EXHIBIT 10.02

NUSTAR GP, LLC

AMENDED AND RESTATED

2002 UNIT OPTION PLAN

Amended and Restated as of April 1, 2007

 

I.

Plan Purpose

The NuStar GP, LLC 2002 Unit Option Plan (the “Plan”) is intended to promote the
interests of NuStar Energy L.P., a Delaware limited partnership (the
“Partnership”), by providing to employees and directors of NuStar GP, LLC, a
Delaware limited liability company (the “Company”), and its Affiliates who
perform services for the Partnership and its subsidiaries the incentive to
acquire Units through the grant of Options to purchase such Units as described
herein. The Plan is intended to assist the Company and its Affiliates in the
attraction, motivation, and retention of employees who are vital to the growth
and financial success of the Partnership and to align employees’ interests with
those of other Unit holders of the Partnership.

 

II.

Definitions

In this Plan, except where the context indicates otherwise, the following
definitions apply:

 

(a)

“Affiliate” means an entity that controls, is controlled by, or is under common
control with the Company, as defined in Sections 424(e) and (f) of the Code (but
substituting “the Company” for “employer corporation”), including entities which
become such after adoption of the Plan.

 

(b)

“Agreement” means a written agreement granting an Option that is executed by the
Company and the Optionee.

 

(c)

“Award” means a grant of one or more Options pursuant to the Plan.

 

(d)

“Beneficiary” means the person or persons described in Section XI(j).

 

(e)

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

 

(f)

“Cause” shall mean the (i) conviction of the Participant by a state or federal
court of a felony involving moral turpitude, (ii) conviction of the Participant
by a state or federal court of embezzlement or misappropriation of funds of the
Company, (iii) the Company’s (or applicable Affiliate’s) reasonable
determination that the Participant has committed an act of fraud, embezzlement,
theft, or misappropriation of funds in connection with such Participant’s duties
in the course of his or her employment with the Company (or applicable
Affiliate), (iv) the Company’s (or its applicable Affiliate’s) reasonable
determination that the Participant has engaged in gross mismanagement,
negligence or misconduct which causes or could potentially cause material loss,
damage or injury to the Company, any of its Affiliates or their respective
employees, or (v) the Company’s (or applicable Affiliate’s) reasonable
determination that (a) the Participant has violated any policy of the Company
(or applicable Affiliate), including but not limited to, policies regarding
sexual harassment, insider trading, confidentiality, substance abuse and/or
conflicts of interest, which violation could result in the termination of the
Participant’s employment or service as a non-employee Director of the

 

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Company (or applicable Affiliate), or (b) the Participant has failed to
satisfactorily perform the material duties of Participant’s position with the
Company or any of its Affiliates.”

 

(g)

“Code” means the Internal Revenue Code of 1986, as amended.

 

(h)

“Committee” means the Compensation Committee of the Board, the committee
appointed by the Board to administer the Plan.

 

(i)

“Company” means NuStar GP, LLC, a Delaware limited liability company.

 

(j)

“Date of Exercise” means the date on which the Company receives notice of the
exercise of an Option in accordance with Section VI(c) of the Plan.

 

(k)

“Date of Grant” means the date on which an Option is granted under the Plan.

 

(l)

“Director” means a member of the Board of Directors of the Company or any
Affiliate.

 

(m)

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

 

(n)

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

 

(o)

“Fair Market Value” means the closing 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.

 

(p)

“Option” means an option to purchase Units granted under the Plan. Such Options
will be nonqualified unit options and are not intended to be Incentive Stock
Options as defined in Section 422 of the Code.

 

(q)

“Option Period” means the period during which an Option may be exercised.

 

(r)

“Optionee” means a Participant to whom an Option has been granted.

 

(s)

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

 

(t)

“Partnership” means NuStar Energy L.P., a Delaware limited partnership.

 

(u)

“Plan” means the NuStar GP, LLC 2002 Unit Option Plan as set forth herein.

 

(v)

“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.

 

(w)

“Unit” means a common unit of the Partnership.

 

III.

Administration of the Plan

 

(a)

The Committee shall administer the Plan.

