Description of Annual Bonus Plans
The Board of Directors of Alon USA Energy, Inc. (Alon) approved three annual bonus plans pursuant
to Alons Amended and Restated 2005 Incentive Compensation Plan (collectively, the Bonus Plans).
Annual cash bonuses under these plans are generally distributed to eligible employees in the first
or second quarter of each year based on the previous years performance. Each of the Bonus Plans
contains the same plan elements, which are described below. Alons refining and marketing employees
and Big Spring refinery employees are eligible to participate in one plan based primarily on the
performance of Alons Big Spring refinery. The employees of Alons Paramount Petroleum Corporation
subsidiary are eligible to participate in a second plan based primarily on the performance of
Alons California refineries. The employees at the Krotz Springs refinery are eligible to
participate in the third plan based primarily on the performance of Alons Krotz Springs refinery.
The bonus potential for Alons named executive officers is based 33.3% on the bonus plan for
employees of Alons Big Spring refinery, 33.3% on the bonus plan for employees of the California
refineries and 33.3% on the bonus plan for employees of the Krotz Springs refineries.
Under each bonus plan, bonus payments are based 37.5% on meeting or exceeding target reliability
measures, 37.5% on meeting or exceeding target free cash flow measures and 25% on meeting or
exceeding target safety and environmental objectives. The bonus pool available under each plan will
be calculated each year based on 20% of the aggregate direct salary expenses of the employees
eligible to participate in such plan. All of Alons current named executive officers are eligible
to participate in the bonus plan applicable to Alons refining and marketing employees. The bonus
potential for Alons named executive officers ranges from 65% to 100% of the respective executive
officers base salary, as established in each executive officers employment agreement.