SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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Westmoreland Coal Company
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2 North Cascade Avenue,
2nd Floor
Colorado Springs, Colorado 80903
![[i10835002.gif]](https://capedge.com/proxy/DEF 14A/0001447572-10-000007/i10835002.gif)
March 29, 2010
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To TheWestmoreland Stockholders:
The Annual Meeting of Stockholders of Westmoreland Coal Company will be held at the Corporate Offices of Westmoreland Coal Company,our corporate offices located at 2 North Cascade Avenue, 2nd Floor, Colorado Springs, Colorado, 80903 on Thursday, May 15, 200820, 2010 at 8:30 a.m. Mountain Daylight Time, for the following purposes:
1.
The election by the holders of Common Stock of twofour directors to the Board of Directors to serve for a one-year term;
2.
The election by the holders of Series A Convertible Exchangeable Preferred Stock, each share of which is represented by four Depositary Shares, of two additional directors to the Board of Directors to serve for a one-year term;
3.
The ratification of the appointment by the Audit Committee of Ernst & Young LLP as principal independent auditor for fiscal year 2010; and
4.
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 April 4, 2008March 26, 2010 will be entitled to notice of and to vote at the meeting and any postponement or adjournment of the meeting. The proxy statement that follows contains more detailed information as to the actions proposed to be taken.
YOUR VOTE IS IMPORTANT.Whether or not you plan to attend the 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 received 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 annual meeting regardless of whether you attend in person.
This proxy statement, the annual report to stockholders and the proxy voter card are being mailed on or about March 29, 2010.
By Order of the Board of Directors,
/s/ Morris W. Kegley
Morris W. Kegley
General Counsel and Secretary
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 20, 2010. This notice, the accompanying proxy statement and Westmoreland Coal Company’s Annual Report to stockholders for the fiscal year ended December 31, 2009 are available atwww.proxyvote.com. |
PROXY STATEMENT
Page
General Information about the 2010 Annual Meeting of Stockholders | ||||
Questions and Answers about the 2010 Annual Meeting of Stockholders | ||||
Proposal 1 — Election of Directors by the Holders of Common Stock | ||||
Proposal 2 — Election of Directors by the Holders of Series A Preferred Stock | ||||
WESTMORELAND COAL COMPANY2nd Floor
2 North Cascade Avenue,
2nd Floor
Colorado Springs, Colorado 80903
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To be held May 20, 2010
This proxy statement is This proxy statement and the enclosed proxy voter card relating to the Annual Meeting of Stockholders are first being mailed and made available to stockholders on our website on or about March 29, 2010. As of March 26, 2010, the record date, members of Westmoreland Coal Company’s management and directors are the record and beneficial owners of a total of 267,853 shares (approximately 2.5%) of Westmoreland Coal Company’s outstanding common stock and 7,850 (approximately 1.2%) of Westmoreland Coal Company’s outstanding depositary shares. It is management’s intention to vote all of its shares in favor of each matter to be considered by the stockholders. QUESTIONS AND ANSWERS ABOUT THE 2010 ANNUAL MEETING OF STOCKHOLDERS Who can vote at the meeting? Only stockholders who owned our common stock or depositary shares, each of which represents one quarter of a share of Series A Convertible Exchangeable Preferred Stock, $1.00 par value (“depositary shares”) of record at the close of business on March 26, 2010 are entitled to vote. Each holder of common stock is entitled to one vote per share. Each holder of depositary shares is entitled to one vote per share. The common stock and depositary shares will vote separately on Proposal No. 1 (only common) and Proposal No. 2 (only depositary), but will vote together as a single class on Proposal No. 3. There were 10,619,309 shares of common stock and 640,515 depositary shares outstanding on March 26, 2010. What constitutes a quorum for the meeting? 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 meeting, shall constitute a quorum to conduct business at the 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 annual meeting. How do I vote? · Via the Internet at www.proxyvote.com; · By phone 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 Computershare Trust Company, 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 by Broadridge Financial Solutions, Inc. 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 meeting without obtaining authorization from your stockbroker, bank or other nominee, and you need to submit voting instructions to your stockbroker, bank or other nominee in order to cast your vote. Generally, you will receive instructions from your stockbroker, bank or other nominee that you must follow in order to have your shares voted. 1 We encourage you to register your vote via the Internet. If you attend the meeting, you may also submit your vote in person 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 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 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 What vote is required to approve each item? The election of directors (Proposals 1 and 2) requires that each director receive the affirmative vote of a plurality of the How are broker non-votes treated? What is the effect of not casting my vote? Morris W. Kegley and Jennifer S. Grafton were named by our Board of Directors (the “Board”) as proxy holders. They will vote all proxies, or If you hold your shares in street name, it is critical that you cast your vote if you want it to count in the election of directors (Proposals 1 and 2). In the past, if you held your shares in street name and you did not indicate how you wanted your shares voted in the election of directors, your bank or broker was allowed to vote those shares on your behalf in the election of directors as they felt appropriate. However, recent changes in stock exchange rules removed the ability of your bank or broker to vote your uninstructed shares in the election of directors on a discretionary basis. Thus, if you hold your shares in street name and you do not instruct your bank or broker how to vote in the election of directors, no votes will be cast on your behalf. Your bank or broker will, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointment of our independent registered public acc ounting firm (Proposal 3). How are you handling solicitation of votes? The accompanying proxy is solicited on behalf of our Board. In addition to solicitations by mail, Do I have any rights of Under Delaware law, stockholders are not entitled to Where can I find the voting results of the meeting? We will announce preliminary general voting results at the meeting and 2 How do I submit a stockholder proposal for the 2011 annual meeting? Any proposal that a stockholder wishes to be considered for inclusion in our proxy statement and proxy card for the 2011 Annual Meeting of Stockholders (the “2011 Annual Meeting”) must be submitted to the Secretary at our offices, 2 North Cascade Avenue, 2nd Floor, Colorado Springs, Colorado 80903, no later than December 7, 2010. 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 2011 Annual Meeting, but does not wish to have the proposal considered for inclusion 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 21, 2011 and no later than February 20, 2011, and the stockholder must comply with the provisions of our bylaws. Does the Company offer an opportunity to receive future proxy materials electronically? Yes. If you are a stockholder of record or · If you vote online, you may sign up for electronic delivery at that time; or · You may sign up at any time by visitinghttp://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 How can I get electronic access to the proxy materials and This proxy statement and our 2009 Annual Report are available atwww.proxyvote.com. 3 Table of DIRECTORS, DIRECTOR NOMINEE AND EXECUTIVE OFFICERS Name Age Director/ Executive Officer Since Position Keith E. Alessi 55 2007 Director; President and Chief Executive Officer Thomas J. Coffey 57 2000 Director –Independent Michael R. D’Appolonia 61 2008 Director– Independent Richard M. Klingaman 74 2006 Director– Independent William M. Stern 64 2000 Director– Independent Frank T. Vicino Jr. 46 Nominee Director Nominee– Independent Morris W. Kegley 62 2007 General Counsel and Secretary Todd A. Myers 46 2002 Vice President of Coal Sales John V. O’Laughlin 59 2005 Vice President of Coal Operations Kevin A. Paprzycki 39 2008 Chief Financial Officer Director Information All our directors bring to our Board a wealth of leadership experience derived from their service as executives of corporations. Certain individual qualifications and skills of our directors that contribute to the Board’s effectiveness as a whole are described in the following paragraphs. Keith E. Alessi currently serves as a director and our President and Chief Executive Officer. Since he began working for us in 2007, he has assumed various roles including Executive Chairman and Interim President and Interim Chief Executive Officer. In addition to his work with us, Mr. Alessi has been an adjunct lecturer at the Ross School of Business at the University of Michigan since March 2002. Prior to Westmoreland, Mr. Alessi was Chief Executive Officer of Lifestyle Improvement Centers, LLC from April 2003 to May 2006. Mr. Alessi currently serves as a member of the board of directors of Town Sports International Holdings, Inc., H&E Equipment Services, Inc. and MWI Veterinary Supply, Inc. Mr. Alessi’s wealth of experience in turnaround management, including his roles as Vice-Chairman of Farm Fresh and Chief Executive Officer of Jackson Hewitt and Telespectrum Worldwide, Inc., gives him unique insights into the hurdles, challenges and opportunities we face and provides him the necessary leadership experience to lead us during this integral transition period. In addition, Mr. Alessi has extensive public company board experience, including chairing numerous audit committees and serving on compensation, corporate governance and nominating committees. Thomas J. Coffeyhas been a Partner of B2B CFO Partners, LLC, a professional financial services organization, since 2005. Prior to 2005, Mr. Coffey was Vice President-Finance, Global Infrastructure Services from 1999 to 2005 and Vice President-Operations Analysis from 1998 to 1999 of Unisys Corporation, a technology services company. Mr. Coffey has over 25 years of financial and operational management experience working with both public and private companies. He has served as the Chief Financial Officer of a Michael R. D’Appolonia is President and Chief Executive Officer of Mr. D’Appolonia’s experience as Chief Executive Officer of a large global organization brings to our Board the perspective of a leader facing the same set of current external economic, social and governance issues. In addition, Mr. D’Appolonia brings to the Richard M. Klingaman has been a consultant to the natural resources and energy industries since May 1992. Prior to consulting, Mr. Klingaman was a senior executive with Penn Virginia Corporation, a natural resources company specializing in coal, oil, natural gas, timber, lime and limestone. 4 Mr. Klingaman’s decades of experience in the mining and energy industries, including as Senior Vice President of a large natural resources company, provides him with an intimate knowledge of our operations and our industry. In addition, he brings knowledge of coal by-products and non-aqueous coal beneficiation techniques. William M. Sternhas been Executive Vice President of Stern Brothers & Company, a broker-dealer since 1999, and has been employed in various capacities, including as a senior executive, in the banking industry for several decades. Mr. Stern’s current leadership of a broker-dealer, past senior management experience with various banking organizations and expertise in financial markets and financial analysis is valuable to our Board’s discussions and oversight of the Company’s Frank T. Vicino, Jr.is the President of Mr. Vicino is the The enclosedsolicited on behalf ofbeing furnished by the Board of Directors of Westmoreland Coal Company a Delaware corporation (“Westmoreland” orto holders of our common stock and depositary shares in connection with the “Company”), for usesolicitation by the Board of Directors of proxies to be voted at the Annual Meeting of Stockholders of Westmoreland Coal Company to be held at our corporate offices located at 2 North Cascade Avenue, 2nd Floor, Colorado Springs, Colorado, 80903 on Thursday, May 15, 2008.20, 2010 at 8:30 a.m. Mountain Daylight Time, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders and this proxy statement.ait prior to the meeting, your shares will be voted at the meeting in the manner set forth in this proxy statement or as otherwise specified by you.its exercisethe proxy is exercised by either filing with our Secretary a written notice to the Secretary of the Company, by executing and deliveringrevocation or a duly executed proxy withcard bearing a later date or by voting in person at the meeting. AttendanceThe powers of the proxy holders will be suspended if you attend the meeting in person and so request. However, attendance at the meeting will not, by itself, causerevoke 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 meeting to be effective.proxy.votes cast with respect to that director at the annual meeting. This means that, with respect to each Proposal, the nominees who receive the largest number of “FOR” votes cast will be elected. Neither broker non-votes nor abstentions will have any effect on the election of directors. The Company will pay the expenseaffirmative vote of this solicitation. This proxy statement and the enclosed proxy were first sent toall stockholders, having a majority of the Companyvotes present in person or represented by proxy at the meeting and entitled to vote on the matter, are necessary to ratify the appointment of Ernst & Young LLP (Proposal 3). Abstentions will have the same effect as a vote against this proposal. Cumulative voting is not permitted for any of the proposals included in this proxy statement.about April 16, 2008.record an abstention or withholding, in accordance with the directions on the proxy. If no contrary direction is given, the shares will be voted as recommended by the Board. If you hold your shares in street name through a stockbroker, bank or other nominee rather than directly in your own name, your broker or nominee is not permitted to exercise voting discretion with respect to the election of directors. If you do not give your broker or nominee specific instructions, your shares will not be voted on this matter. As brokers may vote on the ratification of our auditors, shares represented by such “broker non-votes” will be voted in favor of Proposal 3.the Company’sour directors, officers, and employees may solicit proxies by telephone,e-mail facsimile, and personal interview, but will receive no additional compensation for doing so. The CompanyWe 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. The CompanyWe will reimburse those brokerage houses and other persons for their reasonable expenses for such services.Stockholdersrecord at the close of business on April 4, 2008 (“record date”) will beappraisal?votedissenters’ rights on any proposal referred to herein.any postponementpublish final detailed voting results on a Form 8-K that we will file within four business days after the meeting.adjournmenta member of the meeting. On401(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 record date, the Company had outstanding 9,456,865 shares of Common Stockmaterials are available, along with a par valueweb address for viewing the materials and instructions for voting by telephone or on the Internet. If you have more than one account, you may receive separate e-mail notifications for each account.You may sign up for electronic delivery in two ways:$2.50 per shareyour broker.640,515 Depositary Shares (eachthe annual report?which represents one quarterContentssharepublic company, worldwide divisional Chief Financial Officer of Series A Convertible Exchangeable Preferred Stocka global technology company and a Partner with a par valueBig 4 accounting firm. His extensive experience is invaluable to our Board’s responsibility for financial and accounting issues.$1.00 per share).Common StockWashington Group International, Inc. from 2001 to 2007.Series A Preferred Stock constitute allBoard an extensive knowledge of the construction industry and alternative energy solutions, including solar power and storage solutions for solar and wind energy. Mr. D’Appolonia also has extensive public company board experience, including chairing a compensation committee and serving on audit, corporate governance and nominating committees.voting securities. Undercapital and liquidity needs. In addition, Mr. Stern vice-chaired the CertificateEquity Committee during the Fremont General Company bankruptcy.Designation governingF. Vicino Drywall Inc. and F. Vicino and Co. Inc., contracting and construction companies located in South Florida.Series A Preferred Stock, the holders of the Series A Preferred Stock are entitled to vote on any matter on which the holders of Common Stock are entitled to vote, except that, when six or more quarterly dividends are accumulated and unpaid — as is presently the case — the holders of the Series A Preferred Stock do not vote with the holders of Common Stock for the election of directors and instead vote separately to elect two directors.FOR THIS REASON, ONLY HOLDERS OF COMMON STOCK WILL BE PERMITTED TO VOTE ON PROPOSAL 1 AND ONLY HOLDERS OF SERIES A PREFERRED STOCK WILL BE PERMITTED TO VOTE ON PROPOSAL 2.We refer to the candidates nominated for election by the holderslargest individual shareholder of our Common Stock as the Common Stockholder Nominees and the candidates nominated for election by the holders of our Series A Preferred Stock as the Depositary Stockholder Nominees.Holders of Depositary Shares vote with respect to Proposal 2 by instructing the depositary either to vote the Series A Preferred Stock for director nominees or to withhold votes from director nominees. Because each share of Series A Preferred Stock is entitled to four votes, and because each share of Series A Preferred Stock is represented by four Depositary Shares, we occasionally speak in this proxy statement as if each Depositary Share voted directly and had one vote.Separate proxy cards are being sent to holders of Common Stock and to holders of Depositary Shares. If you hold only shares of Common Stock, you will be sent only the proxy card for holders of Common Stock. If you hold only Depositary Shares, you will be sent only the proxy card for holders of Depositary Shares. If you own both Common Stock and Depositary Shares, you will be sent both proxy cards and you should complete both proxy cards if you wish to vote your respective interests in both the Common Stock and Depositary Shares.
