Exhibit 10.05

 

VALERO GP, LLC

AMENDED AND RESTATED

2000 LONG-TERM INCENTIVE PLAN

 

Amended and Restated as of January 1, 2005

 

SECTION 1. Purpose of the Plan.

 

The Valero GP, LLC 2000 Long-Term Incentive Plan (the “Plan”) is intended to
promote the interests of Valero L.P., a Delaware limited partnership (the
“Partnership”), by providing to employees and directors of Valero GP, LLC, a
Delaware limited liability company (the “Company”), and its Affiliates who
perform services for the Partnership and its subsidiaries incentive awards for
superior performance that are based on Units. The Plan is also intended to
enhance the Company’s and its Affiliates’ ability to attract and retain
employees whose services are key to the growth and profitability of the
Partnership, and to encourage them to devote their best efforts to the business
of the Partnership, thereby advancing the Partnership’s interests.

 

SECTION 2. Definitions.

 

As used in the Plan, the following terms shall have the meanings set forth
below:

 

  2.1 “Affiliate” means, with respect to any Person, any other Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term “control” means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.

 

  2.2 “Award” means a grant of one or more Options or Restricted Units pursuant
to the Plan, and any tandem DERs granted with respect to such Award.

 

  2.3 “Board” means the Board of Directors of the Company.

 

  2.4 “Cause” means:

 

  (i) fraud or embezzlement on the part of the Participant;

 

  (ii) conviction of or the entry of a plea of nolo contendere by the
Participant to any felony;

 

  (iii) gross insubordination or a material breach of, or the willful failure or
refusal by the Participant to perform and discharge his duties, responsibilities
or obligations (other than by reason of disability or death) that is not
corrected within 30 days following written notice thereof to the Participant,
such notice to state with specificity the nature of the breach, failure or
refusal; or

 

  (iv) any act of willful misconduct by the Participant that (a) is intended to
result in substantial personal enrichment of the Participant at the expense of
the Partnership, the Company or any of their Affiliates, or (b) has a material
adverse impact on the business or reputation of the Partnership, the Company or
any of their Affiliates (such determination to be made by the Partnership, the
Company or any of their Affiliates in the good faith exercise of its reasonable
judgment).

 

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  2.5 “Change of Control” means, and shall be deemed to have occurred upon the
occurrence of one or more of the following events: (i) any sale, lease, exchange
or other transfer (in one transaction or a series of related transactions) of
all or substantially all of the assets of the Company or the Partnership to any
Person or its Affiliates, unless immediately following such sale, lease,
exchange or other transfer such assets are owned, directly or indirectly, by
Valero Energy Corporation and its Affiliates or the Company; (ii) the
consolidation or merger of the Partnership or the Company with or into another
Person pursuant to a transaction in which the outstanding voting interests of
the Company is changed into or exchanged for cash, securities or other property,
other than any such transaction where, in the case of the Company, (a) all
outstanding voting interest of the Company is changed into or exchanged for
voting stock or interests of the surviving corporation or entity or its parent
and (b) the holders of the voting interests of the Company immediately prior to
such transaction own, directly or indirectly, not less than a majority of the
voting stock or interests of the surviving corporation or entity or its parent
immediately after such transaction and, in the case of the Partnership, Valero
Energy Corporation retains operational control, whether by way of holding a
general partner interest, managing member interest or a majority of the
outstanding voting interests of the surviving corporation or entity or its
parent; or (iii) a “person” or “group” (within the meaning of Sections 13(d) or
14(d)(2) of the Exchange Act) being or becoming the “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of all
voting interests of the Company then outstanding, other than (a) in a merger or
consolidation which would not constitute a Change of Control under clause (ii)
above and (b) Valero Energy Corporation and its Affiliates.

 

  2.6 “Committee” means the Compensation Committee of the Board or such other
committee of the Board appointed to administer the Plan.

 

  2.7 “DER” means a contingent right, granted in tandem with a specific
Restricted Unit, to receive an amount in cash equal to the cash distributions
made by the Partnership with respect to a Unit during the period such Restricted
Unit is outstanding.

 

  2.8 “Director” means a “non-employee director” of the Company, as defined in
Rule 16b-3.

