Proxy Statement (definitive) (def 14a)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

Filed by the Registrant þ

Filed by a Party other than the Registrant o

Check the appropriate box:



o		Preliminary Proxy Statement
o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to §240.14a-12

Westmoreland Coal Company

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):



þ		No fee required.
o		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
	(1)		Title of each class of securities to which transaction applies:

	(2)		Aggregate number of securities to which transaction applies:

	(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

	(4)		Proposed maximum aggregate value of transaction:

	(5)		Total fee paid:



o		Fee paid previously with preliminary materials.
o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1)		Amount Previously Paid:

	(2)		Form, Schedule or Registration Statement No.:

	(3)		Filing Party:

	(4)		Date Filed:

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WESTMORELAND COAL COMPANY

9540 South Maroon Circle, Suite 300

Englewood, Colorado 80112

March 31, 2017

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Westmoreland Stockholders:

We invite you to join us for the 2017 Annual Meeting of Stockholders of Westmoreland Coal Company (the "2017 Annual Meeting"), which will once again be held as a virtual meeting. You will be able to attend the 2017 Annual Meeting, vote, and submit your questions during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/WLB2017 . Be sure to have your 12-Digit Control Number to enter the meeting. The 2017 Annual Meeting will be held via the Internet on Tuesday, May 16, 2017 at 8:30 a.m. Mountain Daylight Time, for the following purposes:


1.	To elect ten directors to the Board of Directors to serve for a one-year term;


2.	To approve, on an advisory basis, Westmoreland Coal Company's executive compensation of Named Executive Officers;


3.	To approve the Westmoreland Coal Company Amended and Restated 2014 Equity Incentive Plan (the "Amended and Restated 2014 Plan");


4.	To ratify the appointment of Ernst & Young LLP as Westmoreland Coal Company's independent registered public accounting firm for fiscal year 2017 ;


5.	To approve, on an advisory basis, the frequency of future advisory votes on Westmoreland Coal Company's executive compensation of Named Executive Officers; and


6.	To transact such other business as may properly come before the meeting or any postponement or adjournment thereof.

Only stockholders of record at the close of business on March 17, 2017 (the "Record Date") will be entitled to notice of and to vote at the meeting and any postponement or adjournment thereof. YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the 2017 Annual Meeting, we hope you will vote as soon as possible. You may vote by proxy over the Internet or by telephone, or, if you requested paper copies of the proxy materials, you can also vote by mail by following the instructions on the proxy card or voting instruction card. Voting over the Internet, by telephone or by written proxy or voting instruction card will ensure your representation at the 2017 Annual Meeting regardless of whether you attend.

In accordance with the Securities and Exchange Commission’s “notice and access” model, we are providing our notice of 2017 Annual Meeting, Proxy Statement and annual report on Form 10-K for the year ended December 31, 2016 to you online with paper copies available, free of charge, upon request. Prior to April 6, 2017, we will begin mailing a Notice of Internet Availability of Proxy Materials detailing how to access the proxy materials electronically and how to submit your proxy via the Internet. The Notice of Internet Availability of Proxy Materials also provides instructions on how to request and obtain paper copies of the proxy materials and proxy card or voting instruction form, as applicable. We believe this process provides our stockholders with a convenient way to access the proxy materials and submit their proxies online, while allowing us to reduce our environmental impact as well as the costs of printing and distribution.



	By Order of the Board of Directors,

	Jennifer S. Grafton Chief Administrative Officer, Chief Legal Officer and Secretary

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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 16, 2017 .

This notice, the accompanying proxy statement and Westmoreland Coal Company's annual report to stockholders for the fiscal year ended December 31, 2016 are available at www.proxyvote.com .

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PROXY SUMMARY

We provide below highlights of certain information in this proxy statement. As it is only a summary, please review the complete proxy statement and 2016 annual report before you vote.

2016: Westmoreland Shows it Can Weather the Storm

2016 Westmoreland Performance Highlights

The following are key highlights from fiscal year 2016:


•	Eclipsing our company records set in 2015, in 2016 we sold a record 54.7 million tons and finished with record revenues of $1.5 billion, adjusted EBITDA* of $271.9 million and cash flows from operations of $151.9 million;


•	We closed on the acquisition of San Juan Coal Company, an underground coal operator in New Mexico, on January 31, 2016, using innovative customer-backed financing, and successfully integrated our second underground mine into our portfolio of assets;


•	We reduced our Total Reportable Incident Rate from 2.34 to 2.12, and our Violations per Inspection Day rate from 0.69 to 0.33, which correlated to significant savings in regulator penalties. Our Buckingham Mine, an underground continuous-miner operation, operated throughout 2016 without a reportable incident;


•	We optimized working capital, generating significant cash, including $12.0 million in cash from spare parts inventories;


•	Through discussions with stockholders, we bolstered our Investor Relations team and added valuable expertise to our Board;


•	Our Ohio operations won the Appalachian Region Active Mine Reclamation Award from the Office of Surface Mining Reclamation and Enforcement;


•	In October, we successfully added our new partner East West Bank to our revolving loan facility;


•	We amended our obligations under agreements at our Roanoke Valley Power Generating Facility to reduce cash losses from the asset by 50%, and position it for a possible sale in 2017; and


•	We launched our One Westmoreland initiative aimed at streamlining and standardizing the organization, demonstrated by centralizing our support functions to Colorado and integrating from 3 enterprise resource planning systems to 1 global system.

*See page 47 for information about reconciliation of non-GAAP financial measures.

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Corporate Governance Highlights

At Westmoreland Coal Company, good governance remains a critical component of our corporate culture. Several of our key governance strengths and actions are noted in the table below.

BOARD AND OTHER GOVERNANCE INFORMATION

Ten member Board of Directors

Diverse Board (as to Gender, Experience and Skills)

Annual Election of All Directors

Majority Voting for Directors

Separate Chairman & CEO

Independent Directors Meet Without Management Present

Annual Board Self-Evaluation Conducted by Independent Third-Party

Annual Equity Grant to Non-Employee Directors

Board Orientation Program

Code of Business Conduct and Ethics for Directors

Corporate Governance Guidelines for Directors

Annual Advisory Approval of Executive Compensation

Policy Prohibiting Use of Corporate Funds for Political Expenditures

Director and Executive Prohibition on Hedging

Double-Trigger Change in Control Agreements with Executive Officers

Executive Compensation Clawback Policy

Proxy Access Bylaw - Approved at 2016 Annual Meeting

Meeting Agenda Items

Item 1 - Election of Directors - Our Board recommends a vote FOR the election of the director candidates nominated by the Board.

You are being asked to elect ten directors. Each of our current directors is standing for re-election to hold office until the next annual meeting of stockholders or until his or her successor is duly elected and qualified. All directors who were on the Board in 2016 attended at least 94% of the meetings of the Board and Board committees on which they served, with eight directors attending 100%. On July 22, 2016, our Board of Directors voted to expand the size of the Board from nine to ten members and on August 9, 2016 appointed Jeffrey S. Stein to fill the newly created director position.

SUMMARY INFORMATION ABOUT OUR DIRECTOR NOMINEES



	AGE	DIRECTOR SINCE	OCCUPATION AS OF 3/31/17	INDEPENDENT
Kevin A. Paprzycki	46	2015	Chief Executive Officer, Westmoreland Coal Company
Terry J. Bachynski	59	2014	Natural Resource Consultant in Canada	X
Robert C. Flexon	58	2016	President & Chief Executive Officer, Dynegy Inc.	X
Gail E. Hamilton	67	2011	Retired IT Executive	X
Michael G. Hutchinson	61	2012	Retired Audit Partner, Deloitte & Touche	X
Craig R. Mackus	65	2013	Retired Equipment Manufacturer CFO	X
Jan B. Packwood	73	2011	Retired Public Utility CEO	X
Robert C. Scharp	70	2011	Retired Coal Industry Executive	X
Jeffrey S. Stein	47	2016	Founding Partner of Financial Advisory Firm	X
Robert A. Tinstman	70	2016	Retired Multi-national Construction Company CEO	X

For more information on the director nominees and the proposal to elect them to the Board, see Current Directors and Executive Officers beginning on page 5 and Proposal 1, beginning on page 38, respectively.

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Item 2 - Advisory approval of our executive compensation - Our Board recommends a vote FOR this proposal.

We are asking stockholders to approve, on an advisory basis, the compensation of our Named Executive Officers. We hold this advisory vote on an annual basis.

SUMMARY INFORMATION ON OUR EXECUTIVE COMPENSATION PROGRAM

Our executive compensation program is designed to reward our leadership team for delivering results and building long-term value. We believe our program's performance measures align the interests of our stockholders and senior executives by tying pay outcomes to our short- and long-term performance. Several important features of our executive compensation program are:


ü	All executive officers are at-will employees, subject to certain rights to which they are entitled in the event that they are terminated in connection with a change of control of our business;


ü	No gross-ups;


ü	No company aircraft or company-provided vehicles;


ü	No SERPS, defined benefit plans or other executive-only retirement plans;


ü	Our long-term incentive awards include performance-vested restricted stock units whose value is based on achievement of three-year targets;


ü	Executive compensation subject to our Clawback Policy; and


ü	We require our executive officers to have significant ownership of company stock.

Westmoreland also has a strong history of setting executive compensation levels at which stockholders approve:



Say on Pay Vote
Annual Stockholder Meeting	Approval Percentage
2016	98.29%
2015	98.52%
2014	98.73%

For more information on our compensation programs, total compensation in 2016 and our compensation philosophy, see our Compensation Discussion and Analysis Section that starts on page 20, and Proposal 2 beginning on page 38.

Item 3 - Approval of Westmoreland Coal Company's Amended and Restated 2014 Equity Incentive Plan - Our Board recommends a vote FOR this proposal.

We are asking stockholders to approve the Amended and Restated 2014 Plan, which is discussed in more detail in our Proposal 3 beginning on page 39.

Item 4 - Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2017 - Our Board recommends a vote FOR this proposal.

Ernst & Young LLP has been our independent registered public accounting firm since 2009. Proposal 4, which includes details on the fees paid to Ernst & Young LLP for 2016, is discussed in further detail on page 44. One or more representatives of Ernst & Young LLP will be present at the meeting, will be given the opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions.

Item 5 - Advisory vote on the frequency of the stockholder advisory vote on the Company's executive compensation - Our Board recommends a vote for "1 Year" for this proposal.

We are seeking an advisory (non-binding) determination from our stockholders with regard to the frequency of future advisory votes on executive compensation, as further discussed in Proposal 5, beginning on page 45. Currently, we seek this advisory approval annually. Our proxy card provides voting options to hold our advisory vote on executive compensation either every 1 year, 2 years or 3 years.

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PROXY STATEMENT

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	Page
General Information about the 2017 Annual Meeting of Stockholders	1

Questions and Answers about the 2017 Annual Meeting of Stockholders	1

Current Directors and Executive Officers	5

Corporate Governance	8

Committees of the Board of Directors	10

Director Compensation	15

Beneficial Ownership of Securities	17

Section 16(a) Beneficial Ownership Reporting Compliance	18

Equity Compensation Plan Information	19

Compensation Discussion and Analysis	20

Executive Compensation for 2016	31

Certain Transactions	37

Overview of Proposals	38

Additional Information	47

Miscellaneous	47

Appendix A: Amended and Restated 2014 Long Term Incentive Plan	A-1

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WESTMORELAND COAL COMPANY

9540 South Maroon Circle, Suite 300

Englewood, Colorado 80112

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

To be held May 16, 2017

GENERAL INFORMATION ABOUT THE 2017 ANNUAL MEETING OF STOCKHOLDERS

This Proxy Statement is being furnished by the Board of Directors (the “Board”) of Westmoreland Coal Company (the “Company,” "Westmoreland," "we" or "us") to holders of our common stock in connection with the solicitation by the Board of proxies to be voted at the 2017 Annual Meeting. The 2017 Annual Meeting will be held via the Internet on Tuesday, May 16, 2017 at 8:30 a.m. Mountain Daylight Time, for the purposes set forth in the accompanying Notice of Annual Meeting and this Proxy Statement. Although we refer to our website and other websites in this Proxy Statement, the information contained on our website or other websites is not a part of this Proxy Statement.

