Document:

Exhibit 10.12

		
			STOCKHOLDER AGREEMENT
		

		
			This STOCKHOLDER AGREEMENT (this “Agreement”) is made and entered into as of December 22, 2015, among VAALCO Energy, Inc., a Delaware corporation (the “Company”), and Kornitzer Capital Management, Inc., a Kansas corporation, and John C. Kornitzer (collectively with their respective Affiliates and Associates, the “Stockholder Group”).  The Stockholder Group and the Company are each referred to herein as a “Party” and collectively, as the “Parties.”
		

		
			RECITALS
		

		
			WHEREAS, as of the date hereof, the Stockholder Group beneficially owns, in the aggregate, 4,720,990 shares of common stock of the Company, par value $0.10 per share (“Common Stock”); 
		

		
			WHEREAS, the Company and the Stockholder Group have determined to come to an agreement with respect to the composition of the Board of Directors of the Company (the “Board”) and certain other matters, as provided in this Agreement; and
		

		
			NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound hereby, agree as follows:
		

		
			1.Board Composition and Related Matters. 
		

		
			(a)Immediately following the execution of this Agreement, the Board shall appoint John Knapp to the Board (the “Stockholder Group Designee”). Following his appointment to the Board, the Board shall appoint the Stockholder Group Designee (and any Stockholder Group Replacement Designee) to the Audit Committee. 
		

		
			(b)During the time period starting on the date hereof and ending on the Termination Date (the “Commitment Period”), the Board shall (i) nominate the Stockholder Group Designee (and any Stockholder Group Replacement Designee) for election to the Board at each Stockholder Meeting at which directors are to be elected; (ii) cause the Company to file a definitive proxy statement in respect of each Stockholder Meeting at which directors are to be elected and recommend that the Company’s stockholders vote directly or by proxy in favor of, and otherwise use reasonable best efforts to cause, the election of the Stockholder Group Designee (and any Stockholder Group Replacement Designee); and (iii) cause the Company to file a definitive consent revocation statement in respect of any solicitation of written consents of stockholders to remove the Stockholder Group Designee (and any Stockholder Group Replacement Designee) and recommend that the Company’s stockholders do not sign consents to remove the Stockholder Group Designee (and any Stockholder Group Replacement Designee) and use reasonable best efforts to cause the revocation of any such consents.
		

		

		

		 

 

		

			 

		

		
		

		
			(c)The Stockholder Group Designee (and any Stockholder Group Replacement Designee) shall resign as a director of the Board immediately (i) in the event the Shareholder Group ceases to beneficially own 5% or more of the issued and outstanding shares of Common Stock or (ii) on the Termination Date.
		

			
	
			
				 2.
			Voting.   

		
			(a)During the Commitment Period, each member of the Stockholder Group shall, and shall cause its applicable Affiliates and Associates to, appear in person or by proxy, or deliver a consent or consent revocation, as applicable, at each Stockholder Meeting and in respect of any solicitation of written consents of stockholders and to vote all shares of Common Stock beneficially owned by such person and over which such person has voting power at such Stockholder Meeting or solicitation by written consent (i) in accordance with the Board’s recommendations with respect to each election of directors and any removal of directors, in each case as set forth in the Board’s applicable definitive proxy statement, consent solicitation statement or consent revocation statement filed in respect thereof; and (ii) in accordance with the Board’s recommendations with respect to any other proposal to be submitted to the stockholders of the Company, in each case as set forth in the Board’s applicable definitive proxy statement, consent solicitation statement or consent revocation statement filed in respect thereof;  provided,  however, that, solely in respect of clause (ii), to the extent that the recommendation of Institutional Shareholder Services (“ISS”) differs from the Board’s recommendation, the Stockholder Group shall have the right to vote any or all shares held by it in accordance with the recommendation of ISS.
		

		
			(b)Each member of the Stockholder Group agrees that it shall not, and that it shall not permit any of its Affiliates and Associates to, directly or indirectly, take any action inconsistent with this Section  2.
		

		
			3.Other Stockholder Group Commitments.  During the Commitment Period, without the prior written consent of the Board, each member of the Stockholder Group shall not, and shall cause its Affiliates and Associates not to,  directly or indirectly:
		

		
			(a)acquire or acquire rights to acquire (except by way of stock dividends or other distributions or offerings made available to holders of voting securities of the Company generally on a pro rata basis), directly or indirectly, whether by purchase, tender or exchange offer, through the acquisition of control of another person, by joining a group, through swap or hedging transactions or otherwise, any voting securities of the Company or any voting rights decoupled from the underlying voting securities which would result in the Stockholder Group and its Affiliates and Associates under its control (together with any other person or group) owning, controlling or otherwise having any beneficial ownership interest in more than 15.0% of the then-outstanding shares of the Common Stock in the aggregate; provided,  however, that this shall exclude any grants of equity securities received by the Stockholder Group Designee in his capacity as director of the Company.
		

