Valero GP, LLC
Unit Option Agreement
THIS AGREEMENT is between Valero GP, LLC, a Delaware Limited Liability
company (the "Company") and the person whose signature is set forth on the
signature page hereof ("Participant").
WHEREAS, the Company has adopted the Valero GP, LLC 2002 Unit Option Plan
(the "Plan") which provides for the grant of Options to certain key employees
and non-employee directors of the Company and its Affiliates.
WHEREAS, Participant is a key employee or non-employee director and in
such capacity is in a position to contribute materially to the continued growth
and development and the future financial success of the Company and its
controlled Affiliates; and
WHEREAS, the Company wishes to grant to Participant an option to purchase
Units of Valero L.P. (the "Partnership") on the terms and conditions specified
herein to provide a means for the Participant to participate in the future
growth of the Company and to increase the Participant's incentive and personal
interest in the continued success and growth of the Company;
NOW THEREFORE, the parties agree as follows (any capitalized terms used
herein but not defined herein shall have the respective meanings given in the
a. Grant. Subject to the terms and conditions of this Agreement and
the Plan, the Company hereby ----- grants to Participant an Option to
purchase all or any part of the Units set forth on the signature page
hereof, at the exercise price set forth on the signature page hereof.
b. Term. The term of the Option shall expire at 11:59 p.m. on the
tenth anniversary of the Date ---- of Grant of the Option.
2. Exercise. Participant may, subject to the limitations of this Agreement
and the Plan, exercise all or any portion of the Option by providing written
notice of exercise to the Company specifying the number of Units with respect to
which the Option is being exercised and accompanied by payment of the exercise
price for such Units. The method or methods by which payment of the exercise
price may be made will include any method acceptable to the Company and the
Partnership at the time of exercise of the option.
3. Securities Restrictions. Participant agrees and acknowledges with respect to
any Units issued under the Options that have not been registered under the
Securities Act of 1933 as amended (the "Act"), that (i) Participant will not
sell or otherwise dispose of such Units except pursuant to an effective
registration statement under the Act and any applicable state securities laws or
in a transaction which in the opinion of counsel for the Company, is exempt from
such registration, and (ii) a legend will be placed on the certificates for the
Units to such effect.
4. Limited Interest.
a. The grant of the Option shall not be construed as giving
Participant any interest other than as provided in this Agreement.
b. Participant shall have no rights as a Unit holder as a result of the
grant of the Option, until the Option is exercised, the exercise price is paid,
and the Units issued thereunder.
c. The grant of the Option shall not affect in any way the right or power
of the Company to make or authorize any or all adjustments, recapitalizations,
reorganizations, or other changes in the Company's capital structure or its
business, or any merger, consolidation or business combination of the Company,
or any issuance or modification of any term, condition, or covenant of any bond,
debenture, debt, preferred stock or other instrument ahead of or affecting the
Units or the rights of the holders thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business or any other Company act or proceeding, whether of a similar character
5. Incorporation by Reference. The terms of the Plan to the extent not
stated herein are expressly incorporated herein by reference and in the event of
any conflict between this Agreement and the Plan, the Plan shall govern.
6. Amendment. This Agreement may not be amended, modified, terminated or
otherwise altered except by the written consent of the parties thereto.