By April 6, 2017, we will have mailed a Notice of Internet Availability of Proxy Materials (the “Notice of Availability”) to our stockholders containing instructions on how to access the proxy materials and submit your proxy online. We have made these proxy materials available to you over the Internet or, upon your request, will deliver paper copies of these materials to you by mail, in connection with the solicitation of proxies by the Board for the 2017 Annual Meeting. As of the Record Date, the Company's officers and directors are the record and beneficial owners of a total of 257,258 shares (approximately 1.39%) of the Company's outstanding common stock. It is management's intention to vote all of its shares in the manner recommended by the Board for each matter to be considered by the stockholders.

QUESTIONS AND ANSWERS ABOUT THE 2017 ANNUAL MEETING OF STOCKHOLDERS

What is a Virtual Annual Meeting?

A virtual annual meeting of stockholders is an official annual meeting held over the Internet that offers the ability to verify attendance and provides an interactive element that allows for real-time voting in a secure environment. The virtual meeting also enables two-way engagement, allowing stockholders to ask questions of corporate officers and directors. The virtual meeting provides Westmoreland a low-cost way for stockholders to attend and interact with management, and has the potential to increase participation and reduce costs associated with meeting facilities and travel.

Westmoreland will be hosting the 2017 Annual Meeting live via the Internet. A summary of the information you need to attend the meeting online is provided below:


•	Any stockholder can attend the 2017 Annual Meeting live via the Internet at www.virtualshareholdermeeting.com/WLB2017;


•	Webcast starts at 8:30 a.m. Mountain Daylight Time;


•	Stockholders may vote and submit questions while attending the 2017 Annual Meeting on the Internet;


•	Please have your 12-Digit Control Number to enter the 2017 Annual Meeting;


•	Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at www.virtualshareholdermeeting.com/WLB2017; and


•	Webcast replay of the 2017 Annual Meeting will be available until May 16, 2018.

Who can vote at the meeting?

Only common stockholders who were owners of record at the close of business on March 17, 2017 are entitled to vote. Each holder of common stock is entitled to one vote per share. There were 18,571,424 shares of common stock outstanding on March 17, 2017 .

What constitutes a quorum for the meeting?

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The holders of a majority of the aggregate voting power of the common stock outstanding on the Record Date, present in person or by proxy at the 2017 Annual Meeting, shall constitute a quorum to conduct business at the 2017 Annual Meeting. Abstentions and “broker non-votes” (shares held by a broker or nominee that does not have discretionary authority to vote on a particular matter and has not received voting instructions from its client) are counted for purposes of determining the presence or absence of a quorum for the transaction of business at the 2017 Annual Meeting.

How do I vote?


•	Via the Internet at www.proxyvote.com;


•	By phone for registered and beneficial owners at 1-800-690-6903; or


•	By completing and mailing in a paper proxy card.

If your shares are registered directly in your name with our transfer agent, you are considered a stockholder of record with respect to those shares and the proxy card and voting instructions have been sent directly to you. If, like most stockholders, you hold your shares in “street name” through a stockbroker, bank or other nominee rather than directly in your own name, you may not vote your shares in person at the 2017 Annual Meeting without obtaining authorization from your stockbroker, bank or other nominee. You need to submit voting instructions to your stockbroker, bank or other nominee in order to cast your vote.

We encourage you to register your vote via the Internet. If you attend the virtual 2017 Annual Meeting, you may also submit your vote in person over the Internet and any votes that you previously submitted - whether via the Internet, by phone or by mail - will be superseded by the vote that you cast at the 2017 Annual Meeting. Whether your proxy is submitted by the Internet, by phone or by mail, if it is properly completed and submitted and if you do not revoke it prior to the 2017 Annual Meeting, your shares will be voted at the 2017 Annual Meeting as specified by you or, if you do not specify a choice as to a particular matter, in the manner set forth in this proxy statement.

Can I change my vote after I return my proxy card?

Yes. Even after you have submitted your proxy card, you may change your vote at any time before the proxy is exercised by either filing with our Secretary a written notice of revocation or a duly executed proxy card bearing a later date or by voting in person at the 2017 Annual Meeting. The powers of the proxy holders will be suspended if you attend the 2017 Annual Meeting in person and so request. However, attendance at the virtual 2017 Annual Meeting will not, by itself, revoke a previously granted proxy. If you want to change or revoke your proxy and you hold your shares in “street name,” contact your broker or the nominee that holds your shares. Any written notice of revocation sent to us must include the stockholder's name and must be received prior to the 2017 Annual Meeting to be effective.

What vote is required to approve each item?

Under our bylaws, which were amended and restated in February 2015, we have a majority vote standard for election of directors. In an uncontested election, each director will be elected by a vote of the majority of the votes cast, meaning the number of shares cast “for” a director exceeds the number of votes cast “against” that director. In a contested election, the directors will be elected by a plurality of the votes cast, meaning the directors receiving the largest number of “for” votes will be elected to the open positions. With respect to Proposal 1, regardless of whether the majority of votes cast or plurality standard applies, broker non-votes, abstentions and withheld votes will have no effect because such votes are not treated as being cast.

In an uncontested election, a nominee who does not receive a majority vote will not be elected. An incumbent director who is not elected because he or she does not receive a majority vote will continue to serve as a holdover director until the earliest of: (a) 90 days after the date on which the election inspector determines the voting results as to that director, (b) the date on which the Board appoints an individual to fill the office held by that director, or (c) the date of that director's resignation.

Approval of Proposals 2, 3 and 5 requires the affirmative vote of a majority of the shares present or represented by proxy and entitled to vote at the 2017 Annual Meeting. With respect to Proposals 2 and 3, broker non-votes will have no effect, but abstentions from other shares entitled to vote will have the same effect as a vote against such proposals. With respect to Proposal 5, since the advisory vote on the frequency of holding the vote on our executive compensation will be determined by the frequency option (every one year, every two years or every three years) that receives the greatest number of votes, abstentions will have no effect on the outcome of the vote on this proposal.

Which ballot measures are considered “routine” or “non-routine”?

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The ratification of the appointment of Ernst & Young LLP as the Company's independent registered public accounting firm for 2017 (Proposal 4) is a matter considered routine under applicable rules. A broker or other nominee may generally vote on routine matters, and therefore broker non-votes are not expected in connection with Proposal 4.

The election of directors (Proposal 1), the advisory approval of the Company's executive compensation (Proposal 2), the approval of the Amended and Restated 2014 Plan (Proposal 3), and the advisory approval of the frequency of the advisory approval of the Company's executive compensation (Proposal 5) are matters considered non-routine under applicable rules. A broker or other nominee cannot vote without instructions on non-routine matters, and therefore there may be broker non-votes on Proposals 1, 2, 3 and 5. However, since the advisory vote under Proposal 5 will be determined by the frequency option (every one year, every two years or every three years) that receives the greatest number of votes, broker non-votes will have no effect on the outcome of the vote on this proposal.

How are you handling solicitation of votes?

The accompanying proxy is solicited on behalf of our Board and the cost of solicitation is borne by us. In addition to solicitations by mail, our directors, officers, and employees may solicit proxies by telephone, e-mail and personal interview, but will receive no additional compensation for doing so. We will also request brokerage houses, custodians, nominees, and fiduciaries to forward copies of the proxy material to those persons for whom they hold shares and request instructions for voting the proxies. We will reimburse those brokerage houses and other persons for their reasonable expenses for such services.

Do I have any rights of appraisal?

Under Delaware law, stockholders are not entitled to rights of appraisal on any proposal referred to herein.

Where can I find the voting results of the 2017 Annual Meeting?

We will announce preliminary general voting results at the 2017 Annual Meeting and publish final detailed voting results on a Form 8-K that we will file with the Securities and Exchange Commission ("SEC") within four business days after the 2017 Annual Meeting.

How do I submit a stockholder proposal for the 2018 Annual Meeting?

Any proposal that a stockholder wishes to be considered for inclusion in our proxy statement and proxy card for the 2018 Annual Meeting of Stockholders (the “ 2018 Annual Meeting”) must be submitted to the Company's Secretary at our offices, 9540 South Maroon Circle, Suite 300, Englewood, Colorado 80112, no later than December 1, 2017. In addition, such proposals must comply with the requirements of Rule 14a-8 under the Securities Exchange Act of 1934.

If a stockholder wishes to present a proposal before the 2018 Annual Meeting, without having the proposal included in our proxy statement and proxy card, such stockholder must give written notice to the Secretary at the address noted above. The Secretary must receive such notice no earlier than January 16, 2018 and no later than February 15, 2018, and the stockholder must comply with the provisions of Sections 2.5 or 2.6, as applicable, of our bylaws. Only proposals included in the proxy statement or that comply with our advance notice bylaw requirements will be considered properly brought before the annual meeting.

Does the Company offer an opportunity to receive future proxy materials electronically?

Yes. If you are a stockholder of record or a member of the 401(k) plan, you may, if you wish, receive future proxy statements and annual reports online rather than receiving proxy materials in paper form. If you elect this feature, you will receive an e-mail message notifying you when the materials are available, along with a web address for viewing the materials and instructions for voting by telephone or on the Internet. You may sign up for electronic delivery at any time by visiting http://enroll.icsdelivery.com/wlb. If you received this proxy statement electronically, you do not need to do anything to continue receiving proxy materials electronically in the future. If you hold your shares in a brokerage account, you may also have the opportunity to receive proxy materials electronically. Please follow the instructions of your broker.

How can I get electronic access to the proxy materials and the annual report?

This Proxy Statement and our 2016 annual report to stockholders on Form 10-K ("Annual Report" or "Form 10-K") are available at www.proxyvote.com; please have your Notice of Availability, which includes your personal control number, in hand

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when you log onto the website. Internet voting facilities will close and no longer be available on the date and time specified on the proxy card or Notice of Availability.

Will I receive a separate proxy statement if I share the same address and last name as another stockholder?

No. If you are the beneficial owner, but not the record holder, of shares of our stock, your broker, bank or other nominee may only deliver one copy of this proxy statement and our annual report to multiple stockholders who share an address, unless that nominee has received contrary instructions from one or more of the stockholders. We will deliver promptly, upon written or oral request, a separate copy of this proxy statement and our annual report to a stockholder at a shared address to which a single copy of the documents was delivered. Beneficial owners sharing an address who are receiving multiple copies of proxy materials and annual reports and who wish to receive a single copy of such materials in the future will need to contact their broker, bank or other nominee to request that only a single copy of each document be mailed to all stockholders at the shared address in the future.

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CURRENT DIRECTORS AND EXECUTIVE OFFICERS



Name	Age	Director/ Executive Officer Since	Position
Terry J. Bachynski	59	2014	Director - Independent
Robert C. Flexon	58	2016	Director - Independent
Gail E. Hamilton	67	2011	Director - Independent
Michael G. Hutchinson	61	2012	Director - Independent
Craig R. Mackus	65	2013	Director - Independent
Jan B. Packwood	73	2011	Director - Independent; Chairman of the Board
Robert C. Scharp	70	2011	Director - Independent
Jeffrey S. Stein ⁽¹⁾	47	2016	Director - Independent
Robert A. Tinstman	70	2016	Director - Independent
Kevin A. Paprzycki	46	2008	Director; Chief Executive Officer
John A. Schadan	51	2014	President and Chief Operating Officer
Gary A. Kohn ⁽²⁾	51	2016	Chief Financial Officer and Treasurer
Jennifer S. Grafton	41	2011	Chief Administrative Officer, Chief Legal Officer and Corporate Secretary
Joseph E. Micheletti	51	2011	Executive Vice President - Operations

______________________________________



(1)	Mr. Stein was appointed to the Board on August 9, 2016.
(2)	On November 15, 2016, upon the resignation of Mr. Jason Veenstra, Mr. Kohn was appointed Interim Chief Financial Officer and Treasurer, and on March 6, 2017 Mr. Kohn was appointed Chief Financial Officer and Treasurer.

