Exhibit 10.11

ZIPREALTY, INC.

DIRECTOR COMPENSATION POLICY

     Non-employee directors of ZipRealty, Inc. (the “Company”) shall receive the
following compensation for their service as a member of the Board of Directors
(the “Board”) of the Company, commencing upon the effective date of the first
registration statement that is filed by the Company and declared effective
pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended,
with respect to the Company’s common stock:

Initial Option Grant for New Board Members

     Pursuant to the Company’s 2004 Equity Incentive Plan, an automatic grant of
an option to purchase 50,000 shares of common stock of the Company (an “Initial
Option”) shall be granted on or about the date such non-employee director first
becomes a member of the Board, at an exercise price equal to the fair market
value of the common stock on the date of grant. The Initial Option is subject to
vesting over a period of three years in equal annual installments commencing on
the date of grant, subject to the non-employee director’s continued service to
the Company through the vesting dates. An employee director who ceases to be an
employee, but who remains a director, will not receive an Initial Option.

Annual Option Grant for Continuing Board Members

     Pursuant to the Company’s 2004 Equity Incentive Plan, an automatic annual
grant of an option to purchase 20,000 shares of common stock of the Company (an
“Annual Option”) shall be granted to continuing non-employee directors on the
date of each Company annual meeting of stockholders, beginning in 2005, at an
exercise price equal to the fair market value of the common stock on the date of
grant. The Annual Option for continuing Board members vests in full on the first
anniversary of the date of grant, subject to the non-employee director’s
continued service to the Company through the vesting date. A non-employee
director will receive an Annual Option only if he or she has served on the Board
for at least the preceding six (6) months.

Annual Cash Compensation

     Annual Retainer

     Each non-employee director shall be entitled to an annual cash retainer in
the amount of $7,500 (the “Annual Retainer”). The Company shall pay such
retainer on a quarterly basis, subject to the non-employee director’s continued
service to the Company as a non-employee director on each such date.

 

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     Additional Retainer for Board Committee Chairpersons

     In addition to the Annual Retainer, a non-employee director who serves as
the Chairperson of a Board committee shall be entitled to the following annual
cash retainer: (a) $10,000 for the Chairperson of the Audit Committee; (b)
$5,000 for the Chairperson of the Compensation Committee; and (c) $5,000 for the
Chairperson of the Corporate Governance and Nominating Committee. The Company
shall pay the applicable retainer on a quarterly basis, subject to the
non-employee director’s continued service to the Company as Chairperson of the
applicable Board committee on each such date.

     Additional Retainer for Board Committee Members

     In addition to the Annual Retainer, a non-employee director who serves as a
member, but not the Chairperson, of a Board committee shall be entitled to an
annual cash retainer of $2,500 for such committee membership. The Company shall
pay the applicable retainer on a quarterly basis, subject to the non-employee
director’s continued service to the Company as a member of the applicable Board
committee on each such date.

Provisions Applicable to All Non-Employee Director Equity Compensation Grants

     Each Initial Option and Annual Option shall be subject to the terms and
conditions of the Company’s 2004 Equity Incentive Plan and the terms of the
Stock Option Agreement issued thereunder. The descriptions of these grants set
forth above are qualified in their entirety by reference to the 2004 Equity
Incentive Plan and the applicable Stock Option Agreement issued thereunder.

Adopted June 18, 2004

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