EXHIBIT        10.03

 

**NUSTAR        GP, LLC**

**AMENDED AND RESTATED**

**2003        EMPLOYEE UNIT INCENTIVE PLAN**

Amended        and Restated as of April 1, 2007

         

| SECTION 1. | Purpose of the Plan. |
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The NuStar        GP, LLC 2003 Employee Unit 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 of NuStar GP, LLC, a Delaware limited        liability company (the “Company”), and its Affiliates who perform services for        the Partnership and its subsidiaries incentive awards for superior performance that are        based on Units. The Plan is also intended to enhance the Company’s and its        Affiliates’ ability to attract and retain employees whose services are key to the        growth and profitability of the Partnership, and to encourage them to devote their best        efforts to the business of the Partnership and its subsidiaries, 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. |
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|   | 2.2 | “Award” means a grant of one or more Options or                        Restricted Units pursuant to the Plan, and any tandem DERs granted with                        respect to such Award. |
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|   | 2.3 | “Board” means the Board of Directors of the                        Company. |
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|   | 2.4 | “Cause” means 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 (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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|   | (b) | “Change of                        Control”»2.1                                       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 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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|   | 2.2 | “Committee” means the Compensation Committee of                        the Board or such other committee of the Board appointed to administer the                        Plan. |
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|   | 2.3 | “DER” or “Distribution Equivalent                        Right” means a contingent right, granted in tandem with a specific                        Restricted Unit, to receive an amount in cash equal to the cash                        distributions made by the Partnership with respect to a Unit during the                        period such Restricted Unit is outstanding. |
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|   | 2.4 | “Employee” means any employee of the Company or                        an Affiliate, who performs services for the Partnership, as determined by                        the Committee, provided, however that employees who are                        “officers” of the Company or an Affiliate (as such term is                        defined in Rule 16a-1(f) of the Exchange Act), are not to be                        “Employees” for purposes of this Plan. |
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|   | 2.5 | “Exchange Act” means the Securities Exchange Act                        of 1934, as amended. |
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|   | 2.6 | “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 |
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time a determination of fair market value is required to be made hereunder,        the determination of fair market value shall be made in good faith by the        Committee.

|   | 2.7 | “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 to the Participant                        that are substantially similar to those then enjoyed by similarly situated                        employees unless the Partnership, the Company or their Affiliates provide                        aggregate benefits equivalent to those then in effect; or |
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|   | (iv) | 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 such action or        inaction is not corrected within thirty (30) days thereafter.

|   | 2.8 | “Option” means on option to purchase Units as                        further described in Section 6.1. |
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|   | 2.9 | “Participant” means any Employee granted an                        Award under the Plan. |
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|   | 2.10 | [reserved]. |
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|   | 2.11 | “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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|   | 2.12 | “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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|   | 2.13 | “Restricted Unit” means a phantom unit granted                        under the Plan which is equivalent in value and in dividend and interest                        rights to a Unit, and which upon or following vesting entitles the                        Participant to receive a Unit or its Fair Market Value in cash, whichever                        is determined by the Committee. |
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|   | 2.14 | “Rule 16b-3” means Rule 16b-3 promulgated by the                        SEC under the Exchange Act, or any successor rule or regulation thereto as                        in effect from time to time. |
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|   | 2.15 | “SEC” means the Securities and Exchange                        Commission. |
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|   | 2.16 | “Unit” means a common unit of the                        Partnership. |
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|   | 2.17 | “Valero Energy” means Valero Energy                        Corporation. |
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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

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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;        (v) determine whether, to what extent, and under what circumstances Awards may be        settled, exercised, canceled, or forfeited; (vi) interpret and administer the Plan and        any instrument or agreement relating to an Award made under the Plan; (vii) establish,        amend, suspend, or waive such rules and regulations and appoint such agents as it shall        deem appropriate for the proper administration of the Plan; and (viii) make any other        determination and take any other action that the Committee deems necessary or desirable for        the administration of the Plan. Unless otherwise expressly provided in the Plan, all        designations, determinations, interpretations, and other decisions under or with respect to        the Plan or any Award shall be within the sole discretion of the Committee, may be made at        any time and shall be final, conclusive, and binding upon all Persons, including the        Company, the Partnership, any Affiliate, any Participant, and any beneficiary of any        Award.

| SECTION 4. | Units Available for Awards. |
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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 500,000. If any Award is                        forfeited or otherwise terminates or is canceled without the delivery of                        Units, then the Units covered by such Award, to the extent of such                        forfeiture, termination, or cancellation, shall again be Units with respect                        to which Awards may be granted. |
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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 shall be eligible to be designated a Participant and receive an Award under the        Plan.