		

		

		 

 

		

			 

		

		
		

		
			(b)(i) nominate or recommend for nomination a person for election at any Stockholder Meeting at which directors of the Board are to be elected or any solicitation of written consents of stockholders of the Company; (ii) initiate, encourage or participate in any solicitation of proxies or consents in respect of any election contest or removal contest with respect to the Company’s directors; (iii) submit any stockholder proposal for consideration at, or bring any other business before, any Stockholder Meeting; (iv) initiate, encourage or participate in any solicitation of proxies or consents in respect of any stockholder proposal for consideration at, or bring any other business before, any Stockholder Meeting; (v) initiate, encourage or participate in any solicitation of written consents of stockholders; or (vi) initiate, encourage or participate in any “withhold” or similar campaign with respect to any Stockholder Meeting or any solicitation of written consents of stockholders;  
		

		
			(c)form, join or in any way participate in any group with respect to any voting securities of the Company in connection with any election or removal contest with respect to the Company’s directors (other than with other members of the Stockholder Group or one or more of their Affiliates to the extent that any such person signs a joinder to this Agreement reasonably agreeable to the Company);
		

		
			(d)deposit any Company voting securities in any voting trust or subject any Company voting securities to any arrangement or agreement with respect to the voting thereof;
		

		
			(e)seek, alone or in concert with others, to amend any provision of the Company’s certificate of incorporation or bylaws; provided,  however, that nothing herein shall be deemed to restrict the ability of each Designee to propose any changes he deems appropriate in accordance with his fiduciary duties as a director of the Company; 
		

		
			(f)effect or seek to effect, offer or propose to effect, cause or participate in, or in any way assist or facilitate any other person to effect or seek, offer or propose to effect or participate in any tender offer or exchange offer, merger, acquisition, share exchange or other business combination with the Company or any of its subsidiaries; or any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries or any material portion of its or their businesses; 
		

		
			(g)enter into any discussions, negotiations, agreements or understandings with any Third Party with respect to the foregoing, or advise, assist, encourage or seek to persuade any Third Party to take any action with respect to any of the foregoing, or otherwise take or cause any action inconsistent with any of the foregoing; or
		

		
			(h)take any action challenging the validity or enforceability of this Section  3 or this Agreement, or publicly make or in any way advance publicly any request or proposal that the Company or Board amend, modify or waive any provision of this Agreement.
		

		
			Nothing in this Section  3 shall be deemed to limit the ability of the Stockholder Group Designee to exercise his fiduciary duties under law solely in his capacity as a  director of the Company and in a manner consistent with his obligations under this Agreement.
		

		

		

		 

 

		

			 

		

		
		

		
			4.Mutual Non-Disparagement.  During the Commitment Period, each Party shall not, and shall not permit any of its Representatives to, publicly disparage or criticize the other Party, its business or any current or former directors, officers or employees of the other Party, as applicable. Except for amendments to the Schedule 13D as required by law and made solely to report a change in the level of ownership of Common Stock, the Stockholder Group shall not, and shall not permit any of its Representatives to, make any public announcement or public statement regarding the Company, its business or any current or former directors, officers or employees of the Company.
		

		
			5.No Litigation.  During the Commitment Period:
		

		
			(a)Each Party hereby covenants and agrees that it shall not, and shall not permit any of its Affiliates and Associates to, directly or indirectly, alone or in concert with others, pursue, or assist any other person to initiate or pursue, any lawsuit, claim or proceeding before any court (collectively, “Legal Proceeding”) against the other Party or any of its Representatives, except for any Legal Proceeding initiated solely to remedy a breach of or to enforce this Agreement; provided,  however, that the foregoing shall not prevent any Party or any of their Representatives from responding to a Legal Requirement in connection with any Legal Proceeding if such Legal Proceeding has not been initiated by, or on behalf of, or at the suggestion of, such Party or any of their Representatives; provided,  further, that in the event a Party or any of its Representatives receives such Legal Requirement, such Party shall give prompt written notice of such Legal Requirement to the other Party.
		

		
			6.Mutual Releases.
		

