We invite you to join us for the 20142015 Annual Meeting of Stockholders of Westmoreland Coal Company, which will once again be held as a virtual meeting. You will be able to attend the 20142015 Annual Meeting, vote, and submit your questions during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/WLB2014WLB2015. Be sure to have your 12-Digit Control Number to enter the meeting. The Annual Meeting of Stockholders of Westmoreland Coal Company will be held via the Internet on Tuesday, May 20, 201419, 2015 at 8:30 a.m. Mountain Daylight Time, for the following purposes:

Only stockholders of record at the close of business on March 24, 2014April 14, 2015 will be entitled to notice of and to vote at the meeting and any postponement or adjournment thereof.

This proxy statement is being furnished by the Board of Directors (the “Board”) of Westmoreland Coal Company (the “Company”) to holders of our common stock and depositary shares in connection with the solicitation by the Board of proxies to be voted at the Annual Meeting of Stockholders of Westmoreland Coal Company (the “Annual Meeting”). The Annual Meeting will be held via the Internet on Tuesday, May 20, 201419, 2015 at 8:30 a.m. Mountain Daylight Time, for the purposes set forth in the accompanying Notice of Annual Meeting and this proxy statement.

This proxy statement and the enclosed proxy voter card relating to the Annual Meeting are first being mailed to stockholders on or about April 4, 2014.24, 2015. As of March 1, 2014,April 2, 2015, the Company's officers and directors are the record and beneficial owners of a total of 485,417612,104 shares (approximately 3.23%3.41%) of the Company's outstanding common stock and have no ownership in the Company's outstanding depositary shares.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.

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 20142015 Annual Meeting live via the Internet. A summary of the information you need to attend the meeting online is provided below:

The holders of a majority of the aggregate voting power of the common stock and depositary shares outstanding on the record date, present in person or by proxy at the Annual Meeting, shall constitute a quorum to conduct business at the Annual

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 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 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 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 Annual Meeting, your shares will be voted at the 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.

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 Annual Meeting. The powers of the proxy holders will be suspended if you attend the Annual Meeting in person and so request. However, attendance at the virtual 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 Annual Meeting to be effective.

Under our bylaws, which were amended and restated in January 2013,February 2015, we now 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, 34 and 4,5, requires the affirmative vote of a majority of the shares present or represented by proxy and entitled to vote at the Annual Meeting. With respect to Proposals 2, 34 and 4,5, 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.

The ratification of the appointment of Ernst & Young LLP as the Company's independent registered public accounting firm for 20142015 (Proposal 4)3) 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 4.3.

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 have also retained Alliance Advisors LLC for proxy solicitation and related services in connection with our 2015 Annual Meeting of Stockholders. Under our agreement with Alliance, Alliance will receive a fee of $11,000 and we will reimburse them for reasonable and customary out-of-pocket expenses incurred in performing such services. 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.

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

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

Any proposal that a stockholder wishes to be considered for inclusion in our proxy statement and proxy card for the 20152016 Annual Meeting of Stockholders (the “2015“2016 Annual Meeting”) must be submitted to the Company's Secretary at our offices, 9540 S. Maroon Circle, Suite 200, Englewood, Colorado 80112, no later than November 25, 2014.December 19, 2015. 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 20152016 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 20, 20152016 and no later than February 19, 2015,2016, 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.

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.

The Board has fixed the number of directors at eight. All our directors 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.

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 Code of Conduct Handbook 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 Handbook. We will post on our website any amendments to the Code of Conduct Handbook or waivers of the Code of Conduct Handbook 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 200, Englewood, Colorado 80112.