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| Business Experience During Past Five Years and | Director | |||||||||||
Name | Other Directorships | Age | Since | Current Committees(1) | ||||||||
| Keith E. Alessi | President and Chief Executive Officer of the Company (August 2007 to present); Interim President and Interim Chief Executive Office of the Company (May 2007 to August 2007); member of the Board of Directors and Chairman of the audit committee of Town Sports International Holdings, Inc. (April 1997 to present); member of the Board of Directors and Chairman of the audit committee of H&E Equipment Services, Inc. (November 2002 to present); member of the Board of Directors of MWI Veterinary Supply, Inc. (2003 to present); adjunct lecturer at the Ross School of Business at the University of Michigan (March 2002 to present); Chief Executive Officer of Lifestyle Improvement Centers, LLC (April 2003 to May 2006). | 53 | 2007 | Executive | ||||||||
| Thomas J. Coffey | Partner, B2BCFO/CIO, LLC, a professional services organization (December 2005 to present); Vice President-Finance, Global Infrastructure Services (July 1999 to May 2005) and Vice President-Operations Analysis (April 1998 to July 1999) of Unisys Corporation, a technology services company; Senior Vice President, Chief Financial Officer and Treasurer of Intelligent Electronics, Inc., a technology distribution company (1995 to September 1997); and Partner of KPMG (1985 to 1995). | 55 | 2000 | Audit (Chairman), Compensation and Benefits, Nominating and Corporate Governance | ||||||||
4
Executive Officer Information
Keith E. Alessi, our President and Chief Executive Officer, is discussed above under “Director Information.”
Kevin A.Paprzycki joined Westmoreland as Controller and Principal Accounting Officer in June 2006 and was named Chief Financial Officer in April 2008. Prior to Westmoreland, he was Corporate Controller at Applied Films Corporation from 2005 to 2006. Mr. Paprzycki became a certified public accountant in 1994 and a certified financial manager and certified management accountant in 2004.
Morris W. Kegley joined Westmoreland in October 2005 as Assistant General Counsel and was named General Counsel in August 2007. Prior to Westmoreland, he worked in the proxy card intendlegal department of Peabody Energy Company from 2004 to vote for the election2005. He is a member of the Depositary Stockholder Nominees named below. Each Depositary Stockholder Nominee has consentedbar of Indiana, Illinois, Wyoming, and Colorado.
Todd A. Myers joined Westmoreland in January 2000 as Vice President, Marketing and Business Development and, in 2002, became Vice President, Sales and Marketing, a position that is now called Vice President, Coal Sales. Prior to being namedWestmoreland, Mr. Myers was Senior Consultant and Manager of the environmental consulting group of a nationally recognized energy consulting firm, specializing in coal markets, independent power development, and environmental regulation.
John V. O’Laughlin joined Westmoreland in February 2001 as Vice President, and was promoted to serve if elected. If any Depositary Stockholder Nominee should decline or be unableVice President of Coal Operations in May 2005. Prior to serve,Westmoreland, Mr. O’Laughlin was Vice President of Mine Operations for Washington Group International, formerly known as Morrison-Knudsen Co.
We are committed to maintaining the persons namedhighest 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 proxy will vote for the election of such substitute nominee as shall have been recommended by the Nominating and Corporate Governance Committee and designated by the Board of Directors. The Company has no reason to believe that any Depositary Stockholder Nominees will decline or be unable to serve. The holders of the Company’s Common Stock are not entitled to vote for the election of Depositary Stockholder Nominees.
| Business Experience During Past Five Years and | Director | |||||||||||
Name | Other Directorships | Age | Since | Current Committees(1) | ||||||||
| Richard M. Klingaman | Consultant, natural resources and energy (May 1992 to present); Retired Senior Vice President, Penn Virginia Corporation, a natural resources company specializing in coal, oil, natural gas, timber, lime and limestone (1977 to 1992); Director of Westmoreland Resources, Inc. (1980 to 1993). | 73 | 2006 | Executive, Audit | ||||||||
| William M. Stern | Executive Vice President, Stern Brothers & Company, a broker-dealer (1999 to present); Vice President, Mercantile Bank Capital Markets Group, a banking company (1998 to 1999); Senior Vice President, Mark Twain Capital Markets Group, a banking company (1983 to 1998). | 62 | 2000 | Audit, Compensation and Benefits | ||||||||
5
Board Structure and Risk Oversight
The Board separated the positions of Chairman of the Board and Committees
5
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 and weather conditions. Management is responsible for the day-to-day management 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 that full and open communication between management and the Board is essential for effective risk management and oversight. Our Chairman talks regularly with our CEO to discuss strategy and the risks facing us. Senior management attend the quarterly board meetings and are 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 has held twenty-four meetings during 2007, including four meetings held jointlya strategic planning session with senior management to discuss strategies, key challenges, and risks and opportunities for us.
While the Board is ultimately responsible for our risk oversight, our Audit Committee and one meeting held jointly with the Compensation and Benefits Committee. AllCommittee 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, as well as succession planning for our directors attended in person, or by telephone, all of the meetingsand executive officers.
Committees of the Board of Directors and all
As of the date of this proxy statement, our Board has five directors and the following five standing committees: (1) Audit; (2) Compensation and Benefits; (3) Nominating and Corporate Governance; (4) Pricing; and (5) Executive. The current committee membership, the number of meetings during the last fiscal year and the function of each of the standing committees are described below. Each of the standing committees, except for the Pricing and Executive Committee, operate under a written charter adopted by the Board. Allof the committee charters are available on our website at www.westmoreland.com. During fiscal year 2009, the Board held byeight meetings. Each director serving during fiscal year 2009 attended at least 75% of the aggregate of all committees on which they served during 2007Board and which wereapplicable standing committee meetings held during the time they were members of the Board. All director nominees attended our 2007 annual meeting of stockholders. Resolutions adopted by the Board provideperiod that directorshe served as a director. Directors are expected to attend the annual me eting of stockholders. All directors attended the last annual meeting of stockholders.
Name of Director |
| Audit |
| Compensation and Benefits |
| Nominating and Corporate Governance |
| Pricing |
| Executive |
Non-Employee Directors: |
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|
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Thomas J. Coffey |
| Chair |
| Member |
| Member |
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|
Michael R. D’Appolonia |
|
|
| Chair |
|
|
|
|
| Member |
Richard M. Klingaman |
| Member |
| Member |
|
|
| Member |
| Member |
William M. Stern |
| Member |
|
|
| Chair |
|
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|
Employee Director |
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Keith E. Alessi |
|
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|
| Mem ber |
| Chair |
Number of Meetings in Fiscal 2009 |
| 5 |
| 5 |
| 3 |
| 0(1) |
| 0 |
(1)The Pricing Committee acted only by unanimous written consent in May 2007. Messrs. Thomas W. Ostrander and Donald A. Tortorice were elected to the Board at our 2006 annual meeting. Mr. Ostrander chose not to stand and Mr. Tortorice was not nominated for re-election at the 2007 annual meeting. Mr. Seglem served as Chairman of the Board through May 1, 2007. In May 2006, Mr. Robert E. Killen was named Vice-Chairman. Effective May 2, 2007, Mr. Killen was named interim Non-executive Chairman of the Board, and effective August, 2007, Mr. Killen was named Non-executive Chairman of the Board. At that time the Board concluded that the Vice-Chairman position was no longer necessary because of the smaller size of the Board and because Mr. Killen was not a corporate officer. Mr. Alessi is the only member of the Board who is also an employee of the Company.
Audit Committee
The Audit Committee provides oversight of the Boardquality and integrity of Directors met ten times during 2007, including four meetings held jointly with the Board of Directors.our accounting, auditing and financial reporting practices. The committee was comprisedexercises its oversight obligations through regular meetings with management, the director of Messrs. Coffey (Chairman), Sterninternal controls and Ostrander (through his tenure on the Board which ended in August 2007) and Mr. Klingaman (beginning in August 2007). The Audit Committee, which reports to the Board of Directors, approves the appointment of our independent registered public accounting firm, monitors the independence and directs the performanceErnst & Young LLP. The Audit Committee is also responsible for oversight of our independent registered publicrisks relating to accounting firm, and monitors the integrity of ourmatters, financial reporting process and systems of internal controls regarding finance, accounting, and legalregulatory compliance. It also reviewsTo satisfy these oversight responsibilities, the committee separately meets with our Chief Financial Officer, Director of Internal Controls, 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 registered publicauditors, the status of material litigation, accounting firm the audit plan for our company, our internal accounting controls,changes that could affect our financial statements and the independent registered public accounting firm’s report to the Audit Committee.proposed audit adjustments. The Board of Directors has determined that Thomas J. Coffey is an “audit committee financial expert” as defined in Item 407(d)(5) ofRegulation S-K.
6
Audit Committee Report
Management is responsible for our internal controls and the financial reporting process. Ernst & Young LLP is our independent registered public accounting firm and is responsible for performing an independent audit of our consolidated financial statements in accordance with generally accepted auditing standards and for issuing audit reports on the consolidated financial statements and the assessment of the effectiveness of internal controls over financial reporting. The Audit Committee’s responsibility is to monitor and oversee these processes on behalf of the Board.
In this context, the committee has discussed with Ernst & Young the matters required by Statement of Auditing Standards No. 114,The Auditors Communication With Those Charged With Governance,and has received from and discussed with Ernst & Young the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the audit committee concerning independence, and discussed with Ernst & Young their independence from Westmoreland and its management.
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 also determined that each member ofreviewed and discussed the audited financial statements with management.
Based on the reviews and discussions described above, the Audit Committee including Mr. Coffey, is “independent” underrecommended to the American Stock Exchange’s listing standards, Section 10ABoard 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 Securities Exchange Act of 1934, as amended, or the Exchange Act, andRule 10A-3 thereunder. A copy of thefiscal year ended December 31, 2009. The Audit Committee Charter can be found in the Investor Relations section ofhas selected Ernst & Young LLP as our web site at www.westmoreland.com.
Thomas J. Coffey, Chairman
Richard M. Klingaman
William M. Stern
Compensation and Benefits Committee
The Compensation and Benefits Committee of the Board of Directors met four times during 2007 including one meeting held jointly with the Board of Directors. Through August 2007, the committee was comprised of Messrs. Tortorice (Chairman), Armstrong (until his resignation from the Board in June 2007), and Klingaman. Effective August 2007 the committee was comprised of Messrs. Killen (Chairman), Stern, and Coffey. Each member of the Compensation and Benefits Committee is “independent” under the American Stock Exchange’s listing standards. This committee is responsible for assuring that the Board, of Directors, various committee chairpersons and committee members, 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. The
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Compensation and Benefits Committee Interlocks and Insider Participation
During 2007,2009, each of Messrs. Armstrong, Klingaman, Tortorice, Killen, Stern,Coffey and CoffeyD’Appolonia served on our Compensation and Benefits Committee. None of these directors was a current or former officer or employee of our company, and none had any related person transaction involving our company. During 2007,2009, 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 Committee Risk Assessment
In early 2010, utilizing various risk assessment tools provided by Buck Consulting, the committee thoroughly reviewed our compensation policies and practices for all employees, including executive officers. As part of the risk assessment, the committee reviewed our compensation programs for certain design features that have been identified by experts as having the potential to encourage excessive risk-taking such as compensation mix overly weighted toward annual incentives and unreasonable goals or thresholds. The committee determined that, for all employees, our compensation programs do not encourage excessive risk and instead encourage behaviors that support sustainable value creation. The committee, with the assistance of Buck Consulting, intends to continue, on an on-going basis, a process followedof thoroughly reviewing our compensation policies and programs to determine if any risk mitigation programs should be put into place to further discourage imprudent risk-ta king activities.
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Compensation 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 below, be included in this proxy statement.
Michael R. D’Appolonia, Chairman
Thomas J. Coffey
Richard M. Klingaman
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 stockholders. The committee also provides oversight on corporate governance matters and provides for the evaluation of Board, committee, 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 to identify and evaluate director candidates when a vacancy exists or is anticipated includes invitations to Board members for recommendations, the collection of information about individuals recommended, meetings to evaluate biographical information and background material relating toconsiders various potential candidates for director and interviews of selected candidatesemploys the same process for evaluating all can didates, including those submitted by membersstockholders. 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 Board.
In considering whether to recommend any particular candidate for inclusion in the Board’s slate of recommended director nominees, the Nominating and Corporate Governance Committee takes into consideration a number of criteria which include the candidate’s integrity,include: professional work experience; skills; expertise; diversity; personal and professional integrity; character; temperament; business acumen, knowledgejudgment; time availability in light of our business and industry, maturity, experience, diligence, potentialother commitments; dedication; conflicts of interest, willingness to serve as a directorinterest; and regularly attend and participate in Board meetings, and the ability to act in the interests of all stockholders.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 divers e viewpoints. 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
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On March 1, 2010, the Board adopted a retirement policy for directors mandating that directors elected to the Board at our annual meeting will be required to retire from the Board at the first annual meeting of stockholders following the director’s 75th birthday. The Board grandfathered all current directors who will turn 75 prior to the 2010 annual meeting, making the new retirement policy only applicable to current and future directors who will turn 75 following our 2010 annual meeting.