Director Information

On July 22, 2016, the Board voted to expand its size from nine to ten directors as the result of a successful candidate selection process initiated in connection with the Company's March 23, 2016 agreement with Venor Capital Management LP ("Venor") to add one additional candidate identified by Venor no later than August 15, 2016. Although the expansion of the size of our Board and the selection of Mr. Stein were precipitated by the agreement with Venor, the Board believes that these changes will further enhance its industry and capital market expertise. All of our directors and nominees bring to our Board a wealth of leadership experience derived from their service as executives and respected professionals. Certain individual qualifications and skills of our directors that contribute to the Board's effectiveness as a whole are described in the following paragraphs.

Terry J. Bachynski has over 30 years’ experience in the energy business, having served in several executive management and Board positions with various private and public companies, including Suncor Energy Inc., Gulf Canada Resources Limited, CS Resources Limited, EPCOR Utilities Inc. and Syncrude Canada. Since 2001, Mr. Bachynski has been President and CEO of JDEL Associates Ltd. which provides regulatory, environmental, stakeholder, aboriginal and government affairs consulting services to its clients for the development and operation of major resource development projects, primarily in Western Canada. Mr. Bachynski sits on the boards of several private companies including Universe Machines Corporation, Unified Alloys Ltd. and Millennium EMS Solutions Ltd. Mr. Bachynski has an LL.B. from the University of Western Ontario and resides in Edmonton, Alberta, Canada.

Mr. Bachynski has performed a wide range of roles in his extensive career in the energy sector. Mr. Bachynski provides the Board with a unique insight into challenges and opportunities specific to natural resource development in Canada. His experience brings an active voice for our Canadian operations to the Board.

Robert C. Flexon has served as President and Chief Executive Officer of Dynegy Inc. since July 2011 and as a director of Dynegy Inc. since June 2011, and oversaw Dynegy Inc.'s entry into, and exit from, the bankruptcy process beginning in 2012. Prior to Dynegy, Mr. Flexon served as the Chief Financial Officer of UGI Corporation, a distributor and marketer of energy products and related services from February 2011 to July 2011 and Chief Executive Officer of Foster Wheeler AG from June to October 2010. Mr. Flexon brings with him vast experience in executive management and operations, and unique insights into the power generation sector. Mr. Flexon holds a Bachelor of Science degree in Accounting from Villanova University. Mr. Flexon served on the public board of directors of Foster Wheeler from 2006 until 2009 and from May to October 2010 and is currently serving on the board of Neighborhood Centers, the largest not-for-profit in Texas.

Mr. Flexon brings to the Board accounting, financial and a breadth of executive management experience. In his years as an energy industry executive, he has developed a deep comprehension of wholesale power generation markets and customers.

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Gail E. Hamilton most recently served as Executive Vice President of Symantec Corporation, an infrastructure software and services provider, retiring in 2005. Previously, she served as the General Manager of the Communications Division of Compaq Computer Corporation and as the General Manager of the Telecom Platform Division for Hewlett-Packard Company. She is currently a director of Arrow Electronics Inc., OpenText Corp., and Ixia.

Ms. Hamilton is a former senior executive with business and operational experience at a public technology company, whose strategic planning and business development experience are invaluable in guiding the development and progression of our information technology infrastructure and programs. In addition, Ms. Hamilton's extensive public and private board experience bring further professionalism and insight to the board room.

Michael G. Hutchinson recently retired from Deloitte & Touche. His Deloitte career spanned nearly 35 years, leading its Denver Energy and Natural Resources Practice for the last fifteen years while at the same time managing the Audit and Enterprise Risk Management practice of the Denver office. Mr. Hutchinson currently serves as a member of the board of directors of One Gas, Inc. and as its audit committee chairman.

As the former lead audit partner at a top four auditing firm, Mr. Hutchinson brings to the Board his substantial expertise in accounting and finance matters, which he gained during his nearly 35 years of experience in public accounting. Mr. Hutchinson is well qualified to serve as a director based on his experience with accounting principles, financial controls and evaluating financial statements of public companies in the energy sector, particularly from an auditor's perspective.

Craig R. Mackus became Chief Financial Officer of Bucyrus International, Inc. in June 2004 after serving as Vice President-Finance from October 2002 through June 2004 and as Controller from February 1988 through May 2006. Mr. Mackus retired from Bucyrus International, Inc. in 2011 upon its merger with Caterpillar. He also served as Bucyrus's secretary from May 1996 through his retirement in 2011.

As a senior manager of an international manufacturing company providing equipment to the mining industry, Mr. Mackus brings significant financial, governance and operational mining experience to the Board. As the CFO during a major merger transaction between Bucyrus International Inc. and Caterpillar, Mr. Mackus provides the Board with his first-hand experience in significant merger and acquisition activity.

Jan B. Packwood was the President and Chief Executive Officer of IDACORP, Inc., a holding company whose main subsidiary, Idaho Power Company, is an electric utility engaged in the generation, transmission, distribution, sale and purchase of electric energy, from 1999 to 2006. Prior to such time, Mr. Packwood served in various executive-level capacities of Idaho Power Company beginning in the 1980s.

As the former President and Chief Executive Officer of an electric utility involved in the mining and use of coal in the Pacific Northwest, Mr. Packwood brings to the Board a vast knowledge of our and our main customers' business, including an understanding of the risks faced by our own power plant and the power plants we supply. This expertise is invaluable in directing the future of our power plant operations, as well as providing insight into potential growth and expansion activities in our mining segment.

Kevin A. Paprzycki has served as President and Chief Executive Officer of Westmoreland Coal Company and Westmoreland Resource Partners, LP since December 2015. He joined Westmoreland as Controller and Principal Accounting Officer in June 2006 and was named Chief Financial Officer in April 2008. In June 2010, he was also named Treasurer, a role that he relinquished in 2015. Mr. Paprzycki became a certified public accountant in 1994 and a certified financial manager and certified management accountant in 2004.

With over twenty years of financial experience, Mr. Paprzycki brings a breadth of expertise in public accounting, management, and financial planning and analysis. Mr. Paprzycki is a veteran executive that led Westmoreland through a transaction-heavy growth period and has unique insights into the challenges and opportunities that Westmoreland faces.

Robert C. Scharp was previously the Chief Executive Officer of Shell Coal Pty Ltd from 1997 to 2000 and then Chief Executive Officer of Anglo Coal Australia from 2000 to 2001. He served as the Chairman of the Shell Canada Energy Mining Advisory Council from 2005 to 2010. He had a 22 year career with Kerr McGee Corporation including serving as President - Kerr McGee Coal Corporation and Senior Vice President - Oil and Gas Production. Mr. Scharp was a director of Bucyrus International from 2005 to 2011 and was a director of Foundation Coal Holdings from 2005 to 2009. Mr. Scharp is also a retired Army National Guard colonel.

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Mr. Scharp brings a wealth of coal mining industry experience to the Board, including invaluable chief executive operational oversight of coal mine operations. Mr. Scharp's vast industry experience assists the Board in driving future operational mining excellence and evaluating potential growth and expansion opportunities.

Jeffrey S. Stein is the Managing Partner of Stein Advisors LLC, a financial advisory firm that provides consulting services to institutional investors. Mr. Stein is also Co-Founder and Managing Partner of Power Capital Advisors LLC, a financial advisory and merchant banking firm focused on energy, power and commodity-related project development and restructuring investments. Mr. Stein currently serves as Chairman of the board of Ambac Financial Group, Inc., a director on the board of Dynegy Inc., as well as a director on the private boards of MLR Petroleum LLC and Granite Ridge Holdings, LLC. Mr. Stein previously served as a director on the boards of US Power Generating Company and KGen Power Corporation.

Mr. Stein brings extensive public and private company board expertise especially in the areas of capital allocation and structure, operating and financial performance, risk management, and investor communications. Mr. Stein's experience provides him with particularly desirable insight, from the perspective of an investor and board member, into the merchant power and regulated utilities markets.

Robert A. Tinstman was the Executive Chairman of James Construction Group from 2002 to 2007 and Chief Executive Officer and director of Morrison Knudsen Corporation from 1995 to 1999. Mr. Tinstman is chairman of the board of directors of IDACORP Inc. and director at Primoris. Mr. Tinstman brings extensive operational and executive experience in the construction industry to our Board. Mr. Tinstman’s construction industry knowledge and expertise provide a valuable contribution to the Board's oversight function as Westmoreland emerges from a strong growth period.

Mr. Tinstman brings considerable experience and expertise in board oversight of major projects from serving for many years on the boards of directors of several public companies. Mr. Tinstman's power and construction industry experience provides the Board with important perspectives from both Westmoreland customers and stakeholders.

Executive Officer Information

Kevin A. Paprzycki , who joined Westmoreland in 2006 and serves as Chief Executive Officer, is discussed above under “Director Information.”

John A. Schadan joined Westmoreland in April 2014 as Senior Vice President and became President and Chief Operating Officer on December 1, 2015. Mr. Schadan’s career has encompassed both the western Canadian coal business as well as engineering and construction for a major international firm, and spans a variety of disciplines including mine engineering, environmental and regulatory approvals, business development, marketing, commercial contract negotiations, establishing joint venture partnerships, operations and general management. Prior to joining Westmoreland, Mr. Schadan worked for Sherritt’s coal division as VP Operations from March 2013, and prior to that was employed at SNC-Lavalin beginning in 1999. Mr. Schadan is a registered Professional Engineer in the Province of Alberta and holds a mining engineering degree from Queen’s University. He currently sits as a Director for the Alberta Chamber of Resources and is Chair of the Board of Directors of the Coal Association of Canada.

Jennifer S. Grafton joined Westmoreland as Associate General Counsel in December 2008 and was named General Counsel and Secretary in February 2011. In her current position of Chief Legal Officer, Chief Administrative Officer and Secretary, she oversees a variety of functions including legal, human resources, information technology and risk management. Prior to Westmoreland, Ms. Grafton worked in the corporate group of various Denver-based and national law firms focusing her practice on securities and corporate governance. She holds a Bachelor of Arts from University of Puget Sound, received her JD from the University of Denver Sturm College of Law and received her MBA from the University of Michigan Ross School of Business. She is currently a director on the Board of the National Mining Association.

Joseph E. Micheletti joined Westmoreland in 1998 and has held key leadership positions at several Westmoreland mining projects, including President and General Manager of our Jewett Mine, and was promoted in 2014 and currently holds the position of Executive Vice President - Operations. He holds a Bachelor of Science degree in Mineral Processing Engineering from Montana College of Mineral Science and Technology. Mr. Micheletti has worked in the production, maintenance, processing, and engineering disciplines of the mining industry for over 26 years.

Gary A. Kohn was named our Interim Chief Financial Officer and Treasurer on November 15, 2016, and was promoted to Chief Financial Officer and Treasurer on March 6, 2017. Mr. Kohn joined the Company as Vice President, Investor Relations in April 2016. Mr. Kohn has held diverse leadership positions in investor relations, treasury, and financial planning and analysis across several public companies including First Data, Western Union, including most recently, from 2013-2016 at Intrepid Potash

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and 2010-2013 at Ciber. Mr. Kohn began his career as a CPA with a focus on audit and taxation. He earned his Bachelor of Science degree in Accounting from the University of Northern Colorado in 1988.