 

  2.9 “Employee” means any employee of the Company or an Affiliate, as
determined by the Committee.

 

  2.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

  2.11 “Fair Market Value” means the closing sales price of a Unit on the New
York Stock Exchange on the applicable date (or if there is no trading in the
Units on such date, on the next preceding date on which there was trading). If
Units are not publicly traded at the time a determination of fair market value
is required to be made hereunder, the determination of fair market value shall
be made in good faith by the Committee.

 

  2.12 “Good Reason” means:

 

  (i) a reduction in the Participant’s annual base salary;

 

  (ii) failure to pay the Participant any compensation due under an employment
agreement, if any;

 

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  (iii) failure to continue to provide benefits substantially similar to those
then enjoyed by the Participant unless the Partnership, the Company or their
Affiliates provide aggregate benefits equivalent to those then in effect; or

 

  (iv) failure to continue a compensation plan or to continue the Participant’s
participation in a plan on a basis not materially less favorable to the
Participant, subject to the power of the Partnership, the Company or their
Affiliates to amend such plans in their reasonable discretion

 

  (v) the Partnership, the Company or their Affiliates purported termination of
the Participant’s employment for Cause or disability not pursuant to a procedure
indicating the specific provision of the definition of Cause contained in this
Plan as the basis for such termination of employment;

 

The Participant may not terminate for Good Reason unless he has given written
notice delivered to the Partnership, the Company or their Affiliates, as
appropriate, of the action or inaction giving rise to Good Reason, and if such
action or inaction is not corrected within thirty (30) days thereafter, such
notice to state with specificity the nature of the breach, failure or refusal.

 

  2.13 “Option” means an option to purchase Units as described in Section 6.1.

 

  2.14 “Participant” means any Employee or Director granted an Award under the
Plan.

 

  2.15 [reserved]

 

  2.16 “Person” means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity.

 

  2.17 “Restricted Period” means the period established by the Committee with
respect to the vesting of an Award during which the Award either remains subject
to forfeiture or is not exercisable by the Participant.

 

  2.18 “Restricted Unit” means a phantom unit granted under the Plan which is
equivalent in value and in divided and interest rights to a Unit, and which upon
or following vesting entitles the Participant to receive a Unit .

 

  2.19 “Rule 16b-3” means Rule 16b-3 promulgated by the SEC under the Exchange
Act, or any successor rule or regulation thereof as in effect from time to time.

 

  2.20 “SEC” means the Securities and Exchange Commission.

 

  2.21 “Unit” means a common unit of the Partnership.

 

SECTION 3. Administration.

 

Annual grant levels for Participants will be recommended by the Chief Executive
Officer of the Company, subject to the review and approval of the Committee. The
Plan shall be administered by the Committee. A majority of the Committee shall
constitute a quorum, and the acts of the members of the Committee who are
present at any meeting thereof at which a quorum is present, or acts unanimously
approved by the members of the Committee in writing, shall be the acts of the
Committee. Subject to the terms of the Plan and applicable law, and in addition
to other express

 

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powers and authorizations conferred on the Committee by the Plan, the Committee
shall have full power and authority to: (i) designate Participants; (ii)
determine the type or types of Awards to be granted to a Participant; (iii)
determine the number of Units to be covered by Awards; (iv) determine the terms
and conditions of any Award; (v) determine whether, to what extent, and under
what circumstances Awards may be settled, exercised, canceled, or forfeited;
(vi) interpret and administer the Plan and any instrument or agreement relating
to an Award made under the Plan; (vii) establish, amend, suspend, or waive such
rules and regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan; and (viii) make any other determination
and take any other action that the Committee deems necessary or desirable for
the administration of the Plan. Unless otherwise expressly provided in the Plan,
all designations, determinations, interpretations, and other decisions under or
with respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive, and binding
upon all Persons, including the Company, the Partnership, any Affiliate, any
Participant, and any beneficiary of any Award.

 

SECTION 4. Units Available for Awards.

 

  4.1 Units Available. Subject to adjustment as provided in Section 4.3, the
number of Units with respect to which Awards may be granted under the Plan is
250,000. If any Award is forfeited or otherwise terminates or is canceled
without the delivery of Units, then the Units covered by such Award, to the
extent of such forfeiture, termination, or cancellation, shall again be Units
with respect to which Awards may be granted.

