Exhibit 10.01

Valero Energy Corporation

Annual Incentive Plan for Named Executive Officers

Section I. Preamble.

This is the Annual Incentive Plan for Named Executive Officers (the “Plan”) of
Valero Energy Corporation (the “Company” or “Valero”). The Plan is established
as a sub-plan under the terms and provisions of the stockholder-approved Valero
Energy Corporation 2011 Omnibus Stock Incentive Plan (“OSIP”) as a cash-based
incentive plan under Section 6.7 thereof. The Plan is designed to meet the
requirements of a performance plan pursuant to Internal Revenue Code (“IRC”)
Section 162(m) as set forth in the terms and provisions of the OSIP. The terms
and conditions of the OSIP are incorporated into this Plan. Capitalized terms
used but not specifically defined in the Plan shall have the meanings given to
them in the OSIP.

Section II. Participation.

The Participants in the Plan shall be limited to only those Company officers who
are considered to be Named Executive Officers (“NEOs”) whose compensation is
reported in the Summary Compensation Table of Valero’s annual proxy statement to
stockholders as required by rules and regulations of the Securities and Exchange
Commission (“SEC”).

Section III. Plan Administration.

The Plan will be administered by the members of the Compensation Committee of
Valero’s Board of Directors who qualify as an “outside director” within the
meaning of Section 162(m)(4)(o)(i) of the IRC (hereafter, the “Committee”). In
accordance with and subject to the provisions of the Plan, the Committee shall
have full authority with respect to Awards under the Plan, including but not
limited to: (a) the establishment and approval of the Performance Goals for the
annual performance period, which must be formally recorded in writing into the
Committee’s records; (b) the determination of the maximum pool of Awards that
may be paid to Participants based upon the Company’s financial performance for
the applicable performance period; (c) the exercise of negative discretion to
reduce the amount of any NEO’s Award based upon supplemental performance
criteria that the Committee may consider with respect to the Company’s or
individual executive’s performance during the performance period; and (d) to
interpret and administer the Plan in the good faith and judgment of the
Committee, consistent with the terms and provisions of the Plan and the OSIP.

Section IV. Performance Period.

This is an annual incentive plan and the Plan’s performance period shall be
Valero’s annual fiscal year, January 1 through December 31.

Section V. Financial Formula for Funding the Maximum Pool of Awards.

 

A.

Within the first 90 days of a performance period, the Committee must establish
and approve the Performance Goals that will fund the maximum pool of Awards for
Participants for the applicable

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performance period. The Committee must record the establishment of such
Performance Goals in writing within its records. Such Performance Goals must be
contemplated within the list of performance criteria set forth under
Section 11.2 of the OSIP.

 

B.

The Performance Goals and financial formulae that will fund the maximum pool of
Awards will be the greater of the following performance criteria after the
completion of the performance period:

 

  a)

.80 percent (0.80%) times Adjusted Net Cash Provided by Operating Activities,
wherein Adjusted Net Cash Provided by Operating Activities is a calculated
number and is defined as net cash provided by operating activities excluding the
effects of “changes in current assets and current liabilities” and “changes in
deferred charges and credits and other operating activities, net,” as reported
in Valero’s Consolidated Statement of Cash Flow; or

 

  b)

.65 percent (0.65%) times Earnings before Interest, Taxes, Depreciation, and
Amortization (EBITDA), wherein EBITDA is a calculated number and is defined as
“Operating Revenues” less “Cost of Sales” less “Operating Expenses” less
“General and Administrative Expenses,” as reported in Valero’s Consolidated
Statement of Income.

 

C.

The Committee will review Valero’s financial records following the completion of
the performance period and will attest to the calculation of the maximum pool of
Awards in writing in the Committee’s records.

Section VI. Allocation of Maximum Pool of Awards to Participants.

Once the maximum pool of Awards is calculated annually as set forth in Section V
above, the Awards will be allocated to each NEO as set forth in Table A below.
This will establish the maximum Award payable to any Participant for a specified
performance period.

Table A – Allocation of Funded Maximum Pool of Awards to Participants

 

September 30,

Position

     Percentage of Pool Funding (%)  

Chief Executive Officer

       50 % 

Second Highest Paid NEO

       20 % 

Third Highest Paid NEO

       10 % 

Fourth Highest Paid NEO

       10 % 

Fifth Highest Paid NEO

       10 % 

Section VII. Further Adjustment to Awards, Negative Discretion.

The maximum Award payable to any individual Participant will be determined by
the calculations established in Sections V. and VI. described above. To
determine the actual amount of an Award

 

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payable to a Participant for any performance period, the Committee may exercise
its discretion to adjust the Awards calculated per the terms of Section V. and
VI. in a downward fashion below the amounts calculated, but the Committee may
not increase the amount of an Award calculated for any Participant. The
Committee, in exercising its negative discretion in making downward adjustments,
may consider such performance factors as Company and divisional financial
performance, operational data, strategic measures, environmental compliance,
health and safety measures, individual performance achievements and
contributions, and such other measures of annual performance as the Committee
considers to be appropriate.

Section VIII. Payment of Awards.

As soon as practicable after the Committee has received the appropriate
financial and other data after the end of a performance period, the Committee
will for each Participant certify in writing the extent to which the applicable
Performance Goals for such Participant have been met and the corresponding
amount of the Award earned by such Participant. Payment of each Award in a cash
lump sum, less applicable withholding taxes, shall be made as soon as
practicable thereafter. Notwithstanding anything in the Plan to the contrary, no
payment made pursuant to any Award in respect of any performance period shall
exceed $20 million, as prescribed by Section 6.2(a)(vi) of the OSIP.