 

 

(b)

The Committee shall have full power and authority to interpret the provisions of
the Plan and supervise its administration. All decisions and selections made by
the Committee pursuant to the provisions of the Plan shall be made by a majority
of its members. Any decision reduced to writing and signed by a majority of the
members shall be fully effective as if adopted by a majority at a meeting duly
held. Subject to the provisions of the Plan, the Committee shall have full and
final authority to determine the Participants

 

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to whom Options hereunder shall be granted; the number of Units to be covered by
each Option; the terms and conditions of any Option, the determination of
whether, to what extent, and under what circumstances Options may be settled,
exercised, cancelled, or forfeited; the determination of such rules and
regulations as deemed proper for the administration of the Plan; and the making
of any other determination or actions required for the proper interpretation and
administration of the Plan.

 

 

(c)

Unless expressly provided in the Plan, all designations, determinations,
interpretations, and other decisions under or with respect to the Plan or any
Award or Option shall be within the sole discretion of the Committee, may be
made at any time, and shall be final, conclusive, and binding upon the Company,
the Partnership, any Affiliate, any Participant, and any beneficiary of any
Award or Option.

 

IV.

Units Available for Awards

 

(a)

Units Available. Subject to adjustment as provided in Section IV. (c) hereunder,
the number of Units with respect to which Awards may be granted under the Plan
is 200,000. If any Award is forfeited or otherwise terminates or is canceled
without the exercise of such Option grant, 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.

 

 

(b)

Sources of Units Deliverable Under Awards. Any Units delivered pursuant to the
exercise of an Option 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.

 

 

(c)

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
types 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 or Options, and (iii) if deemed
appropriate, make provision for a cash payment to the holder of an outstanding
Option; provided, that the number of Units subject to any Award or Option shall
always be a whole number.

 

V.

Eligibility

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

 

VI.

Awards

The Committee shall have the authority to determine the Employees and
Non-Employee Directors to whom Options shall be granted, the number of Units to
be covered by each Option, the Date of Grant of

 

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the Option, the purchase price therefor and the conditions and limitations
applicable to the exercise of the Option, including the following terms and
conditions, as the Committee shall determine, that are not inconsistent with the
provisions of the Plan.

 

 

(a)

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.

 

 

(b)

Time and Method of Exercise. The Committee shall determine 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 “cashless-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. The
Participant shall provide written notice to the Company Secretary of his intent
to exercise on or before the Date of Exercise.

 

 

(c)

Term. Subject to earlier termination as provided in the Agreement or the Plan,
each Option shall expire on the tenth (10th) anniversary of its Date of Grant.

 

 

(d)

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 or membership on the Board of the
Company or its Affiliates, whichever is applicable, involuntarily for Cause or
on a voluntary basis (other than for retirement, death or disability of the
Participant (see Section 6.3(ix) below)) during the applicable Restricted
Period, (i) that portion of any Option that has not vested on or prior to such
date of termination shall automatically lapse and be forfeited by the
Participant at the close of business on the date of the Participant’s
termination and (ii) all vested but unexercised Options previously granted shall
automatically lapse and be forfeited by the Participant at the close of business
on the 30th day following the date of such Participant’s termination, unless an
Option expires earlier according to its original terms. If a Participant’s
employment or service as a Director is involuntarily terminated by the Company
other than for Cause: (i) that portion of any Option that has not vested on or
prior to such date of termination shall automatically lapse and be forfeited by
the Participant at the close of business on the date of the Participant’s
termination and (ii) all vested but unexercised Options previously granted shall
automatically lapse and be forfeited by the Participant at the close of business
on last day of the twelfth month following the date of such Participant’s
termination, unless an Option expires earlier according to its original terms.
The Committee or the Chief Executive Officer may waive in whole or in part such
forfeiture with respect to a Participant’s Options.