 

  4.2 Sources of Units Deliverable Under Awards. Any Units delivered pursuant to
an Award shall consist, in whole or in part, of Units acquired in the open
market, from any Affiliate, the Partnership or any other Person, or any
combination of the foregoing, as determined by the Committee in its discretion.

 

  4.3 Adjustments. If the Committee determines that any distribution (whether in
the form of cash, Units, other securities, or other property), recapitalization,
split, reverse split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Units or other securities of the
Partnership, issuance of warrants or other rights to purchase Units or other
securities of the Partnership, or other similar transaction or event affects the
Units such that an adjustment is determined by the Committee to be appropriate
in order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan, then the Committee shall,
in such manner as it may deem equitable, adjust any or all of (i) the number and
type of Units (or other securities or property) with respect to which Awards may
be granted, (ii) the number and type of Units (or other securities or property)
subject to outstanding Awards, and (iii) if deemed appropriate, make provision
for a cash payment to the holder of an outstanding Award; provided, that the
number of Units subject to any Award shall always be a whole number.

 

SECTION 5. Eligibility.

 

Any Employee and Director shall be eligible to be designated a Participant.

 

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SECTION 6. Awards.

 

  6.1 Options. The Committee shall have the authority to determine the Employees
and Directors to whom Options shall be granted, the number of Units to be
covered by each Option, the purchase price therefor and the conditions and
limitations applicable to the exercise of the Option, including the following
terms and conditions and such additional terms and conditions, as the Committee
shall determine, that are not inconsistent with the provisions of the Plan.

 

  (i) Exercise Price. The purchase price per Unit purchasable under an Option
shall be determined by the Committee at the time the Option is granted but shall
not be less than its Fair Market Value as of the date of grant.

 

  (ii) Time and Method of Exercise. The Committee shall determine the Restricted
Period (i.e., the time or times at which an Option may be exercised in whole or
in part) and the method or methods by which payment of the exercise price with
respect thereto may be made or deemed to have been made which may include,
without limitation, cash, check acceptable to the Company, a “cash-broker”
exercise (through procedures approved by the Company), other securities or other
property, a note from the Participant (in a form acceptable to the Company), or
any combination thereof, having a value on the exercise date equal to the
relevant exercise price.

 

  (iii) Term. Subject to earlier termination as provided in the grant agreement
or the Plan, each Option shall expire on the 10th anniversary of its date of
grant.

 

  (iv) Forfeiture. Except as otherwise provided in this Plan, in the terms of an
Award agreement, or in a written employment agreement (if any) between the
Participant and the Company or one of its Affiliates, upon termination of a
Participant’s employment with the Company or its Affiliates for any reason
(other than for retirement, death or disability of the Participant (see Section
6.3(ix) below)) during the applicable Restricted Period, all Options which
remain unexercised, whether vested or unvested, shall be forfeited by the
Participant at the close of business on the date of the Participant’s
termination of employment. The Committee or the Chief Executive Officer may
waive in whole or in part such forfeiture with respect to a Participant’s
Options.

 

  6.2

Restricted Units. The Committee shall have the authority to determine the
Employees and Directors to whom Restricted Units shall be granted, the number of
Restricted Units to be granted to each such Participant, the duration of the
Restrict Period (if any), the conditions under which the Restricted Units may
become vested (which may be immediate upon grant) or forfeited, and such other
terms and conditions as the

 

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Committee may establish respecting such Awards, including whether DERs are
granted with respect to such Restricted Units.

 

  (i) DERs. To the extent provided by the Committee, in its discretion, a grant
of Restricted Units may include a tandem DER grant, which may provide that such
DERs shall be paid directly to the Participant, be credited to a bookkeeping
account (with or without interest in the discretion of the Committee) subject to
the same restrictions as the tandem Award, or be subject to such other
provisions or restrictions as determined by the Committee in its discretion.

