EXHIBIT 10.01
VALERO ENERGY CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2008)

 

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VALERO ENERGY CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS

                      Page  
ARTICLE I
  DEFINITIONS     1  
1.1
  Accrued Benefit     1  
1.2
  Actuarial Equivalent or Actuarially Equivalent Basis     1  
1.3
  Board of Directors     1  
1.4
  Change in Control     1  
1.5
  Code     2  
1.6
  Company     2  
1.7
  Committee     2  
1.8
  Credited Service     2  
1.9
  Eligible Earnings     3  
1.10
  Final Average Compensation     3  
1.11
  Monthly Covered Compensation     3  
1.12
  Monthly FICA Amount     3  
1.13
  Normal Retirement Date     3  
1.14
  Participant     3  
1.15
  Plan     3  
1.16
  Plan of Deferred Compensation     3  
1.17
  Plan Year     3  
1.18
  Retirement     4  
1.19
  Rules     4  
1.20
  Securities Act     4  
1.21
  Separation from Service     4  
1.22
  Subsidiary     4  
1.23
  Surviving Spouse     4  
1.24
  Trust     4  
1.25
  Trustee     4  
1.26
  Valero     4  
1.27
  Valero Pension Plan     4  
1.28
  Valero Pension Plan Benefit     4  
ARTICLE II
  ELIGIBILITY     5  
2.1
  Eligibility     5  
2.2
  Frozen Participation     5  
2.3
  Renewed Eligibility     5  
ARTICLE III
  VESTING     5  
ARTICLE IV
  RETIREMENT BENEFIT     6  
4.1
  Calculation of Retirement Benefit     6  
4.2
  Form and Time of Payment     6  
4.3
  Modification of Pension     6  
4.4
  Delay of Certain Payments     7  

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                      Page  
ARTICLE V
  PRERETIREMENT SPOUSAL DEATH BENEFIT     7  
5.1
  Death Prior to Retirement     7  
5.2
  Beneficiary Designation Prohibited     7  
ARTICLE VI
  PROVISIONS RELATING TO ALL BENEFITS     7  
6.1
  Effect of This Article     7  
6.2
  No Duplication of Benefits     7  
6.3
  Forfeiture Upon Termination for Cause     7  
6.4
  Forfeiture for Competition     8  
6.5
  Expenses Incurred in Enforcing the Plan     8  
6.6
  No Restrictions on any Portion of Benefits        
 
  Determined to be Excess Parachute Payments     8  
6.7
  Benefits Upon Re-employment     8  
ARTICLE VII
  ADMINISTRATION     8  
7.1
  Committee Appointment     8  
7.2
  Committee Organization and Voting     9  
7.3
  Powers of the Committee     9  
7.4
  Committee Discretion     9  
7.5
  Reliance Upon Information     9  
7.6
  Approval of Benefit Modifications     10  
ARTICLE VIII
  ADOPTION BY SUBSIDIARIES     10  
8.1
  Procedure for and Status After Adoption     10  
8.2
  Termination of Participation By Adopting Subsidiary     10  
8.3
  Spinoff Plan     10  
ARTICLE IX
  AMENDMENT AND/OR TERMINATION     11  
9.1
  Amendment or Termination of the Plan     11  
9.2
  No Retroactive Effect on Annual Benefits     11  
9.3
  Effect of Termination     11  
9.4
  Effect of Change in Control     11  
ARTICLE X
  FUNDING     12  
10.1
  Payments from Trust     12  
10.2
  Plan May Be Funded Through Life Insurance     12  
10.3
  Required Funding of Rabbi Trust     12  
10.4
  Ownership of Assets; Release     13  
10.5
  Reversion of Excess Assets     13  
10.6
  Repurchase of Valero Stock     13  
10.7
  Participants Must Rely Only on General Credit of the Companies     13  
ARTICLE XI
  MISCELLANEOUS     14  
11.1
  Responsibility for Distributions and Withholding of Taxes     14  
11.2
  Limitation of Rights     14  
11.3
  Arbitration of Disputes.     15  
11.4
  Distributions to Incompetents     16  
11.5
  Nonalienation of Benefits     17  
11.6
  Severability     17  
11.7
  Notice     17  
11.8
  Gender and Number     17  
11.9
  Governing Law     17  

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                      Page  
11.10
  Effective Date     17  

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VALERO ENERGY CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
     WHEREAS, Valero Energy Corporation (the “Company”) established the Valero
Energy Corporation Supplemental Executive Retirement Plan (the “Plan”),
originally effective January 1, 1983 which provides, for certain highly
compensated, management personnel, a supplement to their benefits under the
Valero Pension Plan so as to retain their loyalty and to offer a further
incentive to them to maintain and increase their standard of performance; and
     WHEREAS, pursuant to Section 9.1, the Committee may amend the Plan at any
time by an instrument in writing; and
     WHEREAS, the Committee has determined that the Plan should be amended and
restated to reflect the spinoff of liabilities relating to eligible Employees of
NuStar Energy, LLC (formerly Valero GP, LLC) into a separate plan effective as
of July 1, 2006, and to make certain other changes consistent with Code section
409A;
     NOW, THEREFORE, the Company amends and restates the Plan as follows:
ARTICLE I
DEFINITIONS
     All defined terms used in the Valero Pension Plan shall have the same
meaning for this Plan, except as otherwise set forth below.
     1.1 Accrued Benefit. “Accrued Benefit” means, as of any given date of
determination, the Retirement benefit calculated under Section 4.1 with Final
Average Compensation, but with the offsets for benefits provided by the Valero
Pension Plan and Credited Service determined as of that date.
     1.2 Actuarial Equivalent or Actuarially Equivalent Basis. “Actuarial
Equivalent” or “Actuarially Equivalent Basis” means an equality in value of the
aggregate amounts expected to be received under different forms of payment based
on the same mortality and interest rate assumptions. For this purpose, the
mortality and interest rate assumptions used in computing benefits under the
Valero Pension Plan will be used. If there is no Valero Pension Plan or
successor qualified defined benefit plan, then the actuarial assumptions to be
used will be those actuarial assumptions deemed appropriate by the actuarial
firm, which last served as independent actuary for the Valero Pension Plan prior
to its termination or merger had the Valero Pension Plan remained in existence
with its last participant census.
     1.3 Board of Directors. “Board of Directors” means the Board of Directors
of Valero.
     1.4 Change in Control. “Change in Control” means the occurrence of one or
more of the following events:

