comply with any of the
provisions of this Agreement.

<PAGE>

     Any  election  by  the  Company to terminate this Agreement for cause under
paragraphs  5.1  or 5.2 above shall be made by giving Employee written notice to
such effect by certified or registered mail at Employee's last known address, or
by  personal delivery of such notice to Employee; provided, however, that in the
event Employee is either convicted or pleads guilty or nolo contendere to any of
                                                       ---------------
the  charges  set  forth  in  paragraph  5.1  above, the Company may immediately
terminate  this  Agreement thereupon. The waiver by the Company of any such acts
of  Employee as described in this paragraph 5 shall not be construed as a waiver
of  any  subsequent  acts  by  Employee.

6.            PERMANENT DISABILITY
              --------------------

     6.1     The terms  "permanent disability"  as used in this  Agreement shall
mean six (6) months of substantially continuous disability.  Disability shall be
deemed "substantially continuous" if, as a practical matter, Employee, by reason
of mental  or physical  health,  is unable to sustain reasonably long periods of
substantial   performance  of  his  duties.   Frequent  long  illnesses,  though
different  form a  preceding illness  and though  separated  by relatively short
period  of Employee's performance of his duties hereunder, shall be deemed to be
"substantially continuous."

     6.2     In  the event of any dispute concerning the permanent disability of
Employee, the Company  and Employee  shall  each select  a physician licensed to
practice  medicine in  the State of  California,  who shall  then select a third
physician so licensed.   Such selection  shall be  made  within thirty (30) days
after  Employee  gives  notice  to the  Company that he  disputes  the Company's
determination that the Employee is permanently disabled.  The determination of a
majority of  the three (3)  physicians  concerning  whether  or  not Employee is
permanently  disabled shall be  conclusive and binding  upon  the parties.  Such
determination shall be  made by  the three (3) physicians within sixty (60) days
of their selection.    In the event that either the Company of Employee fails to
select a physician within the prescribed time period, then either it or he shall
be  deemed  to  have  waived its or his right  to do so,  and the  determination
regarding  Employee's disability  hereunder shall  be made by the sole physician
selected.

7.     ASSIGNMENT.     Employee  may  not  assign  or  otherwise  transfer  this
       ----------
Agreement  or any  of  the Employee's  rights,  duties, interests or obligations
hereunder without the written request of the Company.

8.     ENTIRE AGREEMENT.     This Agreement embodies the entire agreement and
       ----------------
understanding between the parties with respect to the subject matter hereof, and
supercedes all prior and  contemporaneous agreements and understandings relating
to such subject matter,  whether oral or written, including, without limitation,
the Previous Agreement.  The parties acknowledge and agree that neither has made
any representations with respect to the  subject matter of this Agreement except
as specifically set forth in this Agreement.

9.     AMENDMENT.     This  Agreement  may not  be amended  excet  by a  written
       ---------
document executed by both parties.

10.     SEVERABILITY.     If any provision of this Agreement shall be held
        ------------
unenforceable  as  applied to any  circumstance, the remainder of this Agreement
and  the   application  of  such  provision  to  other  circumstances  shall  be
interpreted  so as best affect  the intent of the  parties.  The parties further
agree to replace any such unenforceable provision with an  enforceable provision
(and to take such other action) which  will achieve, to the extent possible, the
purposes of the unenforceable provision.

11.     GOVERNING LAW.     This  agreement  shall  be  governed by and construed
        -------------
under the laws of the State of California.

<PAGE>

12.     ARBITRATION.     Any dispute arising under the terms of this Agreement
        ------------
shall be submitted to binding arbitration under the Commercial Arbitration Rules
of the  American  Arbitration Association (the "Rules").   Any hearing under the
Rules shall take place in Los Angeles, California, in accordance with Rule 11 of
the Rules.   The hearing  shall be  before one (1) arbitrator in accordance with
Rule 17 of the Rules;  provided,  however,  that the  event of  a  claim made in
excess of One Hundred  Thousand  Dollars ($100,000), the hearing shall be before
three (3) arbitrators, in accordance with the Rules.   The provisions of Section
1283.05 of the California Code of Civil Procedure are incorporated into and made
part of this Agreement,  except that  subparagraph  (e) of Section 1283.05 shall
not  apply.   Depositions  in  any  arbitration  hereunder  may  be  noticed  in
accordance with the California Code of Civil Procedure, and leave  to do so need
not be requested by the arbitrator or  arbitrators.   Any award  rendered by the
arbitrator  pursuant to  this Agreement  and the  Rules shall be enforced in the
Superior Court  of the County  of Los Angeles in and for the State of California
as the court having full jurisdiction over the arbitration.