 

  (ii) Forfeiture. Except as otherwise provided in this Plan, in the terms of an
Award agreement, or in a written employment agreement (if any) between the
Participant and the Company or one of its Affiliates, upon termination of a
Participant’s employment with the Company or its Affiliates for any reason
(other than for retirement, death or disability of the Participant (see Section
6.3(ix) below)) during the applicable Restricted Period, all Restricted Units
shall be forfeited by the Participant at the close of business on the date of
the Participant’s termination of employment. The Committee or the Chief
Executive Officer may waive in whole or in part such forfeiture with respect to
a Participant’s Restricted Units.

 

  (iii) Lapse of Restrictions. Upon the vesting of each Restricted Unit, the
Participant shall be entitled to receive from the Company one Unit subject to
the provisions of Section 8.2.

 

  6.3 General.

 

  (i) Awards May be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in substitution for any other Award granted under the Plan or
any award granted under any other plan of the Company or any Affiliate,
including the Annual Incentive Plan or the Intermediate Incentive Compensation
Plan. Awards granted in addition to or in tandem with other Awards or awards
granted under any other plan of the Company or any Affiliate may be granted
either at the same time as or at a different time from the grant of such other
Awards or awards.

 

  (ii) Limits on Transfer of Awards. No Award and no right under any such Award
may be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant otherwise than by will or by the laws of descent and
distribution and any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable against the
Company or any Affiliate.

 

  (iii) Terms of Awards. The term of each Award shall be for such period as may
be determined by the Committee.

 

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  (iv) Unit Certificates. All certificates for Units or other securities of the
Partnership delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the Plan or the rules, regulations, and
other requirements of the SEC, any stock exchange upon which such Units or other
securities are then listed, and any applicable federal or state laws, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.

 

  (v) Consideration for Grants. Awards may be granted for no cash consideration
or for such consideration as the Committee determines including, without
limitation, such minimal cash consideration as may be required by applicable
law.

 

  (vi) Delivery of Units or other Securities and Payment by Participant of
Consideration. Notwithstanding anything in the Plan or any grant agreement to
the contrary, delivery of Units pursuant to the exercise or vesting of an Award
may be deferred for any period during which, in the good faith determination of
the Committee, the Company is not reasonably able to obtain Units to deliver
pursuant to such Award without violating the rules or regulations of any
applicable law or securities exchange. No Units or other securities shall be
delivered pursuant to any Award until payment in full of any amount required to
be paid pursuant to the Plan or the applicable Award Agreement (including,
without limitation, any exercise price or any tax withholding) is receivable by
the Company. Such payment may be made by such method or methods and in such form
or forms as the Committee shall determine, including, without limitation, cash,
other Awards, withholding of Units, or any combination thereof; provided that
the combined value, as determined by the Committee, of all cash and cash
equivalent and the value of any such Units or other property so tendered to the
Company, as of the date of such tender, is at least equal to the full amount
required to be paid to the Company pursuant to the Plan or the applicable Award
agreement.

 

  (vii) Change of Control. Upon a Change of Control, all Awards shall
automatically vest and become payable or exercisable, as the case may be, in
full. In this regard, all Restricted Periods shall terminate and all performance
criteria, if any, shall be deemed to have been achieved at the maximum level.

 

  (viii)

Sale of Significant Assets. In the event the Company or the Partnership sells or
otherwise disposes of a significant portion of the assets under its control,
(such significance to be determined by action of the Board of the Company in its
sole discretion) and as a consequence of such disposition (a) a Participant’s
employment is terminated by the Partnership, the Company or their affiliates
without Cause or by the Participant for Good Reason or (b) as a result of such
sale or disposition, the Participant’s employer shall no longer be the
Partnership, the Company or one of their Affiliates, then all of such
Participant’s Awards shall automatically vest and become payable or exercisable,
as the case may be, in full. In this regard, all Restricted Periods

 

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shall terminate and all performance criteria, if any, shall be deemed to have
been achieved at the maximum level.

 

  (ix) Retirement, Death, Disability. Except as otherwise determined by the
Committee and included in the Participant’s Award agreement, if a Participant’s
employment is terminated because of retirement, death or disability (with the
determination of disability to be made within the sole discretion of the
Committee), any Award held by the Participant shall remain outstanding and vest
or become exercisable according to the Award’s original terms, provided,
however, that any Restricted Units held by such Participant which remain
unvested as of the date of retirement, death or disability shall immediately
vest and become non-forfeitable as of such date.