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     (a) Change in Ownership of Valero. The acquisition by any one person, or
more than one person acting as a group (within the meaning of Code § 409A), of
ownership of stock of Valero that, together with stock held by such person or
group, constitutes more than fifty percent (50%) of the total fair market value
or total voting power of the stock of Valero.
     (b) Change in Effective Control of Valero. Either of the following:
(i) The acquisition, during any 12-month period, by any one person, or more than
one person acting as a group (within the meaning of Code § 409A), of stock of
Valero comprising thirty percent (30%) or more of the total voting power of the
stock of Valero; or
(ii) The replacement, during any 12-month period, of a majority of the members
of the Board of Directors with directors whose appointment or election is not
endorsed by the majority of the members of the Board of Directors before the
date of such appointment or election.
     (c) Change in Ownership of a Substantial Portion of Valero’s Assets. The
acquisition by any one person, or more than one person acting as a group (within
the meaning of Code § 409A), during the 12 month period ending on the date of
the most recent acquisition by such person or persons, of assets of Valero that
have a total gross fair market value equal to or more than forty percent (40%)
of the total gross fair market value of all of the assets of Valero immediately
before such acquisition or acquisitions. For purposes of this provision, “gross
fair market value” means the value of the assets of Valero, or the value of the
assets being disposed of, determined without regard to any liabilities
associated with such assets.
     1.5 Code. “Code” means the Internal Revenue Code of 1986, as amended from
time to time.
     1.6 Company. “Company” means Valero and any Subsidiary adopting the Plan.
     1.7 Committee. “Committee” means the Compensation Committee of the Board of
Directors.
     1.8 Credited Service. “Credited Service” means a Participant’s continuing
period of employment with a Company (whether or not contiguous), commencing on
the first day for which such Participant is paid, or entitled to payment, for
the performance of duties with a Company and terminating with the Participant’s
final cessation of participation in the Plan. With respect to any full calendar
year in which a Participant receives Eligible Earnings in each payroll period as
an active employee, he shall be credited with one year of Credited Service. With
respect to any partial calendar year in which a Participant receives Eligible
Earnings as an active employee (such as the calendar year in which employment
commences or participation ceases) he shall be credited with a fraction of a
year of Credited Service, in the same proportion that the number of payroll
periods during such calendar year that he received Eligible Earnings as an
active employee bears to the total number of payroll periods during such year.
All partial years of Credited Service shall be aggregated so that a Participant
receives credit for all periods of

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employment regardless of whether the Credited Service is interrupted. Credited
Service shall also include, and a Participant shall be credited with, such
additional periods of time, if any, as may have been agreed upon by the
Participant and a Company in connection with the Participant’s employment,
termination or otherwise.
     1.9 Eligible Earnings. “Eligible Earnings” means all compensation paid or
payable by a Company to the employee in the form of base salary or wages and
annual bonuses (whether paid or payable in cash or securities or any combination
thereof), including therein any amounts of such base salary or wages and annual
bonuses earned which, at the employee’s election, in lieu of a cash payment to
him, are contributed to a Plan of Deferred Compensation maintained by the
Company. During a leave of absence from work, with or without pay, such as
disability leave of absence or personal leave of absence, the Participant’s base
rate of pay in effect immediately prior to the leave of absence and his most
recent annual bonus amount earned shall be used in computing his Eligible
Earnings.
     1.10 Final Average Compensation. “Final Average Compensation” means a
Participant’s average monthly Eligible Earnings from any Company for the
thirty-six consecutive calendar months that give the highest average monthly
rate of Eligible Earnings for the Participant out of all calendar months next
preceding the earliest of (a) the date upon which a Participant becomes
ineligible for participation in this Plan pursuant to Section 2.2; (b) his
Retirement; or (c) the termination of the Plan.
     1.11 Monthly Covered Compensation. “Monthly Covered Compensation” means the
quotient resulting from dividing Covered Compensation by 12.
     1.12 Monthly FICA Amount. “Monthly FICA Amount” means the quotient
resulting from dividing by 12 the Taxable Wage Base in effect or assumed to be
in effect at the beginning of the calendar year in which a Participant attains
social security retirement age (as defined in Section 415(b)(8) of the Code).
     1.13 Normal Retirement Date. “Normal Retirement Date” means the first day
of the month coincident with or next following the date on which the Participant
attains the age of 65 years.
     1.14 Participant. “Participant” means either (a) an employee of a Company
who is eligible for and is participating in the Plan or (b) a former employee of
a Company who is eligible to receive benefits under the Plan upon such former
employee’s Retirement.
     1.15 Plan. “Plan” means the Valero Energy Corporation Supplemental
Executive Retirement Plan as set forth in this document, as amended from time to
time.
     1.16 Plan of Deferred Compensation. “Plan of Deferred Compensation” means
the Valero Energy Corporation Executive Deferred Compensation Plan, any
successor, alternative or additional nonqualified plan of deferred compensation,
and any contributions made under a salary reduction agreement to a Code
Section 125 cafeteria plan or Code Section 401(k) cash or deferred arrangement
maintained by the Company.
     1.17 Plan Year. “Plan Year” means the calendar year.

