Exhibit 10.01

 

AMENDMENT TO PERFORMANCE AWARD AGREEMENT

 

This Amendment to 2003 Performance Award Agreement, dated December 29, 2005,
amends that certain Performance Award Agreement (the “Agreement”) dated January
23, 2003 between Valero Energy Corporation, a Delaware corporation (“Valero”)
and William E. Greehey (“Participant”).

 

WHEREAS, the parties desire to amend the Agreement in certain respects.

 

NOW THEREFORE, the parties agree as follows.

 

Section 3. of the Agreement is hereby amended and restated in its entirety as
follows:

 

“3.

Vesting and Delivery of Shares. (a) Vesting. The Performance Shares shall be
eligible to vest in the following increments: one-third on January 23, 2004;
one-third on January 23, 2005; and one-third on January 23, 2006 (each a “Normal
Vesting Date”), subject to verification of attainment of the Performance
Objectives described in Paragraph 4 by the Compensation Committee of the Valero
Board of Directors, which determination is usually made each year at a meeting
of the Compensation Committee of the Board held in January.

 

(b) Delivery of Shares. The shares of Common Stock that Participant becomes
eligible to receive as determined (a) on any Normal Vesting Date, or (b) per the
terms of Paragraph 5 below, shall not be issued or delivered to Participant (or
his estate) until the Participant dies, becomes “disabled” (as contemplated in
Section 409A of the Internal Revenue Code, hereafter “IRC Section 409A”) or
“separates from service” (as contemplated in IRC Section 409A) with Valero, in
accordance with the following:

 

(i)

If Participant’s dies or becomes disabled, then the shares of Common Stock shall
be distributed to Participant (or his estate or heirs) as soon as practicable
following the date on which the Participant died or became disabled, and in any
event on or before the later of: (a) the last day of the calendar year in which
the Participant died or became disabled; or (b) the fifteenth day of the third
month following the date of the Participant’s death or disability; or

 

(ii)

if Participant separates from service from Valero, then the shares of Common
Stock attributable to a Normal Vesting Date occurring after December 31, 2004
(or otherwise not covered by the following sentence) shall be distributed to
Participant upon the latter of: (a) the date that is six months following the
Participant’s separation from service, or (b) January 1 of the year following
the year in which Participant separates from service. All shares of Common Stock
distributable upon Participant’s separation from service from Valero (pursuant
to Participant’s retirement under Valero’s Pension Plan) for which a Normal
Vesting Date occurred on or before December 31, 2004, shall be distributed
January 1 of the year following the year in which Participant separates from
service, in accordance with the original terms of the Agreement.

 

(c) Rights. Until shares of Common Stock are actually issued to Participant (or
his estate) in settlement of the Performance Shares, neither Participant nor any
person claiming by, through or under Participant shall have any rights as a
stockholder of Valero (including, without limitation, voting rights or any right
to receive dividends or other distributions) with respect to such shares, and
Participant’s status with respect to the issuance of such shares shall be that
of a general creditor of Valero.”

 

 

 

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Section 5 of the Agreement is hereby amended and restated to read in its
entirety as follows:

 

“5.

Termination of Employment. Except for a Change of Control (described below), if
Participant separates from service (as contemplated under IRC Section 409A) with
Valero for reasons other than termination for “cause” (as defined pursuant to
the Employment Agreement then in effect between Valero and Participant), or if
Participant dies or becomes disabled (as contemplated under IRC Section 409A),
then those Performance Shares that have not vested or been forfeited and for
which a Normal Vesting Date has not yet occurred shall be deemed to have been
earned and vested at the target level (2nd Quartile), and shall be distributed
in accordance with the provisions of Paragraph 3 above. Notwithstanding the
foregoing, those Performance Shares that have not theretofore vested or been
forfeited, and for which a Normal Vesting Date occurs on or before the 90th day
following the date of such separation from service, shall be subject to vesting
on such Normal Vesting Date in accordance with Paragraph 4 hereof. If
Participant’s separation from service is due to his termination by Valero for
“cause” (as defined pursuant to the Employment Agreement then in effect between
Valero and Participant), then those Performance Shares for which the Normal
Vesting Date has not yet occurred shall be forfeited as of the effective date of
Participant’s separation from service.”

 

VALERO ENERGY CORPORATION

 

 

By:

/s/ Jay D. Browning

 

x:

/s/ William E. Greehey

 

Jay D. Browning

 

 

William E. Greehey

 

Vice President