Document:

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                                                                    EXHIBIT 10.3

                                 ZIPREALTY, INC.

                           2004 EQUITY INCENTIVE PLAN

         1.       Purposes of the Plan. The purposes of this Plan are:

                  -        to attract and retain the best available personnel
                           for positions of substantial responsibility,

                  -        to provide additional incentive to Employees,
                           Directors and Consultants, and

                  -        to promote the success of the Company's business.

                  The Plan permits the grant of Incentive Stock Options,
Nonstatutory Stock Options, Restricted Stock, Stock Appreciation Rights,
Performance Units and Performance Shares.

         2.       Definitions. As used herein, the following definitions will
apply:

                  (a)      "Administrator" means the Board or any of its
Committees as will be administering the Plan, in accordance with Section 4 of
the Plan.

                  (b)      "Applicable Laws" means the requirements relating to
the administration of equity-based awards under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.

                  (c)      "Award" means, individually or collectively, a grant
under the Plan of Options, SARs, Restricted Stock, Performance Units or
Performance Shares.

                  (d)      "Award Agreement" means the written or electronic
agreement setting forth the terms and provisions applicable to each Award
granted under the Plan. The Award Agreement is subject to the terms and
conditions of the Plan.

                  (e)      "Board" means the Board of Directors of the Company.

                  (f)      "Change in Control" means the occurrence of any of
the following events:

                           (i)      Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company's then outstanding voting securities; or

                           (ii)     The consummation of the sale or disposition
by the Company of all or substantially all of the Company's assets;

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                           (iii)    A change in the composition of the Board
occurring within a two-year period, as a result of which fewer than a majority
of the directors are Incumbent Directors. "Incumbent Directors" means directors
who either (A) are Directors as of the effective date of the Plan, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination (but will not include an individual whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors to the Company); or

                           (iv)     The consummation of a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving
entity or its parent outstanding immediately after such merger or consolidation.

                  (g)      "Code" means the Internal Revenue Code of 1986, as
amended. Any reference to a section of the Code herein will be a reference to
any successor or amended section of the Code.

                  (h)      "Committee" means a committee of Directors or of
other individuals satisfying Applicable Laws appointed by the Board in
accordance with Section 4 hereof.

                  (i)      "Common Stock" means the common stock of the Company.

                  (j)      "Company" means ZipRealty, Inc., a Delaware
corporation, or any successor thereto.

                  (k)      "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity.

                  (l)      "Director" means a member of the Board.

                  (m)      "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code, provided that in the case of Awards
other than Incentive Stock Options, the Administrator in its discretion may
determine whether a permanent and total disability exists in accordance with
uniform and non-discriminatory standards adopted by the Administrator from time
to time.

                  (n)      "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director's fee by the Company
will be sufficient to constitute "employment" by the Company.

                  (o)      "Exchange Act" means the Securities Exchange Act of
1934, as amended.

                  (p)      "Exchange Program" means a program under which (i)
outstanding Awards are surrendered or cancelled in exchange for Awards of the
same type (which may have lower

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exercise prices and different terms), Awards of a different type, and/or cash,
and/or (ii) the exercise price of an outstanding Award is reduced. The
Administrator will determine the terms and conditions of any Exchange Program in
its sole discretion.

                  (q)      "Fair Market Value" means, as of any date, the value
of Common Stock determined as follows:

                           (i)      If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market, its Fair Market Value will be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

                           (ii)     If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share will be the mean between the high bid and low asked
prices for the Common Stock on the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable;

                           (iii)    For purposes of any Awards granted on the
Registration Date, the Fair Market Value will be the initial price to the public
as set forth in the final prospectus included within the registration statement
in Form S-1 filed with the Securities and Exchange Commission for the initial
public offering of the Company's Common Stock; or

                           (iv)     In the absence of an established market for
the Common Stock, the Fair Market Value will be determined in good faith by the
Administrator.

                  (r)      "Fiscal Year" means the fiscal year of the Company.

                  (s)      "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

                  (t)      "Inside Director" means a Director who is an
Employee.

                  (u)      "Nonstatutory Stock Option" means an Option that by
its terms does not qualify or is not intended to qualify as an Incentive Stock
Option.

                  (v)      "Officer" means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

                  (w)      "Option" means a stock option granted pursuant to the
Plan.

                  (x)      "Optioned Stock" means the Common Stock subject to an
Award.

                  (y)      "Outside Director" means a Director who is not an
Employee.

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                  (z)      "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

                  (aa)     "Participant" means the holder of an outstanding
Award.

                  (bb)     "Performance Share" means an Award granted to a
Participant pursuant to Section 9.

                  (cc)     "Performance Unit" means an Award granted to a
Participant pursuant to Section 9.

                  (dd)     "Period of Restriction" means the period during which
the transfer of Shares of Restricted Stock are subject to restrictions and
therefore, the Shares are subject to a substantial risk of forfeiture. Such
restrictions may be based on the passage of time, the achievement of target
levels of performance, or the occurrence of other events as determined by the
Administrator.