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 allowingso that our CEO tocan focus on our day-to-day business, while allowing the Chairman of the Board to lead the Board in its fundamental role of providing advice to and independent oversight of management. On April 8, 2013, Keith Alessi transitioned from CEO to Executive Chairman of the Board. Simultaneously, Robert King transitioned from President and Chief Operating Officer to President and CEO. As Executive Chairman, Mr. Alessi continued to play an important role in the Company's strategic direction, chaired all regular sessions of the Board and, in consultation with the Lead Independent Director and with input from the CEO, set the agenda for Board meetings. In light of the recent announcement relating to the Sherritt acquisition,March 21, 2014, Mr. Alessi was asked to resume his service in an employee capacity as CEO to facilitate an efficient transition of the Sherritt business into Westmoreland. Accordingly, Mr. Klingaman formerly our Lead Independent Director, was elevated to the Chairman of the Board position.position where he chaired all regular and independent executive sessions of the Board 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 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 for us. Further, the Board is empowered to hire its own advisors 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. On an annual basis, pursuant to such committee's charters, the committees assess risk and have specific conversations with senior management regarding the risks faced.

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 Messrs.Mr. Alessi, and King, are independent. The independent directors meet during most Board meetings 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 Messrs. Klingaman,Hutchinson, Bachynski, Mackus and Packwood, and Hutchinson, the 20132014 Audit Committee members, each met such heightened independence standards. Beginning in July 2013, each member of the Compensation and Benefits Committee was required to also meet heightened independence standards under the NASDAQ Marketplace Rules listing standards. In 2013,The Board determined that Ms. Hamilton and Messrs. Hutchinson, Scharp and Mackus, the members of the2014 Compensation and Benefits Committee members, met such heightened independence standards.

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 200 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.

As of the date of this proxy statement,Throughout 2014, our Board consistsconsisted of eight directors and the following four committees: (1) Audit; (2) Compensation and Benefits; (3) Nominating and Corporate Governance; and (4) Executive. 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. On February 20, 2015, the Board created a Health, Safety and Environment committee, which has begun drafting a charter and setting goals for the year. During 2013,2014, the Board held thirteeneleven meetings. Each of our current directors attended at least 90%86% of the aggregate of all Board and applicable committee meetings held during the period that he or she served as a director.director, with six directors attending 100%. All directors attended the last Annual Meeting of Stockholders and all are expected to attend this year's Annual Meeting of Stockholders. The 20132014 committee membership, number of meetings held during 20132014 and function of each of the committees are described in the table below.

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 accounts. 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. The Board has determined that Michael G. Hutchinson qualifies as an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K.

Under its charter, the Audit Committee assists the Board of Directors in fulfilling the Board's responsibility for oversight of Westmoreland's financial reporting process and practices, and its internal control over financial reporting. Management is primarily responsible for our financial statements, the reporting process and assurance for the adequacy of the internal control over financial reporting. Our independent registered public accounting firm, Ernst & Young LLP, is responsible for performing an independent audit of Westmoreland's financial statements and internal control over financial reporting, and for expressing an opinion on the conformity of our audited financial statements to generally accepted accounting principles used in the United States and the adequacy of our internal control over financial reporting.

The Audit Committee has reviewed and discussed with Ernst & Young LLP Westmoreland's audited consolidated financial statements and internal control over financial reporting. The Audit Committee has discussed with Ernst & Young LLP, during the 20132014 fiscal year, the matters required to be discussed by Statement on Auditing Standards No. 16, as amended (Communication with Audit Committees) as adopted by the Public Company Accounting Oversight Board. The Audit Committee has received and reviewed the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding such firm's communications with the Audit Committee concerning independence, and has discussed with the independent accountants their independence.

The Audit Committee discussed with our internal and independent auditors the overall scope and plans for their respective audits. The Audit Committee meets with the independent auditors, with and without management present, to discuss the results of its examinations, the evaluations of our internal controls and the overall quality of our financial reporting. The Audit Committee also has reviewed and discussed the audited financial statements with management.

Based on the reviews and discussions described above, the Audit Committee recommended to the Board that the audited financial statements and assessment of internal controls over financial reporting be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013.2014. The Audit Committee has selected Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2014.2015.

The Compensation and Benefits Committee is responsible for assuring that the Board, our Chief Executive Officer, other executive officers, and our key management 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 2014.2015.

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 its annual review it engaged Pay Governance in January 2014 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 yet provide them a reasonable opportunity to reach the threshold amount, while requiring meaningful growth to reach the target level and substantial growth to reach the maximum level. The amount of growth 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 to employees as a whole.