		
			(a)Each member of the Stockholder Group, on behalf of themselves and their respective heirs, estates, trustees, beneficiaries, successors, predecessors, assigns, subsidiaries, principals, directors, officers, Associates and Affiliates (the “Stockholder Releasors”), hereby do remise, release and forever discharge, and covenant not to sue or take any steps to pursue or further any Legal Proceeding against the Company or its successors, predecessors, assigns, subsidiaries, principals, directors, officers, Associates and Affiliates (the “Company Releasees”), and each of them, from and in respect of any and all claims and causes of action, whether based on any federal, state or foreign law or right of action, direct, indirect or representative in nature, foreseen or unforeseen, matured or unmatured, known or unknown, which all or any of the Stockholder Releasors have, had or may have against the Company Releasees, or any of them, of any kind, nature or type whatsoever, up to the date of this Agreement; provided,  however, that the foregoing release shall not release any rights or duties under this Agreement or any claims or causes of action the Stockholder Releasors may have for the breach or enforcement of any provision of this Agreement.
		

		

		

		 

 

		

			 

		

		
		

		
			(b)The Company, on behalf of itself and its successors, predecessors, assigns, subsidiaries, principals, directors, officers, Associates and Affiliates (the “Company Releasors”), hereby do remise, release and forever discharge, and covenant not to sue or take any steps to further any Legal Proceeding against any member of the Stockholder Group or their respective heirs, estates, trustees, beneficiaries, successors, predecessors, assigns, subsidiaries, principals, directors, officers, Associates and Affiliates (the “Stockholder Releasees”), and each of them, from and in respect of any and all claims and causes of action, whether based on any federal, state or foreign law or right of action, direct, indirect or representative in nature, foreseen or unforeseen, matured or unmatured, known or unknown, which all or any of the Company Releasors have, had or may have against the Stockholder Releasees, or any of them, of any kind, nature or type whatsoever, up to the date of this Agreement; provided,  however, that the foregoing release shall not release any rights or duties under this Agreement or any claims or causes of action the Company Releasors may have for the breach or enforcement of any provision of this Agreement.
		

		
			(c)Each Party waives any and all rights (to the extent permitted by state law, federal law, principles of common law or any other law) which may have the effect of limiting the releases as set forth in this Section  6. Without limiting the generality of the foregoing, each Party acknowledges that there is a risk that the damages and costs which it believes it has suffered or will suffer may turn out to be other than or greater than those now known, suspected, or believed to be true.  Facts on which each Party has been relying in entering into this Agreement may later turn out to be other than or different from those now known, suspected or believed to be true.  Each Party acknowledges that in entering into this Agreement, it has expressed that it agrees to accept the risk of any such possible unknown damages, claims, facts, demands, actions, and causes of action.  Each Party acknowledges and agrees that the releases and covenants provided for in this Section  6 are binding, unconditional and final as of the date hereof.
		

		
			7.Press Release and SEC Filings.
		

		
			(a)No later than one (1) Business Day following the execution of this Agreement, the Company and the Stockholder Group shall announce the entry into this Agreement and the material terms hereof by means of a mutually agreed upon press release in the form attached hereto as Exhibit A or as otherwise agreed to by the Parties (the “Mutual Press Release”). Prior to the issuance of the Mutual Press Release, neither the Company nor the Stockholder Group shall issue any press release or public announcement regarding this Agreement or take any action that would require public disclosure thereof without the prior written consent of the other Party.  No Party or any of its Representatives shall make any public statement (including, without limitation, in any filing required under the Exchange Act) concerning the subject matter of this Agreement inconsistent with the Press Release, except as required by law or the rules of any applicable stock exchange or with the prior written consent of the Stockholder Group and/or the Company, as applicable, and otherwise in accordance with this Agreement.  
		

		

		

		 

 

		

			 

		

		
		

		
			(b)No later than two (2) Business Days following the execution of this Agreement, the Stockholder Group shall file with the SEC a Schedule 13D in compliance with Section 13 of the Exchange Act, reporting its entry into this Agreement, disclosing applicable items to conform to its obligations hereunder and appending this Agreement as an exhibit thereto (the “Schedule 13D”).  The Schedule 13D shall be consistent with the Mutual Press Release and the terms of this Agreement.  The Stockholder Group shall provide the Company and its Representatives with a reasonable opportunity to review the Schedule 13D prior to it being filed with the SEC and consider in good faith any comments of the Company and its Representatives. 
		

