8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 16, 2005

VALERO ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-13175	74-1828067
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)

One Valero Way
San Antonio, Texas	78249
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (210) 345-2000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Second Amendment to Deferred Compensation Plan

2006 Elective Deferral Agreement

Investment Election Form

2006 Distribution Election Form

Item 1.01 Entry into a Material Definitive Agreement.

On December 16, 2005, the election period closed for participation during calendar year 2006 in the Valero Energy Corporation Deferred Compensation Plan (the “Plan”). Each of the “named executive officers” (as defined in Item 402(a)(3) of Regulation S-K) of Valero Energy Corporation (the “Company”) is eligible to participate in the Plan. The agreement and forms filed as exhibits to this Current Report on Form 8-K — together with the Plan — contain the material terms and conditions for participation in the Plan. In reliance on Instruction 1 to Item 601(b)(10) of Regulation S-K, the Company is not filing each individual participant’s personal arrangement under the Plan.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

10.01	Valero Energy Corporation Deferred Compensation Plan dated as of March 1, 1998, and First Amendment dated December 20, 2002 — incorporated by reference to Exhibit 10.04 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
* 10.02	Second Amendment to the Valero Energy Corporation Deferred Compensation Plan
* 10.03	2006 Elective Deferral Agreement
* 10.04	Investment Election Form
* 10.05	2006 Distribution Election Form

* filed herewith

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	VALERO ENERGY CORPORATION
Date: December 21, 2005	By:	/s/ Gregory C. King
		Gregory C. King
		President

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EXHIBIT INDEX

Number	Exhibit
10.02	Second Amendment to the Valero Energy Corporation Deferred Compensation Plan
10.03	2006 Elective Deferral Agreement
10.04	Investment Election Form
10.05	2006 Distribution Election Form

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EX-10.02

Exhibit 10.02

SECOND AMENDMENT
TO THE
VALERO ENERGY CORPORATION
DEFERRED COMPENSATION PLAN

     THIS AGREEMENT by Valero Energy Corporation (the “Sponsor”),

WITNESSETH:

     WHEREAS, the Sponsor has executed and maintains a non-qualified deferred compensation plan entitled “Valero Energy Corporation Deferred Compensation Plan,” (the “Plan”); and

     WHEREAS, the Sponsor desires to amend the Plan to allow for the cancellation of an outstanding election to defer compensation on a special one-time basis under specific transition rules for the Plan established by the Internal Revenue Service; and

     WHEREAS, Section 8.1 of the Plan provides that it may amend the plan at any time;

     WHEREAS, the Bylaws of the Sponsor authorize the Board of Directors of the Sponsor (“Board”) to delegate to the person acting as chief executive officer of the company (the “Chief Executive Officer”) such duties as the Board may deem advisable; and

     WHEREAS, by resolution dated May 9, 2002, the Board delegated to the Chief Executive Officer the full power and authority of the Board to approve, and cause to be placed into effect, amendments to the Plan.

     NOW, THEREFORE, in accordance with the provisions of Section 8.1 of the Plan and the delegation of authority described above, the Plan is hereby amended in the following respects:

1. Section 3.1 of the Plan is hereby amended by adding the following new sentence at the end thereof:

Notwithstanding the foregoing provisions and any other provisions of the Plan to the contrary, effective as of February 1, 2005, a Participant may, at any time during 2005, elect to cancel an outstanding Elective Deferral Agreement with respect to amounts deferred after December 31, 2004, on

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a special one-time basis under transition relief granted by the Internal Revenue Service relating to relevant provisions of the Code. The amount of compensation subject to any such cancelled Elective Deferral Agreement shall be paid to the Participant and includable in the Participant’s income, in the calendar year 2005, or, if later, the taxable year in which the compensation is earned and vested. No such cancellation may be made later than December 31, 2005.

2. Capitalized terms used but not otherwise defined in herein shall have the defined meanings as provided in the Plan.

3. As amended hereby, the Plan shall continue in full force and effect.

[Remainder of Page Intentionally Left Blank — Signature Appears on Next Page]

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     IN WITNESS WHEREOF, the Sponsor has caused this instrument to be signed on its behalf and attested by its duly authorized representative this 21st day of December, 2005, to be effective in accordance with the provisions hereof.

VALERO ENERGY CORPORATION

/s/ William E. Greehey

William E. Greehey,

Chief Executive Officer

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EX-10.03

Exhibit 10.03

ACTION REQUIRED: Must be returned to Financial Benefits (E1N) by December 16, 2005

2006 ELECTIVE DEFERRAL AGREEMENT

VALERO ENERGY CORPORATION

DEFERRED COMPENSATION PLAN

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% increments not to exceed 50%) of any cash bonuses to which I may become entitled;
		4.	$___of any cash bonuses to which I may become entitled.

NOTE: The Company has taken measures to design the Plan in a manner that conforms to current tax law. However, it is possible that new legislation could affect your deferral elections. Your 2006 Plan Year deferral elections are irrevocable, and such deferral elections are governed by the terms and conditions of the Plan; however, in order to comply with federal legislation, the Company may modify the Plan or implement a new plan. Your selections will be subject to modifications made to the Plan to conform with federal legislation or to the terms of another plan if the Company chooses to implement a new plan to conform to federal legislation. The Committee may reduce the amount you have elected to defer above, or such deferral elections may be rendered null and void if necessary to comply with federal income tax law (including applicable regulations) regarding nonqualified deferred compensation plans.