                  (ee)     "Plan" means this 2004 Equity Incentive Plan.

                  (ff)     "Registration Date" means the effective date of the
first registration statement that is filed by the Company and declared effective
pursuant to Section 12(g) of the Exchange Act, with respect to any class of the
Company's securities.

                  (gg)     "Restricted Stock" means Shares issued pursuant to a
Restricted Stock award under Section 7 of the Plan, or issued pursuant to the
early exercise of an Option.

                  (hh)     "Rule 16b-3" means Rule 16b-3 of the Exchange Act or
any successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan.

                  (ii)     "Section 16(b)" means Section 16(b) of the Exchange
Act.

                  (jj)     "Service Provider" means an Employee, Director or
Consultant.

                  (kk)     "Share" means a share of the Common Stock, as
adjusted in accordance with Section 13 of the Plan.

                  (ll)     "Stock Appreciation Right" or "SAR" means an Award,
granted alone or in connection with an Option, that pursuant to Section 8 is
designated as a SAR.

                  (mm)     "Subsidiary" means a "subsidiary corporation",
whether now or hereafter existing, as defined in Section 424(f) of the Code.

         3.       Stock Subject to the Plan.

                  (a)      Stock Subject to the Plan. Subject to the provisions
of Section 13 of the Plan, the maximum aggregate number of Shares that may be
optioned and sold under the Plan is 1,000,000 Shares plus (i) the number of
Shares which have been reserved but not issued under the Company's 1999 Stock
Plan (the "1999 Plan") as of the Registration Date, (ii) any Shares returned to
the 1999 Plan as a result of termination of options or repurchase of Shares
issued under such plan, and (iii) an
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annual increase to be added on the first day of the Company's fiscal year
beginning in 2006, equal to the least of (A) 1,666,666 Shares, (B) 4% of the
outstanding Shares on such date or (C) an amount determined by the Board. The
Shares may be authorized, but unissued, or reacquired Common Stock. Shares will
not be deemed to have been issued pursuant to the Plan with respect to any
portion of an Award that is settled in cash. Upon payment in Shares pursuant to
the exercise of an SAR, the number of Shares available for issuance under the
Plan will be reduced only by the number of Shares actually issued in such
payment. If the exercise price of an Option is paid by tender to the Company, or
attestation to the ownership, of Shares owned by the Participant, the number of
Shares available for issuance under the Plan will be reduced by the gross number
of Shares for which the Option is exercised.

                  (b)      Lapsed Awards. If an Award expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an Exchange Program, the unpurchased Shares which were subject thereto will
become available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Award, will not be returned to the Plan
and will not become available for future distribution under the Plan, except
that if unvested Shares are forfeited or repurchased by the Company, such Shares
will become available for future grant under the Plan.

                  (c)      Share Reserve. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as will
be sufficient to satisfy the requirements of the Plan.

         4.       Administration of the Plan.

                  (a)      Procedure.

                           (i)      Multiple Administrative Bodies. Different
Committees with respect to different groups of Service Providers may administer
the Plan.

                           (ii)     Section 162(m). To the extent that the
Administrator determines it to be desirable to qualify Options granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan will be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

                           (iii)    Rule 16b-3. To the extent desirable to
qualify transactions hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder will be structured to satisfy the requirements for
exemption under Rule 16b-3.

                           (iv)     Other Administration. Other than as provided
above, the Plan will be administered by (A) the Board or (B) a Committee, which
committee will be constituted to satisfy Applicable Laws.

                  (b)      Powers of the Administrator. Subject to the
provisions of the Plan, and in the case of a Committee, subject to the specific
duties delegated by the Board to such Committee, the Administrator will have the
authority, in its discretion:

                           (i)      to determine the Fair Market Value;

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                           (ii)     to select the Service Providers to whom
Awards may be granted hereunder;

                           (iii)    to determine the number of Shares to be
covered by each Award granted hereunder;

                           (iv)     to approve forms of agreement for use under
the Plan;

                           (v)      to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Awards may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Award or the Shares relating
thereto, based in each case on such factors as the Administrator will determine;

                           (vi)     to institute an Exchange Program;

                           (vii)    to construe and interpret the terms of the
Plan and Awards granted pursuant to the Plan;

                           (viii)   to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of satisfying applicable foreign laws;

                           (ix)     to modify or amend each Award (subject to
Section 18(c) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Awards longer than is otherwise
provided for in the Plan;

                           (x)      to allow Participants to satisfy withholding
tax obligations in such manner as prescribed in Section 14;

                           (xi)     to authorize any person to execute on behalf
of the Company any instrument required to effect the grant of an Award
previously granted by the Administrator;

                           (xii)    to allow a Participant to defer the receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
such Participant under an Award

                           (xiii)   to make all other determinations deemed
necessary or advisable for administering the Plan.