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     1.18 Retirement. “Retirement”, “Retires”, “Retire” or “Retired” means the
first day of the month coincident with or next following the date that a
Participant incurs a Separation from Service after having attained at least age
55 and completing at least five (5) years of Credited Service.
     1.19 Rules. “Rules” means the Commercial Arbitration Rules of the American
Arbitration Association in effect at the date of commencement of any arbitration
hereunder.
     1.20 Securities Act. “Securities Act” means the Securities Exchange Act of
1934, as amended from time to time.
     1.21 Separation from Service. “Separation from Service” means a separation
from service within the meaning of Code section 409A.
     1.22 Subsidiary. “Subsidiary” means (i) any corporation 50% or more of
whose stock having ordinary voting power to elect directors (irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned, directly or indirectly, by Valero, and
(ii) any partnership, association, joint venture or other entity in which,
Valero, directly or indirectly, has a 50% or greater equity interest at the
time.
     1.23 Surviving Spouse. “Surviving Spouse” means the spouse of a Participant
who is eligible to receive a Qualified Preretirement Survivor Annuity benefit
under the Valero Pension Plan.
     1.24 Trust. “Trust” or “Trust Agreement” shall mean the Valero Energy
Corporation Supplemental Executive Retirement Plan Trust as is created by the
terms and conditions of said Trust and as may be amended from time to time.
     1.25 Trustee. “Trustee” means collectively one or more persons or
corporations with trust power which have been appointed by the Committee and
have accepted the duties of Trustee of the Trust and any and all successor or
successors appointed by Valero.
     1.26 Valero. “Valero” means Valero Energy Corporation, the sponsor of this
Plan, and its successors.
     1.27 Valero Pension Plan. “Valero Pension Plan” means the Valero Energy
Corporation Pension Plan, a defined benefit plan qualified under Section 401(a)
of the Code, as it may be amended from time to time and any successor qualified
defined benefit plan.
     1.28 Valero Pension Plan Benefit. “Valero Pension Plan Benefit” means the
amount of monthly benefit payable from the Valero Pension Plan which (a) in the
case of an unmarried Participant, is based upon a lifetime annuity payable to
such Participant pursuant to the provisions of Article 4 of the Valero Pension
Plan, or any successor provision; or, (b) in the case of a married Participant,
is based upon a joint and survivor pension of Actuarially Equivalent Value to
the pension otherwise payable to such Participant for life pursuant to the
provisions of Article 4 of the Valero Pension Plan or any successor provision.

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ARTICLE II
ELIGIBILITY
     2.1 Eligibility. An employee shall become a Participant in the Plan as of
the date he is selected by the Committee for inclusion as a Participant in the
Plan. Ongoing eligibility and participation of Participants shall be determined
by the Committee in its sole discretion, and no employee shall have a right to
initial or ongoing participation in this Plan.
     2.2 Frozen Participation. If, at any time, the Committee determines that an
employee who is a Participant is no longer eligible to continue to participate,
and such employee is still employed by a Company, his Accrued Benefit will be
frozen as of the last day of the Plan Year prior to the Plan Year during which
he initially became ineligible to participate. He will later be entitled to that
frozen Accrued Benefit upon his Retirement (if, at the time of such Retirement,
his Accrued Benefit is vested), subject to the requirements of Articles III and
IV. The frozen Accrued Benefit will be payable at the time and in the form set
forth in Article IV.
     Notwithstanding the foregoing provisions, in the event that the Participant
has, as of the date of his Retirement, accrued a vested benefit in the Valero
Energy Corporation Excess Pension Plan which is greater than his frozen accrued
benefit hereunder, such Participant shall be entitled to receive his accrued
benefit under the Valero Energy Corporation Excess Pension Plan, and shall not
be eligible for any benefits hereunder. Under no circumstances shall a
Participant be entitled to benefits under both this Plan and the Valero Energy
Corporation Excess Pension Plan. The Surviving Spouse of a Participant whose
Accrued Benefit is frozen at the time of the Participant’s death shall not be
entitled to any death benefit under this Plan. A Participant whose Accrued
Benefit is frozen at the time of incurring a disability shall not accrue any
further Credited Service either for accrual or vesting purposes after the
disability occurs so long as the Participant’s Accrued Benefit in this Plan is
frozen. If the frozen Accrued Benefit is less than the benefit which could
otherwise be provided without this limitation, then the benefit will not exceed
the Participant’s frozen Accrued Benefit. Additionally, if any of the events
described in Article VI should occur, the Participant whose Accrued Benefit is
frozen shall be subject to having his frozen Accrued Benefit either restricted
in amount or forfeited in accordance with Article VI.
     2.3 Renewed Eligibility. If an employee who is a Participant becomes
ineligible to continue to participate but remains employed by a Company, and the
Committee later determines that the employee is again eligible to participate,
the Participant will be given Credited Service for the intervening period, will
have his Final Average Compensation computed as though the freeze had never
occurred, and will be treated for all purposes as though he had not had his
participation interrupted.
ARTICLE III
VESTING
     Except as otherwise set forth herein, a Participant shall vest in his
Accrued Benefits pursuant to the following vesting schedule:

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      Participant’s Years of     Credited Service   Vested Percentage
Less than 5
  0%
or more
  100%

     Except as otherwise set forth herein, a Participant’s Accrued Benefit
attributable to Credited Service on or after January 1, 1996 shall vest only
upon the occurrence of the Participant’s death, disability or Retirement, and
all benefits under this Plan shall be forfeited if the Participant terminates
employment from all Companies prior to death, disability or Retirement.
     The foregoing notwithstanding, a Participant’s Accrued Benefit (whether
attributable to Credited Service occurring before, on or after January 1, 1996)
shall become fully vested upon: (i) the occurrence of a Change in Control;
(ii) termination of the Plan pursuant to Section 9.1; or (iii) the termination
of participation in this Plan by the Subsidiary employing the Participant, if
such Participant’s participation in the Plan is not promptly continued through
employment by another adopting Subsidiary. Upon a Participant’s Separation from
Service for any reason prior to becoming fully vested hereunder, the Participant
and any Surviving Spouse shall forfeit any interest in and under this Plan, and
shall have no right to any benefit hereunder.
ARTICLE IV
RETIREMENT BENEFIT
     4.1 Calculation of Retirement Benefit. Subject to the following provisions
of this Section 4.1, the provisions of Section 4.3 and Article III; the benefit
payable under the Plan shall be an amount equal to the present value of a
lifetime annuity based on the sum of (i) plus (ii) minus (iii) where (i) equals:
1.60% of the Participant’s Final Average Compensation multiplied by his number
of years of Credited Service; (ii) equals .35% multiplied by the product of his
years of Credited Service (not to exceed 35 years) times the excess of his Final
Average Compensation over the lesser of (a) 1.25 times his Monthly Covered
Compensation or (b) the Monthly FICA Amount; and (iii) equals the Participant’s
Valero Pension Plan Benefit. The lump sum amount payable hereunder shall be
determined using the lump sum actuarial factors provided for, and/or used under,
the Valero Pension Plan.
     4.2 Form and Time of Payment. Effective for benefit payments commencing as
a result of a Participant’s Retirement on or after January 1, 2008, benefits
shall be made in a single lump sum payment as of the January 1 following the
Participant’s Retirement.
     4.3 Modification of Pension. The Committee shall have the right to modify
the calculation of the benefit payable as to any Participant as it may desire
from time to time; provided, however, that any such modification shall not
result in a reduction of the benefit payable below the amount set forth above in
Section 4.1. The amount of the benefits payable to a Participant under this Plan
may be modified by written agreement entered into between the Participant and a
Company and approved pursuant to Section 7.6. If so modified, the provisions