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

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 cash awards. The use of both time-based and performance-based awards for fiscal 20142015 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.

During 2013,2014, each of Messrs. Hutchinson, Mackus and Scharp, 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 disclosable under Item 404 of Regulation S-K. During 2013,2014, 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.

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 statement and incorporated by reference into Westmoreland's Annual Report on Form 10-K for the fiscal year ended December 31, 2013.2014.

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 stockholders. The committee oversees succession planning. It also 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 stockholders. The committee is responsible for ensuring all director nominees undergo a thorough background check prior to nomination or appointment as a director and to review 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, stockholders or other persons.

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 as to 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 strivesstrive 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.

The Board's retirement policy mandates that directors elected to the Board at our annual meeting retire from the Board at the first annual meeting of stockholders following the director's 75th birthday. The Board grandfathered all directors then serving as a director at the time the policy was adopted in November 2010, making the new retirement policy only applicable to current and future directors who will turn 75 after May 2010.

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 200, 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 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.

During 2013,2014, 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 2013,2014, the Executive Committee held twothree meetings.

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 2013.2014.

In February 2014,2015, the Compensation and Benefits Committee recommended, and the Board approved, the below compensation structure for fiscal year 2014.2015. All non-employee directors receive the “Annual Cash Retainer” in addition to any other retainers they may be entitled for service as the Chair of a committee or for serving as a member of a committee.

In February 2014, the Board adopted new stock ownership guidelines for non-employee directors under which the directors are expected to own a threshold amount of Westmoreland equity. Each non-employee director is now 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 new guidelines.

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, 2013,2014, 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.

At December 31, 2013,2014, we had stock options and stock appreciation rights (“SARs”) outstanding from two stockholder-approved stock plans and one plan that was not approved by stockholders. The 2000 Nonemployee Directors' Stock Incentive Plan is the only plan not approved by stockholders and provided for the grant of stock options to non-employee directors at the time they were first elected to the Board and at the time of each subsequent re-election to the Board. In October 2009, the Board terminated the 2000 Nonemployee Directors' Stock Incentive Plan and several other stock-holder approved plans. The termination of these plans does not impair the rights of any participant under any award granted pursuant to the plans. All new equity issuances, whether to directors or officers, are made out of our stockholder-approved 2007 plan. We intend to make future equity issuances out of the 2014 Equity Incentive Plan, subject to shareholder approval.which was approved by shareholders at our 2014 annual meeting.

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 fiscal year 2013.2014. It discusses the policies and objectives that make up our compensation program, the compensation decisions made in 20132014 and the rationale behind those decisions. This discussion is supplemented by compensation tables and accompanying narratives that follow.

For 2013, the2014, pursuant to SEC requirements, Westmoreland Coal Company's named executive officers were:

Based on Westmoreland's strong 2013 performance andWestmoreland management's significant business accomplishments in transforming the Company in 2014, our Compensation and Benefits Committee (the “Committee”) and Board approved the annual incentive compensation earned by our named executive officers for 20132014 to pay out at as much as 152% ofabove targeted levels. The above-target payout was a resultfor the named executive officers reflects the Committee's and Board's recognition of our free cash flowtheir exceptional performance significantly exceeding the performance target the Board established for 2013.and accomplishments this year. The value of long-term incentive compensation awards granted in 2014 remained static as a percentage of base salary, with any increase in payout merely reflecting an increase in base salary. In 2013,2014, base salaries were increased by amounts we believe are in line with our peer group and reflect the individual officers’ heightened responsibilities. In April 2013, Mr. Alessi assumed a non-employee Executive Chairmanresponsibilities, however they remained below the median of the Board position, which resulted in the elimination of his base salary as an employee. Mr. Alessi qualifies as a named executive officer for his service as Chief Executive Officer during the first three months of 2013. Mr. Alessi's compensation, however, is not included in the Compensation Discussion and Analysis because he did not receive any long-term or annual incentive plan bonuses for 2013. His employee compensation is fully captured by the Summary Compensation Table located on page 29.our peer group.