		
			8.Termination.  Each Party shall have the right to terminate this Agreement by giving written notice to the other Party at any time following the date that is the thirtieth (30th) day prior to the nomination deadline for the 2017 annual general meeting of stockholders (the date of such termination, the “Termination Date”).  Notwithstanding the foregoing,
		

		
			(a)the obligations of the Stockholder Group pursuant to Section  2,  Section  3,  Section  4 and Section  5 shall terminate in the event the Company materially breaches its obligations pursuant to Section  1,  Section  4 or Section  5;  provided,  however, that any termination in respect of a breach of Section 4 requires a determination of a court of competent jurisdiction that the Company has materially breached Section  4;  provided,  further,  that the obligations of the Stockholder Group pursuant to Section  5 shall terminate immediately in the event that the Company materially breaches its obligations under Section  5;  
		

		
			(b)the obligations of the Company pursuant to Section  1,  Section  4 and Section  5 shall terminate in the event any member of the Stockholder Group materially breaches its obligations in Section  1,  Section  2,  Section  3,  Section  4 or Section;  provided,  however, that any termination in respect of a breach of Section  4 requires a determination of a court of competent jurisdiction that the Stockholder Group has materially breached Section  4;  provided,  further,  that the obligations of the Company pursuant to Section  5 shall terminate immediately in the event that any member of the Stockholder Group materially breaches its obligations under Section  5;  provided,  further, that the obligations of the Company pursuant to Section  1 shall terminate immediately in the event the Shareholder Group ceases to beneficially own 5% or more of the issued and outstanding shares of Common Stock.
		

		
			No termination shall relieve any Party from liability for any breach of this Agreement prior to such termination.
		

		
			9.Expenses.  Each Party shall be responsible for its own fees and expenses incurred in connection with the negotiation, execution and effectuation of this Agreement and the transactions contemplated hereby, and no Party shall seek such reimbursement from another Party by any means following the date of this Agreement.
		

		
			
		

		 

 

		

			 

		

		
		

		
			10.Notices.  All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered by hand, with written confirmation of receipt; upon sending if sent by facsimile to the facsimile numbers below, with electronic confirmation of sending; one day after being sent by a nationally recognized overnight carrier to the addresses set forth below; or when actually delivered if sent by any other method that results in delivery, with written confirmation of receipt:
		

			
					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
						 

					
					
						 

					
						 

					
						 

					
						 

					
						212.237.0100

					
						 

					
						 

					
						 

				
	
					
						If to the Company:

					
						VAALCO Energy, Inc.

					
						9800 Richmond Avenue, Suite 700

					
						Houston, Texas 7704

					
						Attention:  General Counsel

					
						Facsimile:  713.623.0982

					
						 

					
					
						with a copy (which shall not constitute notice) to:

					
						Vinson & Elkins L.L.P.

					
						666 Fifth Avenue, 26th Floor

					
						New York, NY  10103-0040

					
						Attention:  Stephen M. Gill, Kai Haakon E. Liekefett, Esq.

					
						Facsimile:  212.237.0100

				
	
					
						If to the Stockholder Group:

					
						John C. Kornitzer

					
						5420 W. 61st Place

					
						Shawnee Mission, KS  66205

					
						Facsimile:  913-831-6263

					
						 

					
					
						with a copy (which shall not constitute notice) to:

					
						Fred Coats, Chief Legal Officer

					
						Kornitzer Capital Management

					
						5420 W. 61st Place

					
						Shawnee Mission, KS 66205

					
						Facsimile:  913-831-6263

					
						 

				

		
			11.Governing Law; Jurisdiction; Jury Waiver.  This Agreement, and any disputes arising out of or related to this Agreement (whether for breach of contract, tortious conduct or otherwise), shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to its conflict of laws principles.  The Parties agree that exclusive jurisdiction and venue for any Legal Proceeding arising out of or related to this Agreement shall exclusively lie in the Court of Chancery of the State of Delaware or, if such Court does not have subject matter jurisdiction, to the Superior Court of the State of Delaware or, if jurisdiction is vested exclusively in the Federal courts of the United States, the Federal courts of the United States sitting in the State of Delaware, and any appellate court from any such state or Federal court.  Each Party waives any objection it may now or hereafter have to the laying of venue of any such Legal Proceeding, and irrevocably submits to personal jurisdiction in any such court in any such Legal Proceeding and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any court that any such Legal Proceeding brought in any such court has been brought in any inconvenient forum.  Each Party consents to accept service of process in any such Legal Proceeding by service of a copy thereof upon either its registered agent in the State of Delaware or the Secretary of State of the State of Delaware, with a copy delivered to it by certified or registered mail, postage prepaid, return receipt requested, addressed to it at the address set forth in Section 10.  Nothing contained herein shall be deemed to affect the right of any Party to serve process in any manner permitted by law.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.
		

