2014 Regal-Beloit Proxy

PROPOSAL 2: AMEND AND RESTATE OUR ARTICLES OF INCORPORATION TO DECLASSIFY OUR BOARD OF DIRECTORS We are asking our shareholders to approve a proposed amendment and restatement of our Articles of Incorporation, as amended (the “Articles”), to provide for a phased‐in declassification of our Board (the “Restatement”). The following summary is qualified by reference to the full text of the proposed Amended and Restated Articles of Incorporation attached as Appendix A to this proxy statement, which shows proposed additions indicated by underlining, and proposed deletions indicated by overstriking. This proposal amends Section 5(a) of the Articles. The Board has approved the Restatement. If shareholders approve the Restatement at the Annual Meeting, then the phased‐in declassification of the Board will begin at our next annual meeting of shareholders to be held in 2016. Declassification of the Board Our Board has approved, and recommends that our shareholders approve at the Annual Meeting, the Restatement, which would amend the Articles to eliminate the classified Board structure to provide for an annual election of directors commencing in 2016. The Restatement provides that directors who have been or will be elected to three‐year terms prior to the 2016 annual meeting of shareholders, including those elected at the Annual Meeting, will complete those terms. Any director elected to fill a vacancy who is replacing a director who was in the course of serving a three‐year term shall serve for the remainder of the predecessor’s term. Beginning with the 2016 annual meeting of shareholders, and at all annual meetings of shareholders thereafter, directors whose terms are expiring will be subject to election for a one‐year term expiring at the next annual meeting. As a result, current directors whose terms expire in 2016, 2017 and 2018 will first be elected for one‐year terms beginning in those respective years. Beginning with the 2018 annual meeting of shareholders, the entire Board will be elected annually. Rationale for Declassification Our Board carefully reviewed the various arguments for and against a classified board structure. Our Board recognizes that a classified structure may offer several advantages, such as promoting continuity and stability, encouraging directors to take a long‐term perspective and reducing our vulnerability to coercive takeover tactics. The Board also recognizes, however, that a classified structure may appear to reduce directors’ accountability to shareholders because such a structure does not enable shareholders to express a view on each director’s performance by means of an annual vote. Our Board believes that implementing annual elections for all directors is consistent with our shareholders’ expectations and our ongoing commitment to corporate governance “best practices” where the Board believes that the same are in the best interests of our shareholders. In view of the considerations described above, our Board believes that it is in our and our shareholders’ best interests to eliminate the classified Board structure as proposed. Effectiveness of the Restatement If the foregoing proposal to amend and restate the Articles is approved by our shareholders, then the Restatement will be filed with the Wisconsin Department of Financial Institutions. If our shareholders approve one but not both of our proposals to amend and restate the Articles, then we will file the Restatement containing only the amendments that were approved.

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