**EXHIBIT        10.05**

 

**Non-Employee Director**

**AWARD        AGREEMENT**

 

This Restricted Unit and distribution equivalent right award agreement        (“Agreement”), effective as of the date set forth at the end of this Agreement        (“Grant Date”), is between Valero GP Holdings, LLC (the “Company”)        and**[insert name]**(“Participant”), a participant in the**Valero GP Holdings, LLC Long-Term Incentive        Plan**, as amended (the “Plan”). All capitalized terms        contained in this Award shall have the same definitions as are set forth in the Plan unless        otherwise defined herein. The terms of this grant are set forth below.

| 1. | The Compensation Committee of the Board of Directors of the                        Company hereby grants to Participant**[insert                        #]**Restricted Units under the Plan. A                        “Restricted Unit” is a phantom unit which is equivalent in                        value to a common unit (“Common Unit”) of the Company. In                        addition, a Restricted Unit represents the right to receive, upon vesting                        as provided below, a Common Unit. Restricted Units are granted hereunder in                        tandem with an equal number of distribution equivalent rights                        (“DERs”). A DER is a right to receive an amount in cash from                        the Company or its designee equal to the distributions made by the Company                        with respect to a Common Unit during the period that ends upon vesting of                        the tandem Restricted Unit or its forfeiture pursuant to Section 6(b) of                        the Plan. |
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| 2. | The Restricted Units granted hereunder are subject to the                        following Restricted Periods, and will vest and accrue to Participant in                        the following increments:**[insert 1/3                        #]**Units on**[first                        anniversary of grant date]**;**[insert 1/3 #]**Units on**[second anniversary of grant                        date]**; and**[insert 1/3                        #]**Units on**[third                        anniversary of grant date]**. The restrictions may                        terminate prior to the expiration of such period as set forth in the Plan.                        Upon vesting, for each Restricted Unit granted hereunder, the Participant                        will be entitled to receive an unrestricted Common Unit. |
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| 3. | DERs with respect to the Restricted Units will be paid to                        you in cash as of each record payment date during the period such                        Restricted Units are outstanding. |
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| 4. | Neither this Award nor any right under this Award may be                        assigned, alienated, pledged, attached, sold, or otherwise transferred or                        encumbered by you otherwise than by will or by the laws of descent and                        distribution. |
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| 5. | The Company will withhold any taxes due from your                        compensation as required by law, which, in the sole discretion of the                        Compensation Committee, may include withholding a number of Restricted                        Units otherwise payable to you. |
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| 6. | By accepting this Award, you hereby accept and agree to be                        bound by all of the terms, provisions, conditions, and limitations of the                        Plan and any subsequent amendment or amendments, as if it had been set                        forth verbatim in this Award. |
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| 7. | By accepting this Award, you will become a Participant as of                        the effective date of this Award and, as such, you shall have no rights                        with respect to the Restricted Units or DERs granted hereunder except as                        are expressly conferred by the Plan and this Award. |
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| 8. | This Award shall be binding upon the parties hereto and                        their respective heirs, legal representatives, and successors. |
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| 9. | This Award is effective as of**[insert grant date]**. |
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| 10. | Upon termination of the Participant’s membership on                        the Board of the Company or its Affiliates, whichever is applicable,                        involuntarily for Cause (as hereinafter defined) or on a voluntary basis                        (other than for retirement, death or disability (see Section 11 below))                        during the applicable Restricted Period, all outstanding Restricted Units                        awarded the Participant shall be automatically forfeited by the Participant                        at the close of business on the date of such termination.                        “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 |
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**EXHIBIT        10.05**

 

(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.

| 11. | If the Participant is terminated because of retirement,                        death or disability (with the determination of disability to be made with                        the sole discretion of the Compensation Committee), any Restricted Units                        held by the Participant which remains 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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VALERO GP HOLDINGS, LLC

         

|   | By: |  |
|--------|-----|--|

|   | Curtis V Anastasio |
|--------|--------------------|

|   | President & Chief Executive Officer |
|--------|-----------------------------------------|

Accepted:

 

 

**[insert        name]**

Date:__________