		 

 

		

			 

		

		
			12.Specific Performance.  Each member of the Stockholder Group, on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other Party would occur in the event any provision of this Agreement were not performed in accordance with such provision’s specific terms or were otherwise breached or threatened to be breached and that such injury would not be adequately compensable by the remedies available at law (including the payment of money damages).  It is accordingly agreed that each member of the Stockholder Group, on the one hand, and the Company, on the other hand (the “Moving Party”), shall each be entitled to specific enforcement of, and injunctive relief to prevent any violation of, the terms hereof, and the other Party hereto shall not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available at law or in equity.  This Section 12 shall not be the exclusive remedy for any violation of this Agreement.
		

		
			13.Certain Definitions and Interpretations.  As used in this Agreement:  (a) the terms “Affiliate” and “Associate” (and any plurals thereof) have the meanings ascribed to such terms under Rule 12b-2 promulgated by the SEC under the Exchange Act and shall include all persons or entities that at any time prior to the Termination Date become Affiliates or Associates of any person or entity referred to in this Agreement; (b) the term “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder; (c) the terms “beneficial ownership,” “group,” “person,” “proxy,” and “solicitation” (and any plurals thereof) have the meanings ascribed to such terms under the Exchange Act; (d) the term “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in the State of Delaware are authorized or obligated to be closed by applicable law; (e) the term “Representatives” means a person’s Affiliates and Associates under its control and its and their respective directors, officers, employees, partners, members, managers, consultants, legal or other advisors, agents and other representatives;  (f) the term “SEC” means the U.S. Securities and Exchange Commission; (g) the term “Short Interests” means any agreement, arrangement, understanding or relationship, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, by such person, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of shares of any class or series of the Company’s equity securities by, manage the risk of share price changes for, or increase or decrease the voting power of, such person with respect to the shares of any class or series of the Company’s equity securities, or which provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of the shares of any class or series of the Company’s equity securities; (h) the term “Stockholder Meeting” means each annual or special meeting of stockholders of the Company, or any other meeting of stockholders held in lieu thereof, and any adjournment, postponement, reschedulings or continuations thereof; (i) the term “Synthetic Equity Interests” means any derivative, swap or other transaction or series of transactions engaged in, directly or indirectly, by such person, the purpose or effect of which is to give such person economic risk similar to ownership of equity securities of any class or series of the Company, including due to the fact that the value of such derivative, swap or other transactions are determined by reference to the price, value or volatility of any shares of any class or series of the Company’s equity securities, or which derivative, swap or other transactions provide, directly or indirectly, the opportunity to profit from any increase in the price or value of shares of any class or series of the Company’s equity securities, without regard to whether (i) the derivative, swap or other transactions convey any voting rights in such equity securities to such person; (ii) the derivative, swap or other transactions are required to be, 
		

		 

 

		

			 

		

		or are capable of being, settled through delivery of such equity securities; or (iii) such person may have entered into other transactions that hedge or mitigate the economic effect of such derivative, swap or other transactions; and (j) the term “Third Party” refers to any person that is not a Party, a member of the Board, a director or officer of the Company, or legal counsel to any Party.  In this Agreement, unless a clear contrary intention appears, (i) the word “including” (in its various forms) means “including, without limitation;” (ii) the words “hereunder,” “hereof,” “hereto” and words of similar import are references in this Agreement as a whole and not to any particular provision of this Agreement; (iii) the word “or” is not exclusive; and (iv) references to “Sections” in this Agreement are references to Sections of this Agreement unless otherwise indicated.  
		

		
			14.Miscellaneous.
		

		
			(a)This Agreement contains the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the Parties with respect to the subject matter hereof and thereof.
		

		
			(b)This Agreement is solely for the benefit of the Parties and is not enforceable by any other persons.  
		

		
			(c)This Agreement shall not be assignable by operation of law or otherwise by a Party without the consent of the other Party.  Subject to the foregoing sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the permitted successors and assigns of each Party.
		

		
			(d)Neither the failure nor any delay by a Party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder.
		

		
			(e)If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.  It is hereby stipulated and declared to be the intention of the Parties that the Parties would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable.  In addition, the Parties agree to use their reasonable best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid, void or enforceable by a court of competent jurisdiction.
		