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of such written agreement shall prevail in determining the amount of the
benefits payable to the Participant under this Plan. In addition, benefits
payable under this Plan to any Participant shall not affect any other right or
entitlement a Participant may have by contract or otherwise, except as may be
provided in any such contract.
     4.4 Delay of Certain Payments. With respect to any Participant who is a
“Specified Employee”, as defined in Code section 409A and the regulations and
rulings issued thereunder, any benefit that becomes payable by reason of such
Participant’s Separation from Service shall not commence prior to the date that
is six (6) months following such Participant’s separation from service. The
provisions of this Section 4.4 shall not apply (a) with respect to any benefit
that becomes payable due to the death of the Participant, or (b) if, at the time
of such Participant’s Separation from Service, no stock of the Company is
publicly traded on an established securities market or otherwise.
ARTICLE V
PRERETIREMENT SPOUSAL DEATH BENEFIT
     5.1 Death Prior to Retirement. In the event that a Participant who has
attained age 55 and completed five years of Credited Service dies while employed
by a Company but has not Retired, the Participant’s Surviving Spouse shall
receive a Surviving Spouse benefit under the Plan, which shall be payable in the
form of a lump sum as of the date of the Participant’s death and shall be equal
to fifty percent (50%) of the amount the Participant would have received under
Section 4.1 if he had Retired on his date of death.
     5.2 Beneficiary Designation Prohibited. Since the only death benefit
payable under the Plan is to a Surviving Spouse as provided in Section 5.1
above, no Participant shall have the right to designate a beneficiary to receive
any benefits hereunder.
ARTICLE VI
PROVISIONS RELATING TO ALL BENEFITS
     6.1 Effect of This Article. The provisions of this Article will control
over all other provisions of this Plan.
     6.2 No Duplication of Benefits. It is not intended that there be any
duplication of benefits. Therefore, in no event will a Participant and such
Participant’s Surviving Spouse qualify for separate benefit payments under
Articles IV and V.
     6.3 Forfeiture Upon Termination for Cause. If the Committee finds, after
full consideration of the facts presented on behalf of both the Company and a
Participant, that the Participant was discharged by a Company for fraud,
embezzlement, theft, commission of a felony, proven dishonesty in the course of
his employment by a Company which damaged the Company, or for disclosing trade
secrets of a Company, the entire Accrued Benefit of the Participant will be
forfeited even though it may have been previously vested, and the Participant
and any Surviving Spouse shall have no right to a benefit hereunder. The
decision of the Committee as to the cause of a former Participant’s discharge
and the damage done to the

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Company will be final and binding on all parties. No decision of the Committee
will affect the finality of the discharge of the Participant by the Company in
any manner. Notwithstanding the foregoing, no forfeiture should be permitted
pursuant to this Section following Plan termination or a Change in Control
unless pursuant to arbitration consistent with the provisions of Section 11.3.
     6.4 Forfeiture for Competition. If the Committee finds, after full
consideration of the facts presented on behalf of the Company and a Participant,
that the Participant, at any time within two years following his termination of
employment from all Companies and without written consent of a Company, directly
or indirectly owns, operates, manages, controls or participates in the ownership
(other than through ownership of less than 5% of the voting equity securities or
other interests of a publicly traded entity), management, operation or control
of or is employed by, or is paid as a consultant or other independent contractor
by a business which competes with the Company, and if the Participant continues
to be so engaged sixty (60) days after written notice has been given to him:
(a) the Participant shall, upon the demand of the Committee, repay to Valero the
full amount of the payment previously made to the Participant hereunder; or
(b) if the Participant has not yet received the payment of his vested Accrued
Benefit, the Participant and any Surviving Spouse shall forfeit any rights under
this Plan and shall not be entitled to receive any benefit hereunder.
     6.5 Expenses Incurred in Enforcing the Plan. Valero will pay a Participant
for all reasonable legal fees and expenses incurred by him in successfully
contesting or disputing his termination of employment by a Company or in
successfully seeking to obtain or enforce any benefit provided by this Plan if
such termination occurs or a benefit is payable following a Change in Control.
     6.6 No Restrictions on any Portion of Benefits Determined to be Excess
Parachute Payments. Notwithstanding that any benefit received or to be received
by a Participant in connection with a Change in Control, or the termination of
his employment by a Company, would not be deductible, whether in whole or in
part, by a Company or any affiliated company, as a result of Section 280G of the
Code, the benefit payable under this Plan shall nevertheless not be reduced.
     6.7 Benefits Upon Re-employment. If a former employee who received a
benefit under this Plan for his past service is re-employed by the Company, and
participates in the Plan during such period of re-employment, the amount of his
benefit upon his subsequent Retirement will be based on his total Credited
Service, and will be reduced by the amount of the previous payment made
hereunder.
ARTICLE VII
ADMINISTRATION
     7.1 Committee Appointment. The members of the Compensation Committee of the
Board of Directors shall serve as the Committee; provided, that the Board of
Directors will have the sole discretion to remove any one or more Committee
members and appoint one or more