                  (c)      Effect of Administrator's Decision. The
Administrator's decisions, determinations and interpretations will be final and
binding on all Participants and any other holders of Awards.

         5.       Eligibility. Nonstatutory Stock Options, Restricted Stock,
Stock Appreciation Rights, Performance Units and Performance Shares may be
granted to Service Providers. Incentive Stock Options may be granted only to
Employees.

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         6.       Stock Options.

                  (a)      Limitations.

                           (i)      Each Option will be designated in the Award
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Participant during any calendar year
(under all plans of the Company and any Parent or Subsidiary) exceeds $100,000,
such Options will be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options will be taken into account in the order in
which they were granted. The Fair Market Value of the Shares will be determined
as of the time the Option with respect to such Shares is granted.

                           (ii)     The following limitations will apply to
grants of Options and Stock Appreciation Rights:

                                    (1)      No Service Provider will be
granted, in any Fiscal Year, Options and/or Stock Appreciation Rights to
purchase more than 666,666 Shares.

                                    (2)      In connection with his or her
initial service, a Service Provider may be granted Options and/or Stock
Appreciation Rights to purchase up to an additional 1,000,000 Shares, which will
not count against the limit set forth in Section 6(a)(2)(ii)(1) above.

                                    (3)      The foregoing limitations will be
adjusted proportionately in connection with any change in the Company's
capitalization as described in Section 13.

                                    (4)      If an Option and/or Stock
Appreciation Right, as applicable, is cancelled in the same Fiscal Year in which
it was granted (other than in connection with a transaction described in Section
13), the cancelled Option and/or Stock Appreciation Right, as applicable, will
be counted against the limits set forth in subsections (1) and (2) above. For
this purpose, if the exercise price of an Option and/or Stock Appreciation
Right, as applicable, is reduced, the transaction will be treated as a
cancellation of the Option and/or Stock Appreciation Right and the grant of a
new Option and/or Stock Appreciation Right, as applicable.

                  (b)      Term of Option. The term of each Option will be
stated in the Award Agreement. In the case of an Incentive Stock Option, the
term will be ten (10) years from the date of grant or such shorter term as may
be provided in the Award Agreement. Moreover, in the case of an Incentive Stock
Option granted to a Participant who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option will be five (5) years from
the date of grant or such shorter term as may be provided in the Award
Agreement.

                  (c)      Option Exercise Price and Consideration.

                           (i)      Exercise Price. The per share exercise price
for the Shares to be issued pursuant to exercise of an Option will be determined
by the Administrator, subject to the following:

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                                    (1)      In the case of an Incentive Stock
Option

                                             a) granted to an Employee who, at
the time the Incentive Stock Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price will be no
less than 110% of the Fair Market Value per Share on the date of grant.

                                             b) granted to any Employee other
than an Employee described in paragraph (A) immediately above, the per Share
exercise price will be no less than 100% of the Fair Market Value per Share on
the date of grant.

                                             c) Notwithstanding the foregoing,
Incentive Stock Options may be granted with a per Share exercise price of less
than 100% of the Fair Market Value per Share on the date of grant pursuant to a
transaction described in, and in a manner consistent with, Section 424(a) of the
Code.

                                    (2)      In the case of a Nonstatutory Stock
Option, the per Share exercise price will be determined by the Administrator. In
the case of a Nonstatutory Stock Option intended to qualify as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the per Share exercise price will be no less than 100% of the Fair Market
Value per Share on the date of grant.

                           (ii)     Waiting Period and Exercise Dates. At the
time an Option is granted, the Administrator will fix the period within which
the Option may be exercised and will determine any conditions that must be
satisfied before the Option may be exercised.

                           (iii)    Form of Consideration. The Administrator
will determine the acceptable form of consideration for exercising an Option,
including the method of payment. In the case of an Incentive Stock Option, the
Administrator will determine the acceptable form of consideration at the time of
grant. Such consideration may consist entirely of: (1) cash; (2) check; (3)
promissory note; (4) other Shares, provided Shares acquired directly or
indirectly from the Company, (A) have been owned by the Participant and not
subject to substantial risk of forfeiture for more than six months on the date
of surrender, and (B) have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which said Option will be
exercised; (5) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan; (6) a reduction
in the amount of any Company liability to the Participant, including any
liability attributable to the Participant's participation in any
Company-sponsored deferred compensation program or arrangement; (7) any
combination of the foregoing methods of payment; or (8) such other consideration
and method of payment for the issuance of Shares to the extent permitted by
Applicable Laws.

                  (d)      Exercise of Option.

                           (i)      Procedure for Exercise; Rights as a
Stockholder. Any Option granted hereunder will be exercisable according to the
terms of the Plan and at such times and under such conditions as determined by
the Administrator and set forth in the Award Agreement. An Option may not be
exercised for a fraction of a Share.

