Document:

Exhibit 10.3 

VALERO GP, LLC 

AMENDED AND RESTATED

2003 EMPLOYEE UNIT INCENTIVE PLAN 

Amended and Restated as
of October 11, 2004 

	SECTION 1. 	  	Purpose of the Plan.  

The Valero GP, LLC 2003 Employee Unit
Incentive Plan (the “Plan”) is intended to promote the interests of Valero L.P.,
a Delaware limited partnership (the “Partnership”), by providing to employees of
Valero GP, LLC, a Delaware limited liability company (the “Company”), and its
Affiliates who perform services for the Partnership and its subsidiaries incentive awards
for superior performance that are based on Units. The Plan is also intended to enhance the
Company’s and its Affiliates’ ability to attract and retain employees whose
services are key to the growth and profitability of the Partnership, and to encourage them
to devote their best efforts to the business of the Partnership and its subsidiaries,
thereby advancing the Partnership’s interests. 

	SECTION 2.  	  	Definitions.  

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

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

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

	  	         2.3  	  	"Board"
means the Board of Directors of the Company. 

	  	         2.4  	  	"Cause"
means: 

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

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

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

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

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

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

	  	2.7 	  	
“DER” 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. 

	  	2.8 	  	
“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. 

	  	         2.9  	  	"Exchange
Act" means the Securities Exchange Act of 1934, as amended. 

	  	2.10 	  	
“Fair Market Value” means the closing sales price of a Unit on the New York
Stock Exchange on the applicable date (or if there is no trading in the Units on such
date, on the next preceding date on which there was trading). If Units are not publicly
traded at the time a determination of fair market value is required to be made hereunder,
the determination of fair market value shall be made in good faith by the Committee. 

	  	2.11  	  	“Good
Reason” means: 

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

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

	  	  	  	(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  

	  	  	  	(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.  

	  	
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. 

	  	         2.12  	  	"Option"
means on option to purchase Units as further described in Section 6.1. 

	  	         2.13  	  	"Participant"
means any Employee granted an Award under the Plan. 

	  	2.14  	  	[reserved].

	  	2.15 	  	
“Person” means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association, government
agency or political subdivision thereof or other entity. 

	  	2.16 	  	
“Restricted Period” means the period established by the Committee with respect
to the vesting of an Award during which the Award either remains subject to forfeiture or
is not exercisable by the Participant. 

	  	2.17 	  	
“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. 

	  	2.18 	  	
“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. 

	  	         2.19  	  	"SEC"
means the Securities and Exchange Commission. 

	  	         2.20  	  	"Unit"
means a common unit of the Partnership. 

	  	         2.21  	  	"Valero
Energy" means Valero Energy Corporation. 

	SECTION 3.  	  	Administration.  

Annual grant levels for Participants
will be recommended by the Chief Executive Officer of the Company, subject to the review
and approval of the Committee. The Plan shall be administered by the Committee. A majority
of the Committee shall constitute a quorum, and the acts of the members of the Committee
who are present at any meeting thereof at which a quorum is present, or acts unanimously
approved by the members of the Committee in writing, shall be the acts of the Committee.
Subject to the terms of the Plan and applicable law, and in addition to other express
powers and authorizations conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii) determine the type or types
of Awards to be granted to a Participant; (iii) determine the number of Units to be
covered by Awards; (iv) determine the terms and conditions of any Award; (v) determine
whether, to what extent, and under what circumstances Awards may be settled, exercised,
canceled, or forfeited; (vi) interpret and administer the Plan and any instrument or
agreement relating to an Award made under the Plan; (vii) establish, amend, suspend, or
waive such rules and regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan; and (viii) make any other determination and take
any other action that the Committee deems necessary or desirable for the administration of
the Plan. Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to the Plan or
any Award shall be within the sole discretion of the Committee, may be made at any time
and shall be final, conclusive, and binding upon all Persons, including the Company, the
Partnership, any Affiliate, any Participant, and any beneficiary of any Award. 

	SECTION 4.  	  	Units Available for Awards.  

	  	4.1 	  	
Units Available. Subject to adjustment as provided in Section 4.3, the number of
Units with respect to which Awards may be granted under the Plan is 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. 

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

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

	SECTION  5.	  	Eligibility.  

Any Employee shall be eligible to be
designated a Participant and receive an Award under the Plan. 

	SECTION 6. 	  	 Awards. 

	  	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. 