13.     ATTORNEY'S FEES.     In  any  arbitration  or  action  to  enforce  this
        ---------------
Agreement,   the  prevailing  party  shall  be  entitled  to  recover  from  the
non-prevailing  party  all  reasonable  costs,  including,  without  limitation,
attorneys' fees.

14.     ADDITIONAL DOCUMENTS.          The parties agree to execute such
        --------------------
additional  documents  and  perform  such  other  acts  as  may be  necessary or
appropriate to achieve the purposes of this Agreement.

15.     NON-WAIVER.     No  waiver by a  party of any failure by the other party
        ----------
to keep any  provision  of  this   Agreement  shall  be  deemed  a waiver of any
preceding  or  succeeding  breach  of  the  same  or  any  other  provision.

16.     BINDING EFFECT.     Subject  to  paragraph  7 above,  this  Agreement is
        --------------
binding upon and shall inure to the benefit of the parties and  their respective
successors, assigns, heirs, and legal representatives.

17.     NOTICE.     Any  notice or  other communication given hereunder shall be
        ------
deemed sufficient if in writing and sent by registered or certified mail, return
receipt requested, addressed to the parties as indicated below:

     If to the Company:

     Grill Concepts, Inc.
     11661 San Vicente Blvd., #404
     Los Angeles, CA 90049

     If to Employee:

     Philip Gay
     5575 Clee Court
     Agoura Hills, CA 91301

Or  to  such  other  address as the parties may designate in writing pursuant to
this  paragraph.  Notice  shall  be  deemed  to  have  been given on the date of
mailing, except notices of change of address, which shall be deemed to have been
given  when  received.

18.     COUNTERPARTS.     This Agreement may be executed in one or more
        ------------
counterparts and/or by facsimile, each of which shall be deemed an original but
all of which together shall constitute  one and the same instrument.  Facsimile

<PAGE>

signatures shall be accepted  by the parties as valid  and binding in  lieu  of
original signatures; however, if facsimile signatures are presented by any party
in lieu of original signatures, within two (2) business days after execution of
the Agreement such party shall also deliver to counsel for the other party(ies)
an original signed by that party.

19.     ACKNOWLEDGEMENT OF INDEPENDENT COUNSEL.     Both  the  Company  and
        --------------------------------------
Employee acknowledge that each of them has read and understands this Agreement.
In connection with the foregoing, the parties acknowledge that each of them has
had an opportunity to have the Agreement  reviewed by independent  counsel, and
that each of the parties is aware of and understands the form, content and legal
effect of this Agreement and their rights and obligations hereunder.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

     The Company:                  Grill Concepts, Inc.
                                   a Delaware corporation

                                   By
                                     -------------------------

                                   Its:
                                       -----------------------
     Employee:

                                   ---------------------------
                                   Philip Gay

<PAGE>Exhibit
      10-ii

    Michael
      J. LaVelle - Terms and Conditions of 

    Retirement
      and Consulting Agreement

    

    	·  	
            On
              December 31, 2005, Mr. LaVelle will receive a lump sum distribution
              of
              approximately $1.4 million from the Company’s Special Executive Retirement
              Plan (the “Plan”) as specified by the terms and conditions of the
              Plan.

          

    

    	·  	
            Mr.
              LaVelle will continue to serve as Chairman of the Board and receive
              compensation for such services as set by the Compensation Committee
              from
              time to time.

          

    

    	·  	
            Mr.
              LaVelle will provide services as an employee-consultant concerning
              management transition until June 30, 2006 for a minimum average of
              twenty
              (20) hours per week at a monthly gross salary of
              $16,675.

          

    

    	·  	
            Mr.
              LaVelle will maintain medical and dental insurance coverage for himself
              and his spouse in accordance with the Company’s Supplemental Medicare
              Coverage Plan and Supplemental Dental Coverage
              Plan.

          

    

    	·  	
            Prior
              to termination of employment, the Company will study and arrange for
              2004
              restricted stock award to continue to vest as scheduled through 2007
              and
              for continuation of currently held stock options in $3-$5 strike price
              range while a member of the Board or until such options
              expire.

          

    

    	·  	
            Mr.
              LaVelle will continue to have use of company office space and a company
              car during his tenure as Chairman.

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