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                                             An Option will be deemed exercised
when the Company receives: (i) notice of exercise (in such form as the
Administrator specify from time to time) from the person entitled to exercise
the Option, and (ii) full payment for the Shares with respect to which the
Option is exercised (together with an applicable withholding taxes). Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Award Agreement and the Plan. Shares issued
upon exercise of an Option will be issued in the name of the Participant or, if
requested by the Participant, in the name of the Participant and his or her
spouse. Until the Shares are issued (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company),
no right to vote or receive dividends or any other rights as a stockholder will
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. The Company will issue (or cause to be issued) such Shares promptly
after the Option is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Shares are
issued, except as provided in Section 13 of the Plan.

                           Exercising an Option in any manner will decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

                           (ii)     Termination of Relationship as a Service
Provider. If a Participant ceases to be a Service Provider, other than upon the
Participant's death or Disability, the Participant may exercise his or her
Option within such period of time as is specified in the Award Agreement to the
extent that the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Award
Agreement). In the absence of a specified time in the Award Agreement, the
Option will remain exercisable for three (3) months following the Participant's
termination. Unless otherwise provided by the Administrator, if on the date of
termination the Participant is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option will revert to the Plan. If
after termination the Participant does not exercise his or her Option within the
time specified by the Administrator, the Option will terminate, and the Shares
covered by such Option will revert to the Plan.

                           (iii)    Disability of Participant. If a Participant
ceases to be a Service Provider as a result of the Participant's Disability, the
Participant may exercise his or her Option within such period of time as is
specified in the Award Agreement to the extent the Option is vested on the date
of termination (but in no event later than the expiration of the term of such
Option as set forth in the Award Agreement). In the absence of a specified time
in the Award Agreement, the Option will remain exercisable for twelve (12)
months following the Participant's termination. Unless otherwise provided by the
Administrator, if on the date of termination the Participant is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option will revert to the Plan. If after termination the Participant does not
exercise his or her Option within the time specified herein, the Option will
terminate, and the Shares covered by such Option will revert to the Plan.

                           (iv)     Death of Participant. If a Participant dies
while a Service Provider, the Option may be exercised following the
Participant's death within such period of time as is specified in the Award
Agreement to the extent that the Option is vested on the date of death (but in
no event may the option be exercised later than the expiration of the term of
such Option as set forth in the Award Agreement), by the Participant's
designated beneficiary, provided such beneficiary has been designated prior to
Participant's death in a form acceptable to the Administrator. If no such
beneficiary has been

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designated by the Participant, then such Option may be exercised by the personal
representative of the Participant's estate or by the person(s) to whom the
Option is transferred pursuant to the Participant's will or in accordance with
the laws of descent and distribution. In the absence of a specified time in the
Award Agreement, the Option will remain exercisable for twelve (12) months
following Participant's death. Unless otherwise provided by the Administrator,
if at the time of death Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option will
immediately revert to the Plan. If the Option is not so exercised within the
time specified herein, the Option will terminate, and the Shares covered by such
Option will revert to the Plan.

         7.       Restricted Stock.

                  (a)      Grant of Restricted Stock. Subject to the terms and
provisions of the Plan, the Administrator, at any time and from time to time,
may grant Shares of Restricted Stock to Service Providers in such amounts as the
Administrator, in its sole discretion, will determine.

                  (b)      Restricted Stock Agreement. Each Award of Restricted
Stock will be evidenced by an Award Agreement that will specify the Period of
Restriction, the number of Shares granted, and such other terms and conditions
as the Administrator, in its sole discretion, will determine. Unless the
Administrator determines otherwise, Shares of Restricted Stock will be held by
the Company as escrow agent until the restrictions on such Shares have lapsed.

                  (c)      Transferability. Except as provided in this Section
7, Shares of Restricted Stock may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until the end of the applicable Period of
Restriction.

                  (d)      Other Restrictions. The Administrator, in its sole
discretion, may impose such other restrictions on Shares of Restricted Stock as
it may deem advisable or appropriate.

                  (e)      Removal of Restrictions. Except as otherwise provided
in this Section 7, Shares of Restricted Stock covered by each Restricted Stock
grant made under the Plan will be released from escrow as soon as practicable
after the last day of the Period of Restriction. The Administrator, in its
discretion, may accelerate the time at which any restrictions will lapse or be
removed.

                  (f)      Voting Rights. During the Period of Restriction,
Service Providers holding Shares of Restricted Stock granted hereunder may
exercise full voting rights with respect to those Shares, unless the
Administrator determines otherwise.

                  (g)      Dividends and Other Distributions. During the Period
of Restriction, Service Providers holding Shares of Restricted Stock will be
entitled to receive all dividends and other distributions paid with respect to
such Shares unless otherwise provided in the Award Agreement. If any such
dividends or distributions are paid in Shares, the Shares will be subject to the
same restrictions on transferability and forfeitability as the Shares of
Restricted Stock with respect to which they were paid.

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                  (h)      Return of Restricted Stock to Company. On the date
set forth in the Award Agreement, the Restricted Stock for which restrictions
have not lapsed will revert to the Company and again will become available for
grant under the Plan.