		
			(f)Any amendment or modification of the terms and conditions set forth herein or any waiver of such terms and conditions must be agreed to in a writing signed by each Party.
		

		

		

		 

 

		

			 

		

		
		

		
			(g)This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, shall have the same effect as physical delivery of the paper document bearing the original signature.
		

		
			[Signature Page Follows]
		

		
			 
		

		
			 
		

		

		

		 

 

		

			 

		

		IN WITNESS WHEREOF, each of the Parties has executed this Agreement, or caused the same to be executed by its duly authorized representative, as of the date first above written.
		

		
			 
		

		
			JOHN C. KORNITZER
		

		
			/s/ John C. Kornitzer
		

		
			John C. Kornitzer
		

		
			 
		

		
			KORNITZER CAPITAL MANAGEMENT, INC.
		

		
			By: /s/ John C. Kornitzer
		

		
			Name: John C. Kornitzer
		

		
			Title:   
		

		
			 
		

		
			 
		

		

		

		 

		

			 

		

 

		

			 

		

		VAALCO ENERGY, INC. 
		

		
			By: /s/ Steven P. Guidry
		

		
			Name: Steven P. Guidry
		

		
			Title:   Chief Executive OfficerExhibit

SPLIT-DOLLAR INSURANCE AGREEMENT

THIS AGREEMENT made and entered into this 18th day of December, 2015, between WESTBURY BANK, a corporation with its principal office located in the State of Wisconsin (hereinafter referred to as the "Employer"), and GREG J. REMUS, (hereinafter referred to as the "Employee").

RECITALS

A.Employee is a valued employee of Employer, is currently serving as the Employer's President and Chief Executive Officer, and Employer wishes to retain him in its employ.

B.    Employer, as an inducement to such continued employment, wishes to assist Employee with his personal life insurance program.

AGREEMENTS

NOW, THEREFORE, the parties hereto mutually agree as follows:

1.    The Policy.  The life insurance policy with which this Agree- ment deals is Policy Number 21409783 (hereinafter called "Policy") issued by The Northwestern Mutual Life Insurance Company (hereinafter called "Insurer") on the life of Employee.  

Employer also owns Policy Number 13923371 (the "Secondary Policy") issued by Mass Mutual Life Insurance Company on the life of Employee.  The Secondary Policy is not currently subject to this Agreement, but the parties agree to make the Secondary Policy subject to this Agreement if and to the extent the net death benefit under the Policy is not sufficient to provide $600,000 to Employee's beneficiaries as provided in the following provisions of this Agreement.  It is the parties' specific intent to provide a death benefit of $600,000 to Employee's beneficiaries at Employee's death from the Policy, and if the Policy is insufficient then from the Secondary Policy (assuming this Agreement is then in effect).

2.    Rights of the Parties.  

(A)Employer.  Employer shall have the following rights:

(i)Death Benefit.  Employer shall be the sole and exclusive owner of the Policy and the direct beneficiary of the greater of an amount of the death proceeds equal to:  (a) the cash value of the Policy as of the date to which premiums have been paid; or (b) the net death benefit reduced by $600,000.  Any indebtedness on the Policy will first be deducted from the proceeds payable to the Employer.  Also, any collateral assignment made by the Employer will be deducted from the proceeds payable to it.  

(ii)Other Rights.  The Employer's rights in the Policy include all the rights of "owner" under the Policy, subject to paragraph 2(B) below.  Employer shall have the following specific rights in the Policy, which rights may be exercised without the consent of any other party:

(a)    The right to make and receive policy loans under the policy loan provisions of the Policy, up to but not in excess of the Employer's portion of the Policy as defined in Section 2(A)(i)-(a)-(b), above, as of the date of the loan.

(b)    The right to convey its interest in the Policy, after first offering this interest to Employee or his designee as provided in Section 11, below.

(iii)Limits.  Employer hereby covenants with Employee that it will not exercise any rights in the Policy in any way that might impair or defeat the rights and interests of Employee, his designee, or the beneficiary under the Policy.

(B)    Employee.  Employee shall have the following rights:

(i)Death Benefit.  Employee shall have the right to designate the beneficiary of the Policy's death benefit in an amount equal to the lesser of: (a) $600,000; or (b) the death benefit minus the greater of the Employer's cumulative premiums paid or the Policy cash value as of the Employee's death.  The parties agree to add the Secondary Policy to this Agreement if Employee requests and it reasonably appears the amount described in subsection 2(B)(i)(b) is less than $600,000.  As provided in Section 9, below, Employee's rights and economic benefits, either in this Agreement or documented on the Insurer's records, are limited exclusively to the value of one-year death benefit protection stipulated in this paragraph 2(B)(i).

