**EXHIBIT 10.01**

 

**NUSTAR        GP, LLC SECOND AMENDED AND RESTATED**

**2000        LONG-TERM INCENTIVE PLAN**

 

**Amended and Restated as of April 1, 2007**

| SECTION 1. | Purpose of the Plan. |
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The NuStar GP, LLC 2000 Long-Term Incentive 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 Unit-based        incentive awards for superior performance. 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. |
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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. Notwithstanding the immediately preceding two sentences, to the                        extent that Section 409A of the Code applies to Options or other                        equity-based Awards granted under the Plan, the term                        “Affiliate” means all persons with whom the Company could be                        considered a single employer under Section 414(b) or Section (c)                        of the Code, substituting (for the purpose of determining whether Options                        or other equity-based Awards that may be subject to Section 409A of                        the Code are derived in respect of Units of the service recipient in order                        to comply with any applicable requirements of                        Section 1.409A-1(b)(5)(iii) of the proposed regulations issued under                        Section 409A of the Code or any successor regulation or other                        regulatory guidance relating thereto) “20 percent” in place of                        “80 percent” in determining a controlled group under                        Section 414(b) of the Code and in determining trades or businesses                        that are under common control for purposes of Section 414(c) of the                        Code. |
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|   | 2.2 | “Award                        ” means a grant of one or more Options, Performance Units,                        Performance Cash or Restricted Units pursuant to the Plan, and any tandem                        DERs granted with respect to such Award. |
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|   | 2.3 | “Board                        ” means the Board of Directors of the Company. |
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|   | 2.4 | “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 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. |
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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 NuStar GP Holdings, LLC 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 are                        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 interests of the Company are 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, NuStar GP Holdings, LLC 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; NuStar GP Holdings, LLC 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 NuStar GP                        Holdings, LLC or the Company then outstanding, other than, in the case of                        the Company, (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; or (iv) in the case of NuStar GP Holdings, LLC,                        the consummation of a reorganization, merger, consolidation or other form                        of business transaction or series of business transactions, in each case,                        with respect to which more than 50% of the voting power of the outstanding                        equity interests in NuStar GP Holdings, LLC cease to be owned by the                        persons who owned such interests immediately prior to such reorganization,                        merger, consolidation or other form of business transaction or series of                        business transactions. |
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Solely with respect to any Award that is subject to Section 409A of the        Code and to the extent that the definition of change of control under Section 409A        applies to limited liability companies, this definition is intended to comply with the        definition of change of control under Section 409A of the Code and, to the extent that        the above definition does not so comply, such definition shall be void and of no effect        and, to the extent required to ensure that this definition complies with the requirements        of Section 409A of the Code, the definition of such term set forth in regulations or        other regulatory guidance issued under Section 409A of the Code by the appropriate        governmental authority is hereby incorporated by reference into and shall form part of this        Plan as fully as if set forth herein verbatim and the Plan shall be operated in accordance        with the above definition of Change of Control as modified to the extent necessary to        ensure that the above definition complies with the definition prescribed in such        regulations or other regulatory guidance insofar as the definition relates to any Award        that is subject to Section 409A of the Code.

|   | 2.6 | “Code                        ” means the Internal Revenue Code of 1986, as amended. |
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|   | 2.7 | “Committee                        ” means the Compensation Committee of the Board or such other                        committee of the Board appointed to administer the Plan. |
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|   | 2.8 | “Covered                        Participants” means a Participant who is a                        “covered employee” as defined in Section 162(m)(3) of the                        Code, and the regulations promulgated thereunder, and any individual the                        Committee determines should be treated like such a covered                        employee. |
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|   | 2.9 | “Date of                        Grant” means the effective date on which an                        Award is made to a Participant as set forth in the applicable Award                        Agreement. |
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|   | 2.10 | “DER                        ” means a contingent right, granted in tandem with a specific Award,                        to receive an amount in cash equal to the cash distributions made by the                        Partnership with respect to a Unit during the period such Award is                        outstanding. |
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|   | 2.11 | “Director                        ” means a “non-employee director” of the Company, as                        defined in Rule 16b-3. |
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|   | 2.12 | “Employee                        ” means any employee of the Company or an Affiliate, as determined by                        the Committee. |
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|   | 2.13 | “Exchange                        Act” means the Securities Exchange Act of                        1934, as amended. |
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|   | 2.14 | “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. |
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|   | 2.15 | “Good                        Reason” means: |
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|   | (i) | a reduction in the Participant’s annual base                        salary; |
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|   | (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 |
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|   | (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; or |
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|   | (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; |
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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.