         8.       Stock Appreciation Rights.

                  (a)      Grant of SARs. Subject to the terms and conditions of
the Plan, a SAR may be granted to Service Providers at any time and from time to
time as will be determined by the Administrator, in its sole discretion. The
Administrator may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any
combination thereof.

                  (b)      Number of Shares. The Administrator will have
complete discretion to determine the number of SARs granted to any Service
Provider, subject to the limits set forth in Section 6(a)(ii).

                  (c)      Exercise Price and Other Terms. The Administrator,
subject to the provisions of the Plan, will have complete discretion to
determine the terms and conditions of SARs granted under the Plan. However, the
exercise price of Tandem or Affiliated SARs will equal the exercise price of the
related Option.

                  (d)      SAR Agreement. Each SAR grant will be evidenced by an
Award Agreement that will specify the exercise price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.

                  (e)      Expiration of SARs. An SAR granted under the Plan
will expire upon the date determined by the Administrator, in its sole
discretion, and set forth in the Award Agreement. Notwithstanding the foregoing,
the rules of Section 6(d) also will apply to SARs.

                  (f)      Payment of SAR Amount. Upon exercise of an SAR, a
Participant will be entitled to receive payment from the Company in an amount
determined by multiplying:

                           (i)      The difference between the Fair Market Value
of a Share on the date of exercise over the exercise price; times

                           (ii)     The number of Shares with respect to which
the SAR is exercised.

         At the discretion of the Administrator, the payment upon SAR exercise
may be in cash, in Shares of equivalent value, or in some combination thereof.

         9.       Performance Units and Performance Shares.

                  (a)      Grant of Performance Units/Shares. Performance Units
and Performance Shares may be granted to Service Providers at any time and from
time to time, as will be determined by the Administrator, in its sole
discretion. The Administrator will have complete discretion in determining the
number of Performance Units and Performance Shares granted to each Participant.

                  (b)      Value of Performance Units/Shares. Each Performance
Unit will have an initial value that is established by the Administrator on or
before the date of grant. Each

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Performance Share will have an initial value equal to the Fair Market Value of a
Share on the date of grant.

                  (c)      Performance Objectives and Other Terms. The
Administrator will set performance objectives or other vesting provisions
(including, without limitation, continued status as a Service Provider) in its
discretion which, depending on the extent to which they are met, will determine
the number or value of Performance Units/Shares that will be paid out to the
Service Providers. The time period during which the performance objectives or
other vesting provisions must be met will be called the "Performance Period."
Each Award of Performance Units/Shares will be evidenced by an Award Agreement
that will specify the Performance Period, and such other terms and conditions as
the Administrator, in its sole discretion, will determine. The Administrator may
set performance objectives based upon the achievement of Company-wide,
divisional, or individual goals, applicable federal or state securities laws, or
any other basis determined by the Administrator in its discretion.

                  (d)      Earning of Performance Units/Shares. After the
applicable Performance Period has ended, the holder of Performance Units/Shares
will be entitled to receive a payout of the number of Performance Units/Shares
earned by the Participant over the Performance Period, to be determined as a
function of the extent to which the corresponding performance objectives or
other vesting provisions have been achieved. After the grant of a Performance
Unit/Share, the Administrator, in its sole discretion, may reduce or waive any
performance objectives or other vesting provisions for such Performance
Unit/Share.

                  (e)      Form and Timing of Payment of Performance
Units/Shares. Payment of earned Performance Units/Shares will be made as soon as
practicable after the expiration of the applicable Performance Period. The
Administrator, in its sole discretion, may pay earned Performance Units/Shares
in the form of cash, in Shares (which have an aggregate Fair Market Value equal
to the value of the earned Performance Units/Shares at the close of the
applicable Performance Period) or in a combination thereof.

                  (f)      Cancellation of Performance Units/Shares. On the date
set forth in the Award Agreement, all unearned or unvested Performance
Units/Shares will be forfeited to the Company, and again will be available for
grant under the Plan.

         10.      Formula Option Grants to Outside Directors.

         All grants of Options to Outside Directors pursuant to this Section
will be automatic and nondiscretionary, except as otherwise provided herein, and
will be made in accordance with the following provisions:

                  (a)      Type of Option. All Options granted pursuant to this
Section will be Nonstatutory Stock Options and, except as otherwise provided
herein, will be subject to the other terms and conditions of the Plan.

                  (b)      No Discretion. No person will have any discretion to
select which Outside Directors will be granted Options under this Section or to
determine the number of Shares to be covered by such Options (except as provided
in Sections 10(f) and 13).

                                      -12-
<PAGE>

                  (c)      Initial Option. Each person who first becomes an
Outside Director following the Registration Date will be automatically granted
an Option to purchase 16,666 Shares (the "Initial Option") on or about the date
on which such person first becomes an Outside Director, whether through election
by the stockholders of the Company or appointment by the Board to fill a
vacancy; provided, however, that an Inside Director who ceases to be an Inside
Director, but who remains a Director, will not receive a First Option.