(ii)Other Rights.  Employee shall have the right and power to designate a beneficiary or beneficiaries to receive his share of the proceeds payable on his death and to elect and change a payment option for such beneficiaries but subject to any right or interest the Employer may have in such proceeds as provided in the Agreement.  The Employee's beneficiary designation shall not be altered without the consent of Employee or his designee.  Any selection or change of beneficiary must be made in writing and filed with the Insurer.

3.    Policy Changes.  

(A)    Death Benefit Option Changes.  Neither party shall change the Policy death benefit option without the written consent of the other party.

(B)    Face Amount Changes.  Neither party shall increase or decrease the face amount of the Policy without written consent of the other party.

4.    Death Benefit.  The parties agree that the beneficiary designation under the Policy shall provide that upon the death of the Employee the proceeds of the Policy shall be paid as follows:

(A)    Employer's Portion.  The Employer shall be entitled to an amount equal to the cumulative premiums paid as of the date of death or, if greater, the Policy's cash value determined as of the date to which premiums are paid, less any indebtedness, and interest on such indebtedness determined as of the date of death.  Such cash value shall include any outstanding accumulations or cash value of any paid-up additions and any postmortem dividends determined as of the date of death.

(B)    Employee's Portion.  The Employee's beneficiary or beneficiaries, designated in accordance in Section 2(B), shall be entitled to the remainder of such proceeds.

(C)    Interest.  Employer and Employee's beneficiary or beneficiaries shall share in any interest due on the death proceeds as their respective share of the Proceeds as defined above bears to the total proceeds excluding any such interest.

5.    Additional Policy Benefits and Riders.  Employer agrees that it will cooperate with Employee or his designee in securing such additional riders to the Policy on such terms as may be mutually acceptable to Employer and to Employee or his designee.  The parties agree to comply with such requirements as may be imposed by the Insurer to qualify for benefits from any such riders.

6.     Payment of Premiums.  The entire premium on the Policy has been paid by Employer.  Any additional premium(s) to be paid on the Policy will also be paid by Employer.

7.    Disability Waiver of Premiums.  Notwithstanding any other provision in this Agreement to the contrary, if the Policy contains a disability waiver of premium provision, the Employer shall pay all premiums attributable to such provision, and any premium waived shall be considered as having been paid by the Employer.

8.    Use of Dividends.  Policy dividends shall be applied to purchase paid-up additional insurance protection.

9.    Economic Benefit Tax Treatment.  This Agreement shall be interpreted and enforced to comply with the split-dollar final regulations issued by the United States Department of the Treasury so that it is treated as an economic benefit transaction for tax purposes in which, at all times, the only economic benefit to Employee shall be the value of the current life insurance protection attributable to naming the beneficiary under the Policy.  Employee shall not have any current access to the Policy's cash values within the meaning of the split-dollar regulations or any other economic benefit other than the cost of current life insurance protection.

10.     Taxable Income.  The Employee is responsible for determining the amount, if any, includable in his gross income for tax purposes as a result of this Agreement.

11.    Employer's Right to Surrender the Policy.  Employer shall not sell, surrender, change the insured or transfer ownership of the Policy while this Agreement is in effect without first giving Employee the option to purchase the Policy during a period of 60 days from notice to Employee of such intention.  The purchase price of the Policy shall be the sum of the interpolated terminal reserve and any unearned premiums, plus a pro-rata portion of dividends expected to be paid for that Policy year, minus any Policy and premium loans and any other indebtedness secured by the Policy.   This restriction shall not impair the right of Employer to terminate this Agreement pursuant to Section 12, below.  The exercise by the Employer of the right to surrender the Policy will terminate the rights of the Employee.

12.    Termination of Agreement.  This Agreement shall terminate immediately upon any of the following events:  (A) the complete cessation of the business of the Employer; (B) the bankruptcy, receivership or dissolution of the Employer; or (C) termination of Employee's employment with Employer for any reason whatsoever other than the Employee's death.

In addition, this Agreement may be terminated by either party hereto, with or without the consent of the other, by giving notice of termination in writing to the other party.  Such termination shall be effective as of the date of such notice.  In the event of termination of the Agreement regardless of the cause of the termination, Employee shall have the right to purchase the Policy from Employer on the same terms and conditions as specified in Section 11, above.