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, 2 North Cascade Avenue, 2nd Floor, Colorado Springs, CO 80903. Assuming that appropriate biographical and background material has been provided on a timely basis, the committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others. If the Board determines to nominate a stockholder-recommended candidatecan didate and recommends his or her election, then his or her name will be included in our proxy statement for the next annual meeting.
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Stockholders also have the right under our bylaws to nominate director candidates directly, without any action or recommendation on the part of the Corporate Governance and Nominating Committeecommittee 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 for election as a director must give notice to us within the specified time period specified in such section, and the notice must includethat includes the information about the stockholder and the proposed nominee required inby the bylaws. Any stockholder wishing to nominate a candidate for election to the Board without any action or recommendation ofpursuant to the Nominating and Corporate Governance Committee or the Boardbylaw provision must strictly comply with the procedures specified in Section 2.6 of the bylaws. Candidates nominated by stockholders in accordance with thethese procedures set forth in the bylaws will not be included in our proxy statement for the next annual meeting.
Other Committees
During 2009, the Board had two other standing committees in addition to the committees set forth above: the Executive Committee and the Pricing Committee. The Executive Committee is authorized to act on behalf of the Board during periods between Board meetings. During 2009, the Executive Committee held no meetings. The Pricing Committee acts in the event of offerings of the Company’s securities with respect to matters such as determining the price and terms at which such securities shall be sold to underwriters and the public. During 2009, the Pricing Committee held no meetings, but acted by unanimous written consent on several occasions with respect to the contribution of shares to our pension plans.
Director Independence
The NYSE Amex listing standards generally define an “independent director” as a non-employee director who is affirmatively determined by the Board not to have a material relationship with the listed company that would interfere with the exercise of independent judgment. Our Board has determined that each of our directors, with the exception of our Chief Executive Officer, is independent as defined by the NYSE Amex. The independent directors meet during most Board meetings in separate executive session without management present. The Chairman of the Board, who is an independent director, presides over these meetings. The Board considered Mr. Vicino’s 17% ownership of our depositary shares as a factor when considering his independence and did not feel such ownership would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Each member of the Audit Committee must, in addition to the independenc e requirements of the NYSE Amex, meet the heightened independence standards required for audit committee members under the NYSE Amex listing standards, Section 10A of the Securities Exchange Act of 1934, and Rule 10A-3 thereunder. The Board has determined that Messrs. Coffey, Klingaman and Stern each meet such heightened independence standards.
Communicating with the Board
The Board has provided a process that permits stockholders to communicate directly with the Board. Stockholders wishing to communicate with us, including the Board, generally are asked to contact the Vice President-Corporate Relations and Secretary, Diane S. Jones, at Westmoreland Coal Company, 2 North Cascade Ave., 2nd Floor, Colorado Springs, Colorado 80903, diane.jones@westmoreland.com,(719) 448-5814, who is primarily responsible for receiving, managing, monitoring, and responding to stockholder communications.
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DIRECTOR COMPENSATION FOR 2009
Name(1) | Fees Earned Or Paid In Cash($) | Stock Awards($)(2) | Total Compensation($) |
Thomas J. Coffey | 56,000 | 29,992 | 85,992 |
Michael R. D’Appolonia | 42,800 | 29,992 | 72,792 |
Richard M. Klingaman | 81,038 | 29,992 | 111,030 |
William M. Stern | 40,000 | 29,992 | 69,992 |
(1) | Mr. Alessi, who is our Chief Executive Officer and a director, does not receive any additional compensation for his services as a director. |
(2) | 3,631 shares of common stock were awarded to each non-employee director re-elected to the Board in May 2009. Sale of the shares is restricted until May 2010. The grant date fair value of these awards was $8.26 per share. |
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Annual Retainer and BenefitsMeeting Fees
Our non-employee directors, except for our Chairman of the Board and our Chairman of the Audit Committee, generally reviewsreceive an annual cash retainer of $30,000 paid quarterly. Our Chairman of the Board receives a cash retainer of $90,000 and our Chairman of the Audit Committee receives a cash retainer of $41,000. All retainers are prorated in any quarterly period in which the individual is not a director compensation every other year.and/or the Chairman for the entire quarterly period. Each non-employee director also receives $1,000 per meeting attended of the Board and of each committee of which he is a member. Any director who participates in meetings by telephone, rather than in person, receives a reduced fee of $500 per meeting. There is no reduction in fee for meetings in which all directors participate telephonically. In 2006 and prior years,addition, the Company engaged Mercer to assist in its evaluationChairman of director compensation. As part of its analysis, Mercer used the Mercer General Industry Survey and a review of proxy data from a peer group of companies. AtAudit Committee receives an additional $750 per meeting, the requestChairman of the Compensation and Benefits Committee Mercer updated its 2005 report in 2006 and providedreceives an additional report regarding director compensation in December 2006. Also in 2006, our human resources department provided$650 per meeting an d all other committee chairmen receive an additional $500 per meeting attended and chaired. Should multiple meetings of the full Board or a committee with information basedoccur on the National Associationsame day, we pay each director only one meeting fee plus a chairperson fee, if applicable.
Long-Term Compensation
Pursuant to the 2007 equity plan, each non-employee director is entitled to receive, upon his or her election/ re-election to the Board, a grant of Corporate Directors’ 2006 reportrestricted stock equal to $30,000 in value with a one-year restriction on directors’ compensation.
2009 Outstanding Equity Awards at Fiscal Year-End for Directors
| Option Awards | Stock Awards | ||||
Name | Securities Underlying Unexercised Options (#) Exercisable | Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Shares that have not vested (#)(1) | Market value of shares that have not vested as of 12/31/09($)(2) |
Thomas J. Coffey | 10,000 | 0 | 18.00 | 5/31/11 |
|
|
5,000 | 0 | 15.31 | 5/24/12 |
|
| |
1,762 | 0 | 25.13 | 6/23/16 |
|
| |
Michael R. D’Appolonia |
|
|
|
| 1,458 | 12,991 |
Richard M. Klingaman | 3,733 | 0 | 23.98 | 2/27/16 |
|
|
William M. Stern | 5,000 | 0 | 18.00 | 5/31/11 |
|
|
5,000 | 0 | 15.31 | 5/24/12 |
|
| |
1,762 | 0 | 25.13 | 6/23/16 |
|
| |
(1) | Mr. D’Appolonia received an initial grant of 2,916 shares upon being elected as a director on July 23, 2008. These shares vest over a two-year period. |
(2) | Market value of unvested restricted stock was determined by multiplying the closing price of $8.91 on December 31, 2009 by the number of shares. |
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The following table sets forth information, as of March 1, 2010, concerning beneficial ownership by: holders of more than 5% ofany class of our voting securities
Name of Beneficial Owner | Common | % of | Depositary | % of Depositary |
5% or Greater Equity Holders |
|
|
|
|
Jeffrey L. Gendell (1) | 3,276,751 | 26.7% | 4,300 | * |
Stephen D. Rosenbaum (2) | 131,404 | 1.2% | 60,000 | 9.4% |
T. Rowe Price (3) | 757,700 | 7.2% | — | — |
BlackRock, Inc. (4) | 585,263 | 5.5% | — | — |
Officers, Directors and Director Nominees | ||||
Frank T. Vicino, Jr. (5) | 185,711 | 1.7% | 108,730 | 17.0% |
William M. Stern (6) | 67,453 | * | 7,850 | 1.2% |
Thomas J. Coffey (7) | 48,795 | * | — | — |
Richard M. Klingaman (8) | 7,442 | * | — | — |
Michael R. D’Appolonia (9) | 6,547 | * | — | — |
Keith E. Alessi (10) | 53,601 | * | — | — |
John V. O’Laughlin (11) | 44,733 | * | — | — |
Todd A. Myers (12) | 40,862 | * | — | — |
Morris W. Kegley (13) | 3,763 | * | — | — |
Kevin A. Paprzycki (14) | 3,657 | * | — | — |
Delbert L. Lobb | 0 | * | — | — |
Directors and Executive Officers as a Group (9 persons) | 276,853 | 2.5% | 7,850 | 1. 2% |
* Percentages of less than 5% of our voting securities as of March 31, 2008:
| Name and Address | Percentage of | Percentage of | ||||||||||||||
of Beneficial Owner | Common Stock | Common Stock | Depositary Shares | Depositary Shares | ||||||||||||
| Alan A. Blase | — | — | 70,659 | (2) | 11.0 | % | ||||||||||
| 1073 SW 119th Ave., #5 Davie, FL 33325 | ||||||||||||||||
| Jeffrey L. Gendell | 3,050,943 | (3) | 27.9 | % | 4,300 | (4) | * | |||||||||
| 55 Railroad Avenue Greenwich, CT 06830 | ||||||||||||||||
| Stephen D. Rosenbaum | 28,924 | * | 60,000 | (5) | 9.4 | % | ||||||||||
| 817 N. Calvert Street Baltimore, MD 21202 | ||||||||||||||||
| T. Rowe Price | 579,000 | (6) | 6.1 | % | — | — | ||||||||||
| 100 East Pratt St. Baltimore, Maryland 21289 | ||||||||||||||||
(1) | The total for Mr. Gendell includes shares of common stock, | |
| notes issued March 4, 2008. According to a Schedule 13D/A filed | ||
(2) | The total for Mr. |
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| depositary shares. The depositary shares are convertible into 102,480 shares of common | ||
(3) | According to a Schedule |
| Percentage of | Percentage of | |||||||||||||||
Name of Directors, Named Executive Officers and Persons as a Group(2) | Common Stock | Common Stock | Depositary Shares | Depositary Shares | ||||||||||||
| Keith E. Alessi | 28,862 | (3) | * | — | — | |||||||||||
| Thomas J. Coffey | 41,853 | (4) | * | — | — | |||||||||||
| Morris W. Kegley | 467 | (5) | * | — | — | |||||||||||
| Robert E. Killen | 227,174 | (6) | 2.4 | % | 750 | (7) | * | |||||||||
| Richard M. Klingaman | 500 | * | — | — | ||||||||||||
| Todd A. Myers | 32,196 | (8) | * | — | — | |||||||||||
| John V. O’Laughlin | 38,416 | (9) | * | — | — | |||||||||||
| William M. Stern | 47,103 | (10) | * | 7,850 | (11) | 1.2 | % | |||||||||
| David J. Blair | 947 | (12) | * | — | — | |||||||||||
| Robert W. Holzwarth | 0 | (13) | — | — | — | |||||||||||
| Christopher K. Seglem | 172,554 | (14) | 1.8 | % | 1,100 | (15) | * | |||||||||
| Roger D. Wiegley | 3,596 | (16) | * | — | — | |||||||||||
| Directors and Executive Officers as a Group (9 persons) | 416,947 | (17) | 4.4 | % | 8,600 | (18) | 1.3 | % | ||||||||
| T. Rowe Price is 100 East Pratt St., Baltimore, Maryland 21289. | ||
(4) | According to a report on Schedule 13G filed on January 29, 2010, BlackRock Inc. (a) is | |
(5) | According to a Schedule 13D/A filed on February 19, 2010, Mr. Frank Vicino Jr., a director nominee, beneficially owns 108,730 depositary shares of which he has sole voting and sole dispositive power |
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(6) | Includes 10,000 common shares that may be purchased upon exercise of options under the 2000 Directors’ | |
(7) | Includes 15,000 common shares that may be purchased upon exercise of options and 3,631 common shares for which sale is restricted until May 2010. | |
(8) | Includes 3,631 common shares for which sale is restricted until May 2010. | |
(9) | Includes 1,458 restricted common shares | |
(10) | Includes 3,046 common shares | |
(11) | Includes 3,834 common shares held through the 401(k) plan and 39,299 common shares that may be purchased upon exercise of options under equity plans. | |
(12) | Includes 3,678 common shares held | |
(13) | Includes 1,430 common shares held through the 401(k) plan and 2,333 common shares that may be purchased upon exercise of options under the 2007 plan. | |
(14) | Includes 1,324 common shares held | |
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Section 16(a) of the Securities Exchange Act of 1934 requires the Company’sour officers and directors and persons who own more than ten percent of a registered class of the Company’sour equity securities to file reports of ownership and changes in ownership on Forms 3, 4 and 45 with the SEC and the American Stock Exchange. Officers, directors, and greater than ten percent stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.NYSE Amex. To the knowledge of management, based solely on its review of such reports, furnished tono person who at any time during the Company, all Section 16(a) filing requirements applicable to the Company’s officers, directors, and greater than ten percent beneficial owners were complied with during thefiscal year ended December 31, 2007.