Our pay 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 to be vested declines 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 annual incentive program (“AIP”) and our long-term incentive program (“LTIP”). The chart below shows base salary, AIP and LTIP compensation, as a percentage of total compensation opportunity (using target awards for fiscal 2013)2014) for our Chief Executive Officer and other named executive officers. 

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.

In 20132014 the Committee made the following decisions and took the following actions with respect to our executive compensation program:

Throughout this Compensation Discussion and Analysis, all individuals who served as Chief Executive Officer and Chief Financial Officerprincipal executive officer or principal financial officer during fiscal year 2013,2014, as well as the other individuals included in the “Summary Compensation Table” on page 2931 of this Proxy Statement pursuant to Securities and Exchange Commission ("SEC") requirements, are referred to as the named executive officers. They were (i) Robert P. King,Keith E. Alessi, our Chief Executive Officer, (ii) Kevin A. Paprzycki, our Chief Financial Officer and Treasurer, (iii) Doug P. Kathol, ourJohn A. Schadan, Executive Vice President, (iv) Joseph E. Micheletti, our SeniorExecutive Vice President, - Coal Operations and (v) Jennifer S. Grafton, our General CounselSenior Vice President, Chief Administrative Officer and Secretary. In addition, Keith E. Alessi is included in certain compensation tables as he served as the principal executive officer from January through early April 2013 in the capacity ofCorporate Secretary, and (vi) Mr. Robert P. King, former Chief Executive Officer. However, Mr. Alessi did not receive an equity award or an AIP award in his executive capacity; therefore, he is not included when discussing the overall executive compensation philosophy for 2013.

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

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 2013,2014, 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.

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 guidelines. The management team is expected to be in compliance with these guidelines within five years of becoming subject to the policy. As of the end of 2014, all named executive officers except for Mr. Schadan (who joined the Company in April 2014) have met the stock ownership guideline. The ownership requirement for our officers is calculated as a multiple of base salary as follows:

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 shareholder interests. In February 2013, the Board of Directors adopted a provision within our Insider Trading Policy that prohibits hedging of Westmoreland stock by any employee or non-employee director.

At this time, the Committee has not adopted a clawback policy for the executive management team. While in full support of such a policy in concept, the Committee is waiting for more formal guidance from the Securities and Exchange CommissionSEC before adoption and implementation of a formal policy.

The Committee considers comparative data of executives’ compensation within our peer group. This process studies trends and comparative practices in executive compensation generally, as well as the specific levels and mix of total compensation for benchmarking purposes. In creating our peer group, we noted that there are few comparably-sized publicly-traded coal companies. In addition, a third of our executive team comes from segments other than mining. The companies in our peer group have at least one of the following characteristics:

Our Committee reviews the composition and appropriateness of our peer group annually. Following a review in early 2013,2014, the Committee determinedadjusted our peer group companies.companies to ensure continued comparability to Westmoreland after the Canadian Acquisition. The Committee is assisted in this decision by our compensation consultant, Pay Governance, whose role is more thoroughly discussed below. The fiscal year 20132014 peer group is made up of the following companies:

Under Section 162(m) of the Internal Revenue Code, we may not be able to deduct certain forms of compensation in excess of $1,000,000 paid per year to our named executive officers who are employed by us at year-end. The Committee believes that it is generally in our best interest to satisfy the requirements for deductibility under Internal Revenue Code Section 162(m). Accordingly, the Committee has taken appropriate actions, to the extent it believes feasible, to preserve the deductibility of long-term performance awards. However, notwithstanding this general policy, the Committee also believes that there may be circumstances when our interests are best served by maintaining flexibility in the way compensation is provided, whether or not compensation is fully deductible under Internal Revenue Code Section 162(m). Accordingly, we reserve the authority to award non-deductible compensation in appropriate circumstances. Further, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued thereunder, no assurance can be given, notwithstanding our efforts, that compensation intended by us to satisfy the requirements for deductibility under Section 162(m) does in fact do so.

The Committee has the authority to retain outside counsel, consultants and other advisors,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 20132014 and recently reengaged the Consultant for fiscal year 2014.2015. 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.