|   | 2.16 | “Option                        ” means an option to purchase Units as described in                        Section 6.1. |
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|   | 2.17 | “Participant                        ” means any Employee or Director granted an Award under the                        Plan. |
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|   | 2.18 | “Performance                        Award” means an Award made pursuant to this                        Plan to a Participant which Award is subject to the attainment of one or                        more Performance Goals. Performance Awards may be in the form of either                        Performance Units, Performance Cash or DERs. |
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|   | 2.19 | “Performance                        Cash” means an Award, designated as                        Performance Cash and denominated in cash, granted to a Participant pursuant                        to Section 6.4 hereof, the value of which is conditioned, in                        whole |
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or in part, by the attainment of Performance Goals in a manner deemed        appropriate by the Committee and described in the Award agreement.

|   | 2.20 | “Performance                        Criteria” or                        “Performance                        Goals” or                        “Performance                        Measures” mean the objectives established                        by the Committee for a Performance Period, for the purpose of determining                        when an Award subject to such objectives is earned. |
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|   | 2.21 | “Performance                        Period” means the time period designated by                        the Committee during which performance goals must be met. |
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|   | 2.22 | “Performance                        Unit” means an Award, designated as a                        Performance Unit in the form of Units or other securities of the Company,                        granted to a Participant pursuant to Section 6.4 hereof, the value of                        which is determined, in whole or in part, by the value of Units and/or                        conditioned on the attainment of Performance Goals in a manner deemed                        appropriate by the Committee and described in the Award                        agreement. |
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|   | 2.23 | “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. |
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|   | 2.24 | “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. |
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|   | 2.25 | “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. |
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|   | 2.26 | “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. |
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|   | 2.27 | “SEC                        ” means the Securities and Exchange Commission. |
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|   | 2.28 | “Unit                        ” means a common unit of the Partnership. |
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| SECTION 3. | Administration. |
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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 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 (including but not limited to performance requirements for such        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.

 

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| SECTION 4. | Units Available for Awards. |
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|   | 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 1,500,000. If any                        Award expires, is canceled, exercised, paid or otherwise terminates without                        the delivery of Units, then the Units covered by such Award, to the extent                        of such expiration, cancellation, exercise, payment or termination, shall                        again be Units with respect to which Awards may be granted. In the event                        that Units issued under the Plan are reacquired by the Partnership or the                        Company pursuant to any forfeiture provision, such Units shall again be                        available for the purposes of the Plan. In the event a Participant pays for                        any Award through the delivery of previously acquired Units, the number of                        Units available shall be increased by the number of Units delivered by the                        Participant. |
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|   | 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. |
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|   | 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. |
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| SECTION 5. | Eligibility. |
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Any Employee or Director shall be eligible to be designated a        Participant.