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As of December 31, 2007 the Company2009, we had stock options and stock appreciation rights (“SARs”) outstanding from three shareholder-approved stock plans for employees that were approved by shareholders, two stock incentive plansstockholders, one stockholder-approved plan for employees and non-employee directors approved by shareholders and one stock incentive plan for non-employee directors that was not approved by shareholders.stockholders. The value of a SAR is equal to the appreciation in the market value of a share of the Company’s common stock between the date of grant and the date of exercise. The Company has utilized SARs, and currently intends to settle those SARs in stock, because stock-settled SARs generally require fewer shares than do options to deliver similar incentive to an executive or Board member. In August 2007 shareholders approved the 2007 Equity2000 Nonemployee Directors’ Stock Incentive Plan for Employeesis the only plan not approved by stockholders and Non-Employee Directors, but no stock options or SARs from that plan have been granted or were outstanding as of December 31, 2007.
| Number of | ||||||||||||
| Securities | ||||||||||||
| Remaining Available | ||||||||||||
| Number of | for Future Issuance | |||||||||||
| Securities to be | Under Equity | |||||||||||
| Issued Upon | Compensation Plans | |||||||||||
| Exercise of | Weighted Average | (Excluding | ||||||||||
| Outstanding | Exercise Price | Securities | ||||||||||
| Options, Warrants | of Outstanding Options, | Reflected | ||||||||||
| and Rights | Warrants and Rights | in Column (a)) | ||||||||||
Plan Category | (a) | (b) | (c) | |||||||||
| Equity compensation plans approved by security holders | 258,366 | (1)(2)(3) | $ | 17.77 | (1) | 795,144 | (1)(3) | |||||
| Equity compensation plans not approved by security holders | 85,000 | $ | 14.35 | 19,176 | ||||||||
| Total | 343,366 | (1)(3) | $ | 16.92 | (1) | 814,320 | (1)(3) | |||||
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 security holders | 276,224(1) | $ 19.71 | 422,722(3) |
Equity plans not approved by security holders | 75,000(2) | $ 15.85 | 0 |
Total | 351,224 | $ 18.89 | 422,722 |
(1) | Excludes SARs to acquire 139,267 shares of | |
(2) | Excludes SARs to acquire 16,067 shares of common stock with exercise prices above $8.91, the closing price of a share of our common stock as reported on the NYSE Amex on December 31, 2009. At December 31, | |
(3) | Number of securities remaining available for future issuance reflects the reservation of 95,100 shares for issuance to certain employees upon the completion of |
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Westmoreland Coal Company has experienced dramatic changes since its inception in 1854. Originally focused on underground mining in the Appalachian Basin, we have since divested ourselves of all eastern mining properties and assets, moved our headquarters to the West and purchased five surface coal mining operations. Since 2001, we have dramatically refocused our energies on becoming an energy company focused on niche coal markets where we take advantage of long-term coal contracts and rail transportation advantages. To understand our company and the way in which we compensate our executives, it is important to understand our business environment over the last several years and the recent struggles that produces approximately 30 million tons of coalwe have faced. We believe that fully understanding who we are as a company and generates 1.6 million megawatt hours of electric power annually. We also broker coal for others. Wethe steps we have been mining coal fortaken over 150 years. Between 1992the last several years to position ourselves to forge ahead into the next decade will provide insight into our past compensation practices and 2001the steps we transitioned from primarily underground coal production, most of which wasintend to take in the Eastern United States,future to current production from surfacealign the pay of our executives with creating long-term stockholder value.
Business Environment
Our business is unusual in that a high proportion of our revenues, and therefore cash flows, are contractually set or limited by contractual relationships. For example, our ROVA power facility is under contract to provide electricity to its sole customer under contracts that run through 2019. Under the terms of the contract, the rate at which we are paid is set for the contract term and management can only affect profitability of the ROVA division through cost control. Similarly, our Jewett and Rosebud mines are under long-term contracts that set the terms under which the remaining coal reserves at those mines will be sold. Once again, management must focus on cost control, standardization, and efficiency in Montana, North Dakota,order to generate cash and Texas. Working in combination with others, we also diversified intoprofits. These circumstances make it incumbent upon management to exercise strong financial and reporting controls as so many of the production of independent power, and we brought eight projects to commercial operations during this period. Our principal power production facility today is in North Carolina. We now employ approximately 1140 people in six states and our Company is ranked as the ninth largest coal producerkey drivers in the country based on tonsbusiness are not controllable. Additionally, since a large pro portion of our coal mined in 2007.
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customer should suffer an unexpected event that prevents them from accepting coal deliveries, we have relied primarily on asset-based financing, which limitednowhere to sell the amount of free cash available to us from our operations. As a result,committed coal. Coupled with these long-term contracts, we have been burdened by substantial post-retirement health care liabilities to retirees, and have struggled to generate enough cash constrained overat our operating subsidiaries to fund the pastcost of corporate overhead and these post-retirement liabilities. Our lack of liquidity has limited our opportunity to consider options that might grow the business.
In 2007, we hired Mr. Keith E. Alessi as Interim Chief Executive Officer at a difficult time in our history when we were not producing cash flows sufficient to fund our operations. Shortly after Mr. Alessi’s arrival, it was discovered that we were facing our second major accounting restatement in two decades. In recognitionyears. The Board charged Mr. Alessi with standardizing our operations, implementing procedures and controls, reducing corporate overhead, stabilizing cash flow and setting a new, focused strategic vision. From 2007 through the end of this,2008, management radically overhauled the business through staffing changes, elimination of unnecessary perquisites and compensation structures, settling of numerous outstanding litigations, consolidating and leveraging benefits across all business units, standardizing and streamlining financial and business reporting and restructuring all of our major debt arrangements. Additionally, a new long-term contract was entered into with our sole customer at the Jewett mine.
The Compensation and Benefits Committee have kept cash compensation levels relatively low and flat. This has meant deferring or limiting pay increases(the “Committee”) recognized the unique difficulties presented by our business model and the pay-outtransition period we were undergoing with new leadership and understood the complexity of certainimplementing substantive business growth in troubled economic times that include very tight credit markets. As such, the Committee sought to put into place a compensation structure that recognized the difficulty of the tasks that management would face. The Committee did not feel that traditional incentive measurements, such as earnings or cash flow, were appropriate drivers of incentive compensation, earned.
Fiscal 2009 – The Year in Review
In 2009, a number of severe and adverse business conditions arose that could not have been anticipated when we set our strategic plan has been predicated on attracting and retainingfiscal year 2009 budgets. First, there was a talented and highly motivated executive team with a deep technical and operational knowledge ofcatastrophic failure at our largest customer’s power plant that resulted in the energy markets. The skill sets, educational requirements, experience and personal qualities of our executives are in demand by many of our competitors. Atplant being shut down for over six months. In the same time period, a second large customer also experienced extended down time at its power facility. Finally, at the end of the third quarter, our ROVA I power plant experienced an unanticipated outage following a scheduled outage, resulting in lost power sales. These outages combined with overall reduced volume as a result of general economic conditions resulted in significant reductions in revenues and cash flows. In addition, due to the outages, general economic conditions, and atypical weather conditions that lowered overall coal sales in 2009, we faced several covenant violations of our major debt instruments in 2009, which required the paym ent of penalties and resulted in all of our outstanding debt being reclassified to current. Despite these adverse conditions, our management team was able to:
·
Mitigate potential debt-related issues through the negotiation of reasonable covenant waivers with our WML lenders and the refinancing of our revolving and term debt with First Interstate Bank;
·
Freeze the pension plans and eliminate retiree health care benefits for non-union employees, while implementing an enhanced 401(k) plan to minimize the effects of the pension freeze;
·
Achieve significant cost containment of our post-retirement medical obligations through successful negotiations with the United Mine Workers of America;
·
Implement administrative and healthcare network improvements for our retiree population resulting in substantial cost savings and reduced retiree medical liabilities;
·
Successfully implementing the Indian Coal Production Tax Credit transaction; and
·
Continue standardization of processes and procedures to eliminate redundancies and costs, such as transitioning all non-union employees to the same health, welfare and paid leave plans.
These measures that management implemented during 2009 were taken into account when the individual performance component of annual incentive compensation was considered.
Fiscal 2010 – The Year Ahead
In light of the unique nature of our business, the fact that we have had to addressno true comparables given the financial constraints imposed on us in transforming our company from a mature but struggling enterprise to a more financially stable one with sustainable positive cash flow. The relatively small numbercost-plus nature of our shares outstanding has limited our abilitylong-term contracts and the changing compensation landscape, the Committee, with the assistance of Buck Consultants (a newly-hired Committee compensation consultant), intends to deliver long-term incentives at the level of value typically indicated for a company in this stage of the business cycle. Therefore, compensation levels for our executives have changed only minimally from prior years’ levels.
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General Compensation Practices and Philosophy
Our current philosophy is to compensate executives with competitive market for talent.
· Design a program that is simple, easy to understand, incents performance and aligns with long-term stockholder interests by using equity awards; · Target compensation levels that are competitive with our industry and the markets in which we compete for executive talent; · Structure compensation to reflect our business situation; · Link pay to performance by making a substantial percentage of total | ||
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Provide a compensation program takes into considerationthat emphasizes direct compensation as opposed to perquisites and other benefits.
The Committee is responsible for setting the total mix of components that encompass our compensation program, which currently includes base salary, annual incentive and long-term compensation. As has been our historical practice, in general, our compensation components are targeted as follows: 60% base salary, 25% incentive compensation and 15% long-term compensation in the form of equity. This compensation mix has been appropriate due to our past economic hardships and the transitional nature of the business. In 2009, utilizing peer and survey data, we analyzed and determined that our total cash compensation program was competitive with said data and felt that maintaining the current mix of cash components was appropriate at that time. Due to the methodologies for evaluating equity and the poor performance of our stock, we were unable to perform a solid analysis of the available data, which might have resulted in an adjustment of our long - -term equity compensation component. While we feel that the components are the proper mix of compensation for attracting and retaining key executives, increasing our long-term profitability and building stockholder value, the Committee, with the assistance of Buck Consultants, will be analyzing our compensation components to determine if our current allocation of components is the most appropriate for meeting our objectives and business situation, the marketplacestrategy.
Compensation Methodology
Peer Comparisons and Survey Data
In 2009, compensation was evaluated using national, broad-based industry survey data, internal equity for similar positions and proxy data of a meaningful peer group for benchmark analysis. In creating our past practices,peer group, we noted that there are very few comparably-sized publicly-traded coal companies to align ourselves with for comparative purposes. In addition, a third of our executive team comes from segments other than mining. With these two factors in mind, we benchmarked ourselves relative to a peer group of companies with similar revenue and employee base. Revenue and employee base are used as reference points to determine the composition of the peer group because they provide a reasonable basis for comparing like positions and scopes of responsibilities. The companies included in the peer group differ from those listed in the indices used to prepare our stock price performance graph, which can be found in our 2009 Annual Report to Stockholders. We felt that t he companies listed in the compensation peer group more closely represent the employment markets in which we compete for executive talent. In 2009, our peer group consisted of the following companies, as compared to our coal segment:
Name | Business | Revenues in Millions ($) | Employees |
Westmoreland Coal Company | Coal Mining (Coal Segment Only) | 420 | 1118 |
Atheros Communications Inc. | Wireless/wire communication products | 472 | 1079 |
PMC-Sierra, Inc. | Semiconductor solutions | 525 | 1064 |
James River Coal Company | Coal Mining | 568 | 1750 |
Rhino Resources Partners, L.P. (as of 12/31/2007) | Coal Mining | 403 | 875 |
Horsehead Holding Corp. (as of 12/31/2007) | Zinc producer | 546 | 1080 |
Affymetrix, Inc. | Genetic analysis businesses | 410 | 1128 |
Zeeco Instruments, Inc. | Solutions for HB-LED and solar | 442 | 1195 |
Northwest Pipe | Large diameter steel pipeline systems | 439 | 1217 |
Churchill Downs, Inc. | Pari-Mutuel wagering properties | 430 | 1000 |
USANA Health Sciences, Inc. | Science-based personal care/ nutrition | 429 | 948 |
Maidenform Brands, Inc. | Intimate apparel | 413 | 1120 |
California Water Service Group | Treatment and distribution of water | 410 | 929 |
Calgon Carbon Corporation | Water and air purifiers | 400 | 943 |
Reddy Ice Holdings | Packaged ice manufacturer | 329 | 1400 |
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In 2009, we used Economic Research Institute, CompAnalyst and Hay Group market data as additional comparison points. Total market data was compared with individual pay for each position, and “compa-ratios” were determined. Compa-ratios are an individual’s current salary divided by the reference point of the market data. For example, if an individual’s salary is $125,000 and the mid-point of the market data for that position was $100,000, the compa-ratio for that individual would be 125%, meaning such person is earning 25% greater than the average of the market.
Internal Pay Equity
The Committee considers internal pay equity when making compensation decisions. However, the Committee does not use a fixed ratio or formula when comparing compensation among executive officers. Our CEO is compensated at a higher level than other executive officers due to his significantly greater level of experience, accountability and talentsresponsibility. Mr. Alessi’s total cash compensation was 4.52 times greater than the average of our four other named executive officers, which differential includes his 2009 special discretionary bonus. We feel that each individualMr. Alessi’s cash compensation for 2009 as compared to the other named executive bringsofficers is appropriate based on his significant contributions in refocusing our business since 2007 and the relatively modest cash compensation of our executive team. Since joining us in 2007, Mr. Alessi has received no base pay increases, modest special discretionary bonuses and has forfeited over 60% of his initial equity grant. Our next highest paid named executive officer makes 1.29 times our lowest paid named executive officer. We believe such internal pay equity highlights the reasonableness of the dispersion of pay to our company. At Westmoreland,named executive officers.
Compensation Administration and the Compensation and Benefits Committee, a committeeRole of the Board of Directors consisting of three independent directors, administers our executive compensation program. Management in Determining Executive Compensation
The Compensation and Benefits Committee establishes our overall compensation strategy to ensure that our executives are rewarded appropriately and that executive compensation supports our business strategy and objectives.
While the Committee has the responsibility to monitor and approve all compensation program in achieving desired results.
Role of Compensation Consultants
The Committee has the authority to retain consultants directly; however, the Committee did not retain a consultant for fiscal year 2009. For 2009, the Committee, through management, obtained survey information from an executive compensation consulting firm, the Hay Group, for executives in the mining industry. This survey data, together with proxy data from companies in similar industries and/or below target, depending upon various measures of performance. As a result,similar size, was studied by management and the Committee during 2009. In February 2010, the Committee hired Buck Consulting to serve as the Committee’s compensation consultant to assist the Committee in thoroughly reviewing our executive compensation program is designed to result in compensation to our executives that can be significantly above target in times of relatively superior performance and significantly below target in times of relatively poor performance.
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Our executive compensation program consists of three main elements:
Base Salary
In determining base salaries, each executive’s role and responsibility, applicable experience, unique skills, past performance, future potential with us, salary levels for similar positions (compa-ratios), and internal equity are considered. Starting in 2010, the Committee was guided in its base salary determinations by a merit matrix that takes into account compa-ratios and performance. This matrix, which was utilized for all employees, including our named executive officers, except Mr. Alessi,allowed the Committee to approve recommended base pay increases out of the available merit pool, which was set at 2.5% for 2010. For example, an outstanding performing executive who has a low compa-ratio, such as 80%, would be eligible for a 4% merit increase, while, conversely, a lower performing executive with a high compa-ratio, such as 120%, would not be eligible for a merit increase.