In February 2013,of 2014, the Committee set executive base salaries, annual incentive plan and long-term incentive plan goals for fiscal year 2013 that are discussed below.2014, except for Mr. Alessi whose compensation was set at the time he returned to his role as Chief Executive Officer in March of 2014. Mr. Schadan's base salary, annual incentive plan and long-term incentive plan goals were set in May of 2014 upon his joining Westmoreland following the Canadian Acquisition. Mr. Paprzycki, Ms. Grafton and Mr. Micheletti received salary increases in April of 2014 to reflect the individual officers’ heightened responsibilities.

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 goals set by the Committee. However, whereCommittee, however, certain individuals bonuses are tied to the performance of specific segments of the Company. Where individuals are compensated differently or the reasoning is different, we provide more information.

Mr. King assumedAlessi returned to the role of President and Chief Executive Officer on April 8, 2013.March 21, 2014, and at the same time relinquished his title of Executive Chairman of the Board. The Committee determined Mr. King’sAlessi’s base salary with the assistance of the Consultant, utilizing peer group and market survey data.

The Chief Executive Officer and Executive Chairman proposed, and the Committee approved, a 105%discretionary individual performance payout of $330,000 for Mr. Paprzycki. In 2013,2014, Mr. Paprzycki focused on strengthening Westmoreland’sguided Westmoreland through a senior secured note debt raise of $425 million, followed by a combined senior secured note and term loan debt refinance of $700 million. He led his team's integration of U.S. and Canadian financial reporting along with financial planning and analysis. Mr. Paprzycki continued to lead the investor relations function oversaw our financial reporting and increased analyst coverage. He also implemented a new financial performance report to better manage our investment in working capital and enriched our financial analysis process. Mr. Paprzycki reorganizedof the finance department by centralizing the transactional and operations functions, which resulted in cost savings and greater consistency in the accounting process.Westmoreland. Mr. Paprzycki also played a pivotal roleroles in the Sherritt acquisition,negotiations and completion of both the Canadian Acquisition and WMLP transactions, each of which included extensive due diligence and financial modeling.

The Chief Executive Officer and Executive Chairman proposed, and the Committee approved, a 100%discretionary individual performance payout of $300,000 for Mr. Kathol.Ms. Grafton. In 2013, Mr. Kathol focused2014, Ms. Grafton steered us through the legal matters arising out of acquisition activity for both the Canadian Acquisition and the WMLP transactions, each on pursuing potential acquisition opportunitiesa demanding timeline. In November of 2014, Ms. Grafton was named Senior Vice President and enhancing our sales function. We renewed several critical coal supply contracts under his leadership. Mr. Kathol was a key memberChief Administrative Officer, adding the role of global head of Human Resources in addition to her leadership for Westmoreland in the Sherritt acquisition team. He was also instrumental in reaching an agreementareas of legal, business development, insurance and risk. Ms. Grafton continued her role as Secretary and oversaw corporate compliance with Dominion Virginia that restructured the ROVA contract.charters, policies, and regulations.

The SEC’s calculation of total compensation includes several items that are driven by accounting and actuarial assumptions, which are not necessarily reflective of compensation actually realized by the named executives in 2013.2014. To supplement the SEC-required disclosure, we have included an additional table that shows compensation actually realized by each of the named executives in 2013.2014. Set forth below we have provided a table showing for each named executive: (1) 20132014 compensation actually realized by the named executive, as reported on each named executive’s W-2 form (Realized Compensation Total), and (2) 20132014 compensation as determined under SEC rules (Summary Compensation Total). We believe this information provides a helpful view of compensation actually received by our named executive officers in 2013,2014, and is useful to our stockholders in assessing the alignment between executive pay and our performance. The amounts reported in this table differ from the amounts reported as total compensation in the 20132014 Summary Compensation Table and are not a substitute for those amounts.

