Westmoreland Coal Company Stock Ownership Guidelines
Approved by the Board of Directors: October 22, 2015
Ownership Guidelines for Senior Management
- 3.0x base salary for Level 15
- 1.5x base salary for Level 14 and 13
- 1.0x base salary for Level 12
Ownership Guidelines for Non-Employee Directors
- 3.0x base annual retainer
Measurement and Progress towards Stock Ownership
-Each participant shall have a five-year period over which they can make progress towards the ownership guideline. The Compensation & Benefits Committee may approve a suspension of such progress towards the stated goal due to hardship or other extenuating circumstances.
-Compliance with the ownership targets shall be measured on an annual basis on January 1st of each year. Once a participant reaches the stock ownership target as of January 1st of any year based on the twelve-month trailing average of the stock price over the previous fiscal year, the individual will be deemed to have complied with the stock ownership guideline as to those shares owned on such date at the applicable salary and or base retainer in place as of January 1st of that year. The participant will remain in compliance with the guidelines once met, despite future changes in stock price, as long as the individual continues to own the minimum number of shares that brought them into compliance.
Example: Bill is a Level 12 employee and is making $100,000 as of January 1, 2014 and owns 5,000 shares. The average stock price from fiscal year 2013 on January 1, 2014 is $40 per share. He owns $200,000 worth of stock on such date, which exceeds his $100,000 goal. On January 1, 2015, the average stock price has dropped to $5.00 per share. So long as he still owns the 5,000 shares, he is still deemed to be in compliance with the ownership guideline as to $100,000 of his salary despite that his ownership has fallen to $25,000 worth of stock.
-Each year, those participants who have not yet met the ownership goal shall be required to fulfill ownership as to his or her full salary as of January 1st. Once an individual meets the goal, stock ownership shall be measured incrementally based on increases in base salary or base retainer. A participant shall be required to meet the ownership guideline as to any increase in salary based on incremental ownership since the date of measurement that brought them into compliance.
Example: Bill is a Level 12 employee and has met his $100,000 stock ownership goal based on his 5,000 shares owned as of January 1, 2014. Bill is promoted to Level 13 at a salary of $200,000. As such, he must now meet an additional ownership goal of $150,000 ($100,000 additional salary multiplied by 1.5x ownership goal) using shares acquired above the 5,000 shares. If he owns 8,000 shares as of January 1, 2015 and the stock is trading at $20.00, he has $60,000 towards his new $150,000 goal and is not in compliance as to his new incremental salary.
-Shares owned outright and shares held in the 401(k) plan shall count towards the participant meeting the stated ownership requirement.