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| SECTION 6. | Awards. |
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|   | 6.1 | Options. The Committee shall                        have the authority to determine the Employees 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, 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 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 of employment 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 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 of employment 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 last day of the twelfth month                        following the date of such Participant’s termination, |
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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.

|   | (v) | In connection with the sale by Valero Energy of its                        ownership interest in NuStar GP Holdings, LLC to public unitholders in a                        series of public offerings, Valero Energy ceased to be an Affiliate of the                        Company effective December 22, 2006. Employees of Valero Energy 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 Valero Energy 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 to whom Restricted                        Units shall be granted, the number of Restricted Units to be granted to                        each such Participant, the duration of the Restricted 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                        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. |
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|   | (iii) | Lapse of Restrictions. Upon the                        vesting of each Restricted Unit, the Participant shall be entitled to                        receive from the Company one Unit or its |
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Fair Market Value, as determined by the Committee, subject to the provisions        of Section 8.2.

|   | (iv) | As described in Section 6.1(v) above, Employees of Valero                        Energy were deemed to have experienced a termination of employment as a                        result of the loss of the Affiliate relationship with Valero Energy in                        connection with the sale by Valero Energy 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 Valero Energy 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. 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; provided that an Option may be                        transferred by a Participant without consideration to immediate family                        members or related family trusts, limited partnerships or similar entities                        or on such terms and conditions as the Committee may from time to time                        establish. |
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|   | (iii) | Term 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 required to be                        paid pursuant to the Plan or the applicable Award agreement (including,                        without limitation, any exercise price or any tax withholding) is received                        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 equivalents 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. |
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|   | (vii) | Change of Control. Upon a                        Change of Control, or such period prior thereto as may be established by                        the Committee, 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,                        other than to an Affiliate, 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, provided, however, that in the case of any such termination by the                        Participant under this subparagraph 6.3(viii), such termination shall not                        be deemed to be for Good Reason unless the termination occurs within 180                        days after the occurrence of the applicable sale or disposition                        constituting the reason for the termination 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 |
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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.

|   | (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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| SECTION 7. | Amendment and Termination. |
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Except to        the extent prohibited by applicable law and unless otherwise expressly provided in an Award        agreement or in the Plan:

|   | (i) | Amendments to the Plan. Except                        as required by applicable law or the rules of the principal securities                        exchange on which the Units are traded and subject to Section 7(ii) below,                        the Board or the Committee may amend, alter, suspend, discontinue, or                        terminate the Plan in any manner, without the consent of any partner,                        Participant, other holder or beneficiary of an Award, or other Person;                        provided, however, that the Board or the Committee may not increase the                        number of Units available for Awards under the Plan. |
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|   | (ii) | Amendments to Awards. The                        Committee may waive any conditions or rights under, amend any terms of, or                        alter any Award theretofore 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. |
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|   | (iii) | Adjustment of Awards Upon the Occurrence of Certain                        Unusual or Nonrecurring Events. The Committee is                        hereby authorized to make adjustments in the terms and conditions of, and                        the criteria included in, Awards in recognition of unusual or nonrecurring                        events (including, without limitation, the events described in                        Section 4.3 of the Plan) affecting the Partnership or the financial                        statements of the Partnership, or of changes in applicable laws,                        regulations, or accounting principles, whenever the Committee determines                        that such adjustments are appropriate in order to prevent dilution or                        enlargement of the benefits or potential benefits intended to be made                        available under the Plan. |
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| SECTION 8. | General Provisions. |
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|   | 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. |
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|   | 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 |
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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. 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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|   | 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. |
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|   | 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. |
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|   | 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. |
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|   | 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. |
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|   | 8.8 | No Fractional Units. No                        fractional Units shall be issued or delivered pursuant to the Plan or any                        Award, and the Committee shall determine whether cash, other securities, or                        other property shall be paid or transferred in lieu of any fractional Units                        or whether such fractional Units or any rights thereto shall be canceled,                        terminated, or otherwise eliminated. |
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NuStar GP,        LLC 2003 Unit Incentive Plan

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|   | 8.9 | Headings. Headings are given to                        the Sections and subsections of the Plan solely as a convenience to                        facilitate reference. Such headings shall not be deemed in any way material                        or relevant to the construction or interpretation of the Plan or any                        provision thereof. |
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|   | 8.10 | Facility Payment. Any amounts                        payable hereunder to any person under legal disability or who, in the                        judgment of the Committee, is unable to properly manage his financial                        affairs, may be paid to the legal representative of such person, or may be                        applied for the benefit of such person in any manner which the Committee                        may select, and the Company shall be relieved of any further liability for                        payment of such amounts. |
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|   | 8.11 | 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. |
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|   | 8.12 | 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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| SECTION 9. | Term of the Plan. |
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The Plan        was approved by the Board on June 11, 2003 with an effective date of June 16, 2003, and        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 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.