 

 

(e)

In connection with the sale by Valero Energy Corporation (“VEC”) of its
ownership interest in NuStar GP Holdings, LLC to public unitholders in a series
of public offerings, VEC ceased to be an Affiliate of the Company effective
December 22, 2006. Employees of VEC were deemed to have experienced a
termination of employment as a result of the loss of the Affiliate relationship.
However, notwithstanding the provisions in Section IV(d) above, immediately
prior to the closing of the public offering of the Units on

 

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December 22, 2006, all Options that (a) were granted under the Plan and are held
by VEC Employees, and (b) are in full force and effect on December 22, 2006,
shall remain outstanding, shall be fully vested and shall not be subject to
lapse and forfeiture as provided in Section IV(d) above. Such Options shall
remain outstanding and in full force and shall expire on the close of business
on December 22, 2007.

 

(f)

[Reserved]

 

(g)

[Reserved]

 

 

(h)

Except as otherwise determined by the Committee and included in the
Participant’s Award agreement, if a Participant’s employment or Board membership
is terminated because of retirement, death or disability (with the determination
of disability to be made within the sole discretion of the Committee), any
Option held by the Participant shall remain outstanding and vest or become
exercisable according to the Option’s original terms.

 

(i)

[Reserved]

 

 

(f)

Notwithstanding the other provisions of this Section VI of the Plan, in no event
may an Option be exercised after the expiration of 10 years from the Date of
Grant.

 

VII.

Assignability of Awards or Options

Options granted under the Plan shall not be assignable or otherwise transferable
by the Participant except by will or the laws of descent and distribution.
Otherwise, Options granted under this Plan shall be exercisable during the
lifetime of the Participant (except as otherwise provided in the Plan or the
applicable Agreement) only by the Participant for his or her individual account,
and no purported assignment or transfer of such Options thereunder, whether
voluntary or involuntary, by operation of law or otherwise, shall vest in the
purported assignee or transferee any interest or right therein whatsoever but
immediately upon any such purposed assignment or transfer, or any attempt to
make the same, such Options thereunder shall terminate and become of no further
effect.

 

VIII.

Effective Date and Term of the Plan

The Plan was approved and adopted by the Board on March 22, 2002 and has become
effective thereon.

 

IX.

Withholding

The Company’s obligation to deliver Units or pay any amount pursuant to the
terms of any Option shall be subject to the satisfaction of applicable federal,
state and local tax withholding requirements. To the extent provided in the
applicable Agreement and in accordance with rules prescribed by the Committee, a
Participant may satisfy any such withholding tax obligation by any of the
following means or by a combination of such means: (i) tendering a cash payment,
(ii) authorizing the Company to withhold Units otherwise issuable to the
Participant, or (iii) delivering to the Company already owned and unencumbered
Units.

 

X.

Amendment and Termination of Awards

 

(a)

Amendments to Awards. The Committee may waive any conditions or rights under,
amend any terms of, or alter any Award or Option theretofore granted, provided
no

 

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change, other than pursuant to Section X(b) below, in an Award shall materially
reduce the benefit to Participant without the consent of such Participant.

 

 

(b)

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 and Options in recognition
of unusual or nonrecurring events (including, without limitation, the events
described in Section IV(c) 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.

 

XI.

General

 

The following general provisions shall be applicable to the Plan:

 

(a)

No Rights to Awards. No Employee or Director 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.

 

 

(b)

No Right to Employment. The grant of an Award or Option 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 an Agreement.

 

 

(c)

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.

 

 

(d)

Severability. If any provision of the Plan or any Award or Option 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 or any Option
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, Award, or Option, and the remainder of
the Plan and any such Award or Option shall remain in full force and effect.

 

 

(e)

Other Laws. The Committee may refuse to issue or transfer any Units or other
consideration under an Award or Option 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

 

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the exercise of such Award or Option shall be promptly refunded to the relevant
Participant, holder or beneficiary.

 

 

(f)

No Trust or Fund Created. Neither the Plan nor the Award or Option 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 or Option, such right shall be
no greater than the right of any general unsecured creditor of the Company or
any Affiliate.

 

 

(g)

No Fractional Units. No fractional Units shall be issued or delivered pursuant
to the Plan or any Award or Option, 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.

 

 

(h)

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.

 

 

(i)

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.