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Annual Incentive Compensation
The annual incentive plan is intended to provide variable compensation awarded for performance based on strategic goals and objectives. The incentive pay is based on financial performance and personal performance, while executives with direct mining operational responsibility also have a safety component. If the thresholds for the financial and safety components are compensated under an executive compensation program which consists of three elements:
GOAL | COMPONENTS | PERCENT OF TOTAL BONUS |
Financial | Threshold = Annual budgeted operating income of the mine/ division1 · 50% of goal will be paid out upon meeting the threshold · Between 50% to 100% of goal will be paid out upon exceeding the threshold by 7.5% · Between 100% and 200% of goal will be paid out upon exceeding the threshold by 15% | · 40% for mine operational executives · 55% for corporate office executives |
Safety | Threshold = Annual National Mine Safety and Health Administration (MSHA) average for reportable incident rate for surface mines in the coal industry2 · 50% of goal will be paid out upon meeting the threshold · Between 50% to 100% of goal will be paid out upon exceeding the threshold by 25% · Between 100% and 200% of goal will be paid out upon exceeding the threshold by 50% | · 30% for mine operational executives · Not applicable for corporate executives |
Individual | The percentage payout is evaluated on achievement of certain individual goals established between the executive and the CEO (or, in the case of the CEO, between him and the Committee) and will be 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. | · 30% for mine operational executives · 45% for corporate office executives |
1 In 2009, annual budgeted operating income for Messrs. Alessi, Kegley, and Paprzycki was ($5.416) million. The 2009 actual operating income was ($29.162) million. In 2009, annual budgeted operating income for Messrs. Myers and O’Laughlin was $26.473 million. The 2009 actual operating income was $0.467 million.
2 In 2009, the average national reportable incident rate was 2.11, which is a calculation based on total hours worked and reportable incidents. In 2009, the average reportable incident rate for the mines Mr. O’Laughlin oversaw was 1.38.
In February 2010, the Committee approved annual incentive compensation payouts for performance in fiscal year 2009. As the 2009 financial component threshold was not met, there was no financial component payout. As such, the entire incentive compensation payout was based on the individual performance component, except for Mr. O’Laughlin, whose incentive payout also included a safety component payout.
Target vs. Actual Annual Incentive Bonuses | ||||
Name | Percentage of Total Compensation | Target Cash Incentive Bonus | Percentage of Target Bonus Approved | Total Cash Bonus |
Keith E. Alessi | 70% | $411,923 | 90% | $370,731 |
John V. O’Laughlin | 50% | $112,611 | 71% | $80,535 |
Kevin A. Paprzycki | 40% | $85,230 | 45% | $38,354 |
Morris W. Kegley | 40% | $85,385 | 90% | $76,847 |
Todd A. Myers | 40% | $93,314 | 90% | $83,983 |
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Long-Term Incentive
Long-term incentive awards are designed to compensatealign the interests of our named executive officers atexecutives with those of our stockholders. In 2009, we moved from options to restricted stock units with a fixed levelthree-year vest to more appropriately incentivize our executives. Long-term equity awards for 2009 were made on July 1, 2009 based on a tiered system that provides an identical number of compensationrestricted stock units to executives in that serves astier, which awards are between approximately 20% and 40% of such executive’s base salary compensation. To determine the number of restricted stock units awarded to a retention tool throughout the executive’s career. In determining base salaries, the Compensation and Benefits Committee considers each executive’s role and responsibility, unique skills, future potential with our company, salary levels for similar positions in our target market, and internal pay equity. Our compensation philosophy is to target base salaries at the 60th percentile for each named executive officer since our incentive compensation levels have typically been far below target and market median levels.
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Long-Term Incentive Awards for 2009 | |||
Name | Long-Term Incentive Tier | Number of Restricted Stock Units | Grant Date Fair Value of RSUs ($) |
Keith E. Alessi | 40% | 30,000 | 245,100 |
John V. O’Laughlin | 30% | 8,400 | 68,628 |
Kevin A. Paprzycki | 20% | 5,600 | 45,752 |
Morris W. Kegley | 20% | 5,600 | 45,752 |
Todd A. Myers | 20% | 5,600 | 45,752 |
Post-Employment Benefits
We have a severance policy that provides, under certain circumstances, our executives with twelve months of base pay, in addition optionto nine months of outplacement assistance and 12 months of health benefits at the same cost share as active employees. Payment under the severance policy is triggered upon the following events: involuntary termination that is not for cause, such as a layoff; the sale of a facility or SAR re-pricing is expressly prohibited.
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Summary of Named Executive Officer Compensation
Keith E. Alessi: President and Chief Executive Officer | |||||
Total Cash Received for 2009 | 2009 Base Salary | Bonus for 2009 | # of RSUs / Grant Date Fair Value of 2009 RSUs | ||
$1,309,1921 | $600,000 | $720,7312 | 30,000 RSUs/ $245,100 | ||
(1) Mr. Alessi’s actual base salary earnings for 2009 of $588,461 were less than his annualized base salary of $600,000 as he did not accept the role of CEO until the end of January. | |||||
(2) Mr. Alessi’s bonus for 2009 included his annual incentive plan bonus of $370,731, as well as a special discretionary bonus of $350,000. | |||||
Base Salary
The Committee kept Mr. Alessi’s base salary at $600,000 for 2010, noting that such base pay was appropriate in lieulight of stock options or grants. As with options or grants,available peer group information. With the 2000 PUP was designedassistance of Buck Consulting, the Committee intends to link employees’ long-term economic interest with those of our shareholders. Use oftake a multi-year performance period emphasized the importance of longer-term results and the enhancement of the value of shareholders’ investments.
Annual Incentive Compensation
Financial Component: As we failed to meet our 2009 financial component threshold, the Committee awarded no payout for the financial component.
Individual Component:Mr. Alessi’s individual component performance goals for 2009 were as follows:
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Provide direction to the senior management team;
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Assure adequate liquidity to allow for continued operations;
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Reduce and/or eliminate heritage costs; and
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Standardize the Information Technology function.
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The Committee felt Mr. Alessi did an excellent job in all functional areas in fiscal year 2009 and Benefitsexpressed their pleasure with his overall performance navigating the difficulties that arose throughout the year. As such, the Committee subject toawarded Mr. Alessi 200% of his individual component based on the following: his leadership during two unscheduled outages at customer facilities, as well as an unscheduled outage at ROVA; his excellent job in controlling those costs that are controllable; the achievement of certain key milestones in 2009, including those associated with heritage costs, pension and post-retirement medical liabilities; his performance metrics measured over a three-year performance period fromin managing our liquidity issues throughout the dateyear; the successful closing of the grant. The CompensationIndian Coal Production Tax Credit transaction; and Benefits Committee has also elected to defer full payment of amounts earned over time.
Safety Component: Not applicable.
Discretionary Bonus
The CompanyCommittee awarded stock optionsMr. Alessi a special discretionary bonus of $350,000 in recognition of his exemplary work since joining us in 2007. As discussed above under “Business Environment,” Mr. Alessi joined Westmoreland at a very difficult time in our history and has taken great strides to implement its long-term incentive program in 2003. Those units granted in 2002substantially change our landscape, including standardizing our operations, implementing procedures and 2004 that vested in 2005controls, reducing corporate overhead, stabilizing cash flow and setting a new, focused strategic vision. From 2007 resulted in no value and no payments because we did not achieve the aggressive performance targets established in 2002 and 2004. Performance units granted in 2005 will be valued atthrough the end of the performance period occurring at the end of June 2008 and performance units granted in 2006 will be valued at the end2009, Mr. Alessi led a radical overhaul of the performance period occurringbusiness through staffing changes, elimination of unnecessary perquisites and compensation structures, settling of numerous outstanding litigations, consolidating and leveraging benefits across all business units, standardizing and streamlining financial and business reporting and restructuring all of our major debt arrangements.
Long-Term Incentive Compensation
Mr. Alessi was awarded long-term equity at the enda targeted 40% of June 2009. Based onbase salary, which is a higher tier than the Company’s stock performance as of December 31, 2007, the performance units granted in 2005 and 2006 were not “in-the money,” meaning if settled at that time, they would result in no payments. No performance units were granted in 2007 and it is the intent of the Company to simplify its long-term incentive compensation by using other forms of equity awards rather than performance units.
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| Kevin A. Paprzycki: Chief Financial Officer |
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| Total Cash Received for 2009 | 2009 Base Salary | Bonus for 2009 | # of RSUs / Grant Date Fair Value of 2009 RSUs |
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| $245,3541 | $207,000 | $38,354 | 5,600 RSUs/ $45,752 |
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| (1) Mr. Paprzycki’s actual base salary earnings for 2009 of $213,076.95 were more than his annualized base salary due to the extra pay period in 2009. |
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Base Salary
The Committee reservesawarded Mr. Paprzycki a 2.5% merit increase to his base salary for 2010, bringing his base salary to $212,175 effective as of April 1, 2010. Mr. Paprzycki’s 2.5% merit increase was based on a commendable performance rating and a compa-ratio of 102% of peer and survey data. The Committee feels Mr. Paprzycki’s base salary is appropriate given his relative years of experience compared to other chief financial officers and the rightscope of responsibilities, which does not currently include treasury or investor relations.
Annual Incentive Compensation
Financial Component: As we failed to use its judgmentmeet our 2009 financial component threshold, the Committee awarded no payout for the financial component.
Individual Component:Mr. Paprzycki’s individual component performance goals for 2009 were as follows:
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Timely completion of financial closes, operational packages delivered to authorize compensation paymentsmanagement, quarterly board of director packages and SEC filings per target schedule; and
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Improvements to forecasting process, including implementation of rolling forecast for each quarter end, more valuable forecast change information, and system-loaded forecasts that may exceed $1 million when it believes such payments are appropriategenerate financials by the second quarter of 2009.
The Committee approved a 100% individual component payout for Mr. Paprzycki as he timely completed all financial closes and delivered operational packages to management and quarterly board of director packages and SEC filings per the target schedule. In addition, Mr. Paprzycki made improvements to our forecasting process, including implementation of rolling forecast for each quarter end, more valuable forecast change information, and system-loaded forecasts that generate financials by the second quarter of 2009.
Safety Component: Not applicable.
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Long-Term Incentive Compensation
The Committee awarded Mr. Paprzycki 5,400 restricted stock units based on his placement in the best interests20% long-term incentive tier, as discussed above.
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| Morris W. Kegley: General Counsel and Secretary |
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| Total Cash Received for 2009 | 2009 Base Salary | Bonus for 2009 | # of RSUs / Grant Date Fair Value of 2009 RSUs |
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| $290,3101 | $207,375 | $76,847 | 5,600 RSUs/ $45,752 |
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| (1) Mr. Kegley’s actual base salary earnings for 2009 of $213,463.15 were more than his annualized base salary due to the extra pay period in 2009. |
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Base Salary
The Committee awarded Mr. Kegley a 4.0% merit increase to his base salary for 2010, bringing his base salary to $215,671 effective as of April 1, 2010. Mr. Kegley’s 4.0% merit increase was based on an outstanding performance rating and a compa-ratio of 78% of peer and survey data. The Committee feels Mr. Kegley’s base salary is appropriate given his limited experience relating to corporate governance and SEC-related disclosure and compliance for which he has hired an attorney specializing in such areas whom he oversees.
Annual Incentive Compensation
Financial Component: As we failed to meet our 2009 financial component threshold, the Committee awarded no payout for the financial component.
Individual Component:Mr. Kegley’s individual component performance goals for 2009 were as follows:
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Provide legal support for the successful conclusion of employee litigation; and
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Provide legal support for Phase 1 negotiations with the UMWA on retiree health costs.
The Committee approved a 200% individual performance payout for Mr. Kegley due to his exemplary negotiation work with the UMWA. During the second quarter of 2009, Mr. Kegley was able to successfully negotiate a settlement of the Aguilar judgment. In the fourth quarter of 2009, Mr. Kegley successfully completed Phase 1 of the multi-year process to contain costs relating to retiree medical benefits, negotiating a new prescription drug program that is projected to save significant costs and reduce liabilities.
Safety Component: Not applicable.
Long-Term Incentive Compensation
The Committee awarded Mr. Kegley 5,400 restricted stock units based on his placement in the 20% long-term incentive tier, as discussed above.
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| Todd A. Myers: Vice President – Coal Sales |
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| Total Cash Received for 2009 | 2009 Base Salary | Bonus for 2009 | # of RSUs / Grant Date Fair Value of 2009 RSUs |
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| $317,2701 | $226,633 | $83,983 | 5,600 RSUs/ $45,752 |
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| (1) Mr. Myers’s actual base salary earnings for 2009 of $233,286.70 were more than his annualized base salary due to the extra pay period in 2009. |
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Base Salary
The Committee awarded Mr. Myers a 3.0% merit increase to his base salary for 2010, bringing his base salary to $233,432 effective as of April 1, 2010. Mr. Myer’s 3.0% merit increase was based on a commendable performance rating and a compa-ratio of 95% of peer and survey data. The Committee feels Mr. Myers’ base salary is appropriate given his institutional knowledge of the business and our customer base and his leadership in strategic efforts and initiatives.
Annual Incentive Compensation
Financial Component: As we failed to meet our 2009 financial component threshold, the Committee awarded no payout for the financial component.
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Individual Component:Mr. Myers’ individual component performance goals for 2009 were as follows:
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Absaloka Coal Private Letter Ruling for Indian Coal Tax Production Credit; and
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Renew expiring coal contracts for Xcel, Western Fuels, and MERC.
The Committee approved a 200% individual performance payout for Mr. Myers due to his continued work and efforts in 2009 to secure the Indian Coal Production Tax Credit for coal produced at WRI. The final IRS Private Letter Ruling was received in 2009, completing the final steps of the tax credit transaction. It is projected that the tax credit could increase WRI’s income and cash flows before taxes over the period October 2008 through December 31, 2012 by as much as $37 million.
Safety Component: Not applicable.
Long-Term Incentive Compensation
The Committee awarded Mr. Myers 5,400 restricted stock units based on his placement in the 20% long-term incentive tier, as discussed above.
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| John V. O’Laughlin: Vice President – Coal Operations |
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| Total Cash Received for 2009 | 2009 Base Salary | Bonus for 2009 | # of RSUs / Grant Date Fair Value of 2009 RSUs |
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| $305,7571 | $220,007 | $80,535 | 8,400 RSUs/ $68,628 |
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| (1) Mr. O’Laughlin’s actual base salary earnings for 2009 of $225,221.71 were more than his annualized base salary due to the extra pay period in 2009. |
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Base Salary
The Committee awarded Mr. O’Laughlin a 2.5% merit increase to his base salary for 2010, bringing his base salary to $225,508 effective as of April 1, 2010. Mr. O’Laughlin’s 2.5% merit increase was based on a commendable performance rating and a compa-ratio of 100% of peer and survey data. The Committee feels Mr. O’Laughlin’s base salary is appropriate given his scope of responsibilities and a blend of available chief operating officer and vice president of mines base salary comparables from peer group data gathered from proxy statements, which the Committee feels is the more appropriate comparable salary data for Mr. O’Laughlin than survey data that reflects salaries of similarly-positioned individuals at significantly larger companies.