| SECTION 6. | Awards. |
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|   | 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. |
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|   | (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. |
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|   | (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                        “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. |
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|   | (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. |
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|   | (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 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. |
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|   | (v) | 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 6.1(iv) above, immediately prior to the closing of the public                        offering of the Units on 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 6.1(iv) above. Such Options shall remain outstanding and in full                        force and shall expire on the close of business on December 22,                        2007. |
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|   | 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 Committee may establish respecting such Awards, including                        whether DERs are granted with respect to such Restricted Units. |
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|   | (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. |
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|   | (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 |
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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. |
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|   | (iv) | As described in Section 6.1(v) above, Employees of VEC were                        deemed to have experienced a termination of employment as a result of the                        loss of the Affiliate relationship with VEC in connection with the sale by                        VEC of its ownership interest in NuStar GP Holdings, LLC. However,                        notwithstanding the provisions in Section 6.2(ii) above, any Restricted                        Unit granted under the terms of the Plan to, and held by, any VEC Employee                        which remains unvested as of December 22, 2006 shall immediately vest and                        become non-forfeitable as of December 22, 2006. |
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|   | 6.3 | General. |
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|   | (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. |
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|   | (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. |
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|   | (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. |
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|   | (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. |
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|   | (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 |
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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. |
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|   | (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 shall terminate and all performance criteria, if any,                        shall be deemed to have been achieved at the maximum level. |
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|   | (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. |
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|   | 6.4 | Performance Based                        Awards. |
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|   | (i) | Grant of Performance Awards.                        The Committee may issue Performance Awards in the form of Performance                        Units, Performance Cash, or DERs to Participants subject to the Performance                        Goals and Performance Period as it shall determine. The terms and                        conditions of each Performance Award will be set forth in the related Award                        agreement. The Committee shall have complete discretion in determining the                        number and/or value of Performance Awards granted to each Participant. Any                        Performance Units granted under the Plan shall have a minimum Restricted                        Period of one year from the Date of Grant, provided that the Committee may                        provide for earlier vesting following a Change in Control or upon an                        Employee’s termination of employment by reason of death, disability                        or retirement. Participants receiving Performance Awards are not required                        to pay the Company therefor (except for applicable tax withholding) other                        than the rendering of services. |
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|   | (ii) | Value of Performance Awards.                        The Committee shall set Performance Goals in its discretion for each                        Participant who is granted a Performance Award. Such Performance Goals may                        be particular to a Participant, may relate to the performance of the                        Affiliate which employs him or her, may be based on the division which                        employs him or her, may be based on the performance of the Partnership                        generally, or a combination of the |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

|   | -8- |
|--------|-----|

foregoing. The Performance Goals may be based on achievement of balance        sheet or income statement objectives, or any other objectives established by the Committee.        The Performance Goals may be absolute in their terms or measured against or in relationship        to other companies comparably, similarly or otherwise situated. The extent to which such        Performance Goals are met will determine the number and/or value of the Performance Award        to the Participant.

|   | (iii) | Form of Payment. Payment of the                        amount to which a Participant shall be entitled upon the settlement of a                        Performance Award shall be made in a lump sum or installments in cash,                        Units, or a combination thereof as determined by the Committee. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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.

|   | 7.1 | 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. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.2 | 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. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7.3 | 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 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. |
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|   | -9- |
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|   | 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. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 8.11 | Code Section 409A.                        Notwithstanding anything in this Plan to the contrary, Awards granted under                        the Plan shall contain terms that (i) are designed to avoid application of                        Section 409A of the Code to the Award or (ii) are designed to avoid                        adverse tax consequences under Section 409A of the Code should that                        section apply to the Award. 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. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| SECTION 9. | Term of the Plan. |
|------------|-------------------|

The Plan was amended and restated effective January 26, 2006. The current        amendment and restatement was approved by the holders of Units and became effective on        October 1, 2006. The Plan shall continue until 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

 

|   | -10- |
|--------|------|

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.

| SECTION 10. | Special Provisions Applicable to Covered                        Participants. |
|-------------|-------------------------------------------------------------------------------|

Awards subject to Performance Criteria paid to Covered Participants under        this Plan shall be governed by the conditions of this Section 10 in addition to the        requirements of Section 6.4, above. Should conditions set forth under this        Section 10 conflict with the requirements of Section 6.4, the conditions of this        Section 10 shall prevail.

|   | 10.1 | Establishment of Performance Measures, Goals or                        Criteria. All Performance Measures, Goals, or                        Criteria relating to Covered Participants for a relevant Performance Period                        shall be established by the Committee in writing prior to the beginning of                        the Performance Period, or by such other later date for the Performance                        Period as may be permitted under Section 162(m) of the Code. The                        Performance Goals may be identical for all Participants or, at the                        discretion of the Committee, may be different to reflect more appropriate                        measures of individual performance. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.2 | Performance Goals. The                        Committee shall establish the Performance Goals relating to Covered                        Participants for a Performance Period in writing. Performance Goals may                        include alternative and multiple Performance Goals and may be based on one                        or more business and/or financial criteria. In establishing the Performance                        Goals for the Performance Period, the Committee in its discretion may                        include one or any combination of the following criteria in either absolute                        or relative terms, for the Partnership or any Affiliate: |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i) | Increased revenue; |
|--------|-----|--------------------|