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replacement or additional Committee members from time to time. Each Committee
member will serve until his or her resignation or removal.
     7.2 Committee Organization and Voting. The Committee shall be organized and
shall conduct its business in accordance with the bylaws of Valero, provided,
however, that a member of the Committee who is also a Participant will not vote
or act on any matter relating to himself or which is otherwise reasonably likely
to enhance the benefits payable to such Participant hereunder.
     7.3 Powers of the Committee. The Committee will have the exclusive
responsibility for the general administration of this Plan according to the
terms and provisions of this Plan and will have all powers necessary to
accomplish those purposes, including but not by way of limitation the right,
power and authority:
     (a) to make rules and regulations for the administration of this Plan;
     (b) to construe all terms, provisions, conditions and limitations of this
Plan;
     (c) to correct any defect, supply any omission or reconcile any
inconsistency that may appear in this Plan;
     (d) to determine all controversies relating to the administration of this
Plan, including but not limited to:
     (1) differences of opinion arising between a Company and a Participant
except when the difference of opinion relates to the entitlement to, the amount
of or the method or timing of payment of a benefit affected by a Change of
Control, in which event it shall be decided only pursuant to arbitration as set
forth in Section 11.3, and
     (2) any question it deems advisable to determine in order to promote the
uniform administration of this Plan for the benefit of all interested parties;
and
     (e) to delegate powers of investment and administration, as well as those
clerical and recordation duties of the Committee, as it deems necessary or
advisable for the proper and efficient administration of this Plan.
     7.4 Committee Discretion. The Committee in exercising any power or
authority granted under this Plan or in making any determination under this Plan
may use its sole discretion and judgment. Any decision made or any act or
omission, by the Committee in good faith shall be final and binding on all
parties and, except as otherwise set forth in Sections 6.4, 6.5 and 7.3(d)(1),
shall not be subject to de novo review.
     7.5 Reliance Upon Information. The Committee will not be liable for any
decision or action taken in good faith in connection with the administration of
this Plan. Without limiting the generality of the foregoing, any decision or
action taken by the Committee when it relies upon information supplied it by any
officer of the Company, the Company’s legal counsel, the

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Company’s actuary, the Company’s independent accountants or other advisors in
connection with the administration of this Plan will be deemed to have been
taken in good faith.
     7.6 Approval of Benefit Modifications. The Chief Executive Officer (“CEO”)
of Valero shall have authority to approve enhancements to the Credited Service,
or other modifications to the benefits, of any Participant or prospective
Participant under the Plan in connection with the employment, retention,
retirement or termination of a Participant; provided however, that any such
modification made with respect to the benefits of the CEO or President of Valero
shall be recommended to and approved by the Board of Directors.
ARTICLE VIII
ADOPTION BY SUBSIDIARIES
     8.1 Procedure for and Status After Adoption. Any Subsidiary of Valero at
the date of adoption of this Plan, and any entity becoming a Subsidiary of
Valero after such date of adoption, may adopt this Plan by appropriate action of
its board of directors or other governing body. Any power reserved under this
Plan to the Company may be exercised separately by each such Subsidiary adopting
the Plan; provided, however, that (i) powers reserved under this Plan to the
Board of Directors or the Committee shall be exercised only by the Board of
Directors of Valero or Committee thereof and (ii) powers reserved under this
Plan to Valero shall be exercised only by Valero. Each Subsidiary adopting the
Plan delegates to Valero exclusive administrative responsibility for the Plan.
However, Valero may allocate the costs of Plan benefits among the Companies in
any reasonable manner such that each Company shall bear the costs of
participation by those Participants who are or were employees of such Company.
Each Subsidiary, by adopting this Plan, and in consideration of the like
undertakings of the other adopting Subsidiaries, agrees that the obligations and
liabilities of the Company(ies) for the payment of benefits to any Participants
(and to any person claiming through a Participant) hereunder shall be the joint
and several obligation of each Subsidiary adopting the Plan, not solely of the
Company employing or previously employing a Participant. Accordingly, each such
adopting Subsidiary agrees that, to the extent permitted under-Section 10.4,
each Participant (and any person claiming through a Participant) shall have
recourse and a right of action to enforce benefits payable under this Plan
against any and all Companies contemporaneously participating in the Plan during
the period of such Participant’s Credited Service.
     8.2 Termination of Participation By Adopting Subsidiary. Any Subsidiary
adopting this Plan may, by appropriate action of its board of directors or other
governing body, terminate its participation in this Plan. The Committee may, in
its discretion, also terminate a Subsidiary’s participation in this Plan at any
time. The termination of the participation in this Plan by a Subsidiary will
not, however, affect the rights of any Participant who is working or has worked
for the Subsidiary as to benefits previously vested under Article III of this
Plan.
     8.3 Spinoff Plan. Notwithstanding the foregoing, effective as of July 1,
2006, all benefits accrued under this Plan with respect to Participants employed
by NuStar Energy, LLC, formerly, Valero GP, LLC (“NuStar”) were spun off into a
separate plan sponsored by NuStar, now known as the NuStar Supplemental
Executive Retirement Plan (“NuStar SERP”). In this regard, effective as of
July 1, 2006, NuStar established what is now known as the NuStar