CORPORATE GOVERNANCE

We are committed to maintaining the highest standards of business conduct and corporate governance, which we believe are essential to running our business efficiently, serving our stockholders and maintaining our integrity in the marketplace. The Company's Code of Conduct and Ethics for directors, officers and employees, in conjunction with the Certificate of Incorporation, Bylaws, Board committee charters and Corporate Governance Guidelines, form the framework for the governance of Westmoreland. All of these documents are available on our website at www.westmoreland.com. On an annual basis, all directors, officers and employees sign an acknowledgment that they have received and reviewed the guidelines provided in the Code of Conduct and Ethics. We will post on our website any amendments to the Code of Conduct and Ethics or waivers of the Code of Conduct and Ethics for directors and executive officers. You can request a copy of any of these documents by writing to the Corporate Secretary, Westmoreland Coal Company, 9540 S. Maroon Circle, Suite 300, Englewood, Colorado 80112.

Board Structure

The Board of Directors does not have a policy regarding the separation of the roles of Chief Executive Officer ("CEO") and Chairman of the Board as the Board believes it is in the best interests of Westmoreland to make that determination based on the position and direction of Westmoreland, and the membership of the Board. Currently, the roles of Chairman of the Board and CEO are split so that our CEO can focus on our day-to-day business, allowing the Chairman of the Board to lead the Board in its fundamental role of providing advice to and independent oversight of management. Our current Chairman of the Board, Mr. Packwood, chaired all regular and independent executive sessions of the Board since his appointment to the position in May of 2016 and, with input from the CEO, set the agenda for Board meetings. We believe this structure promotes a unified approach to corporate strategy development and allows for a bridge between management and the Board, helping each to pursue its common purpose more efficiently.

Risk Oversight by the Board of Directors

Risk is inherent with every business, and how well a business manages risk can ultimately influence its success. We face a number of risks, including economic risks, operational risks, environmental and regulatory risks, and others, such as the impact of competition, weather conditions and pressures from competing fuel sources. Management is responsible for the day-to-day supervision of risks that we face, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.

The Board believes that establishing the right “tone at the top” and full and open communication between management and the Board are essential for effective risk management and oversight. Our Chairman has regular communications with our CEO to discuss strategy and the risks we face. The executive management team attends the quarterly Board meetings and is available to address any questions or concerns raised by the Board on risk management related matters. Each quarter, the Board receives presentations from senior management on strategic matters involving our operations and is provided extensive materials that highlight the various factors that could lead to risk in our organization. The Board holds a strategic planning session with the management team on an annual basis to discuss strategies, key challenges, and risks and opportunities. Further, the Board is empowered to hire its own advisers without management approval to assist it in fulfilling its duties.

While the Board is ultimately responsible for our risk oversight, our committees assist the Board in fulfilling its oversight responsibilities in certain areas of risk. The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to risk management in the areas of financial reporting, internal controls and compliance with legal and regulatory requirements. The Compensation and Benefits Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs. The Nominating and Corporate Governance Committee is tasked with the oversight of succession planning for our directors and executive officers. Our Finance Committee, which was created on January 9, 2017, assists the Board in fulfilling oversight responsibilities with respect to the Company's capital structure, financial risk oversight, treasury and financing matters. On an annual basis, pursuant to such committee's charter, each committee assesses risk and has specific conversations with senior management regarding the risks faced.

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Director Independence

NASDAQ Marketplace Rules require that a majority of the Board be independent. No director qualifies as independent unless the Board determines that the director has no direct or indirect relationship with the Company that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In assessing the independence of its members, the Board examined the commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships of each member. The Board's inquiry extended to both direct and indirect relationships with the Company. Based upon both detailed written submissions by nominees and discussions regarding the facts and circumstances pertaining to each nominee, considered in the context of applicable NASDAQ Marketplace Rules, the Board has determined that all of the nominees for election, other than Mr. Paprzycki, are independent. In August, Mr. Stein was assessed under applicable NASDAQ Marketplace Rules on independence during the Board's nominating process and was affirmatively determined to be independent. The independent directors meet during most Board meetings, and at least quarterly, in separate executive session led by our Chairman and without management present.

Each member of the Audit Committee must, in addition to the independence requirements of the NASDAQ Marketplace Rules, meet the heightened independence standards required for audit committee members under the NASDAQ Marketplace Rules listing standards, Section 10A of the Securities Exchange Act of 1934, and Rule 10A-3 thereunder. The Board determined that each of Messrs. Hutchinson, Bachynski, Flexon, Mackus and Stein, the Audit Committee members who served for some portion of 2016, met such heightened independence standards. Each member of the Compensation and Benefits Committee is also required to also meet heightened independence standards under the NASDAQ Marketplace Rules listing standards. The Board determined that each of Ms. Hamilton and Messrs. Scharp, Tinstman and Mackus, the 2016 Compensation and Benefits Committee members, met such heightened independence standards.

Communicating with the Board

Stockholders who wish to write directly to the Board on any topic should address communications to the Board of Directors in care of the Chairman of the Board, Westmoreland Coal Company Board of Directors, 9540 S. Maroon Circle, Suite 300 Englewood, Colorado 80112. Our Chairman of the Board will report on stockholder communications to the Board and provide copies or specific summaries to directors on matters deemed to be of appropriate importance. In general, communications from stockholders relating to corporate governance will be forwarded to the Board unless they are frivolous, obscene, repeat the same information contained in earlier communications, or fail to identify the author.

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COMMITTEES OF THE BOARD OF DIRECTORS

In 2016 , our Board size increased from eight to ten directors and consisted of the following five committees: (1) Audit; (2) Compensation and Benefits; (3) Nominating and Corporate Governance; (4) Environmental, Health and Safety; and (5) Executive. The Board also commissioned the creation of a Finance Committee in January, and the dissolution of the Executive Committee in March, of 2017. Each of the committees operates under a written charter adopted by the Board. All of the committee charters are available on our website at www.westmoreland.com. During 2016 , the Board held 11 meetings. Each of our current directors attended at least 94% of the aggregate of all Board and applicable committee meetings held during the period that he or she served as a director. All directors attended the last annual meeting of stockholders and all are expected to attend the 2017 Annual Meeting. The 2016 committee membership, number of meetings held during 2016 and function of each of the committees are described in the table and narratives below.



Name of Director	Audit	Compensation and Benefits	Nominating and Corporate Governance	Environmental, Health and Safety	Executive
Non-Employee Directors:
Terry J. Bachynski	Member		Member	Chair
Robert C. Flexon	Member			Member
Gail E. Hamilton		Member	Chair
Michael G. Hutchinson	Chair			Member	Member
Craig R. Mackus	Member	Member
Jan B. Packwood, Chair					Member
Robert C. Scharp		Chair	Member	Member	Member
Jeffrey S. Stein	Member		Member
Robert A. Tinstman		Member	Member
Employee Director:
Kevin Paprzycki					Chair
Number of Meetings in 2016	7	4	5	1	—

Audit Committee

The Audit Committee provides oversight of the quality and integrity of our accounting, auditing and financial reporting practices and is responsible for retaining and terminating our independent accountants. The committee exercises its oversight obligations through regular meetings with management, the director of internal audit and our independent registered public accounting firm, Ernst & Young LLP. The Audit Committee is also responsible for oversight of risks relating to accounting matters, financial reporting and regulatory compliance. To satisfy these oversight responsibilities, the committee separately meets with our Chief Financial Officer, the director of internal audit, Ernst & Young LLP and management. The committee also receives periodic reports regarding issues such as the status and findings of audits being conducted by the internal and independent auditors, the status of material litigation, accounting changes that could affect our financial statements and proposed audit adjustments.

Audit Committee Report

The purpose of the Audit Committee is to assist the Board with the oversight of the integrity of the Company’s financial statements and internal controls, the Company’s compliance with legal and regulatory requirements, the independence, qualifications and performance of the Company’s independent registered public accounting firm and the performance of the Company’s internal audit function. The Audit Committee’s function is more fully described in its charter, which the Board has adopted. The charter is on and may be printed from the Company’s website at www.westmoreland.com and is also available from the Company’s corporate secretary upon request. The Audit Committee reviews the charter on an annual basis. The Board annually reviews the definition of “independence” for audit committee members contained in the listing standards for NASDAQ and applicable rules of the Securities and Exchange Commission ("SEC"), as well as our director independence guidelines, and has determined that each member of the Audit Committee is independent under those standards. The Board has also determined that all of the Audit Committee members are financially literate and that all of the committee members qualify as audit committee financial experts, as defined in Item 407(d)(5) of Regulation S-K.

Management is responsible for the preparation, presentation and integrity of the Company’s financial statements, accounting and financial reporting principles, internal controls and procedures designed to ensure compliance with accounting standards, applicable laws and regulations. The Company’s independent registered public accounting firm, Ernst & Young LLP,

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is responsible for performing an independent audit of the Company’s consolidated financial statements and the Company’s internal control over financial reporting and expressing an opinion on the conformity of those financial statements with generally accepted accounting principles and on the effectiveness of the Company’s internal control over financial reporting.

In this context, the Audit Committee has met and held discussions with management and the Company’s independent registered public accounting firm, Ernst & Young LLP, regarding the fair and complete presentation of the Company’s financial results and management’s report on its assessment of the Company’s internal control over financial reporting. The Audit Committee has discussed the significant accounting policies applied by the Company in its financial statements, as well as alternative treatments. Management has represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent auditor.

The Audit Committee has also reviewed and discussed with both management and the independent registered public accounting firm, management’s assessment of the Company’s internal control over financial reporting. In addition, the Audit Committee has discussed the independent auditor’s report on the Company’s internal control over financial reporting. The Audit Committee has also discussed with the Company’s independent auditor the matters required to be discussed by Public Company Accounting Oversight Board (United States) Auditing Standard No. 1301, Communications with Audit Committees, and Rule 2-07 of the Securities and Exchange Commission’s Regulation S-X (“Communication with Audit Committees”).

In addition, the Audit Committee has discussed with the independent registered public accounting firm, the firm’s independence from the Company and its management, including the matters in the written disclosures and the letter received from Ernst & Young LLP as required by the applicable requirements of the Public Company Accounting Oversight Board (United States) regarding the independent accountant’s communications with the Audit Committee concerning independence. While no non-audit services were provided by Ernst & Young LLP in 2014 and 2015, and minimal tax related work 2016, the Audit Committee takes into account whether the provision of non-audit services to the Company by Ernst & Young LLP is compatible with maintaining that firm’s independence. The Audit Committee has concluded that Ernst & Young LLP is independent from the Company and its management.

The Audit Committee discussed with the Company’s internal and independent auditors the overall scope and plans for their respective audits. The Audit Committee meets with both the internal and independent auditors, with and without management present, to discuss the results of their examinations, the assessments of the Company’s internal control over financial reporting and the overall quality of the Company financial reporting.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board, and the Board approved, the inclusion of the audited financial statements of the Company as of and for the year ended December 31, 2016, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, for filing with the Securities and Exchange Commission.

Respectfully submitted by the members of the Audit Committee of the Board:

Michael G. Hutchinson, Chair

Terry J. Bachynski

Robert C. Flexon

Craig R. Mackus

Jeffrey S. Stein

Compensation and Benefits Committee

The Compensation and Benefits Committee is responsible for assuring that the Board, our Chief Executive Officer, and our other executive officers are compensated appropriately and in a manner consistent with our approved compensation strategy, internal equity considerations, competitive practice, and any relevant laws or regulations. In addition, the committee reviews our compensation programs to ensure that our programs are not promoting imprudent risk-taking. In accordance with its charter, the committee may retain and terminate outside counsel, compensation consultants, or other experts or consultants, as it deems appropriate, form and delegate authority to subcommittees and delegate authority to one or more designated members of the committee. To assist it in satisfying its oversight responsibilities, the committee approved the continued engagement of Pay Governance to serve as its compensation consultant for fiscal year 2017 .