ACKNOWLEDGED AND AGREED:
I hereby authorize the above amounts to be deducted and deferred through payroll deduction/reduction by the Company.

Participant’s Signature	Date
«First Name» «Last Name»	«Emplid»
Participant’s Name	Participant’s Employee ID Number

EX-10.04

Exhibit 10.04

ACTION REQUIRED: If changing investment election for 2006, return this form by December 16, 2005.

2006 INVESTMENT ELECTION FORM

VALERO ENERGY CORPORATION

DEFERRED COMPENSATION PLAN

Direction of Investments

The undersigned Participant hereby directs that the measurement of the Participant’s account be determined as if it were invested in the fund options as indicated below.

DEFERRALS OF SALARY AND/OR BONUSES BEGINNING 1/1/2006
WILL BE TREATED AS IF INVESTED AS INDICATED BELOW.

Enter your investment elections: 5% minimum/increments of 5%.
The total of the percentages must equal 100%.
You may invest in any one or more (including all) of the fund options.

___% Dreyfus Appreciation	___% T. Rowe Price Mid-Cap Growth
___% Fidelity Intermediate Gov’t	___% Vanguard Asset Allocation
___% Janus Worldwide	___% Vanguard Growth and Income
___% Liberty — Columbia Income	___% Vanguard Index 500
___% Oakmark	___% Vanguard Index Extended Market
	___% AASelect Funds Money Market Select Fund

I understand that the elections I have chosen on this form shall remain in effect until I make a directive to change.

Participant’s Signature	Date
«First_Name» «Last_Name»	«Emplid»
Participant’s Name	Participant’s Employee ID Number

EX-10.05

Exhibit 10.05

ACTION REQUIRED: Must be returned to Financial Benefits (E1N) by December 16, 2005

2006 DISTRIBUTION ELECTION FORM
VALERO ENERGY CORPORATION
DEFERRED COMPENSATION PLAN

Optional Payment Election		DEFAULT PAYMENT IF NO ELECTION IS MADE:
Upon Retirement		Fifteen annual installments commencing at date of retirement
I elect that upon retirement, the entire amount of salary and bonus deferred pursuant to my 2006 Elective Deferral Agreement, as well as any investment gains or losses attributable to such amount, will be paid at the time and in the manner elected below. I execute this election of my own free will and with the full understanding of its effect. It will remain in effect until retirement or a new election is made. I elect to receive payment(s):
At the following time (choose one):
¨	As soon as administratively possible following retirement (default time of payment if no election is made)
¨	January 1 after the year of retirement
AND in the following manner (choose one):
¨	Lump sum
¨	Five annual installments
¨	Ten annual installments
¨	Fifteen annual installments (default manner of payment if no election is made)

Optional Payment Election		DEFAULT PAYMENT IF NO ELECTION IS MADE:
Upon Termination		Immediate lump sum payable within 90 days after termination
I elect that upon termination, the entire amount of salary and bonus deferred pursuant to my 2006 Elective Deferral Agreement, as well as any investment gains or losses attributable to such amount, will be paid at the time and in the manner elected below. I execute this election of my own free will and with the full understanding of its effect. It will remain in effect until termination or a new election is made. I elect to receive payment(s):
At the following time (choose one):
¨	Immediately (default time of payment if no election is made)
¨	January 1 after the year of termination
AND in the following manner (choose one):
¨	Lump sum (default manner of payment if no election is made)
¨	Five annual installments

«First_Name» «Last_Name»

Distribution on Specified Date
In accordance with Section 6.5 of the Plan, I hereby elect to receive in one lump sum payment that portion of the amount deferred pursuant to my 2006 Elective Deferral Agreement, as well as any investment gains or losses attributable to such amount, specified below to which I am entitled to withdraw, pursuant to the terms of the Plan, on the date(s) specified below. Any amounts distributed pursuant to this election shall immediately reduce my Account accordingly.
	Date of Specified Event	Amount of the 2006 Elective Deferral

After the initial election relating to this deferral, you may elect to change the form of your distribution, as long as (i) the election to change the form of your distribution (either upon retirement, termination or a specified date) is not effective until at least one year after the date the election is made, and (ii) your payment is delayed by at least five years following the date on which such payment would have otherwise been made or commenced. In addition, if you elect to postpone the distribution previously designated to occur on a specified date, the change in election must be made at least one year prior to your previously designated specified date.

Certain “key” employees (generally, the fifty most highly compensated executives) will have distribution of their benefits delayed for a period of six months following their separation of service. As a result, distributions scheduled for January 1 could possibly not be paid until July 1.

NOTE: The Company has taken measures to design the Plan in a manner that conforms to current tax law. However, it is possible that new legislation could affect your distribution elections. Generally, it is intended that distribution elections submitted pursuant to the Plan will be governed by the terms and conditions of the Plan, and your elections will be subject to modifications made to the Plan to conform with federal legislation or to the terms of another plan if the Company chooses to implement a new plan to conform to federal legislation.

ACKNOWLEDGED AND AGREED:
Participant’s Signature	Date
«First Name» «Last Name»	«Emplid»
Participant’s Name	Participant’s Employee ID Number