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

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

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

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

	  	6.2 	  	
Restricted Units. The Committee shall have the authority to determine the Employees
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. 

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

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

	  	  	  	(iii)  	  	Lapse
of Restrictions. Upon the vesting of each Restricted Unit, the           Participant
shall be entitled to receive from the Company one Unit or its Fair           Market
Value, as determined by the Committee, subject to the provisions of           Section
8.2.  

	  	         6.3  	  	 General.  

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

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

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

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

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

	  	  	  	(vi)  	  	Delivery
of Units or other Securities and Payment by Participant of           Consideration.
Notwithstanding anything in the Plan or any grant agreement           to the contrary,
delivery of Units pursuant to the exercise or vesting of an           Award may be
deferred for any period during which, in the good faith           determination of the
Committee, the Company is not reasonably able to obtain           Units to deliver
pursuant to such Award without violating the rules or           regulations of any
applicable law or securities exchange. No Units or other           securities shall be
delivered pursuant to any Award until payment in full of any           amount required to
be paid pursuant to the Plan or the applicable Award           agreement (including,
without limitation, any exercise price or any tax           withholding) is 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 Fair Market 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, 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.  

	  	  	  	(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 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.  

	SECTION 7. 	  	 Amendment and Termination.  

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

	  	(i)  	  	Amendments
to the Plan. Except as required by applicable law or the rules                of the
principal securities exchange on which the Units are traded and subject                to
Section 7(ii) below, the Board or the Committee may amend, alter, suspend,
               discontinue, or terminate the Plan in any manner, 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.  

	  	(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.  

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

	SECTION 8. 	  	General Provisions.  

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

	  	8.2 	  	
Withholding. The Company or any Affiliate is authorized to withhold from any Award,
from any payment due or transfer made under any Award or from any compensation or other
amount owing to a Participant the amount (in cash, Units, other securities, Units that
would otherwise be issued pursuant to such Award or 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. 

	  	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 	  	
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. 

	  	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. 

	SECTION 9.  	  	 Term of the Plan.  

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.Exhibit 10.4 

AWARD AGREEMENT 

        This
Restricted Unit award agreement (“Agreement”), effective as of the date set
forth at the end of this Agreement (“Grant Date”), is between Valero GP, LLC
(the “Company”) and «First_Name» «Middle_Name»
«Last_Name» (“Participant”), a participant in the Valero GP,
LLC 2000 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 Participant is awarded «Shares_Granted» Restricted Units
          under the Plan. Restricted Units are granted hereunder in tandem with an equal
          number of Distribution Equivalent Rights (“DERs”). 

          

     	2. 	
          The Restricted Units granted hereunder are subject to the following Restricted
          Periods, and will vest and accrue to Participant in the following increments:
          [1/5 Shares Granted]Units on
          [first anniversary of Grant Date]; [1/5 Shares Granted]
          Units on [second anniversary of Grant Date];
          [1/5 Shares Granted] Units on
          third anniversary of Grant Date; [1/5 Shares Granted]
          Units on [fourth anniversary of Grant Date]; and
          [1/5 Shares Granted] Units on
          [fifth anniversary of Grant Date]. The restrictions may terminate prior to
          the expiration of such period as set forth in the Plan. Upon the vesting of each
          Restricted Unit awarded under this Agreement, the Participant will be entitled
          to receive an unrestricted common Unit of Valero L.P. 

          

     	3. 	
          DERs with respect to the Restricted Units will be paid to the Participant in
          cash as of each record payment date during the period such Restricted Units are
          outstanding. The DERs are subject to the same restrictions as the Restricted
          Units. 

          

     	4. 	
          If the Participant’s employment is terminated because of retirement, death
          or disability, 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. 

          

     	5. 	
          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. 

          

     	6. 	
          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. 

          

     	7. 	
          By accepting this Award, you hereby accept and agree to be bound by all of the
          terms, provisions, conditions, and limitations of the Plan, as amended by the
          First Amendment thereto dated October 15, 2002, and any subsequent amendment or
          amendments, as if it had been set forth verbatim in this Award. 

          

     	8. 	
          This Award shall be binding upon the parties hereto and their respective heirs,
          legal representatives, and successors. 

          

     	9. 	
          This Award is effective as of October 28, 2004. 

          

		VALERO GP, LLC

		By	__________________________________________
			Curtis V Anastasio

President and Chief Executive Officer
			

Accepted: 

_________________ 

«First_Name»
«Middle_Name» «Last_Name»

«Option_Date»

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