                  (d)      Annual Option. Each Outside Director will be
automatically granted an Option to purchase 6,666 Shares (an "Annual Option")
on each date of the annual meeting of the stockholders of the Company beginning
in 2005, if as of such date, he or she will have served on the Board for at
least the preceding six (6) months.

                  (e)      Terms. The terms of each Option granted pursuant to
this Section will be as follows:

                           (i)      The term of the Option will be ten (10)
years.

                           (ii)     The exercise price per Share will be 100% of
the Fair Market Value per Share on the date of grant of the Option.

                           (iii)    Subject to Section 13, the Initial Option
will vest and become exercisable as to one-third (1/3rd) of the Shares subject
to the Initial Option on each anniversary of its date of grant, provided that
the Participant continues to serve as a Director through each such date.

                           (iv)     Subject to Section 13, the Annual Option
will vest and become exercisable as to 100% of the Shares subject to the Annual
Option on the anniversary of its date of grant, provided that the Participant
continues to serve as a Director through such date.

                           (v)      No Option granted under this Section 10 may
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will, by the laws of descent and distribution. All rights with
respect to an Option granted to a Participant will be available during his or
her lifetime only to the Participant. Notwithstanding the foregoing, a
Participant may, if the Administrator (in its discretion) so permits, transfer
an Award to an individual or entity other than the Company. Any such transfer
will be made in accordance with such procedures as the Administrator may specify
from time to time.

                  (f)      Amendment. The Administrator in its discretion may
change the number of Shares subject to the First Options and Subsequent Options.

         11.      Leaves of Absence. Unless the Administrator provides
otherwise, vesting of Awards granted hereunder will be suspended during any
unpaid leave of absence. A Service Provider will not cease to be an Employee in
the case of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, or any
Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed
ninety (90) days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract. If reemployment upon expiration of a leave of
absence approved by the Company is not so guaranteed,

                                      -13-
<PAGE>

then three (3) months following the 91st day of such leave any Incentive Stock
Option held by the Participant will cease to be treated as an Incentive Stock
Option and will be treated for tax purposes as a Nonstatutory Stock Option.

         12.      Transferability of Awards. Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Participant, only by the Participant. If the Administrator makes an Award
transferable, such Award will contain such additional terms and conditions as
the Administrator deems appropriate.

         13.      Adjustments; Dissolution or Liquidation; Merger or Change in
Control.

                  (a)      Adjustments. In the event that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs, the Administrator, in
order to prevent diminution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, may (in its sole discretion)
adjust the number and class of Shares that may be delivered under the Plan
and/or the number, class, and price of Shares covered by each outstanding Award,
the numerical Share limits in Sections 3 and 6 of the Plan and the number of
Shares issuable pursuant to Options to be granted under Section 10.

                  (b)      Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Administrator will
notify each Participant as soon as practicable prior to the effective date of
such proposed transaction. To the extent it has not been previously exercised,
an Award will terminate immediately prior to the consummation of such proposed
action.

                  (c)      Change in Control. In the event of a Change in
Control, each outstanding Award will be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Award, the Participant will fully vest in and have
the right to exercise all of his or her outstanding Options and Stock
Appreciation Rights, including Shares as to which such Awards would not
otherwise be vested or exercisable, all restrictions on Restricted Stock will
lapse, and, with respect to Performance Shares and Performance Units, all
performance goals or other vesting criteria will be deemed achieved at target
levels and all other terms and conditions met. In addition, if an Option or
Stock Appreciation Right becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a Change in Control, the
Administrator will notify the Participant in writing or electronically that the
Option or Stock Appreciation Right will be fully vested and exercisable for a
period of time determined by the Administrator in its sole discretion, and the
Option or Stock Appreciation Right will terminate upon the expiration of such
period.

                  For the purposes of this subsection (c), an Award will be
considered assumed if, following the Change in Control, the Award confers the
right to purchase or receive, for each Share subject to the Award immediately
prior to the Change in Control, the consideration (whether stock, cash, or other
securities or property) or, in the case of a Stock Appreciation Right upon the
exercise of which the Administrator determines to pay cash or a Performance
Share or Performance Unit

                                      -14-
<PAGE>

which the Administrator can determine to pay in cash, the fair market value of
the consideration received in the merger or Change in Control by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the Change in Control is not
solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of an Option or Stock
Appreciation Right or upon the payout of a Performance Share or Performance
Unit, for each Share subject to such Award (or in the case of Performance Units,
the number of implied shares determined by dividing the value of the Performance
Units by the per share consideration received by holders of Common Stock in the
Change in Control), to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the Change in Control.

                  Notwithstanding anything in this Section 13(c) to the
contrary, an Award that vests, is earned or paid-out upon the satisfaction of
one or more performance goals will not be considered assumed if the Company or
its successor modifies any of such performance goals without the Participant's
consent; provided, however, a modification to such performance goals only to
reflect the successor corporation's post-Change in Control corporate structure
will not be deemed to invalidate an otherwise valid Award assumption.