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Pension Plan, a defined benefit plan qualified under Code section 401(a), which
will provide benefits to eligible employees of NuStar with respect to service
earned by eligible employees of NuStar and its participating affiliated
companies from and after July 1, 2006. It is the intent of the Company that the
NuStar SERP assumed the current liabilities of this Plan with respect to such
Participants, and shall provide a single supplemental benefit to such employees
that is based upon the benefits such Participant receives under the Valero
Pension Plan, as well as the NuStar Pension Plan. From and after July 1, 2006,
employees of NuStar who had been participating in this Plan ceased participating
in this Plan. This Plan shall have no liability of any kind to such individuals.
Additionally, from and after July 1, 2006, NuStar ceased being a participating
Subsidiary under this Plan.
ARTICLE IX
AMENDMENT AND/OR TERMINATION
     9.1 Amendment or Termination of the Plan. The Committee may amend or
terminate this Plan at any time by an instrument in writing without the consent
of any Company.
     9.2 No Retroactive Effect on Annual Benefits. No amendment will affect the
rights of any Participant to the Retirement benefit provided in Article IV
previously accrued by the Participant or will change a Participant’s rights
under any provision relating to a Change of Control after a Change of Control
has occurred without his consent. However, the Board of Directors retains the
right at any time to change in any manner the Retirement benefit provided in
Article IV but only as to accruals after the date of the amendment.
     9.3 Effect of Termination. If this Plan is terminated, the accrued benefit
of all Participants shall immediately become fully vested, and the benefit of
each Participant (determined as of the date of the Plan termination and
calculated in the manner provided in this Plan) shall, except as provided in
Section 9.4, be paid at the time it would otherwise be paid under the terms of
the Plan.
     9.4 Effect of Change in Control. In the event of a Change in Control, the
accrued benefit of all Participants in the Plan shall immediately become fully
vested. Additionally, the Committee may, within the period beginning thirty
(30) days prior to the effective date of the Change in Control, and ending
twelve (12) months after the effective date of the Change in Control, make an
irrevocable decision to terminate the Plan (and all deferred compensation plans
maintained by Valero which must be aggregated with the Plan under Code section
409A) and distribute all benefits to Participants. In the event of such
termination following a Change in Control, the accrued benefits of each
Participant (determined as of the date of Plan termination and calculated in the
manner provided for in this Plan) shall be distributed in the form of a lump sum
payment within twelve (12) months following the termination of this Plan. In the
absence of such Plan termination, a Change in Control shall not alter the time
and manner of the payment of benefits hereunder, and all benefits shall be paid
at the time and in the manner as they would otherwise be paid in accordance with
the provisions of this Plan.

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ARTICLE X
FUNDING
     10.1 Payments from Trust. As set forth in Section 8.1, the Companies are
jointly and severally liable to pay the benefits due under this Plan; however
should they fail to do so when a benefit is due, the Participant, Surviving
Spouse or other person entitled to payment of a benefit hereunder may apply for
payment of such benefit to the Trustee of the Trust, which shall pay such
benefit in accordance with the provisions of the Trust Agreement. In any event,
if the Trust fails to pay for any reason, the Companies shall remain jointly and
severally liable for the payment of all benefits provided by this Plan.
     10.2 Plan May Be Funded Through Life Insurance. It is specifically
recognized that Valero may, but is not required to, purchase life insurance so
as to accumulate assets sufficient to fund obligations under this Plan and that
Valero may, but is not required to contribute any policy or policies it may
purchase and any amount it finds desirable to the Trust or any other trust
established to accumulate assets to fund obligations under this Plan. However,
under all circumstances, the Participants will have no rights in or to any such
policies.
     10.3 Required Funding of Rabbi Trust. Subject to any limitations under
applicable law, Valero will make contributions of cash or other assets
sufficient to fund the Trust on an actuarially sound basis so as to ensure that
at all times assets within the Trust equal or exceed the Actuarial Equivalent of
Accrued Benefits of all Participants under the Plan, assuming the Accrued
Benefits to be fully vested (whether they are or not). As of the end of each
Plan Year, Valero shall cause the actuary who last performed the annual
actuarial evaluation of the Valero Pension Plan, to determine the Actuarial
Equivalent of the Accrued Benefits of all Plan Participants, assuming the
Accrued Benefits to be fully vested (whether they are or not) as of the end of
the preceding Plan Year. This annual determination shall be performed by the
actuary, as soon as practicable following the close of the Plan Year, and the
actuary shall prepare and provide to Valero a written report detailing the
Accrued Benefits of the Participants. If such report shows that the Plan assets
are less than the Actuarial Equivalent of the Accrued Benefits, then Valero,
commencing within 60 days of receipt of the written report from the actuary,
shall, subject to any limitations under applicable law, contribute to the Trust
(which contribution may be made, at Valero’s sole discretion, in up to four
quarterly installments, the last such installment to be made not later than
December 31 of the Plan Year during which, such report is received) such assets
that it may choose in its sole discretion in an amount necessary to ensue that
the sum of (i) the fair market value of the Trust assets as of the end of such
preceding Plan Year, and (ii) the fair market value of such contributions as of
the date each such contribution is made, equals or exceeds the Actuarial
Equivalent of the Accrued Benefits of all Participants so reported, assuming the
Accrued Benefits to be fully vested (whether they are or not) as of the end of
the prior Plan Year. All Participants shall be entitled to a copy of the report
prepared by the actuary and likewise shall be furnished a schedule of Trust
assets reflecting Valero’s satisfaction of its funding obligation under this
Section 10.3, such report to be furnished to each Plan Participant within
30 days following the due date of Valero’s final contribution to the Trust for
the Plan Year, if any may be required for the particular Plan Year.