Compensation and Benefits Committee Risk Assessment

On an annual basis, the committee reviews the structure of our compensation program to assess whether any aspect of the program could provide an incentive to our executive officers or other employees to take any unnecessary or inappropriate risks that could threaten our operating results, financial condition or impact long-term stockholder value. To assist the committee in

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its annual review, it engaged Pay Governance to conduct a risk assessment of our incentive-based compensation plans (including the annual and long-term incentive programs) and our compensation practices.

Based on the findings of Pay Governance, our internal controls, policies and risk-mitigating components in our incentive arrangements, as well as the committee's formal review and discussion, the committee believes our compensation programs represent an appropriate balance of short-term and long-term compensation and do not encourage executive officers or other employees to take on unnecessary or excessive risks that are reasonably likely to have a material adverse effect on us.

Our incentive compensation is designed to reward bonus-eligible employees for committing to and achieving goals that are intended to be challenging and support the success of the business. Achievement required to reach the maximum level of compensation is developed within the context of the normal business planning cycle and, while difficult to achieve, is not viewed to be at such an aggressive level that it would induce bonus-eligible employees to take inappropriate risks that could threaten our financial or operating stability. The annual bonus program contains a cap on the maximum financial payout.

Our executive compensation program includes the following features to help minimize risk.

Compensation Mix . We allocate compensation between fixed and contingent components, and between annual cash incentives and long-term equity incentives, based in part on an employee's position and level of responsibility within the organization. We believe our mix of compensation elements helps to ensure that executives and other employees who are eligible for incentive compensation do not focus on achieving short-term results at the expense of the long-term growth and sustainability of the Company. None of our employees receive commissions.

Base salary is the only assured portion of compensation that we provide to our executives and other employees. Consequently, our incentive compensation arrangements are intended to reward performance.

The annual incentive plan establishes cash-based award opportunities that are payable if, and only to the extent that, pre-established corporate financial, operational safety and individual performance objectives are achieved. The committee has discretion to exclude certain events outside our direct control and to reward exemplary performance.

The long-term component of the executive compensation program consists of grants of time-vested and performance-based restricted stock units or time-based cash unit awards. The use of both time-based and performance-based awards for the 2016 fiscal year balances our desire to drive long-term growth with the retention pressures we face from our direct peers, as well as from emerging and evolving competitors.

Stock Ownership Guidelines . We have established stock ownership guidelines to ensure that our executives' interests are aligned with those of our stockholders. These guidelines help ensure that the decisions our executives implement to achieve our financial and strategic objectives are focused on our long-term growth and health. We believe that this policy effectively mitigates the possibility that our executives make business decisions to influence stock price increases in the short-term that cannot be sustained over the long-term or would liquidate their equity holdings to capture short-term fluctuations in our stock price.

Board Approval of Transactions . Management must obtain approval from the Board for significant transactions (i.e., mergers, acquisitions, dividends, etc.) that could impact the achievement of previously approved financial performance targets used in the executive compensation program, and the Compensation and Benefit Committee retains the discretion to review the impact of certain factors over which management has no control (such as accounting changes or force majeure events) for purposes of determining whether pre-established performance targets have been met.

Compensation and Benefits Committee Interlocks and Insider Participation

During 2016 , each of Messrs. Mackus, Scharp and Tinstman, and Ms. Hamilton served on our Compensation and Benefits Committee. None of these directors was a current or former officer or employee of the Company, and none had any related party transaction involving the Company that is required to be disclosed under Item 404 of Regulation S-K. During 2016 , none of our executive officers served on the board of directors of any entity that had one or more executive officers serving on our Board.

Compensation and Benefits Committee Report

The Compensation and Benefits Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based on this review and discussion, the Compensation and Benefits Committee recommended to the Board that the Compensation Discussion and Analysis, provided herein, be included in this proxy

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statement and incorporated by reference into Westmoreland's Annual Report on Form 10-K for the fiscal year ended December 31, 2016 .

Robert C. Scharp, Chair

Gail E. Hamilton

Craig R. Mackus

Robert A. Tinstman

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee identifies and recommends individuals qualified to be nominated as members of the Board and considers director candidates brought to the Board by our stockholders. The committee also oversees succession planning, provides oversight on corporate governance matters and conducts the evaluation of the Board, committees, and individual director performance.

The committee regularly assesses the mix of skills and industry experience currently represented on the Board, whether any vacancies on the Board are expected due to retirement or otherwise, the skills represented by retiring directors, and additional skills highlighted during the Board self-assessment process that could improve the overall quality and ability of the Board to carry out its functions. In the event vacancies are anticipated or arise, the Nominating and Corporate Governance Committee considers various potential candidates for director and employs the same process for evaluating all candidates, including those submitted by our stockholders. The committee is responsible for ensuring all director nominees undergo a thorough background check prior to nomination or appointment as a director and reviewing any adverse findings prior to such nomination or appointment. Candidates may come to the attention of the committee through current Board members, professional search firms, our stockholders or other persons. Additionally, the Board has a retirement policy mandating that directors retire from the Board at the first annual meeting of stockholders following the director's 75th birthday.

The committee initially evaluates a candidate based on publicly available information and any additional information supplied by the party recommending the candidate. If the candidate appears to satisfy the selection criteria and the committee's initial evaluation is favorable, the candidate is contacted by the chairman of the committee for an interview to determine the mutual levels of interest in pursuing the candidacy. The committee is tasked with considering whether the candidate is (i) independent pursuant to the requirements of The NASDAQ Stock Market, (ii) accomplished in his or her field and has a reputation, both personal and professional, that is consistent with our ideals and integrity, (iii) able to read and understand basic financial statements, (iv) knowledgeable about us and the issues affecting our business, (v) committed to enhancing stockholder value, (vi) able to understand fully the legal responsibilities of a director and the governance processes of a public company, (vii) able to develop a good working relationship with other Board members and senior management and (viii) able to suggest business opportunities to us. If these discussions and considerations are favorable, the committee makes a final recommendation to the Board to nominate the candidate for election.

In considering whether to recommend any particular candidate, including incumbent directors, for inclusion in the Board's slate of recommended director nominees, the Nominating and Corporate Governance Committee takes into consideration a number of criteria, including: professional work experience; skills; expertise; diversity; personal and professional integrity; character; temperament; business judgment; time availability in light of other commitments; dedication; conflicts of interest; and public company experience. The committee does not assign specific weights to particular criteria and no particular criterion is a prerequisite for each prospective nominee. The committee focuses on issues of diversity, such as diversity of education, professional experience and differences in viewpoints and skills. The committee does not have a formal policy with respect to diversity; however, the Board and the committee believe that it is essential that the Board members represent diverse viewpoints and strive to ensure that the slate of nominees represents a wide breadth of diverse backgrounds and skill sets to adequately represent the needs of the stockholders. With respect to the nomination of continuing directors for re-election, the individual's contributions to the Board are also considered. We believe that the backgrounds and qualifications of our directors, considered as a group, provide a composite mix of skills, experience, and knowledge that will assure that the Board can continue to fulfill its responsibilities.

Stockholders may recommend individuals to the Nominating and Corporate Governance Committee for consideration as potential director candidates by submitting their names, together with appropriate biographical information and background materials and a statement as to whether the stockholder or group of stockholders making the recommendation has beneficially owned more than 5% of our common stock for at least a year as of the date such recommendation is made, to the Nominating and Corporate Governance Committee, c/o Corporate Secretary, Westmoreland Coal Company, 9540 South Maroon Circle, Suite 300, Englewood, Colorado 80112. Assuming that appropriate biographical and background material has been provided on a timely basis, the committee will evaluate stockholder-recommended candidates by following the same process, and applying the same

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criteria, as it follows for candidates submitted by others. If the Board determines to nominate a stockholder-recommended candidate and recommends his or her election, then his or her name will be included in our proxy statement for the next annual meeting.

Stockholders also have the right to nominate director candidates directly, without any action or recommendation on the part of the committee or the Board, by following the procedures set forth in Section 2.6, “Advance Notice of Nominees,” in our bylaws. Among other things, a stockholder wishing to nominate a director candidate must give notice to us within the specified time period that includes the information about the stockholder and the proposed nominee required by the bylaws. Any stockholder wishing to nominate a candidate for election to the Board pursuant to the bylaw provision must strictly comply with the procedures specified in Section 2.6 of the bylaws.

Gail E. Hamilton, Chair

Terry J. Bachynski

Robert C. Scharp

Jeffrey S. Stein

Robert A. Tinstman

Executive Committee

During 2016 , the Board had an Executive Committee. Pursuant to its charter reviewed and adopted on an annual basis, the Executive Committee is authorized to act on behalf of the Board during periods between Board meetings. During 2016 , the Executive Committee held no meetings.

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DIRECTOR COMPENSATION

The Board's goal in designing director compensation is to provide a competitive package that will enable it to attract and retain highly skilled individuals with relevant experience and that reflects the time and talent required to serve on the Board. Compensation for our non-employee directors is reviewed by the Compensation and Benefits Committee with the assistance of Pay Governance. The table below reflects the total director compensation for 2016 .

2016 Non-Employee Director Compensation



Name	Fees Earned Or Paid In Cash($)	Grant Date Fair Value of Stock Awards($) ⁽²⁾	Total Compensation ($)
Kevin A. Paprzycki ⁽¹⁾	—	—	—
Terry J. Bachynski	110,500	65,250	175,750
Robert C. Flexon ⁽³⁾	61,082	65,250	126,332
Gail E. Hamilton	98,389	65,250	163,639
Michael G. Hutchinson	115,883	65,250	181,133
Richard M. Klingaman ⁽⁴⁾	74,915	—	74,915
Craig R. Mackus	102,500	65,250	167,750
Jan B. Packwood ⁽⁴⁾	134,227	65,250	199,477
Robert C. Scharp	115,250	65,250	180,500
Jeffrey S. Stein ⁽³⁾	39,521	58,897	98,418
Robert A. Tinstman ⁽³⁾	60,147	65,250	125,397



(1)	Mr. Paprzycki does not receive any additional compensation for services as a director.
(2)	Non-employee director stock grants in 2016 were calculated using an assumed stock price of $10.00 per share. Directors elected to the Board in May 2016 received 9,000 shares and Mr. Stein, who was appointed August 9, 2016, received 6,929 shares. The restricted stock units vest on May 17, 2017.
(3)	Messrs. Flexon and Tinstman were elected at our 2016 Annual Meeting of Stockholders and have received full compensation for their service as directors since that time. Mr. Stein was appointed to the Board August 9, 2016, and received a prorated stock award as well as prorated fees for the third quarter 2016.
(4)	Mr. Klingaman retired from the Board and his position as Chairman at our 2016 Annual Meeting. He received cash retainer compensation up until that point and no equity award in 2016. Mr. Packwood was appointed Chairman of the Board at the 2016 Annual Meeting.

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Approved 2017 Non-Employee Director Compensation Structure

In March 2017 , the Compensation and Benefits Committee recommended, and the Board approved, the below compensation structure for fiscal year 2017 . In 2016, the Board adopted a Board and committee membership retainer structure in lieu of paying director's meeting fees. We believe this approach reduces administrative burden and ensures appropriate deliberation without regard for additional cost. All non-employee directors' cash compensation now consists of an annual cash retainer, in addition to the other applicable retainers described below that they may be entitled for service as the Board Chair, Chair of a committee, or for serving as a member of a committee.