Annual Incentive Compensation
Financial Component: As we failed to meet our 2009 financial component threshold, the Committee awarded no payout for the financial component.
Individual Component:Mr. O’Laughlin’s individual component performance goals for 2009 were as follows:
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Improve safety results at all mines relative to the national average; and
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Ensured continued training for corporate and salaried personnel and offered production and maintenance training to craft employees throughout the year.
The Committee approved a 100% individual performance payout for Mr. O’Laughlin as he met his goals for 2009, which included an improved safety record at all mines relative to the national average, continued training for corporate and salaried personnel and production and maintenance training to craft employees throughout the year.
Safety Component: Mr. O’Laughlin was paid 184% of his safety component due to above average industry safety records at all, but one, of our company andmines. With direct operational responsibility for all of our stockholders, after taking into consideration changing business conditions and the performance of its employees.
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Long-Term Incentive Compensation
Mr. O’Laughlin was awarded long-term equity at a local business luncheon club. Effective August 2007, we no longer offer financial planning assistance to our senior executives, including ourtargeted 30% of base salary, which is a higher tier than other named executive officers. This benefit providedThe Committee felt such higher tier level was warranted due to Mr. O’Laughlin’s direct responsibility for up to 80% of the cost, capped at $1,600 per year.
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Table of a company-owned vehicle specifically for traveling between locations.
EXECUTIVE COMPENSATION FOR 2009
Summary Compensation table below.
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Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | Change in Pension Value Earnings ($) | All Other Compensation ($)(3) | Total ($) |
Keith E. Alessi CEO and President | 2009 | 588,461 | 350,000 | 245,100 | — | 370,731 | 20,044 | 16,643 | 1,590,979 |
2008 | 403,846 | — | — | 710,400 | 242,308 | 3,775 | 12,222 | 1,372,551 | |
2007 | 351,692 | — | — | 1,355,000 | 422,031 | — | 21,157 | 2,149,880 | |
Kevin A. Paprzycki Chief Financial Officer | 2009 | 213,077 | — | 45,752 | — | 38,354 | 3,599 | 12,467 | 313,249 |
2008 | 189,450 | — | — | 82,880 | 34,101 | 8,741 | 7,088 | 322,260 | |
Morris W. Kegley General Counsel and Secretary | 2009 | 213,463 | — | 45,752 | — | 76,847 | 38,224 | 12,472 | 386,758 |
2008 | 200,156 | — | — | 82,880 | 36,028 | 30,301 | 7,411 | 356,776 | |
2007 | 175,154 | — | — | — | 39,410 | 21,494 | 9,421 | 245,479 | |
Todd A. Myers Vice President of Coal Sales | 2009 | 233,287 | — | 93,352 | — | 83,983 | (6,699) | 12,603 | 416,526 |
2008 | 218,568 | — | — | 82,880 | 78,685 | 29,014 | 7,582 | 416,729 | |
2007 | 208,542 | — | — | — | 37,538 | 14,552 | 8,066 | 268,698 | |
John V. O’Laughlin Vice President of Coal Operations | 2009 | 225,222 | — | 68,628 | — | 80,535 | (5,611) | 12,552 | 381,326 |
2008 | 211,374 | — | — | 177,600 | 45,657 | 52,408 | 6,971 | 494,010 | |
2007 | 200,665 | — | — | — | 89,336 | 32,235 | 9,758 | 331,994 | |
Former Named Executive Officer | |||||||||
Delbert Lobb(4) Former CEO and President | 2009 | 67,606 | — | — | — | — | — | 5,500 | 73,106 |
2008 | 326,923 | 200,000 | 1,639,000 | 296,000 | — | — | 59,657 | 2,521,580 | |
| Change in | ||||||||||||||||||||||||||||||||||||
| Non- | Pension | |||||||||||||||||||||||||||||||||||
| Equity | Value and | |||||||||||||||||||||||||||||||||||
| Incentive | Nonqualified | |||||||||||||||||||||||||||||||||||
| Plan | Deferred | |||||||||||||||||||||||||||||||||||
| Stock | Option | Com- | Compensation | All Other | ||||||||||||||||||||||||||||||||
| Name and Principal | Salary | Bonus | Awards | Awards(1) | pensation | Earnings(2) | Compensation(3)(4) | Total | ||||||||||||||||||||||||||||
Position | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||
| Keith E. Alessi | 2007 | 351,692 | 422,031 | — | 301,073 | — | — | 21,157 | 1,095,953 | |||||||||||||||||||||||||||
| President and CEO | ||||||||||||||||||||||||||||||||||||
| David J. Blair(5) | 2007 | 256,250 | 51,891 | — | 39,267 | — | 21,278 | 9,434 | 378,120 | |||||||||||||||||||||||||||
| Former Chief Financial Officer | 2006 | 253,004 | 110,551 | — | 19,742 | — | 17,115 | 7,508 | 407,920 | |||||||||||||||||||||||||||
| John V. O’Laughlin | 2007 | 200,665 | 76,413 | — | 47,993 | — | 32,235 | 9,758 | 367,064 | |||||||||||||||||||||||||||
| Vice President, Coal Operations | 2006 | 192,860 | 81,657 | — | 29,756 | — | 30,096 | 8,445 | 342,814 | |||||||||||||||||||||||||||
| Todd A. Myers | 2007 | 208,542 | 37,538 | — | 38,297 | — | 14,552 | 8,066 | 306,995 | |||||||||||||||||||||||||||
| Vice President, Coal Sales | ||||||||||||||||||||||||||||||||||||
| Morris W. Kegley | 2007 | 175,154 | 39,410 | — | 9,211 | — | 21,494 | 9,421 | 254,690 | |||||||||||||||||||||||||||
| General Counsel | ||||||||||||||||||||||||||||||||||||
| Christopher K. Seglem(6) | 2007 | 202,325 | — | — | (127,739 | ) | 476,994 | 59,127 | (7) | 610,707 | ||||||||||||||||||||||||||
| Former Chief Executive Officer and President | 2006 | 529,227 | 225,296 | — | 177,934 | — | 353,103 | 16,025 | 1,301,585 | |||||||||||||||||||||||||||
| Roger W. Wiegley(8) | 2007 | 165,873 | — | — | 222,872 | — | — | 23,134 | 411,879 | |||||||||||||||||||||||||||
| Former General Counsel and Secretary | 2006 | 250,042 | 128,947 | — | 44,847 | — | 23,840 | 24,204 | 471,880 | |||||||||||||||||||||||||||
| Robert W. Holzwarth(9) | 2007 | 186,087 | — | — | (19,539 | ) | — | — | 296,676 | 463,224 | ||||||||||||||||||||||||||
| Former Senior Vice President, Power | 2006 | 238,633 | 113,667 | — | 58,034 | — | 26,449 | 8,169 | 444,952 | |||||||||||||||||||||||||||
(1) | Amounts in | |
(2) | Represents the cash bonus awarded under our Annual Incentive Plan, a discretionary performance-based award made in the first quarter of each fiscal year for performance in the prior fiscal year. | |
(3) |
25
| “All Other Compensation” for | ||
(4) | Mr. Lobb resigned effective January 27, 2009. Mr. Lobb forfeited all stock and | |
Non-Equity Incentive Plan Compensation
Non-equity incentive plan compensationamounts 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 officers, exceptofficer, and may include our annual budgeted operating income performance, MSHA average for Mr. Alessi, consists of three elements: base salary, annual incentive bonus and long-term incentive compensation. After 18 months with no internal equity or merit adjustments to base salariesreportable incident rate for executives due to cash constraints, salaries for our named executives, except for Mr. Alessi and Mr. Kegley, were adjusted by 5% effective January 1, 2008. Mr. Alessi’s compensation is determined by the Board of Directors. His initial salary was adjusted from $40,000 per month to $50,000 per month upon his being named President and CEO in August 2007. He previously served as interim President and interim CEO. Mr. Kegley received a 2.75% adjustment effective June 1, 2007 following a salary increase in August 2007 at the time he was named General Counsel.
Equity Awards
Values for stock grants in the summary compensation table and numbers included in the grants of the Executive Compensation Program — Annual Incentive Compensation” above. Bonuses for the named executive officers other than Mr. Alessiplan-based awards table relate to restricted stock and Mr. O’Laughlin were based on financial performance (55%) and personal performance (45%). Mr. O’Laughlin’s bonus was based on the safety of our operations (35%), financial performance (30%), and personal performance (35%). For 2007, the financial component of the bonus was based on the net increase in budgeted cash for the applicable business unit and an increase in budgeted pretax income. These items are explained in more detail above, under “— Annual Incentive Compensation.” If each of these was 7.5% greater than the budgeted amounts, our executives would have received the targeted levels of the financial component of the bonus. The businessrestricted stock units relevantgranted to the named executive officers failed to meet their minimum financial performance targets, so no executive received any bonus in respect of financial performance for 2007. Our safety performance was 42% better than the industry average, which resulted in a 168% payout of that component of the bonus for 2007.under our stockholder-approved 2007 plan. The personal component of the bonus was based on
26
| All Other | ||||||||||||||||||||||||
| Option | ||||||||||||||||||||||||
| Awards: | Grant Date | |||||||||||||||||||||||
| Number of | Exercise or | Closing | Fair Value | |||||||||||||||||||||
| Securities | Base Price | Market Price | of Stock | |||||||||||||||||||||
| Underlying | of Option | on Date | and Options | |||||||||||||||||||||
| Grant | Approval | Options | Awards(1)(2) | of Grant | Awards(3) | |||||||||||||||||||
Name | Date | Date | (#) | ($/Sh) | ($) | ($) | ||||||||||||||||||
| Keith E. Alessi | 5/2/07 | 5/1/07 | 100,000 | 23.925 | 24.12 | 1,354,829 | ||||||||||||||||||
| David J. Blair | — | — | — | — | — | — | ||||||||||||||||||
| John V. O’Laughlin | — | — | — | — | — | — | ||||||||||||||||||
| Todd A. Myers | — | — | — | — | — | — | ||||||||||||||||||
| Morris W. Kegley | — | — | — | — | — | — | ||||||||||||||||||
| Christopher K. Seglem | — | — | — | — | — | — | ||||||||||||||||||
| Roger D. Wiegley | — | — | — | — | — | — | ||||||||||||||||||
| Robert W. Holzwarth | — | — | — | — | — | — | ||||||||||||||||||
27
21
Table of Mr. Alessi’s option award was made on May 1, 2007 for the award effective May 2, 2007.