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     10.4 Ownership of Assets; Release. All policies of insurance or other
assets contributed to the Trust (or to any other trust established for the
purpose of funding benefits hereunder) pursuant to Sections 10.2, 10.3 or
otherwise shall be contributed by Valero, and all such policies or other assets
shall be owned solely by Valero immediately prior to such contribution. No
Company, other than Valero, shall contribute policies or assets to the Trust. As
an internal accounting matter, as between Valero and the other Companies, Valero
may charge or allocate all or any part of such contributions to other Companies
in any reasonable manner determined by Valero in accordance with generally
accepted accounting principles, and may record the amounts so allocated as
obligations owing among Valero and such Companies. Valero may also allocate or
distribute assets received by it from the Trust pursuant to Section 10.5 hereof
to other Companies in any reasonable manner determined by Valero in accordance
with generally accepted accounting principles. However, notwithstanding the fact
that a Company may be deemed to have a claim against Valero with respect to such
contributions or distributions, no Company (other than Valero) shall at any time
own or be deemed to own or have any contingent, reversionary or other beneficial
interest in any portion of the policies and other assets held in the Trust or
any claim, against the Trustee or otherwise, with respect thereto. Each Company
(other than Valero), by its adoption of this Plan, and in consideration of the
mutual covenants herein contained, for itself, its successors, assigns,
representatives, administrators, trustees and other persons claiming by, through
or under such Company, hereby irrevocably and forever releases and relinquishes
(i) any and all rights, claims and interests (beneficial, reversionary, actual,
contingent or otherwise), known or unknown, asserted or unasserted, which it has
or may have, or may hereafter have, in or with respect to the Trust, the Trust
Fund (as such term is defined in the Trust Agreement) and the policies and
assets now or hereafter from time to time contributed or contributable thereto,
held therein or thereby, or distributable therefrom or thereby, and (ii) any
claim, demand, action or cause of action whatsoever which it has or may have, or
may hereafter have, against the Trustee, its successors or assigns, with respect
thereto.
     10.5 Reversion of Excess Assets. Assets held pursuant to the Trust shall
not be loaned to any Company. However, Valero may, at any time, request the
actuary who last performed the annual actuarial valuation of the Valero Pension
Plan to determine the Actuarial Equivalent of the Accrued Benefits, assuming the
Accrued Benefits to be fully vested (whether they are or not), as of the end of
the previous Plan Year. If the fair market value of the assets held in the
Trust, as determined by the actuary, exceeds the Actuarial Equivalent of the
Accrued Benefits of all such Participants by not less than 25%, then Valero may
direct the Trustee to return to Valero that part of the assets which is in
excess of 125% of the Actuarial Equivalent of the Accrued Benefits. Following
the termination of the Plan and the final distribution of all Accrued Benefits
and the full satisfaction of all obligations of the Plan and the Trust, any
remaining assets in the Trust shall revert to Valero.
     10.6 Repurchase of Valero Stock. In order to facilitate diversification of
Plan assets, Valero shall be entitled, from time to time, upon notice to the
Trustee, to repurchase shares of Valero equity securities held in the Trust.
Such repurchases shall be made for cash or in exchange for other assets having a
fair market value, as determined by the Trustee, equal to the fair market value
of such Valero securities at such date of purchase.
     10.7 Participants Must Rely Only on General Credit of the Companies. The
provisions of Sections 10.2 and 10.3 notwithstanding, it is specifically
recognized by the

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Companies and the Participants that this Plan is an unsecured corporate
commitment and that each Participant (and any Surviving Spouse or other person
claiming through a Participant) must rely upon the general credit of the
Companies for the fulfillment of their obligations under this Plan. Nothing
contained in this Plan or in the Trust Agreement will constitute a
representation, covenant or guarantee by any Company that the policies and
assets transferred to the Trust (or any other trust established for the purpose
of funding benefits hereunder) or the general assets of such Company (or
Companies) will be sufficient to pay any or all benefits under this Plan Neither
this Plan nor the Trust creates any secured or priority position, preferential
right, lien, claim, encumbrance, right, title or other interest of any kind in
any Participant in any policy or other asset held by any Company, contributed to
the Trust (or any other trust established for the purpose of funding benefits
hereunder) or otherwise designated to be used for payment of any obligations
created in this Plan. No policy or other specific asset of any Company has
otherwise been or will be set aside, or has been or will be pledged in any way
for the performance of obligations under this Plan, which would remove the
policy or asset from being subject to the claims of the general creditors of the
respective Company. The Trust Agreement (and any other agreement entered into to
fund obligations under this Plan) shall specify that, with respect to their
benefits under this Plan, the Participants (and any Surviving Spouse or other
person claiming through a Participant) are only unsecured general creditors.
ARTICLE XI
MISCELLANEOUS
     11.1 Responsibility for Distributions and Withholding of Taxes. Valero
shall calculate the amount of any distribution payable to a Participant
hereunder, and the amounts of any deductions required with respect to federal,
state or local tax withholding, and shall withhold or cause the same to be
withheld. However, any and all taxes payable with respect to any distribution or
benefit hereunder shall be the sole responsibility of the Participant, not of
Valero or any Company, whether or not Valero or any Company shall have withheld
or collected from the Participant any sums required to be so withheld or
collected in respect thereof and whether or not any sums so withheld or
collected shall be sufficient to provide for any such taxes. Without limitation
of the foregoing, and except as may otherwise be provided in any separate
employment, severance or other agreement between the Participant and any
Company, the individual Participant or Surviving Spouse, as the case may be,
shall be solely responsible for payment of any excise, income or other tax
imposed (i) upon any payment hereunder which may be deemed to constitute an
“excess parachute payment” pursuant to Section 4999 of the Code, or (ii) based
upon any theory of “constructive receipt” of any lump-sum or other amount
hereunder.
     11.2 Limitation of Rights. Nothing in this Plan will be construed:
     (a) to give a Participant or other person claiming through him any right
with respect to any benefit except in accordance with the terms of this Plan or
an agreement modifying rights under this Plan;
     (b) to limit m any way the right of the Company to terminate a
Participant’s employment with the Company at any time;

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     (c) to evidence any agreement or understanding, expressed or implied, that
the Company will employ a Participant in any particular position or for any
particular remuneration; or
     (d) to give a Participant or any other person claiming through him any
interest or right under this Plan other than that of any unsecured general
creditor.
     11.3 Arbitration of Disputes.
     A. It is agreed that any and all disputes, claims, (whether tort, contract,
statutory or otherwise) and/or controversies which relate, in any manner to the
Plan shall be submitted to final and binding arbitration. The claims covered by
this agreement to arbitrate include, but are not limited to, those which relate
to the following:
     a. The application and interpretation of the Plan.
     b. Forfeitures pursuant to Section 6.5 or 6.6 of the Plan.
     c. Eligibility for and the calculation of benefits from the Plan.
     d. That in interpreting or applying the provisions of the Plan, the Company
has treated the Participant unfairly or discriminated against the Participant in
connection with a work-related injury, disease or death, or claim for benefits
under the Plan in violation of the Texas Commission on Human Rights Act, Title
VII of the Civil Rights Act of 1964, as amended, The Equal Pay Act of 1963, as
amended, the Americans with Disabilities Act, the Age Discrimination in
Employment Act of 1967, as amended, the Rehabilitation Act of 1973, as amended,
or any other provision forbidding discrimination in employment on any basis.
     e. That Valero or the Committee in interpreting or applying the provisions
of the Plan, breached any contract or covenant (express or implied), committed a
tort or act of discrimination (including, but not limited to race, sex,
religion, national origin, age, marital status, or medical condition, handicap
or disability), or violated any federal, state or other governmental law,
statute, regulation, or ordinance.
     f. That a Company has discharged or in any manner discriminated against the
Participant because the Participant in good faith filed a claim, hired a lawyer
to represent him or her in a claim, instituted, or caused to be instituted, in
good faith, any proceeding under the Plan or the TWCA, or has testified in any
such proceeding.
     B. This Arbitration provision is expressly made pursuant to and shall be
governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-14. Except to the extent
herein modified, all arbitration proceedings shall be conducted in accordance
with the Rules. The parties hereto agree that, pursuant to Section 9 of the
Federal Arbitration Act, a judgment of the United States District Court for the
Western District of Texas, San Antonio Division, or of any other court of
competent jurisdiction, may be entered upon an award made pursuant to
arbitration.