Type of Compensation		Amount
Annual Cash Retainer		$75,000
Annual Stock Award Retainer ( restricted stock units with one-year vest )		$90,000 stock equivalent
Annual Chairman of the Board Premium		$55,000
Annual Retainer for Committee Chair:
Audit Committee		$20,500
Compensation and Benefits Committee		$19,500
Nominating and Corporate Governance Committee		$12,500
Finance Committee		$12,500
Environmental, Health and Safety Committee		$10,500
Annual Retainer for Serving on a Committee:
Audit Committee		$15,500
Compensation and Benefits Committee		$12,000
Nominating and Corporate Governance Committee		$9,500
Finance Committee		$9,500
Environmental, Health and Safety Committee		$7,500

Non-Employee Director Stock Ownership Guidelines

Non-employee directors are expected to own a threshold amount of Westmoreland equity. Each non-employee director is required to hold Westmoreland common stock with an aggregate value of at least three times his or her Annual Cash Retainer. The directors have a five-year window to comply with these guidelines. As of the end of 2016, each of Messrs. Packwood and Scharp, and Ms. Hamilton, have met the director stock ownership guidelines.

NASDAQ Golden Leash Disclosure

No Westmoreland directors have any arrangements between the director and any person or entity other than Westmoreland relating to compensation or any other payment in connection with such person’s candidacy or service as a director.

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BENEFICIAL OWNERSHIP OF SECURITIES

The following table sets forth information, as of March 10, 2017 (the "Table Date"), concerning beneficial ownership by: holders of more than 5% of any class of our voting securities; directors; each of the Named Executive Officers listed in the Summary Compensation Table; and all directors and Named Executive Officers as a group. The information provided in the table is based on our records, information filed with the SEC and information provided to us, except where otherwise noted. The number of shares beneficially owned by each entity or individual is determined under SEC rules, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the entity or individual has sole or shared voting power or investment power and also any shares that the entity or individual has the right to acquire within 60 days of the Table Date through the exercise of any stock options, the vesting of restricted stock or upon the exercise or conversion of other rights. Unless otherwise indicated, each person has sole voting and investment power with respect to the shares set forth in the table. The percentage calculations set forth in the table are based on 18,571,424 shares of common stock outstanding on the Table Date.



Name of Beneficial Owner	Common Stock	% of Common
5% or Greater Equity Holders
The Mangrove Partners Master Fund, Ltd. ⁽¹⁾	1,613,967	8.69%
BlackRock Inc. ⁽²⁾	1,240,860	6.68%
Jeffrey Gendell ⁽³⁾	1,223,479	6.59%
Named Executive Officers, Directors and Director Nominees
Terry J. Bachynski	4,937	*
Robert C. Flexon	—	—
Gail E. Hamilton	25,500	*
Michael G. Hutchinson	14,133	*
Craig R. Mackus	10,244	*
Jan B. Packwood	25,500	*
Robert C. Scharp	25,500	*
Jeffrey S. Stein	—	—
Robert A. Tinstman	—	—
Kevin A. Paprzycki ⁽⁴⁾	59,969	*
Jennifer S. Grafton ⁽⁵⁾	28,626	*
Joseph E. Micheletti ⁽⁶⁾	42,827	*
John A. Schadan ⁽⁷⁾	18,250	*
Gary A. Kohn ⁽⁸⁾	1,000	*
Jason W. Veenstra ⁽⁹⁾	772	*
Directors and Executive Officers as a Group (15 persons)	257,258	1.39%

____________________



* Percentages of less than 1% are indicated by an asterisk
(1)	Based solely on the review of a Schedule 13 G/A filed on February 1, 2017. The Schedule 13G/A was filed by The Mangrove Partners Master Fund, Ltd. (the "Master Fund"), The Mangrove Partners Fund, L.P. (the "US Feeder"), The Mangrove Partners Fund (Cayman), Ltd. (the "Cayman Feeder"), Mangrove Partners, Mangrove Capital and Nathaniel August (the "Mangrove Reporting Persons"). The Mangrove Reporting Persons beneficially own 1,613,967 shares with shared dispositive power and shared voting power. The principal place of business for each of the US Feeder, Mangrove Partners, Mangrove Capital and Nathaniel August, is 645 Madison Avenue, New York, NY 10022. The principal place of business for each of the Cayman Feeder and the Master Fund is c/o Maples Corporate Services, Ltd., PO Box 309, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands KY1-1104.
(2)	Based solely on the review of a Schedule 13G/A filed on January 27, 2017, BlackRock Inc., a parent holding company of certain institutional investment managers registered under the Exchange Act and certain other entities, beneficially owns 1,240,860 shares with sole dispositive power, and has sole voting power to 1,218,900 of those shares. The principal business address of BlackRock Inc. is 40 East 52nd street, New York, New York 10022.

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(3)	Based solely upon information contained in the Schedule 13F-HR filed by Jeffrey L. Gendell with the SEC on February 10, 2017. Mr. Gendell and Tontine Capital Partners L.P. had previously reported on Schedule 13D/A filed on March 2, 2016, which reported that Mr. Gendell owns 549,000 shares of common stock of which he has sole voting and dispositive power. In addition, Tontine Capital Partners, L.P. and other limited partnerships and limited liability companies that are affiliates of Tontine Capital Partners, L.P. own 1,156,436 shares of common stock. Mr. Gendell is either a managing member of, or a managing member of the general partner of, these limited partnerships and limited liability companies and has shared voting and dispositive power over these shares. All of the foregoing shares may be deemed to be beneficially owned by Mr. Gendell. Mr. Gendell disclaims beneficial ownership of these shares for purposes of Section 16(a) under the Exchange Act, or otherwise, except as to shares directly owned by Mr. Gendell or representing Mr. Gendell’s pro rata interest in, and interest in the profits of, these limited partnerships and limited liability companies. The address for Mr. Gendell is 1 Sound Shore Drive, Greenwich, CT 06830.
(4)	Includes 22,286 shares of common stock held by Mr. Paprzycki and 9,987 shares of common stock held by Prudential Retirement, as trustee of Westmoreland’s 401(k) plan. Additionally, includes 7,000 shares of common stock that may be purchased upon exercise of options under our 2007 Plan and 20,696 shares of common stock Mr. Paprzycki may acquire through the Company's LTIP vesting April 1, 2017.
(5)	Includes 14,395 shares of common stock held by Ms. Grafton and 14,231 shares of common stock Ms. Grafton may acquire through the Company's LTIP vesting April 1, 2017.
(6)	Includes 20,735 shares of common stock held by Mr. Micheletti and 6,392 shares of common stock held by Prudential Retirement, as trustee of Westmoreland’s 401(k) plan. Additionally, includes 5,000 shares of common stock that may be purchased upon exercise of options under our 2007 Plan and 10,700 shares of common stock Mr. Micheletti may acquire through the Company's LTIP vesting April 1, 2017.
(7)	Includes 2,894 shares of common stock held by Mr. Schadan and 15,356 shares of common stock Mr. Schadan may acquire through the Company's LTIP vesting April 1, 2017.
(8)	Includes 1,000 shares of common stock Mr. Kohn may acquire through the Company's LTIP vesting April 1, 2017.
(9)	Mr. Veenstra resigned from his position as Chief Financial Officer and Treasurer on November 15, 2016.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC and The NASDAQ Stock Market. To the knowledge of management, based solely on its review of such reports, no person who at any time during the fiscal year ended December 31, 2016 , was a director, executive officer, or beneficial owner of more than ten percent of any class of equity securities of the Company failed to file on a timely basis reports required by Section 16(a) of the Securities Exchange Act of 1934 during the most recent fiscal year.

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EQUITY COMPENSATION PLAN INFORMATION

At December 31, 2016 , we had stock options and stock appreciation rights (“SARs”) outstanding from only our 2007 Equity Incentive Plan. We no longer have any outstanding awards under an equity plan that was not approved by stockholders. All new equity issuances, whether to directors or officers, are made out of our stockholder-approved 2007 Equity Incentive Plan or our 2014 Equity Incentive Plan. No further issuances may be made out of the 2007 Plan beginning August 2017.



Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options (a)	Weighted Average Exercise Price of Outstanding Options (b)	Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)
Equity plans approved by stock holders	109,306 ⁽¹⁾	$22.16	123,240
Equity plans not approved by stock holders	—	—	—
Total	109,306	$22.16	123,240 ⁽²⁾

____________________



(1)	The closing price of a share of our common stock as reported on The NASDAQ Stock Market on December 31, 2016, was $17.67. On December 31, 2016, there were 109,306 stock options outstanding from equity plans approved by security holders. Included in the number are 78,750 stock options with an exercise price of $21.40 and 30,556 stock options with an exercise price of $24.12.
(2)	The number of securities remaining available for future issuance is as of December 31, 2016, and reflects the reservation of shares for prior employee and director grants upon the completion of certain time-based and performance-based vesting restrictions related to restricted stock units issued on May 20, 2014, June 2, 2014, April 1, 2015, May 19, 2015, May 17, 2016 and May 18, 2016.

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis provides stockholders with a detailed description of the material elements of our compensation program for our Named Executive Officers for 2016 . It discusses the policies and objectives that make up our compensation program, the compensation decisions made in 2016 and the rationale behind those decisions. This discussion is supplemented by compensation tables and accompanying narratives that follow.

For 2016 , pursuant to SEC requirements, Westmoreland Coal Company's named executive officers (the "Named Executive Officers") were:



Named Executive Officer ⁽ ¹⁾	Officer Title
Mr. Kevin Paprzycki	Chief Executive Officer
Mr. John Schadan	President and Chief Operating Officer
Mr. Gary Kohn	Interim Chief Financial Officer and Treasurer
Ms. Jennifer Grafton	Chief Administrative Officer, Chief Legal Officer and Corporate Secretary
Mr. Joseph Micheletti	Executive Vice President - Operations
Mr. Jason Veenstra	Former Chief Financial Officer and Treasurer ⁽²⁾



(1)	Throughout this Proxy Statement we make certain voluntary disclosures regarding Nathan M. Troup, who is the Interim Chief Financial Officer and a "named executive officer" (as such term is defined in Item 402(a)(3) of Reglation S-K) of our affiliate Westmoreland Resource Partners, LP ("WMLP"). Although Mr. Troup is not a Named Executive Officer of Westmoreland Coal Company, where he also serves as Chief Accounting Officer and Controller, his status as a Westmoreland Coal Company employee who devotes some of his time exclusively to WMLP concerns, and a portion of whose compensation is provided by WMLP, we are including disclosure related to his compensation in certain sections of this Proxy Statement to maintain consistency of disclosure and to fulfill the disclosure obligations of our affiliate, WMLP.
(2)	On November 15, 2016, upon the resignation of Mr. Jason Veenstra, Mr. Kohn was appointed Interim Chief Financial Officer and Treasurer, and on March 6, 2017 Mr. Kohn was appointed Chief Financial Officer and Treasurer.