13.    Insurance Company Protected.  The Insurer shall be bound only by the provisions of and endorsement on the Policy, and any payments made or action taken by it in accordance with those provisions shall fully discharge it from all claims, suits and demands of all persons whatsoever.  It shall in no way be bound by or be deemed to have notice of the provisions of this Agreement.

14.    Employee's Right to Assign.  The Employee shall have the right to assign any part or all of the Employee's interest in the Policy and this Agreement to any person, entity or trust by execution of a written assignment delivered to the Employer and to the Insurer.

15.    ERISA Requirements.  The following provisions are part of this Agreement and are intended to meet the requirements of the Employee Retirement Income Security Act of 1974 (ERISA):

(A)    The Named Fiduciary and Claims Manager.  The Employer is the Fiduciary and the Secretary of the Employer is the Claims Manager.    

(B)    The Funding Party.  The funding Policy under this Plan shall be to maintain the Policy in force by paying, when due, all premiums on the Policy when due.

(C)    Basis of Payments.  Direct payment by the Employer is the basis of payment of benefits under this Plan, with those benefits in turn being based on the payment of premiums as provided in the Plan.

(D)    Claims Procedure:

(i)If for any reason a claim for benefits (other than death benefits) under this Plan is denied by the Employer, the Claims Manager shall deliver to the Claimant a written explanation setting forth the specific reasons for the adverse benefit determination; specific references to the Plan section on which the adverse benefit determination is based; a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; and a description of the Plan's review procedure including a statement of the Claimant's rights to bring a civil action under Section 502 of ERISA following an adverse determination on review, all written in a manner calculated to be understood by the Claimant.  For this purpose:

(a)The Claimant's claim shall be deemed filed when presented orally or in writing to the Claims Manager.

(b)The Claims Manager's explanation shall be in writing delivered to the Claimant within 90 days of the date the claim is filed unless the Claims Manager determines that special circumstances require an extension of time for processing the claim.  If such an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90 day period.  In no event shall such extension exceed a period of 90 days from the end of such initial period.  The extension  notice shall indicate the special circumstances requiring an extension of time and the date by which the Claims Manager expects to render the benefit determination.  If the period of time is extended because the Claimant has failed to provide necessary information to decide the claim, the period for making the benefit determination shall be tolled from the date on which the notification of the extension is sent to the Claimant, until the date on which the Claimant provides the information.  Failure to provide notice of decision in the time specified is the same as denial of the claim and the Claimant is entitled to require a review of the denial under the review procedures.

(ii)The Claimant (or his or her duly authorized representative) shall have 60 days following the receipt of the denial of the claim to file with the Claims Manager a written request for review of the denial.  For such review, Claimant shall have the opportunity to submit written comments, documents, records, and other information relating to the claim for benefits.  Claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits.  The review of the claim shall take into account all comments, documents, records, and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

(E)    For a Death Benefit Claim.  A claim for a death benefit must follow the procedures established by the Insurer which may include time deadlines.  If a participant's beneficiary makes a written request to the Claims Manager, the Claims Manager will either provide copies of forms or instructions required by Insurer to make a claim or tell the participant's beneficiary how to obtain them.  Insurer will notify the beneficiary if the claim is denied and will explain the procedures it has for reviewing any claims which it denies.  The time and manner of such review, and the time for a final decision shall correspond to the time and manner of review for claims denied by the Claims Manager.  The beneficiary must act in making any claim for a death benefit.

16.    Amending the Agreement.  The Employer and Employee can mutually agree to amend this Agreement and such amendment shall be in writing and signed by the Employer and Employee.

17.    Parties Bound.  This Agreement shall be binding upon and inure to the benefit of the Employer and its successors and assigns, and the Employee, his successors, assigns and beneficiaries.  

18.    Notices, Consents and Demands.  Any notice, consent or demand under this Agreement shall be in writing, and shall be signed by the party giving or making same.  Such notice, consent or demand shall be sent by United States certified mail, postage prepaid and addressed to such party's last known address as shown on the records of the Employer.  The date of such mailing shall be deemed the date of notice, consent or demand.  

19.    Interpretation.  When appropriate in this Agreement, words used in the singular shall include the plural (and vice versa) and words used in the masculine shall include the feminine (and vice versa).  The section captions used in this Agreement are for organizational purposes only and shall have no determinative effect upon the rights and duties created hereunder.  

20.    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Wisconsin.  

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

EMPLOYER:

WESTBURY BANK

By /s/ Kirk J. Emerich______________
     Its Executive VP/CFO

/s/ Greg J, Remus________________
Greg J. Remus, Employee

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