|   | (ii) | Net income measures (including but not limited to income                        after capital costs and income before or after taxes); |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Unit price measures (including but not limited to growth                        measures and total unitholder return); |
|--------|-------|------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | Market share; |
|--------|------|---------------|

|   | (v) | Earnings per unit (actual or targeted growth); |
|--------|-----|------------------------------------------------|

|   | (vi) | Earnings before interest, taxes, depreciation, and                        amortization                        (“EBITDA”); |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | (vii) | Economic value added                        (“EVA®”); |
|--------|-------|-----------------------------------------------------------------------|

|   | (viii) | Cash flow measures (including but not limited to net cash                        flow and net cash flow before financing activities); |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | (ix) | Return measures (including but not limited to return on                        equity, return on average assets, return on capital, risk-adjusted return                        on capital, return on investors’ capital and return on average                        equity); |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (x) | Operating measures (including operating income, funds from                        operations, cash from operations, after-tax operating income, sales                        volumes, production volumes, and production efficiency); |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (xi) | Expense measures (including but not limited to overhead cost                        and general and administrative expense); |
|--------|------|------------------------------------------------------------------------------------------------------------------------------|

|   | (xii) | Margins; |
|--------|-------|----------|

 

|   | -11- |
|--------|------|

|   | (xiii) | Unitholder value; |
|--------|--------|-------------------|

|   | (xiv) | Total unitholder return; |
|--------|-------|--------------------------|

|   | (xv) | Proceeds from dispositions; |
|--------|------|-----------------------------|

|   | (xvi) | Pipeline and terminal utilization; |
|--------|-------|------------------------------------|

|   | (xvii) | Total market value; and |
|--------|--------|-------------------------|

|   | (xviii) | Corporate values measures (including ethics compliance,                        environmental, and safety). |
|--------|---------|------------------------------------------------------------------------------------------------------------|

|   | 10.3 | Compliance with                        Section 162(m). The Performance Goals must                        be objective and must satisfy third party “objectivity”                        standards under Section 162(m) of the Code, and the regulations                        promulgated thereunder. In interpreting Plan provisions relating to Awards                        subject to Performance Goals paid to Covered Participants, it is the intent                        of the Plan to conform with the standards of Section 162(m) of the                        Code and Treasury Regulation §1.162-27(e)(2)(i), and the Committee in                        establishing such goals and interpreting the Plan shall be guided by such                        provisions. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.4 | Adjustments. The Committee is                        authorized to make adjustments in the method of calculating attainment of                        Performance Goals in recognition of: (i) extraordinary or non-recurring                        items, (ii) changes in tax laws, (iii) changes in generally accepted                        accounting principles or changes in accounting principles, (iv) charges                        related to restructured or discontinued operations, (v) restatement of                        prior period financial results, and (vi) any other unusual, non-recurring                        gain or loss that is separately identified and quantified in the                        Company’s financial statements. Notwithstanding the foregoing, the                        Committee may, at its sole discretion, reduce the performance results upon                        which Awards are based under the Plan, to offset any unintended result(s)                        arising from events not anticipated when the Performance Goals were                        established, or for any other purpose, provided that such adjustment is                        permitted by Section 162(m) of the Code. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.5 | Discretionary Adjustments. The                        Performance Goals shall not allow for any discretion by the Committee as to                        an increase in any Award, but discretion to lower an Award is                        permissible. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.6 | Certification. The Award and                        payment of any Award under this Plan to a Covered Participant with respect                        to a relevant Performance Period shall be contingent upon the attainment of                        the Performance Goals that are applicable to such Covered Participant. The                        Committee shall certify in writing prior to payment of any such Award that                        such applicable Performance Goals relating to the Award are satisfied.                        Approved minutes of the Committee may be used for this purpose. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.7 | Other Considerations. All                        Awards to Covered Participants under this Plan shall be further subject to                        such other conditions, restrictions, and requirements as the Committee may                        determine to be necessary to carry out the purpose of this                        Section 10. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | -12- |
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