Executive Summary

Westmoreland Coal Company's unique volume and margin-protected model once again differentiated it from other coal and energy companies. In 2016, the coal sector saw industry stalwarts declare bankruptcy, destroying shareholder value and confidence. Meanwhile, our mine mouth relationships and strong operational performance continued to deliver the most cost competitive fuel to our customers. Despite these unwelcoming capital markets in 2016, we closed on our acquisition of mine-mouth coal supplier San Juan Coal Company through innovative financing. We once again integrated new operations and centralized several support functions, while at the same time undertaking the new challenge of longwall underground mining. Low demand and low power prices persisted throughout the year, however, cost reductions and improved operational focus through the use of new and enhanced internal reporting metrics, allowed Westmoreland to continue to deliver lowest cost fuel to its customers. With the addition of the San Juan mine, Westmoreland once again achieved record adjusted EBITDA* and cash flows from operations. The Compensation and Benefits Committee (which we refer to throughout this Compensation Discussion and Analysis as the “Committee”) understood the significant challenges of our industry in 2016 when it created our compensation structure based around Westmoreland's core values. In February 2016, the Committee set base salaries and annual incentive program ("AIP") and long-term incentive program ("LTIP") target grants for 2016 to incentivize cash flow generation and shareholder value. Certain of our Company's highlights, and those of the Named Executive Officers, are set out below:


•	Eclipsing our company records set in 2015, in 2016 we sold a record 54.7 million tons and finished with record revenues of $1.5 billion, adjusted EBITDA* of $271.9 million and cash flows from operations of $151.9 million;


•	We closed on the acquisition of San Juan Coal Company, an underground coal operator in New Mexico, on January 31, 2016, using innovative customer-backed financing and successfully integrated our second underground mine into our portfolio of assets;


•	We reduced our Total Reportable Incident Rate from 2.34 to 2.12, and our Violations per Inspection Day rate from 0.69 to 0.33, which correlated to significant savings in regulator penalties. Our Buckingham Mine, an underground continuous miner operation, operated all of 2016 without a reportable incident;


•	We optimized working capital, generating significant cash, including $12.0 million in cash from spare parts inventories;


•	Through discussions with stockholders, we bolstered our Investor Relations team and added valuable expertise to our Board;


•	Our Ohio operations won the Appalachian Region Active Mine Reclamation Award from the Office of Surface Mining Reclamation and Enforcement;

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•	In October, we successfully added our new partner East West Bank to our revolving loan facility;


•	We amended our obligations under agreements at our Roanoke Valley Power Generating Facility to reduce future cash flow drag from the asset by 50%, and position it for a possible sale in 2017; and


•	We launched our One Westmoreland initiative aimed at streamlining and standardizing the organization, demonstrated by centralizing our support functions to Colorado and integrating from 3 enterprise resource planning systems to 1 global system.

*See page 47 for information about reconciliation of non-GAAP financial measures.

Factors Creating Alignment between Pay and Performance

Our compensation programs support our key business objectives and are aligned with the success of our stockholders. If our market capitalization declines, the value of our executives’ vested equity and the equity grants yet to vest will decline accordingly. As an executive’s level of responsibility within our organization increases, so does the percentage of total compensation that we link to performance through our cash bonus AIP and our equity LTIP. The chart below shows base salary, AIP and LTIP compensation, as a percentage of total compensation opportunity (using target awards for fiscal 2016) for our CEO and other Named Executive Officers at the end of 2016.

Westmoreland’s executive compensation program is designed to maintain an appropriate alignment between corporate performance and compensation. The following compensation features protect us from inappropriate risk-taking:


•	A substantial portion of each executive's total compensation is tied to performance, varying from 75% for the CEO to an average of approximately 64% for the other Named Executive Officers;


•	The performance-based incentive compensation program rewards executives for achieving, or exceeding, predetermined goals for nationally reported safety metrics, growth of free cash flow, increase in total shareholder return and individual objectives;


•	Stock ownership guidelines are designed to align the financial interests of executives with those of our stockholders;


•	Our compensation programs are overseen by a Compensation and Benefits Committee of experienced and independent directors, who are assisted by an independent compensation consultant;


•	We conduct an annual risk review to identify and limit any material adverse effects of our compensation policies and practices;


•	We have no supplemental executive retirement plans;


•	No tax gross-up provisions in any compensation plans;


•	Named Executive Officers are at-will employees, however, each has certain rights to which they are entitled if they are terminated in connection with a change of control; and


•	No excessive perquisites such as company aircraft or car leases.

We believe our executive compensation programs, as more fully described in this Compensation Discussion and Analysis and accompanying tables contained in this Proxy Statement, are structured in the best manner possible to grow our business profitably, while also supporting our culture and traditions that have guided us for over 160 years.

Significant Compensation Actions

The Board, upon recommendation by the Committee, made the following decisions and took the following actions with respect to our executive compensation program:

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•

Determined, and recommended to the Board, the compensation package for Mr. Paprzycki. Mr. Paprzycki's compensation package is 75% performance-based to ensure alignment with overall Westmoreland stockholder goals. The Committee also set the compensation packages of each of the other Named Executive Officers in a manner intended to incentivize free cash flow generation and enhance shareholder value;


•	Adopted a Clawback Policy for performance-based compensation related to accounting restatements as a result of material non-compliance with any financial reporting requirement under securities laws, prior to such a policy being required universally;


•	Created time-based cash unit awards under long term incentive plan structure and granted 2016 long-term incentive plan grants utilizing an artificially higher Westmoreland common stock share price in an effort to limit shareholder dilution; and

•

Adjusted the performance metric for the LTIP performance-based RSUs, which over the past two years had been either a three-year free cash flow metric or a total stockholder return metric, weighted 30% Market Vectors Global Coal Index and 70% Russell 3000 Index. Beginning with the 2016 awards, the Company's LTIP goals now blend the two metrics, 50% of the goal being a free cash flow metric and 50% being a total shareholder return metric weighted evenly split between the Market Vectors Global Coal Index and the Russell 3000 Index. The Committee and the Board determined that this mix best aligns the management team with values of the Company and stockholders.

Components of the Executive Compensation Program for 2016

Throughout this Compensation Discussion and Analysis, all individuals who served as principal executive officer or principal financial officer during fiscal year 2016, as well as the other individuals included in the “Summary Compensation Table” on page 31 of this Proxy Statement pursuant to Item 402 of Regulation S-K and SEC requirements, are referred to as the Named Executive Officers. They were (i) Kevin A. Paprzycki, our Chief Executive Officer, (ii) Gary A. Kohn, our Interim Chief Financial Officer and Treasurer, (iii) John A. Schadan, President and Chief Operating Officer, (iv) Joseph E. Micheletti, Executive Vice President - Operations, (v) Jennifer S. Grafton, Chief Administrative Officer, Chief Legal Officer and Corporate Secretary, and (vi) Jason W. Veenstra, our former Chief Financial Officer and Treasurer who served during the majority of fiscal year 2016. Our executive compensation program consists of three main elements: base salary, long-term incentive awards and annual incentive awards. Executives are also eligible for standard post-employment benefits.



Element of Executive Officer Compensation	Description
Base Salary	Ongoing cash compensation based on the executive officer’s role. Salary levels are evaluated annually and are based on each executive’s role and responsibility, market data, applicable experience, unique skills, past performance, and future potential with us. Individual increases to base salary are not guaranteed for our Named Executive Officers and are provided only at the Committee’s discretion after a review of an individual’s performance and relevant market data. Base salary is intended to provide a degree of financial certainty and stability.
Annual Incentive Award	The annual incentive plan is intended to provide compensation for performance based on the achievement of strategic goals and objectives. The incentive pay is based on financial, safety and personal performance. If minimum performance for the financial and safety components are not met, then no payout is made for that particular component. The annual incentive pay motivates our executive officers to achieve annual goals and position Westmoreland for long-term success.
Long-Term Awards	Long-term incentive awards are designed to align the interests of our executives with those of our stockholders. Awards are granted annually under our equity incentive plan. The performance-based awards vest upon the achievement of a preset three-year performance measure. Current unvested outstanding awards are linked to either free cash flow or total stockholder return. The number of shares issued is determined by the Committee or Board on an annual basis and typically reflects a percentage of base salary. Long-term awards incentivize our executive officers to achieve long-term, sustainable success for Westmoreland and to create stockholder value.
Post-Employment Benefits	Our Named Executive Officers have also executed change in control agreements where upon termination after a change in control, as defined under the individual change in control agreements, Named Executive Officers are entitled to two times base pay and payment of their target annual incentive plan payout, as well as an immediate vesting of all unvested equity.

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Compensation Program and Governance

General Compensation Practices and Philosophy

Our compensation philosophy aligns executive compensation with performance metrics that enhance stockholder value. Our compensation programs are guided by several key principles:


•	Align executives’ interests with long-term stockholder interests through equity awards;


•	Link pay to performance by making a substantial portion of total executive compensation variable or “at risk” over the short- and long-term; and


•	Provide a compensation program that emphasizes direct compensation as opposed to perquisites and other benefits.

Westmoreland bases its total compensation strategy on a moderate growth model, which emphasizes a balance of fixed and variable compensation. Westmoreland seeks to provide a portion of short-term incentive based on financial, safety and personal goals and provides a significant percentage of pay in the form of long-term equity. Our Named Executive Officers are at-will employees, subject to certain rights they have when terminated in connection with a change of control. Our Named Executive Officers' change in control agreement terms are further described in the Potential Payments upon Termination or Change-in-Control Section beginning on page 36.

The Westmoreland benefits philosophy is to provide officers with protection and security through health and welfare, retirement, disability insurance and life insurance programs. During fiscal year 2016, the management team received the same benefits that are generally available to other Westmoreland employees. Westmoreland additionally provides physical examinations to executives, which we believe is a prudent measure to help ensure the health of our executives. The executive physical is a benefit generally provided by our peer group companies and is available at a reasonable cost to Westmoreland.

Our disability benefit is capped at a certain dollar threshold. This precludes the management team from receiving the same 60% disability pay replacement as the general employee population. As such, Westmoreland provides additional long-term disability insurance to the management team to match the same benefit as non-executives.

Stock Ownership Requirement, Change in Control Agreements, Hedging and Clawbacks

Highlights:


•	Adopted Clawback Policy in advance of implementation of the SEC Rule 10D-1;


•	Hedging and pledging are prohibited through Westmoreland's insider trading policy;


•	Named Executive Officers are subject to double-trigger change in control provisions and vesting of equity awards does not automatically occur upon a change in control; and


•	Executives are subject to mandatory stock ownership guidelines that require executives to hold all stock grants until such time as their total ownership in Westmoreland stock exceeds a preset multiple of their salary. At no time, may they own less than their required ownership after achieving the goal.

To align the interests of our executive management team with that of our stockholders and promote our commitment to sound corporate governance, the management team is subject to stock ownership requirements. The management team is expected to be in compliance with these guidelines within five years of becoming subject to the policy. The ownership requirement for our officers is calculated as a multiple of base salary as follows:



Executive Level	Multiple of Base Salary
Chief Executive Officer	3.0x
Named Executive Officers	1.5x

In September 2015, the Committee recommended, and the Board approved, that the Company use a full year trailing average stock price for the prior fiscal year (beginning on January 1 of each year) to determine whether an executive or director meets the stock ownership requirements. As of the end of 2016, Mr. Micheletti met the stock ownership guideline requirements. Pursuant to the stock ownership guideline, Ms. Schadan and Ms. Grafton have until 2019 and Mr. Kohn until 2021 to comply with the stock ownership requirement. Similarly, Mr. Paprzycki, having been appointed Chief Executive Officer in December 2015, has until 2020 to meet stock ownership requirement for Chief Executive Officer.

In early 2015, we executed double-trigger change in control agreements with all of our Named Executive Officers, giving them certain rights after a change in control and an additional event, as defined under each Named Executive Officers individual

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change in control agreement, which entitles such officer to two times base pay and payment of such officer's target annual incentive plan payout, as well as an immediate vesting of all equity not yet vested.

We believe that stock hedging by the executive management team works counter to the objectives of our executive compensation strategy and disturbs the relationship between our executive compensation packages and stockholder interests. In February 2013, the Board of Directors adopted a provision within our insider trading policy that prohibits hedging or monetization transactions including, but not limited to, prepaid variable forwards, equity swaps, collars and exchange funds. The hedging provision aims to bar executive management from taking any action that could be seen as misaligning their objectives from that of all other Company stockholders. Additionally, our insider trading policy prohibits holding Company securities in a margin account or otherwise pledging Company securities.

