**Exhibit 10.11**
**ZIPREALTY, INC.**
**DIRECTOR COMPENSATION POLICY**
     Non-employee directors of ZipRealty, Inc. (the “**Company**”) shall receive the followingcompensation 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 Companyand declared effective pursuant to Section 12(g) of the Securities Exchange Act of 1934, asamended, 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 topurchase 50,000 shares of common stock of the Company (an “**Initial Option**”) shall be granted on orabout the date such non-employee director first becomes a member of the Board, at an exercise priceequal to the fair market value of the common stock on the date of grant. The Initial Option issubject to vesting over a period of three years in equal annual installments commencing on the dateof grant, subject to the non-employee director’s continued service to the Company through thevesting dates. An employee director who ceases to be an employee, but who remains a director, willnot 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 optionto purchase 20,000 shares of common stock of the Company (an “**Annual Option**”) shall be granted tocontinuing 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 thedate of grant. The Annual Option for continuing Board members vests in full on the firstanniversary of the date of grant, subject to the non-employee director’s continued service to theCompany through the vesting date. A non-employee director will receive an Annual Option only if heor 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, subjectto the non-employee director’s continued service to the Company as a non-employee director on eachsuch date.
 

 

     *Additional Retainer for Board Committee Chairpersons*
     In addition to the Annual Retainer, a non-employee director who serves as the Chairperson of aBoard committee shall be entitled to the following annual cash retainer: (a) $10,000 for theChairperson 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. TheCompany shall pay the applicable retainer on a quarterly basis, subject to the non-employeedirector’s continued service to the Company as Chairperson of the applicable Board committee oneach such date.
     *Additional Retainer for Board Committee Members*
     In addition to the Annual Retainer, a non-employee director who serves as a member, but notthe Chairperson, of a Board committee shall be entitled to an annual cash retainer of $2,500 forsuch 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 theapplicable 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 theCompany’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 tothe 2004 Equity Incentive Plan and the applicable Stock Option Agreement issued thereunder.
*Adopted June 18, 2004*
2