                  (d)      Termination Following Change of Control. With respect
to Awards granted to an Outside Director that are assumed or substituted for, if
on the date of or following such assumption or substitution the Participant's
status as a Director or a director of the successor corporation, as applicable,
is terminated other than upon a voluntary resignation by the Participant, then
the Participant will fully vest in and have the right to exercise Options and/or
Stock Appreciation Rights as to all of the Optioned Stock, including Shares as
to which such Awards would not otherwise be vested or exercisable, all
restrictions on Restricted Stock will lapse, and, with respect to Performance
Shares and Performance Units, all performance goals or other vesting criteria
will be deemed achieved at target levels and all other terms and conditions met.

         14.      Tax Withholding.

                  (a)      Withholding Requirements. Prior to the delivery of
any Shares or cash pursuant to an Award (or exercise thereof), the Company will
have the power and the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy federal, state, local,
foreign or other taxes (including the Participant's FICA obligation) required to
be withheld with respect to such Award (or exercise thereof).

                  (b)      Withholding Arrangements. The Administrator, in its
sole discretion and pursuant to such procedures as it may specify from time to
time, may permit a Participant to satisfy such tax withholding obligation, in
whole or in part by (a) paying cash, (b) electing to have the Company withhold
otherwise deliverable cash or Shares having a Fair Market Value equal to the
minimum amount required to be withheld, or (c) delivering to the Company
already-owned Shares having a Fair Market Value equal to the minimum amount
required to be withheld. The amount of the withholding requirement will be
deemed to include any amount which the Administrator agrees may be withheld at
the time the election is made, not to exceed the amount determined by using the

                                      -15-
<PAGE>

maximum federal, state or local marginal income tax rates applicable to the
Participant with respect to the Award on the date that the amount of tax to be
withheld is to be determined. The Fair Market Value of the Shares to be withheld
or delivered will be determined as of the date that the taxes are required to be
withheld.

         15.      No Effect on Employment or Service. Neither the Plan nor any
Award will confer upon a Participant any right with respect to continuing the
Participant's relationship as a Service Provider with the Company, nor will they
interfere in any way with the Participant's right or the Company's right to
terminate such relationship at any time, with or without cause, to the extent
permitted by Applicable Laws.

         16.      Date of Grant. The date of grant of an Award will be, for all
purposes, the date on which the Administrator makes the determination granting
such Award, or such other later date as is determined by the Administrator.
Notice of the determination will be provided to each Participant within a
reasonable time after the date of such grant.

         17.      Term of Plan. Subject to Section 21 of the Plan, the Plan will
become effective upon its adoption by the Board. It will continue in effect for
a term of ten (10) years unless terminated earlier under Section 18 of the Plan.

         18.      Amendment and Termination of the Plan.

                  (a)      Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.

                  (b)      Stockholder Approval. The Company will obtain
stockholder approval of any Plan amendment to the extent necessary and desirable
to comply with Applicable Laws.

                  (c)      Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan will impair the rights of any
Participant, unless mutually agreed otherwise between the Participant and the
Administrator, which agreement must be in writing and signed by the Participant
and the Company. Termination of the Plan will not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Awards
granted under the Plan prior to the date of such termination.

         19.      Conditions Upon Issuance of Shares.

                  (a)      Legal Compliance. Shares will not be issued pursuant
to the exercise of an Award unless the exercise of such Award and the issuance
and delivery of such Shares will comply with Applicable Laws and will be further
subject to the approval of counsel for the Company with respect to such
compliance.

                  (b)      Investment Representations. As a condition to the
exercise of an Award, the Company may require the person exercising such Award
to represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

                                      -16-
<PAGE>

         20.      Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, will relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority will not have been obtained.

         21.      Stockholder Approval. The Plan will be subject to approval by
the stockholders of the Company within twelve (12) months after the date the
Plan is adopted. Such stockholder approval will be obtained in the manner and to
the degree required under Applicable Laws.

                                      -17-Exhibit 10.1

                        ENERGY PARTNERS, LTD. Letterhead

--------------------------------------------------------------------------------

October 19, 2004

Mr. Phillip A. Gobe
19011 Lakeside Cove
Houston, Texas 77094

Dear Phillip:

This letter serves to confirm the offer of employment to you for the position of
Chief Operating Officer of Energy Partners, Ltd. (the "Company").