 

 

(j)

Beneficiary. Each person whose name appears on the signature page of a
Participant’s Agreement after the caption “Beneficiary” or is otherwise
designated by Participant in accordance with the rules established by the
Committee and who is Participant’s Beneficiary at the time of his or her death
shall be recognized under the Plan as the Participant’s “Beneficiary” and shall
be entitled to exercise the Option, to the extent it is exercisable, after the
death of Participant. Any Participant may from time to time revoke or change his
or her Beneficiary without the consent of any prior Beneficiary by filing a new
designation with the Company. The last such designation received by the Company
shall be controlling; provided, however, that no designation, or change or
revocation thereof, shall be effective unless received (within the meaning of
such term under Section XI (l) of the Plan) by the Company prior to the
Participant’s death, and in no event shall any designation be effective as of a
date prior to such receipt. If no Beneficiary designation is in effect at the
time of the Participant’s death, or if no designated Beneficiary survives the
Participant or if such designation conflicts with applicable law, each person
entitled to the Option under the Participant’s last will or, in the absence of
any such will, the laws of descent and distribution, shall be deemed to be the
Participant’s Beneficiary who is entitled to exercise the Option, to the extent
it is exercisable after the death of Participant. If the Committee administering
the Plan is in doubt as to the right of any person to exercise the Option, the
Company may refuse to recognize such exercise, without liability for any
interest or distributions on the underlying Units, until the Committee
determines the person entitled to exercise the Option, or the Company may apply
to any court of appropriate jurisdiction for declaratory or other appropriate
relief and such application shall be a complete discharge of the liability of
the Company therefore.

 

 

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(k)

The Company and its Affiliates will pay all expense that may arise in connection
to the administration of this Plan.

 

 

(l)

Any notice required or permitted to be given under this Plan shall be sufficient
if in writing and hand-delivered with appropriate proof of same, or sent by
registered or certified mail, return receipt requested, to the Participant,
Beneficiary or the Secretary (or equivalent person) of the Company, Affiliate,
Partnership, Committee, or other person or entity at the address last furnished
by such person or entity. Such notice shall be deemed given as of the date of
delivery or, if delivery is made by mail, as of the date shown on the postmark
on the receipt for registration or certification.

 

 

(m)

No liability whatever shall attach to or be incurred by any past, present or
future unitholders, stockholders, members, officers or directors, as such, of
the Company and its Affiliates, under or by reason any of the terms, conditions
or agreements contained in this Plan or implied therefrom, and any and all
liabilities of, and any and all rights and claims against, the Company or its
Affiliates, or any unitholder, stockholder, member, officer or director, as
such, whether arising at common law or in equity or created by statute or
constitution or otherwise, pertaining to this Plan (other than liability for the
benefits, if any, provided hereunder), are hereby expressly waived and released
by every Participant, as part of the consideration for any benefits provided by
the Company and its Affiliates under this Plan.

 

 

(n)

Neither the Company nor any Affiliates nor the Committee makes any commitment or
guarantee that any federal or state tax treatment will apply or be available to
any person participating or eligible to participate in this Plan.

 

 

(o)

The provisions of the Plan shall be binding on all successors and assigns of (i)
the Company or any Affiliates and (ii) a Participant, including without
limitation, the estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or
representative of the Participant’s creditors.

 

 

(p)

Except as otherwise provided in any notification or agreement relating to an
Award, a Participant shall have no rights as a unitholder of the Partnership
until such Participant becomes the holder of record of Units.

 

 

(q)

This Plan is not intended by its terms or as a result of surrounding
circumstances to provide retirement income or to defer the receipt of payments
hereunder to the termination of the Participant’s covered employment or beyond.
This Plan is strictly a Unit option program and not a pension or welfare benefit
plan that is subject to the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”). All interpretations and determinations hereunder shall be
made on a basis consistent with the status of the Plan as a Unit option program
that is not subject to ERISA.

 

 

(r)

Code Section 409A. Notwithstanding anything in this Plan to the contrary, if any
Plan provision or Award under the Plan would result in the imposition of an
applicable tax under Code Section 409A and related regulations and Treasury
pronouncements (“Section 409A”), that Plan provision or Award may be reformed to
avoid imposition of the applicable tax and no action taken to comply with
Section 409A shall be deemed to adversely affect the Participant’s rights to an
Award.

 

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