2006 ELECTIVE DEFERRAL AGREEMENT

Pursuant to the Valero Energy Corporation Deferred Compensation Plan (the “Plan”):

¨

I elect not to participate in the Plan during 2006 .

¨

I hereby elect to defer a portion of my compensation for the period commencing January 1, 2006 and ending December 31, 2006
as follows:

Salary (elect either 1 or 2)

1.

___% (in even 1% increments not to exceed 30%) of the regular salary to which I may become entitled;

2.

$_____  per pay period of the regular salary to which I may become entitled with respect to (check either (a) or (b) below):

(a)   ___all pay periods during the Plan Year

(b)   ___the following pay periods (specify):

Bonus (elect either 3 or 4 for bonus earned in 2006 and possibly payable in 2007 )

3.

___% (in even 1%