In February 2016, the Committee recommended, and the Board approved, the adoption of a clawback policy for incentive-based executive compensation ("Clawback Policy"). The Clawback Policy was adopted with the intent that it will meet the scope of the currently proposed Securities and Exchange Commission Rule 10D-1 and ultimately the associated NASDAQ listing exchange rules. Under the Clawback Policy, in the event that the Company is required to prepare an accounting restatement due to the Company's material noncompliance with a financial reporting requirement, the Company shall make reasonable efforts to recover from any current or former executive officer the amount of certain incentive-based compensation in excess of what would have been paid or granted to that executive officer under the circumstances reflected by the accounting restatement. The Clawback Policy applies to any incentive-based compensation paid to an executive officer within the three-year period preceding the date of the restatement. Due to the accounting restatement announced in February 2017, the Committee reviewed the Clawback Policy to determine if any incentive-based compensation was previously earned by our executives in excess of what would have been paid or granted to that executive officer under the circumstances reflected by the accounting restatement. After thorough discussion, the Committee made the assessment that a recovery event was not required under the Clawback Policy. The Committee's reasoning included, but was not limited to, the fact that the accounting restatement had no effect on free cash flow, and had a positive effect on the Company's EBITDA over the affected periods, which we believe is an important metric to our investors, it determined that a recovery event was not necessary at that time.

Peer Group

The Committee considers comparative data of executives’ compensation within our peer group by comparing practices in executive compensation generally and compensation specifics for benchmarking. There are few comparably-sized publicly-traded coal companies, therefore the companies in our peer group are included for having at least one of the following characteristics:


•	Focused on comparable industry (energy-related), specifically, coal, mining and oil and gas-related companies;


•	Comparable size in relation to revenue and employees; or


•	Publicly-traded Colorado headquartered companies with whom we compete for top public company talent.

Our Committee reviews the composition and appropriateness of our compensation peer group annually. Following a review in early 2016, the Committee did not change our compensation peer group participants. The Committee is assisted in this decision by our compensation consultant, Pay Governance, whose role is more thoroughly discussed below. The fiscal year 2016 compensation peer group was made up of the following companies:



Access Midstream Partners	Alliance Holdings	Alliance Resource Partners
Arch Coal	Cloud Peak Energy	Dril-Quip
Genesee & Wyoming	HEICO	Innospec
Koppers Holdings	Parker Drilling	Pioneer Energy Services
Stillwater Mining	SunCoke Energy	Walter Energy

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Role of the Compensation Consultant and the CEO in the Compensation Program

Compensation Consultant

The Committee has the authority to retain outside counsel, consultants and other advisers to assist it in evaluating compensation or in otherwise discharging its duties and responsibilities. The Committee engaged Pay Governance (the “Consultant”) for advice regarding the structuring of executive compensation for fiscal year 2016 and recently reengaged the Consultant for fiscal year 2017. The Consultant assists the Committee in determining appropriate peers for purposes of comparing market compensation and provides other related services. The Committee has authorized the Consultant to interact with management on its behalf. The Consultant has not provided any services for Westmoreland other than the services it provided to the Committee. The Committee has concluded, under the guidance of SEC rules and relevant NASDAQ listing standards, that the Consultant’s work does not raise any conflict of interest.

Determining Executive Compensation

Determinations regarding 2016 executive officer compensation were made at the February 2016 Committee meetings. The following table summarizes the roles of the Committee, Consultant and Chief Executive Officer in executive compensation decision making.



Responsible Party		Roles and Responsibilities
Compensation and Benefits Committee of the Board of Directors The Committee is currently comprised of four Independent Directors and reports to the Board.		● Retains independent counsel, consultants and other advisers to assist it in evaluating compensation or in otherwise discharging its responsibilities. ● Works with the CEO to set performance goals at the beginning of each year targeted to positively influence stockholder value and evaluates CEO performance in relation to those goals and overall performance of the Company. ● Determines and approves compensation for our executive officers other than CEO. ● Reviews and approves overall compensation strategy and all programs in which our executive officers participate, including equity, bonus (including all performance-based goals), retirement and other benefit plans. ● Reviews compensation philosophy, metrics and amounts, and the results of stockholder say-on-pay votes, before establishing executive compensation. ● Considers comparable metrics in our peer group.
Consultant to Compensation Committee Pay Governance, as an independent consultant retained directly by the Committee, provides consulting advice on matters of governance and executive compensation		● Provides advice and opinion on the appropriateness and competitiveness of our compensation programs relative to market practice. ● Performs all functions at the direction of the Committee. ● Attends Committee meetings. ● Provides advice regarding compensation decision-making governance. ● Provides market data, as requested. ● Consults on various compensation matters and recommends compensation program designs and practices. ● With the cooperation of management, works to conduct an assessment of the risks arising from our compensation programs. ● Confers with the CEO and CAO on compensation levels, incentives and goals.
Chief Executive Officer With the support of other members of the management team		● Works with the other executive officers to set personal performance goals at the beginning of each year targeted to positively influence stockholder value. ● Reviews performance of the other executive officers against the set goals and makes recommendations to the Committee with respect to their compensation. ● Confers with the Committee concerning design and development of compensation and benefit plans for Westmoreland employees. ● Recommends appropriate company-wide and mine financial and non-financial performance goals for the annual incentive program.

Components of Executive Compensation in Fiscal Year 2016

In February of 2016, the Committee set base salaries, AIP and LTIP goals for fiscal year 2016. Ms. Grafton and Mr. Micheletti received salary increases in April of 2016 as a result of positive performance evaluations from the CEO and the Committee. Messrs. Paprzycki and Schadan did not receive pay increases as each of their compensation packages were determined at the end of 2015. Mr. Kohn was promoted to Interim Chief Financial Officer of the Company on November 15, 2016, and at the time of his promotion maintained his participation in our AIP and LTIP programs at the levels set in connection with his prior position. However, at the time of his promotion, his salary was increased to a level commensurate with the increased responsibilities of the Chief Financial Officer role, to which he was ultimately appointed in a permanent capacity on March 6, 2017.

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Base Salaries



2016 Base Salaries for Named Executive Officers

Name	Position	Base Salary
Kevin A. Paprzycki	Chief Executive Officer	$500,000
John A. Schadan ⁽²⁾	President and Chief Operating Officer	$264,180
Gary A. Kohn ⁽¹⁾	Interim Chief Financial Officer and Treasurer	$300,000
Jennifer S. Grafton	SVP, Chief Administrative Officer and Corporate Secretary	$350,000
Joseph E. Micheletti	Executive Vice President - Operations	$315,000
Jason W. Veenstra ⁽²⁾⁽³⁾	Former Chief Financial Officer and Treasurer	$226,440



(1)	The base salary listed for Mr. Kohn is as of his appointment to Interim Chief Financial Officer and Treasurer in November 2016.
(2)	Messrs. Schadan and Veenstra are located in Westmoreland's corporate office in Edmonton, Alberta, and as such their cash compensation figures have been converted to U.S. dollar amounts throughout this Proxy Statement using the Bank of Canada full year conversion average for 2016 of $0.7548 U.S. dollars per Canadian dollar, for comparability purposes only. Mr. Schadan's salary in Canadian dollars was $350,000 CAD and Mr. Veenstra's salary in Canadian dollars was $300,000 CAD.
(3)	On November 15, 2016, Mr. Veenstra provided notice of his resignation from his role as Chief Financial Officer and Treasurer of the Company for personal reasons.

Annual Incentive Compensation



GOAL		PERCENT OF TOTAL
Financial	Goal: Annual budgeted free cash flow of Westmoreland, on a global consolidated basis. ● 50% payout upon meeting 80% of goal (threshold) ● 100% payout upon meeting 100% of goal (target) ● 200% payout upon meeting 120% of goal (maximum)	● 50% for all executives
Safety	Goal: A mix of objective (total reportable incident rate) and subjective (performance in safety audits and training) indicators intended to promote safe production.	● 20% for all executives
Individual	The payout is evaluated on achievement of individual goals established between the executive and the CEO (or, in the case of the CEO, between him and the Board) and is based on the executive’s overall performance. An executive may receive greater than 100% payout for the individual goal based on exemplary performance, as approved by the Committee, or in the case of the CEO, by the Board. The Individual payout component is capped at 200%.	● 30% for all executives



2016 Target vs. Actual AIP Bonus Paid

Name	% of Annual Base Salary	Target Total Cash Incentive Bonus	% of Target Individual Bonus Approved	% of Target Financial Bonus Approved	% of Target Safety Bonus Approved	Total Cash Bonus
Kevin A. Paprzycki	100%	$500,000	175%	135%	100%	$700,000
John A. Schadan ⁽¹⁾	100%	$264,180	200%	135%	100%	$384,088
Gary A. Kohn ⁽²⁾	50%	$300,000	200%	135%	100%	$68,753
Jennifer S. Grafton	50%	$350,000	150%	135%	100%	$231,596
Joseph E. Micheletti	50%	$315,000	200%	135%	100%	$232,062
Jason W. Veenstra ⁽¹⁾⁽³⁾	50%	$—	—%	—%	—%	—



(1)	Mr. Schadan was located in Westmoreland's corporate office in Edmonton, Alberta, and as such his cash compensation figures have been converted to U.S. dollar amounts throughout this Proxy Statement using the Bank of Canada full year conversion average for 2016 of $0.7548 U.S. dollars per Canadian dollar, for comparability purposes only. Mr. Schadan's CAD AIP bonus goal was set to $350,000 in February of 2016, and he achieved a pay-out of $515,693 in CAD.
(2)	Mr. Kohn was Vice President of Investor Relations from April 11, 2016 until being promoted to Interim Chief Financial Officer and Treasurer November 15, 2016. As such, his AIP award is comprised of a proportional split of his salary and target AIP award from his time as Vice President of Investor Relations and Interim Chief Financial Officer.
(3)	Mr. Veenstra gave notice of his resignation in November 2016 and is therefore not eligible for AIP bonus awards for 2016 to be paid on March 31, 2017.

Table of Contents

Named Executive Officer Compensation in Fiscal Year 2016

Westmoreland’s Named Executive Officer compensation is broken down into several components. The Named Executive Officers are generally compensated at the same percentage of targeted bonus for meeting team financial and safety goals set by the Committee, however, individual performance may factor into the decision on certain awards. In addition to feedback from the compensation consultant, the Committee meets with the CEO to review his assessment of each of the other Named Executive Officers as well as his self-assessment. The Committee gathers additional feedback on the performance of the CEO from each of the Board members. The Committee reviews the achievements of the Named Executive Officers and each of their compensation components. The following provides more information on executives' compensation decisions where individuals are compensated differently or the reasoning is different.

Annual Incentive Compensation: Financial and Safety Components

Financial Component : The financial component was based on Westmoreland’s free cash flow. Free cash flow is used as the financial metric for AIP awards as we believe it is the best indicator of the health of the Company on an annual basis. With free cash flow generation, Westmoreland can delever and create liquidity for future growth as opportunities present themselves. In 2016, the Named Executive Officers, were subject to the global consolidated free cash flow goal. The management team achieved a global consolidated free cash flow goal of 107%, which resulted in a payout of 135% of the Named Executive Officers targeted AIP amounts.

Safety Component : The safety component was based on consolidated mine site performance weighted by number of employees and hours worked at each mine site during that calendar year. As such, the mines with the largest number of employees and hours worked had a higher contribution to the consolidated safety performance than mines such as Savage with less than 10 employees. The Named Executive Officers' safety component performance is based on a global consolidated average for all mine sites' safety statistics. Each mine site’s performance was based on an objective goal of reduced total reportable incident rate (“TRIR”) from performance in 2015 (or identical TRIR performance if the rate in 2015 was zero), as well as mine-specific objective pro-active indicator goals focused on activities proven to drive safe production. The global consolidated safety payout was 100%.

Kevin A. Paprzycki, Chief Executive Officer



Total Salary and Cash Bonus Received for 2016	2016 Base Salary	Cash Bonus for 2016	# of RSUs / Grant Date Fair Value of 2016 RSUs
$1,200,000	$500,000	$700,000	$628,850