Section IX. Effect of Termination of Employment.

 

A.

Termination Due to Death, Disability, or Retirement.

If a Participant’s employment with Valero is terminated by reason of death,
disability, or retirement during a performance period, the Participant (or the
Participant’s estate) (subject to the Committee’s discretion as allowed by
Section VII of the Plan) shall be paid (pursuant to Section VIII. of the Plan
after the completion of the Plan year) a pro rata amount of the Award earned
according to the terms of the Award equal to the period of service from the
beginning of the performance period through the date of the Participant’s death,
disability, or retirement, as the case may be, as determined by the Committee.

 

B.

Termination for Reasons Other than Death, Disability, or Retirement.

If a Participant’s employment is terminated with Valero prior to the end of the
performance period for any reason other than death, disability, or retirement,
the Participant’s Award for such performance period shall be immediately
forfeited and the Participant shall have no right to any payment thereafter;
provided, however, that under such circumstances the Committee may elect to pay
the Participant a pro rata amount of the Award earned equal to the period of
service from the beginning of the performance period through the date of the
Participant’s termination.

Section X. Payment of Withholding Taxes.

Valero is entitled to withhold and deduct from the payment made pursuant to an
Award or from future wages of the Participant (or from other amounts that may be
due and owing to the Participant from Valero), or make other arrangements for
the collection of, all legally required amounts necessary to satisfy any and all
federal, state, and local withholding and employment-related tax requirements
attributable to any payment made pursuant to an Award.

 

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Section XI. Plan Amendment, Modification, and Termination.

The Committee may suspend or terminate the Plan or any portion thereof at any
time, and may amend the Plan from time to time in such respects as the Committee
may deem advisable in order that Awards under the Plan will conform to any
change in applicable laws or regulations or in any other respect the Committee
may deem to be in the best interests of Valero; provided, however, that no
amendments to the Plan will be effective without the approval of the
stockholders of Valero if stockholder approval of the amendment is then required
for the Plan to continue to be a qualified performance-based compensation plan
pursuant to Section 162(m) of the Code. Any termination, suspension, or
amendment of the Plan may not adversely affect any outstanding Award without the
consent of the affected Participant.

Section XII. Non-Funded, Unsecured Obligation.

A Participant’s only interest under the Plan shall be the right to receive a
cash payment under an Award pursuant to the terms of the Award and the Plan. No
portion of the amount payable to Participants upon the achievement of any
Performance Goal therein shall be held by Valero in trust or escrow or any other
form of asset segregation. To the extent that a participant acquires a right to
receive such a cash payment under the Plan, such right shall be no greater than
the right of any unsecured, general creditor of Valero.

Section XIII. Effective Date.

The Plan was approved by the Compensation Committee of Valero’s board of
directors on February 22, 2012 as a sub-plan under the OSIP, to be effective
immediately upon approval.

Section XIV. Miscellaneous.

 

A.

Employment.

Nothing in the Plan will interfere with or limit in any way the right of Valero
to terminate the employment or otherwise modify the terms and conditions of the
employment of any Participant at any time, nor confer upon any Participant any
right to continue in the employ of the Company.

 

B.

Restrictions on Transfer.

Except pursuant to testamentary will or the laws of descent and as otherwise
expressly permitted by the Plan, no right or interest of any Participant in an
Award will be assignable or transferable, or subjected to any lien, during the
lifetime of the Participant, either voluntarily or involuntarily, directly or
indirectly, by operation of law or otherwise.

 

C.

Governing Law.

Except to the extent in connection with other matters of corporate governance
and authority (all of which shall be governed by the laws of Valero’s
jurisdiction of incorporation), the validity,

 

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construction, interpretation, administration, and effect of the Plan and any
rules, regulations, and actions relating to the Plan will be governed by and
construed exclusively in accordance with the internal, substantive laws of the
State of Texas, without regard to the conflict of law rules of the State of
Texas or any other jurisdiction.

 

D.

Successors.

The Plan will be binding upon and inure to the benefit of the successors of
Valero and the Participants.

 

E.

Compliance with IRC Section 409A.

The Plan is intended to comply, and shall be administered consistently in all
respects, with IRC Section 409A, and the regulations and additional guidance
promulgated thereunder to the extent applicable. Accordingly, Valero shall have
the authority to take any action, or refrain from taking any action, with
respect to the Plan or any Award under the Plan that is reasonably necessary to
ensure compliance with IRC Section 409A (provided that Valero shall choose the
action that best preserves the value of payments and benefits payable under the
Plan that is consistent with Section 409A). This Plan shall be interpreted in a
manner that is consistent with Section 409A. In furtherance, but not in
limitation of the foregoing:

 

  (i)

in no event may Participant designate, directly or indirectly, the calendar year
of any payment to be made hereunder;

 

  (ii)

to the extent the Participant is a “specified employee” within the meaning of
IRC Section 409A, payments, if any, that constitute a “deferral of compensation”
under Section 409A and that would otherwise become due during the first six
months following Participant’s termination of employment shall be delayed and
all such delayed payments shall be paid in full in the seventh month after such
termination date, provided that the above delay shall not apply to any payment
that is excepted from coverage by Section 409A, such as a payment covered by the
short-term deferral exception described in Treasury Regulations
Section 1.409A-1(b)(4);

 

  (iii)

notwithstanding any other provision of this Agreement, a termination,
resignation or retirement of Participant’s employment hereunder shall mean and
be interpreted consistent with a “separation from service” within the meaning of
Section 409A.

 

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