| Option Awards | ||||||||||||||||
| Number of | Number of | |||||||||||||||
| Securities | Securities | |||||||||||||||
| Underlying | Underlying | |||||||||||||||
| Unexercised | Unexercised | Option | ||||||||||||||
| Options | Options | Exercise | Option | |||||||||||||
| (#) | (#) | Price | Expiration | |||||||||||||
Name | Exercisable | Unexercisable | ($) | Date | ||||||||||||
| Keith E. Alessi | 19,444 | (1) | 80,556 | (1) | 23.93 | 5/01/17 | ||||||||||
| David J. Blair | 10,000 | (2) | — | 19.78 | 4/24/15 | |||||||||||
| 19,900 | (2) | — | 20.98 | 6/30/15 | ||||||||||||
| 2,700 | (3) | 5,400 | (3) | 24.41 | 6/30/16 | |||||||||||
| John V. O’Laughlin | 20,000 | (4) | — | 12.04 | 3/4/11 | |||||||||||
| 4,700 | (5) | — | 12.86 | 6/23/12 | ||||||||||||
| 3,650 | (6) | — | 17.80 | 12/30/13 | ||||||||||||
| 3,650 | (7) | — | 18.08 | 6/29/13 | ||||||||||||
| 491 | (8) | — | 18.09 | 5/28/11 | ||||||||||||
| 1,809 | (8) | — | 18.19 | 5/28/11 | ||||||||||||
| 9,800 | (9) | — | 19.37 | 6/30/14 | ||||||||||||
| 14,600 | (2) | — | 20.98 | 6/30/15 | ||||||||||||
| 3,300 | (3) | 6,600 | (3) | 24.41 | 6/30/16 | |||||||||||
| Todd A. Myers | 2,517 | (8) | — | 18.19 | 5/28/11 | |||||||||||
| 683 | (8) | — | 18.09 | 5/28/11 | ||||||||||||
| 6,700 | (5) | — | 12.86 | 6/23/12 | ||||||||||||
| 6,700 | (7) | — | 18.08 | 6/29/13 | ||||||||||||
| 6,700 | (6) | — | 17.80 | 12/30/13 | ||||||||||||
| 12,300 | (9) | — | 19.37 | 6/30/14 | ||||||||||||
| 16,200 | (2) | — | 20.98 | 6/30/15 | ||||||||||||
| 2633 | (3) | 5,267 | (3) | 24.41 | 12/30/16 | |||||||||||
| Morris W. Kegley | 633 | (3) | 1,267 | (3) | 24.41 | 6/30/16 | ||||||||||
| Christopher K. Seglem | — | — | — | — | ||||||||||||
| Roger D. Wiegley | 17,900 | (2) | — | 20.98 | 6/30/15(14 | ) | ||||||||||
| 18,400 | (10) | — | 24.41 | 6/30/16(14 | ) | |||||||||||
| Robert W. Holzwarth | 6,666 | (11) | — | 22.86 | 3/26/08 | |||||||||||
| 17,900 | (2) | — | 20.98 | 3/26/08 | ||||||||||||
| 13,300 | (12) | — | 22.86 | 3/26/08 | ||||||||||||
| 4,033 | (13) | — | 24.41 | 3/26/08 | ||||||||||||
28
2009 Grants of Plan-Based Awards
Name | Grant Date | Approval Date by Comp. Committee | All Other Stock Awards: Number of Units (#) | Grant Date Fair Value of Stock Awards($)(1) |
Keith E. Alessi | 7/01/2009 | 6/17/2009 | 30,000(1) | 245,100 |
Kevin A. Paprzycki | 7/01/2009 | 6/17/2009 | 5,600(1) | 45,752 |
Morris W. Kegley | 7/01/2009 | 6/17/2009 | 5,600(1) | 45,752 |
Todd A. Myers | 6/03/2009 | 5/13/2009 | 5,000(2) | 47,600 |
7/01/2009 | 6/17/2009 | 5,600(1) | 45,752 | |
John V. O’Laughlin | 7/01/2009 | 6/17/2009 | 8,400(1) | 68,628 |
(1) | The 2009 LTIP award granted by the Compensation and Benefits Committee on June 17, 2009 consisted of restricted stock units with a three-year vest issued out of the 2007 plan with a grant date of July 1, 2009. The grant date fair value on July 1, 2009 was $8.17 per share. |
(2) | Mr. Myers was granted a one-time issuance of 5,000 shares with no restrictions or vesting out of the 2007 plan to satisfy a past retirement obligation. The grant date fair value on June 3, 2009 was $9.52 per share. |
2009 Outstanding Equity Awards at Fiscal Year-End
| Option Awards | Stock Awards | ||||
Name | Securities Underlying Unexercised Options (#) Exercisable | Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Units that have not vested (#)(2) | Market value of units that have not vested as of 12/31/09($)(3) |
Keith E. Alessi | 20,000 | 40,000(1) | 21.40 | 7/01/18 |
|
|
30,556 | 0 | 24.12 | 5/02/17 |
|
| |
|
|
|
| 30,000 | 267,300 | |
Kevin A. Paprzycki | 2,333 | 4,667(1) | 21.40 | 7/01/18 |
|
|
1,900 | 0 | 24.41 | 7/01/16 |
|
| |
2,500 | 0 | 29.48 | 6/05/16 |
|
| |
|
|
|
| 5,600 | 49,896 | |
Morris W. Kegley | 2,333 | 4,667(1) | 21.40 | 7/01/18 |
|
|
1,900 | 0 | 24.41 | 7/01/16 |
|
| |
|
|
|
| 5,600 | 49,896 | |
Todd A. Myers | 683 | 0 | 18.09 | 5/29/11 |
|
|
2,517 | 0 | 18.19 | 5/29/11 |
|
| |
6,700 | 0 | 12.86 | 6/24/12 |
|
| |
6,700 | 0 | 18.08 | 6/30/13 |
|
| |
6,700 | 0 | 17.80 | 12/31/13 |
|
| |
12,300 | 0 | 19.37 | 7/01/14 |
|
| |
16,200 | 0 | 20.98 | 7/01/15 |
|
| |
7,900 | 0 | 24.41 | 7/01/16 |
|
| |
2,333 | 4,667(1) | 21.40 | 7/01/18 |
|
| |
|
|
|
| 5,600 | 49,896 | |
John V. O’Laughlin | 20,000 | 0 | 12.04 | 3/05/11 |
|
|
491 | 0 | 18.09 | 5/29/11 |
|
| |
1,809 | 0 | 18.19 | 5/29/11 |
|
| |
4,700 | 0 | 12.86 | 6/24/12 |
|
| |
3,650 | 0 | 18.08 | 6/30/13 |
|
| |
3,650 | 0 | 17.80 | 12/31/13 |
|
| |
9,800 | 0 | 19.37 | 7/01/14 |
|
| |
14,600 | 0 | 20.98 | 7/01/15 |
|
| |
9,900 | 0 | 24.41 | 7/01/16 |
|
| |
5,000 | 10,000(1) | 21.40 | 7/01/18 |
|
| |
|
|
|
| 8,400 | 74,844 | |
(1) | These options were awarded by the Compensation and Benefits Committee in June 2008 as part of the annual LTIP award. The options vest in three annual increments beginning 7/1/09, with the remaining two increments vesting in July 2010 and July 2011. | |
(2) | Awards in this column consist of restricted stock units with a grant date of July 1, 2009. Awards of restricted stock units vest in thirds over a three-year period beginning on the first | |
(3) | The market value of the | |
22
Option Exercises andTable of Contents
Stock Vested Stockin 2009
Name | Shares Acquired on Vesting(#) | Stock Value Realized on Vesting($) |
Todd A. Myers | 5,000 | 47,600 |
2009 Pension Benefits
Name(1) | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit as of December 31, 2009 ($)(2) | Payments During LastFiscal Year ($) |
Keith E. Alessi | Westmoreland Retirement Plan (WCC) | 2.08 | 23,819 | — |
Kevin A. Paprzycki | Westmoreland Retirement Plan (WCC) | 3.0 | 21,241 | — |
Morris W. Kegley | Westmoreland Retirement Plan (WCC) | 3.67 | 111,217 | — |
Todd A. Myers | Westmoreland Retirement Plan (WCC) | 9.5 | 102,631 | — |
John V. O’Laughlin | Westmoreland Retirement Plan (BSS) | 9.0 | 200,250 | — |
| Option Awards | Stock Awards | |||||||||||||||
| Number of Shares | Value Realized on | Number of Shares | Value Realized on | |||||||||||||
| Acquired on Exercise | Exercise | Acquired on Vesting | Vesting | |||||||||||||
Name | (#) | ($) | (#) | ($) | ||||||||||||
| Keith E. Alessi | — | — | — | — | ||||||||||||
| David J. Blair | — | — | — | — | ||||||||||||
| John V. O’Laughlin | — | — | — | — | ||||||||||||
| Todd A. Myers | — | — | — | — | ||||||||||||
| Morris W. Kegley | — | — | — | — | ||||||||||||
| Christopher K. Seglem | 242,255 | (1) | 4,983,337 | — | — | |||||||||||
| Roger D. Wiegley | 3,596 | (2) | 101,281 | — | — | |||||||||||
| Robert W. Holzwarth | — | — | — | — | ||||||||||||
(1) | Mr. Lobb was not vested in the pension plan at the time he ceased employment. | |
(2) | ||
29
| Present Value | ||||||||||||||
| of Accumulated | ||||||||||||||
| Benefit as of | ||||||||||||||
| Number of Years | December 31, | Payments During Last | ||||||||||||
| Credited Service | 2007(1) | Fiscal Year | ||||||||||||
Name | Plan Name | (#) | ($) | ($) | ||||||||||
| Keith E. Alessi(2) | Westmoreland | — | — | — | ||||||||||
| Retirement Plan (WCC) | ||||||||||||||
| David J. Blair | Westmoreland | 2.75 | 49,109 | — | ||||||||||
| Retirement Plan (WCC) | ||||||||||||||
| John V. O’Laughlin | Westmoreland | 7.0 | 153,598 | — | ||||||||||
| Retirement Plan (BSS) | ||||||||||||||
| Todd A. Myers | Westmoreland | 8.08 | 80,602 | — | ||||||||||
| Retirement Plan (WCC) | ||||||||||||||
| Morris W. Kegley | Westmoreland | 2.25 | 42,692 | — | ||||||||||
| Retirement Plan (WCC) | ||||||||||||||
| Christopher K. Seglem | Westmoreland | 26.75 | 378,241 | — | ||||||||||
| Retirement Plan (WCC) | ||||||||||||||
| Supplemental Executive | 26.75 | 2,705,216 | — | |||||||||||
| Plan(3) | ||||||||||||||
| Roger D. Wiegley(4) | Westmoreland | 2.33 | — | — | ||||||||||
| Retirement Plan (WCC) | ||||||||||||||
| Robert W. Holzwarth(4) | Westmoreland | 3.17 | — | — | ||||||||||
| Retirement Plan (WCC) | ||||||||||||||
| Pension economic assumptions are consistent with our SFAS 87 financial reporting for fiscal year | ||
Effective July 1, 2009, the Board froze our pension plan for non-union employees, including our named executive officers, resulting in no future benefits accruing under these plans. Prior to as the Plan, for eligible employees of our company and our subsidiaries to which employees make no contributions. The Plan is a merger of the Westmoreland Pension Plan and other plans that were in place at subsidiaries at the time of their acquisition. The Plan maintains the formulas for benefit calculations which are associated withJuly 2009, each of the original plans. All employees whose terms and conditions of employment are not subject to collective bargaining and who work 1,000 or more hours per year are eligible for participationnamed executive officers, except Mr. Alessi, participated in the Plan.same defined benefit pension plans offered to other non-union employees. Eligible employees become fully vested after five years of service, or, in any event, upon attaining age 65.
In addition, to the purpose of benefit calculation under the Plan for Mr. C. Seglem, credited service under the previousmain Westmoreland pension plan, is included with credited service under the current Plan.
30
Mr. Alessi, and those who are hired on or after July 1, 2006, and who are not subject to collective bargaining and who work 1,000 or more hours per year, are covered under a new benefit plan. There are two components to the new benefit plan design, the first being a defined benefit plan to which employees make no contributions. EligibleAs eligible employees become fully vested after five years of service, or in any event, upon attaining age 65. The second component is a defined contribution plan, or 401(k) Plan, in which employees may elect to have a pre-tax deduction from their pay deposited in a 401(k) Plan account. Employees’ contributions are matched by the Company at 50% of the first 6% of compensation the employee contributes. The matching contribution is made in Westmoreland common stock and employees become vested in the matching contribution over a two-year period. This benefit also provides for a monthly Special Contribution paid by the Company in Westmoreland common stock to employees’ 401(k) plan account equal to 1.5% of their gross pay. Employees are immediately 100% vested in the Special Contribution. The Special Contribution will be made without regard to any contributions the employees make to the Plan. If an employee has not
31
2009 Pension Benefits Upon Retirement/Termination Disability or Death
Mr. O’Laughlin and Mr. Myers are each vested in the pension plan and are entitled to an annual lifetime benefit payable upon retirement, voluntary or involuntary termination, disability or death (paid for the life of the spouse). The following table shows benefits for Mr. C. Seglem based on his termination in May 2007. Benefits shown for Mr. O’Laughlin and Mr. Myers assume that the event entitling them to benefits occurred on December 31, 2007.
| Time or Period of | ||||||||||||||
Name | Type of Termination | Plan | Benefit Amount | Form of Payment | Payment | |||||||||
| Christopher K. Seglem | Retirement/Termination | Pension Plan | $ | 2,793 | Monthly Annuity | Life | ||||||||
| SERP | $ | 19,116 | Monthly Annuity | Life with 10 years guaranteed | ||||||||||
| Disability | Pension Plan | N/A | Monthly Annuity | Life | ||||||||||
| SERP | N/A | Monthly Annuity | Life | |||||||||||
| Death | Pension Plan | N/A | Monthly Annuity | Life of Spouse | ||||||||||
| SERP | N/A | Monthly Annuity | Life of Spouse | |||||||||||
| John V. O’Laughlin | Retirement/Termination | Pension Plan | $ | 1,317 | Monthly Annuity | Life | ||||||||
| Disability | Pension Plan | $ | 1,317 | Monthly Annuity | Life | |||||||||
| Death | Pension Plan | $ | 594 | Monthly Annuity | Life of Spouse | |||||||||
| Todd A. Myers | Retirement/Termination | Pension Plan | $ | 1,803 | Monthly Annuity | Life | ||||||||
| Disability | Pension Plan | $ | 1,803 | Monthly Annuity | Life | |||||||||
| Death | Pension Plan | $ | 1,446 | Monthly Annuity | Life of Spouse | |||||||||
32
| Executive | Registrant | Aggregate | ||||||||||||||||||
| Contributions | Contributions in Last | Aggregate Earnings | Withdrawals/ | Aggregate Balance at | ||||||||||||||||
| in Last Fiscal Year | Fiscal Year | in Last Fiscal Year(1) | Distributions | Last Fiscal Year-End | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
| Keith E. Alessi | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
| David J. Blair | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
| John V. O’Laughlin(2) | 0 | 0 | 2,118 | 17,938 | (3) | 19,026 | (4) | |||||||||||||
| Todd A. Myers(5) | 0 | 0 | 5,591 | 112,899 | (6) | 27,368 | (7) | |||||||||||||
| Morris W. Kegley | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
| Christopher K. Seglem(5) | 0 | 0 | 33,948 | 782,120 | (8) | 132,515 | (9) | |||||||||||||
| Roger D. Wiegley | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
| Robert W. Holzwarth | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
33
Name | Type of Termination | Plan | Benefit Amount | Form of Payment | Time or Period of Payment |
John V. O’Laughlin | Retirement/Termination | Pension Plan | $2,005 | Monthly Annuity | Life |
Disability | Pension Plan | $2,005 | Monthly Annuity | Life | |
Death | Pension Plan | $919 | Monthly Annuity | Life of Spouse | |
Todd A. Myers | Retirement/Termination | Pension Plan | $1,208 | Monthly Annuity | Life |
Disability | Pension Plan | $2,415 | Monthly Annuity | Life to age 65 | |
Death | Pension Plan | $1,038 | Monthly Annuity | Life of |
23
Table of the Company. Mr. C. Seglem asserts that he isContents
Potential Payments upon Termination or Change-in-Control
Our named executive officers are not entitled to paymentany additional payments or benefits relating to termination of severanceemployment other than the retirement benefits under the Executive Policy. The total amount of the severance benefits payable to Mr. C. Seglem has not been determined because the Executive Policy is subject to different interpretations in regard to certain important terms. If Mr. C. Seglem’s interpretation of the severance policy were to be upheld, he would be entitled to severance payments of approximately $3.8 million plus reimbursement of his attorney’s fees. Any severance award payable to Mr. C. Seglem would be payable to him in equal installments over 24 months or in a lump sum, discounted at the two-year treasury bill rate. If Mr. C. Seglem were entitled to a severance award, he would also be entitled to the perquisites and other personal benefitspreviously described in the Executive Policy, including medical, dentalpreceding compensation tables and life insurance coverage for two years from the date of termination, financial planning services for the year of termination plus one year, and outplacement services forparticipation in a period upseverance policy that is generally available to two years from the termination date, but ending upon the acceptance of employment. The Company has recorded a reserve of $1.8 million for this matter. The Company believes that, if there were to be an agreement to the terms and benefits to be provided under the Executive Policy, Mr. C. Seglem would be required to sign a release, acknowledging that such payments and benefits are in full satisfaction of all amounts and obligations owed under the policy.