The following represent the terms and conditions of this offer:

     o    Commencement date on December 6, 2004 (or such other date in close
          proximity thereto as shall be mutually agreed between us).

     o    Starting base salary of $300,000 annually.

     o    Annual bonus target of 65% of base pay.

     o    The grant on the commencement date of your employment of an option
          with a ten year term to purchase 50,000 shares of Common Stock of the
          Company that will vest in one-third increments on each of the first
          three anniversaries of the date of grant at an exercise price equal to
          the closing price of the Company's Common Stock on the date of grant
          (a detailed Stock Option Agreement containing standard terms
          consistent with the foregoing will be provided shortly after your
          commencement of employment).

     o    The award on the commencement date of your employment of 40,000
          Restricted Share Units that will vest on the third anniversary of your
          date of employment (likewise, a Restricted Share Unit Agreement
          containing standard terms consistent with the foregoing will be
          provided shortly after your commencement of employment).

     o    Provision for a Change of Control payment under the circumstances set
          forth in the attached Exhibit A.

     o    Commencing in 2005, you will be eligible for twenty-five days of
          vacation annually.

     o    Relocation assistance to be provided on the terms set forth in the
          Relocation form being provided to you separately.

In addition to your compensation, you will be entitled to participate in any
plans sponsored by the Company, including medical, dental, disability and life
insurance plans, subject in each instance to applicable conditions and waiting
periods. The Company also sponsors a 401(k) plan in which you will be eligible
to participate on the terms provided in the plan documents. A

<PAGE>
                                       2

summary of the benefit plans and a copy of the 401(k) Summary Plan description
are being provided to you separately.

The Company, as do most employers, expressly reserves the right to discontinue
or amend the nature or amount of any of the compensation or benefit
plans/programs/policies/practices that it offers. Also, your employment at the
Company will be on an "at will" basis, meaning that you or the Company may
terminate this employment relationship at any time, with or without reason.

If you have any questions, please call me. We are very pleased to make this
offer to you and are looking forward to you joining our team.

Please acknowledge your acceptance of this offer by signing below and returning
one copy to the undersigned, whereupon this shall constitute a binding agreement
between us.

Sincerely,

/s/ Richard A. Bachmann
-----------------------------
Richard A. Bachmann
Chairman, President and
Chief Executive Officer

ACCEPTED AND AGREED
this 19th day of October, 2004.

/s/ Phillip A. Gobe
---------------------------------
         Phillip A. Gobe

<PAGE>

                                    EXHIBIT A

                      BENEFITS FOLLOWING CHANGE OF CONTROL

In the event that (i) there is a "Change of Control" and (ii) your employment
terminates within two years following said "Change of Control" either by reason
of an involuntary termination by the Company without "Cause" or voluntary
termination by you for "Good Reason", you will be entitled to receive:

     (1)  a cash lump sum within 30 days following such termination of
          employment in an amount equal to 3 times the sum of (A) your annual
          rate of base salary for the year of your termination of employment and
          (B) your average annual bonus for the three years preceding such
          termination of employment (or, if you were employed for less than
          three years, the greater of your average annual bonus for all of your
          prior years of employment or your target bonus for the year of your
          termination of employment), and

     (2)  the Company shall continue to provide you for a period of 18 months
          following termination of your employment with the same level of
          medical and life insurance benefits as you were receiving immediately
          prior to the termination of employment, provided, however, that as a
          condition for receiving such benefits you will be required to pay for
          such benefits the same portion of the required premium for such
          coverage that you were required to pay immediately before termination
          of your employment.

     In addition, in the event of a "Change of Control", all stock options and
     shares of restricted stock granted by the Company will become fully vested
     and will (in the case of stock options) become fully exercisable and (in
     the case of restricted stock) all restrictions will lapse.

     For purposes of this Exhibit A, the following definitions shall apply:

     (1)  "Change of Control" shall have the same meaning as set forth in
          Section 7(b)(i) of the Energy Partners, Ltd. Amended and Restated 2000
          Long Term Stock Incentive Plan, as amended.

     (2)  "Cause" shall mean (i) your conviction of a felony, (ii) dishonesty,
          (iii) failure to perform your duties, (iv) insubordination, (v) theft,
          (vi) wrongful disclosure of confidential information, (vii) conflict
          of interest that is undisclosed and not approved by the Company's
          Board of Directors, (viii) violation of written Company policies
          applicable to all employees, or (ix) engaging in any manner, directly
          or indirectly, in a business that competes with the business of the
          Company in any capacity that is undisclosed and not approved by the
          Company's Board of Directors.

     (3)  "Good Reason" for termination shall exist if, without your consent,
          any of the following events occur:

<PAGE>

          (a)  a reduction in your base salary, or the elimination or reduction
               of a benefit under any employee benefit plan or program of the
               Company or any subsidiary in which you participate, other than an
               elimination or reduction that affects other senior executive
               officers in a similar way;

          (b)  the loss of any of your titles or positions, a significant
               diminution in your duties and responsibilities or the assignment
               to you of duties and responsibilities inconsistent with your
               titles or positions; or

          (c)  any requirement that you relocate outside the greater New
               Orleans, Louisiana metropolitan area.

          A termination of employment by you shall not be considered to be for
          Good Reason unless the termination occurs within sixty (60) days after
          you have knowledge of the event constituting Good Reason.

                                      -2-

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