 

SECTION 7. Amendment and Termination.

 

Except to the extent prohibited by applicable law and unless otherwise expressly
provided in an Award agreement or in the Plan.

 

  (i) Amendments to the Plan. Except as required by applicable law or the rules
of the principal securities exchange on which the Units are traded and subject
to Section 7(ii) below, the Board or the Committee may amend, alter, suspend,
discontinue, or terminate the Plan in any manner, including increasing the
number of Units available for Awards under the Plan, without the consent of any
partner, Participant, other holder or beneficiary of an Award, or other Person.

 

  (ii) Amendments to Awards. The Committee may waive any conditions or rights
under, amend any terms of, or alter any Award therefore granted, provided no
change, other than pursuant to Section 7(iii), in any Award shall materially
reduce the benefit to Participant without the consent of such Participant.

 

  (iii) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee is hereby authorized to make adjustments in
the terms and conditions of, and the criteria included in, Awards in recognition
of unusual or nonrecurring events (including, without limitation, the events
described in Section 4.3 of the Plan) affecting the Partnership or the financial
statements of the Partnership, or of changes in applicable laws, regulations, or
accounting principles, whenever the Committee determines that such adjustments
are appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.

 

SECTION 8. General Provisions.

 

  8.1 No Rights to Awards. No Person shall have any claim to be granted any
Award, and there is no obligation for uniformity of treatment of Participants.
The terms and conditions of Awards need not be the same with respect to each
Participant.

 

  8.2

Withholding. The Company or any Affiliate is authorized to withhold from any
Award, from any payment due or transfer made under any Award or from any
compensation or other amount owing to a Participant the amount (in cash, Units,
other securities, Units that would otherwise be issued pursuant to such Award or

 

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other property) of any applicable taxes payable in respect of the grant of an
Award, the lapse of restrictions thereon, or any payment or transfer under an
Award or under the Plan and to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes.

 

  8.3 No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate or to remain on the Board, as applicable. Further, the Company or
an Affiliate may at any time dismiss a Participant from employment, free from
any liability or any claim under the Plan, unless otherwise expressly provided
in the Plan or in any Award agreement.

 

  8.4 Governing Law. The validity, construction, and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware and applicable federal law.

 

  8.5 Severability. If any provision of the Plan or any Award is or becomes or
is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to
any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.

 

  8.6 Other Laws. The Committee may refuse to issue or transfer any Units or
other consideration under an Award if, in its sole discretion, it determines
that the issuance or transfer of such Units or such other consideration might
violate any applicable law or regulation, the rules of the principal securities
exchange on which the Units are then traded, or entitle the Partnership or an
Affiliate to recover the entire then Fair Market Value thereof under Section
16(b) of the Exchange Act, and any payment tendered to the Company by a
Participant, other holder or beneficiary in connection with the exercise of such
Award shall be promptly refunded to the relevant Participant, holder or
beneficiary.

 

  8.7 No Trust or Fund Created. Neither the Plan nor the Award shall create or
be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any general unsecured creditor of the Company or any
Affiliate.

 

  8.8 No Fractional Units. No fractional Units shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Units or whether such fractional Units or any rights thereto
shall be canceled, terminated, or otherwise eliminated.

 

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  8.9 Headings. Headings are given to the Sections and subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

 

  8.10 Gender and Number. Words in the masculine gender shall include the
feminine gender, the plural shall include the singular and the singular shall
include the plural.

 

SECTION 9. Term of the Plan.

 

The Plan shall be effective on the date of its approval by the Board and shall
continue under the date terminated by the Board or Units are no longer available
for grants of Awards under the Plan, whichever occurs first, provided, however,
that notwithstanding the foregoing, no Award shall be made under the Plan after
the tenth anniversary of the Effective Date. However, unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award granted
prior to such termination, and the authority of the Board or the Committee to
amend, alter, adjust, suspend, discontinue, or terminate any such Award or to
waive any conditions or rights under such Award, shall extend beyond such
termination date.

 

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