34
35
Name | Type of Compensation | Termination for Cause/ Voluntary Termination | Involuntary Not for Cause | Termination upon Change-in-Control | Retirement | Death |
Keith Alessi | Salary | $0 | $600,000 | $0 | $0 | $0 |
Vested Equity(1)(2) | $0 | $0 | $267,300 | $0 | $267,300 | |
Outplacement Services and health benefits | $0 | $23,125 | $0 | $0 | $0 |
| Change | ||||||||||||||||||||||||||||
| in Pension | ||||||||||||||||||||||||||||
| Value and | ||||||||||||||||||||||||||||
| Nonqualified | ||||||||||||||||||||||||||||
| Non-Equity | Deferred | |||||||||||||||||||||||||||
| Fees Earned or | Stock | Option | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||
| Paid in Cash | Awards(2) | Awards(3) | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||
Name(1) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
| Michael Armstrong | 28,320 | — | 6,581 | (4) | — | — | — | 34,901 | ||||||||||||||||||||
| Thomas J. Coffey | 75,500 | 30,000 | 6,581 | (5) | — | — | — | 112,081 | ||||||||||||||||||||
| Robert E. Killen | 101,500 | 30,000 | 6,581 | (6) | — | — | — | 138,081 | ||||||||||||||||||||
| Richard M. Klingaman | 51,000 | 30,000 | 17,588 | (7) | — | — | — | 98,588 | ||||||||||||||||||||
| Thomas W. Ostrander | 40,750 | — | 6,581 | (8) | — | — | — | 47,331 | ||||||||||||||||||||
| William M. Stern | 57,000 | 30,000 | 6,581 | (9) | — | — | — | 93,581 | ||||||||||||||||||||
| Donald A. Tortorice | 37,350 | — | 6,581 | (10) | — | — | — | 43,931 | ||||||||||||||||||||
Name | Type of Compensation | Termination for Cause/ Voluntary Termination | Involuntary Not for Cause | Termination upon Change-in-Control | Retirement | Death | |
Kevin Paprzycki | Salary | $0 | $207,000 | $0 | $0 | $0 | |
Vested Equity(1)(2) | $0 | $0 | $49,896 | $0 | $49,896 | ||
Outplacement Services and other benefits | $0 | $22,235 | $0 | $0 | $0 | ||
Name | Type of Compensation | Termination for Cause/ Voluntary Termination | Involuntary Not for Cause | Termination upon Change-in-Control | Retirement | Death |
Morris Kegley | Salary | $0 | $207,375 | $0 | $0 | $0 |
Vested Equity(1)(2) | $0 | $0 | $49,896 | $0 | $49,896 | |
Outplacement Services and other benefits | $0 | $18,583 | $0 | $0 | $0 |
Name | Type of Compensation | Termination for Cause/ Voluntary Termination | Involuntary Not for Cause | Termination upon Change-in-Control | Retirement | Death |
Todd Myers | Salary | $0 | $226,633 | $0 | $0 | $0 |
Vested Equity(1)(2) | $0 | $0 | $49,896 | $0 | $49,896 | |
Outplacement Services and other benefits | $0 | $23,143 | $0 | $0 | $0 |
Name | Type of Compensation | Termination for Cause/ Voluntary Termination | Involuntary Not for Cause | Termination upon Change-in-Control | Retirement | Death |
John O’Laughlin | Salary | $0 | $220,007 | $0 | $0 | $0 |
Vested Equity(1)(2) | $0 | $0 | $74,844 | $0 | $74,844 | |
Outplacement Services and other benefits | $0 | $17,404 | $0 | $0 | $0 |
(1) | Various unvested options and SARs held by our named executive officers automatically vest upon a change-in-control. However, all outstanding options held by our named executive officers have an exercise price greater than $8.91, the closing price of our stock on December 31, 2009. There is no intrinsic value in any accelerated options or vested stock options because options with an exercise price greater than $8.91 have zero intrinsic value. | |
(2) | We awarded long-term equity to the named executive officers in | |
36
37
Policies and Procedures for Related Person Transactions
Our Board has adopted written policies and procedures for the review of any transaction, arrangement, or relationship in which Westmoreland Coal Company is a participant, the amount involved exceeds $120,000, and one of our executive officers, directors, director nominees or 5% stockholders (or their immediate family members), each of whom we refer to as a related person, has a direct or indirect material interest.
If a related person proposes to enter into such a transaction, arrangement, or relationship, which we refer to as a related person transaction, the related person must report the proposed related person transaction to our general counsel. The policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approved by the Board’sour Audit Committee. Whenever practicable, the reporting, review, and approval will occur prior to entry into the transaction. If advance review and approval is not practicable, the committeeAudit Committee will review, and, in its discretion, may ratify the related person transaction. The policy also permits the Chairman of the committeeAudit Committee to review and, if deemed appropriate, approve proposed related person transactions that arise between committee meetings, subject to ratification by the committeeAudit Committee at its next meeting. Any related person transactions that are ongoing in nature will be reviewed annually.
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the related person’s interest in the transaction. As appropriate for the circumstances, the committee will review and consider:
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the transactions that are excluded bypurpose of, and the instructionspotential benefits to us of, the SEC’s related person transaction disclosure rule, thetransaction.
The Board has determined that the followingcertain transactions do not create a material direct or indirect interest on behalf of related persons and, therefore, are not related person transactions for purposes of this policy:
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| compensation to an executive officer if the compensation has been approved, or recommended to the Board | ||
Certain Relationships and Related Transactions with Tontine
On March 4, 2008, we completed the sale of $15 million of senior secured convertible notes which we call our senior notes, to Tontine Partners, L.P. and Tontine Capital Partners, L.P., or the Tontine Purchasers. The sale was completed pursuant to a Senior Secured Convertible Note Purchase Agreement dated as of March 4, 2008 among us, the Tontine Purchasers,partnerships, and Tontine Capital Associates, L.P., as collateral agent.
Change in Independent Public Accounting Firm
On January 6, 2009, we take the actions described in the note purchase agreement (including paying dividends or making distributions in shares of common stock or issue securities convertible into or exchangeable for shares of common stock at an exercise price less than the conversion pricenotified KPMG LLP that, upon completion of the senior notes then in effect), but the senior notes may not be converted into more than 1,877,946 shares of common stock.
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During the years ended December 31, 2008 and 2007 and the subsequent period through the date of the filing of the Form 8-K/A on March 23, 2009, we had no: (1) disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to KPMG’s satisfaction, would have caused KPMG to make reference in connection with their opinion to the subject matter of the disagreement; or (2) reportable events, except as described below. Our management has been selectedauthorized KPMG to serve asrespond fully to the Company’sinquiries of the new independent registered public accounting firm regarding all matters.
KPMG’s reports on our consolidated financial statements as of and for 2008.the years ended December 31, 2008 and 2007 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles, except that the audit report of KPMG on the consolidated financial statements of Westmoreland and subsidiaries for the year ended December 31, 2008 expressed the opinion that various factors raised substantial doubt about our ability to continue as a going concern. The Company expectsaudit reports of KPMG on the effectiveness of internal control over financial reporting as of December 31, 2008 did not contain any adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope, or
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accounting principles. The audit reports of KPMG on the effectiveness of internal control over financial reporting as of December 31, 2007 did not contain any adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope, or accounting principles, except that KPMG’s report indicated that we did not maintain effective internal control over financial reporting as of December 31, 2007 because of the effect of material weaknesses on the achievement of the objectives of the control criteria and contained an explanatory paragraph that stated that: “Management identified and included in its assessment material weaknesses related to electronic spreadsheets that impact the Company’s financial reporting, census data used to calculate postretirement medical benefit obligations, and the accounting for one of the Company’s stock based compensation plans.”
We requested and obtained from KPMG a representativeletter addressed to the Securities and Exchange Commission stating whether or not it agreed with the above statements. A copy of thatKPMG’s letter, dated March 16, 2009, is filed as Exhibit 16.1 to our Current Report on Form 8-K/A filed March 23, 2009.
Engagement of Ernst & Young LLP
On January 8, 2009, our Audit Committee approved the engagement of Ernst & Young LLP as our new independent registered public accounting firm will be present at the Annual Meeting and will have the opportunity to make a statementbeginning with fiscal year 2009, and to respondperform procedures related to appropriate questions from stockholders.
Auditor’s Fees
The following table summarizes the fees of KPMG, LLP, our independent registered public accounting firm for each of the last two fiscal years.year 2008, and Ernst & Young, for fiscal year 2009. For 2007,2009, audit fees include an estimate of amounts not yet billed.
Fee Category | 2007 | 2006 | ||||||
| Audit Fees(1) | $ | 1,750,000 | $ | 2,304,716 | ||||
| Audit Related Fees(2) | $ | 58,500 | $ | 20,400 | ||||
| Tax Fees(3) | $ | — | $ | 24,115 | ||||
| All Other Fees | $ | — | $ | — | ||||
| Total Fees | $ | 1,808,500 | $ | 2,349,231 | ||||
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Audit Fees(2) | $ | 856,000 | $ | 1,136,000 | |
Total Fees | $ | 856,000 | $ | 1,136,000 | |
(1) | We did not pay any “Audit Related Fees,” “Tax Fees” or “All Other Fees” to either KPMG or Ernst & Young in fiscal years 2008 or 2009. | |
(2) | Audit fees consist of fees for the audit of our financial statements, including fees related to | |
Pre-Approval Policy and Procedures
The Audit Committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by the Company’sour registered public accounting firm. This policy generally provides that the Companywe will not engage itsour registered public accounting firm to render audit or non-audit services unless the service is specifically approved in advance by the Audit Committee or the engagement is entered into pursuant to one of the pre-approval procedures described below.
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ELECTION OF STOCKHOLDERS FOR 2009 ANNUAL MEETING
Each of our common stock director nominees is currently a stockholdermember of the Company wishes to be considered for inclusion in the Company’s proxy statement and proxy card for the Company’s 2009 Annual Meeting of Stockholders (the “2009 Annual Meeting”) must be submitted to the Secretary of the Company at its offices, 2 North Cascade Avenue, 2nd Floor, Colorado Springs, Colorado 80903, no later than December 17, 2008. In addition, such proposals must comply with the requirements ofRule 14a-8 under the Exchange Act.
The Board of Directors recommends that holders of Common Stock vote “FOR” the election of the Companyfollowing nominees whose biographical information can be found above on pages 4 and 5:
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Keith E. Alessi;
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Thomas J. Coffey;
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Michael R. D’Appolonia; and
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Richard M. Klingaman.
ELECTION OF DIRECTORS BY THE HOLDERS OF SERIES A PREFERRED STOCK
The holders of our Series A Preferred Stock are entitled to elect two members to the Board. Each person elected at the meeting shall hold office until the next annual meeting of stockholders, or until his death, resignation, or removal, if earlier. In addition, if the special voting rights of the Series A Preferred Stock terminate, the terms of office of the directors elected by the holders of the Series A Preferred Stock will immediately terminate.
The Board recommends that holders of Depositary Shares vote “FOR” the election of the following nominees whose biographical information can be found above on page 5:
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William M. Stern; and
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Frank T. Vicino, Jr.
RATIFICATION OF PRINCIPAL INDEPENDENT AUDITOR
The Audit Committee appointed the firm of Ernst & Young LLP as our principal independent auditor for fiscal year 2010. Ernst & Young LLP served as our principal independent auditor in fiscal year 2009. Representatives of Ernst & Young LLP are expected to be present at the annual meeting, will have discretionary authoritythe opportunity to make a statement if they desire to do so and will be available to respond to questions.
The Board recommends that you vote on any such proposal.
Upon the written request of any person who on the record date was a record owner of Companyour stock, or who represents in good faith that he or she was on such date abeneficial owner of such stock entitled to vote at the Annual Meeting, the Company annual meeting, wewill send such person, without charge, a copy of itsour Annual Report onForm 10-K for 2007,2009, as filed with the Securities and Exchange Commission.Requests for this report should be directed to the Vice President-Corporate Relations, Diane S. Jones, atCorporate Secretary, Westmoreland Coal Company, 2nd Floor, 2 NorthCascade Avenue, Colorado Springs, Colorado 80903. The Company has adopted a Code of Conduct Policy which is applicable to all employees, including all senior officers and financial personnel. A copy of the Company’s Code of Conduct Policy can be found on the Company’s web site at www.westmoreland.com. The Company will provide any person, without charge, upon request, a copy of its Code of Conduct. Requests for the Code of Conduct should be in writing and should be directed to the attention of the General Counsel of the Company at the preceding address.
The Board of Directors has no present intention of bringing any other business before the meeting and has not been informed of any other matters that are to be presented to the meeting. If any other matters properly come before the meeting, however, the persons named in the enclosed proxy will vote in accordance with their best judgment.
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WESTMORELAND COAL COMPANY 2 N. CASCADE AVE., 2ND FLOOR COLORADO SPRINGS, CO 80903 ATTN: JENNIFER S. GRAFTON | VOTE BY INTERNET -www.proxyvote.com Use the Internet to transmit your ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | |
![[proxycard002.gif]](https://capedge.com/proxy/DEF 14A/0001447572-10-000007/proxycard002.gif)
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | M22366-P91502 | KEEP THIS PORTION FOR YOUR RECORDS |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
Combined Document is available at
www.proxyvote.com.
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WESTMORELAND COAL COMPANY Annual Meeting May 20, 2010 8:30 AM This proxy is solicited by |
The undersigned hereby constitutes and appoints |
This proxy, when properly executed, will be voted in the manner directed herein. If no directions are given, this proxy will be voted FOR the election of | ||
You are encouraged to specify your choices by marking the appropriate boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance with the Board of | ||
Continued and to be signed on reverse side |
WESTMORELAND COAL COMPANY 2 COLORADO SPRINGS, CO 80903 ATTN: JENNIFER S. GRAFTON | VOTE BY INTERNET -www.proxyvote.com Use the Internet to transmit your ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | M22368-P91502 | KEEP THIS PORTION FOR YOUR RECORDS |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
Combined Document is available at
www.proxyvote.com.
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WESTMORELAND COAL COMPANY Annual Meeting May 20, 2010 8:30 AM This proxy is solicited by |
The undersigned hereby constitutes and appoints | ||
This proxy, when properly executed, will be voted in the manner directed herein. If no directions are given, this proxy will be voted FOR the election of | ||
You are encouraged to specify your choices by marking the appropriate boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance with the Board of | ||
Continued and to be signed on reverse side |