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     C. The neutral arbitrator (“Arbitrator”) shall be appointed in the manner
prescribed in Rule 13 of the Rules. The decision of the Arbitrator selected
thereunder shall be final and binding on all parties.
     D. Except as may be modified by the Arbitrator for good cause shown, the
following procedures shall be followed in addition to those set forth within the
Rules themselves. (1) At least twenty (20) days before the arbitration, the
parties must exchange lists of witnesses, including any experts, and copies of
all exhibits intended to be used at the arbitration. Except for good cause, the
Arbitrator may refuse to allow into evidence the testimony of any witness not
timely disclosed. In addition, except for good cause, the Arbitrator may exclude
from evidence any exhibit not previously tendered to the opposing parry in a
timely fashion. (2) Each party may take the deposition of one individual and any
or all expert witnesses designated by another party. Additional discovery,
including but not limited to interrogatories and requests for production of
documents, medical or psychological examinations, may be had, upon a showing of
substantial need, where the Arbitrator so orders. (3) The Arbitrator shall apply
the substantive law (and the law of remedies, if applicable) of the State of
Texas, or federal law or both as applicable to the claim(s) asserted. (4) The
Arbitrator shall have the authority to entertain a motion to dismiss and/or a
motion for summary judgment by any party and shall apply the standards governing
such motions under the Federal Rules of Civil Procedure. (5) Rule 31 of the
Rules is amended to allow for the use of sworn depositions taken in conformity
with the Federal Rules of Civil Procedure. (6) The results of the arbitration
shall be confidential and shall not be publicly released or reported by the
Arbitrator or by either parry.
     E. The Participant (or other person claiming through him) shall pay one
half of the fees and cost of the Arbitrator. Funds or other appropriate security
shall be posted by each party for its share of the Arbitrator’s fee, in an
amount and manner determined by the Arbitrator, ten (10) days before the first
day of hearing. Each party shall pay for its own cost and attorneys fees, if
any. However, if any parry prevails on a statutory claim which affords the
prevailing party attorney’s fees, or if there is a written agreement providing
for fees, the Arbitrator may award reasonable fees to the prevailing party.
     F. This agreement to arbitrate shall survive the termination of
Participant’s employment. It can only be revoked or modified by a writing signed
by the parties which specifically states an intent to revoke or modify the
provisions of this Section 11.3.
     G. Should one or more provisions of this Section 11.3 be rendered or
declared invalid by reason of any existing or subsequently enacted legislation,
or by a decree of a court of competent jurisdiction, such invalidation of such
provision or provisions hereof shall not affect the remaining portions of this
agreement to arbitrate.
     H. Any arbitration proceeding commenced under this Section 11.3 shall, to
the extent practicable, be consolidated with any arbitration proceeding relating
to the same or similar facts and circumstances between the Trustee and Valero
pursuant to the Trust Agreement.
     11.4 Distributions to Incompetents. Should a Participant or a Surviving
Spouse be incompetent at the time any payment is due hereunder, as determined by
the Committee in its sole discretion, Valero is authorized to make such payment
to the guardian or conservator of the

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incompetent Participant or Surviving Spouse or directly to the Participant or
Surviving Spouse or to apply those funds for the benefit of the incompetent
Participant or Surviving Spouse in any manner the Committee determines in its
sole discretion.
     11.5 Nonalienation of Benefits. No right or benefit provided in this Plan
will be transferable by the Participant, except upon his death to a Surviving
Spouse as provided in this Plan. No right or benefit under this Plan will be
subject to anticipation, alienation, sale, assignment, pledge, encumbrance or
charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber,
or charge the same will be void. No right or benefit under this Plan will in any
manner be liable for or subject to any debts, contracts, liabilities or torts of
the person entitled to such benefits. If any Participant or any Surviving Spouse
becomes bankrupt or attempts to anticipate, alienate, sell, assign, pledge,
encumber or charge any right or benefit under this Plan, that right or benefit
will, in the discretion of the Committee, cease. In that event, the Committee
may have Valero hold or apply the right or benefit or any part of it to the
benefit of the Participant or Surviving Spouse, his or her spouse, children or
other dependents or any of them in any manner and in any proportion the
Committee believes to be proper in its sole and absolute discretion, but is not
required to do so.
     11.6 Severability. If any term, provision, covenant or condition of this
Plan is held to be invalid, void or otherwise unenforceable, the rest of this
Plan will remain in full force and effect and will in no way be affected,
impaired or invalidated.
     11.7 Notice. Any notice or filing required or permitted to be given to a
Company, the Committee or a Participant will be sufficient if in writing and
hand delivered or sent by U.S. mail to the principal office of Valero, acting on
behalf of the Company or Committee, or to the residential mailing address of the
Participant. Notice will be deemed to be given as of the date of hand delivery
or if delivery is by mail, as of the date shown on the postmark.
     11.8 Gender and Number. If the context requires it, words of one gender
when used in this Plan will include the other gender, and words used in the
singular or plural will include the other.
     11.9 Governing Law. The Plan will be construed, administered and governed
in all respects by the laws of the State of Texas.
     11.10 Effective Date. Except as otherwise provided herein, this amendment
and restatement of the Plan is effective as of January 1, 2008.
     IN WITNESS WHEREOF, Valero has executed this amendment and restatement of
the Plan effective as of the Effective Date provided for herein.

                  VALERO ENERGY CORPORATION    
 
           
 
  By:    /s/ William R. Klesse    
 
     
 
   

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