The amounts reported in the Realized Compensation Column reflect income for 20132014 shown as reported on the named executives’ W-2 forms. These amounts differ from the amounts reported as total compensation in the 20132014 Summary Compensation Table required under SEC rules and are not a substitute for the amounts reported in the 20132014 Summary Compensation Table. For 2013,2014, realized compensation represents: (1) total compensation, as determined under applicable SEC rules, minus (2) the aggregate grant date fair value of equity awards (as reflected in the Stock Awards and Option Awards columns), minus (3) the year-over-year change in pension value (as reflected in the Change in Pension Value column), plus (4) the value realized in 20132014 from the vesting of RSUs before payment of any applicable withholding taxes. In addition, realized compensation reflects any bonus actually paid in the year shown, whereas total compensation under SEC rules reflects any bonus earned for the year shown. For more information on total compensation as calculated under the SEC rules, see the narrative and notes accompanying the 20132014 Summary Compensation Table set forth on page 29.

The Board is keenly focused on tying executive compensation to our performance. On an annual basis, the management team has a significant portion of its compensation aligned with key financial metrics and performance indicators. These metrics are approved by the Committee in February of each year. In 2013,2014, the Committee elected to tie the financial component of the management team’s short-term AIP bonus to the free cash flow metric. DueAfter the Canadian Acquisition, certain of our named executive officer's financial components were tied to extraordinary performance by the management team and Westmoreland in 2013, thejust U.S. mines, U.S. consolidated or Canadian consolidated free cash flow, while others' financial component of the team’s short-term bonus paid out at 152%.was based on a consolidated global Westmoreland metric.

Beginning in 2011, the Committee began issuing 50% of the long-term incentive component of compensation in the form of performance-based awards. These awards cliff vest over three years and pay out if the threshold goal has been met. If the team

The following tables set forth information regarding the fiscal 20132014 compensation for our Chief Executive Officer, Chief Financial Officer, our other three most highly compensated executive officers who were serving as executive officers at the end of fiscal 20132014 (collectively, our “named executive officers”). Columns required by SEC rules are omitted where there is no amount to report. The table also sets forth information regarding the fiscal 20112012 and/or fiscal 20122013 compensation for those individuals who were also named executive officers in fiscal 20112012 and/or fiscal 2012.2013.

Non-equity incentive plan compensation amounts are annual cash incentives under our Annual Incentive Plan (“AIP”). The AIP is funded based on various components, which are unique to each named executive officer, and may include our annual budgeted EBITDA, annual budgeted free cash flow, MSHA average for reportable incident rate for surface mines in the coal industry, and individual performance goals, all of which are discussed above in “Compensation Discussion and Analysis.”

Values for stock grants in the summary compensation table and numbers included in the grants of plan-based awards table relate to restricted stock and restricted stock units granted to the named executive officers under our stockholder-approved 2007 plan.and 2014 plans. The plan is administered by the Compensation and Benefits Committee, which has retained the exclusive authority to make awards under the plan. The Committee approves all long-term incentive grants to named executive officers other than the CEO, whose grants are approved by the Board. The Committee also approves the overall grant pool for all other participants. Due to a shortage of available stock in the 2007 stockholder-approved equity plan, the committee awarded cash awards in lieu of stock awards to the named executive officers, other than the CEO, as well as the other grant pool participants.

The primary purpose of the long-term incentive plan is to link compensation with the long-term interests of stockholders. For the 20132014 stock award granted to Mr. King,Named Executive Officers, the time-based restricted stock units representing 50% of the total award were granted on April 1, 2013,June 2, 2014, and vest over three years with 33% of the shares becoming vested and available for release each year on April 1st. Full vesting occurs on April 1, 2016. The cash awards granted to the named executive officers work on the same schedule with 33% of the award becoming vested and released each year on April 1st. For the 2013 stock award granted to Mr. King, the performance-based restricted stock units representing the other 50% of the total award were also granted on April 1, 2013June 2, 2014 and will cliff vest on April 1, 2016,2017, upon achievement of a three-year cumulative free cash flow goal that was set by the Compensation and Benefits Committee in early 2013. The performance-based cash awards granted to2014. Beginning in 2015, Westmoreland will tie the named executive officers work on the same guidelines with a cliff vest on April 1, 2016, upon achievement of the same three-year cumulative free cash flow goal.three year performance-based equity awards to a relative total shareholder return calculation. Awards not yet released are forfeited upon separation.