2014 Regal-Beloit Proxy

For 2014, the 21 companies in our peer group for purposes of NEO benchmarking were:

Acuity Brands, Inc. Colfax Corporation

AMETEK, Inc.

Briggs & Stratton Corporation Donaldson Company, Inc.

Crane Co.

Dresser‐Rand Group Inc. Hubbell Incorporated Lennox International Rexnord Corporation

Flowserve Corp. IDEX Corporation

Harsco Corporation Kennametal Inc. Owens Corning Snap‐On Incorporated

Lincoln Electric Holdings Inc.

Roper Industries Inc.

SPX Corporation

The Timken Co.

Xylem Inc.

Towers Watson benchmarked our executive compensation opportunities using (i) the above referenced peer group as the primary benchmark for our CEO, Chief Financial Officer and General Counsel positions and (ii) general industry data from Towers Watson’s Executive Compensation Database as the primary benchmark for our Chief Operating Officer and Vice President, Corporate Human Resources positions. In reviewing and analyzing these data, Towers Watson considered information for each NEO position with respect to the following elements of compensation:

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Base salary;

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Target SVA annual cash incentive;

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Target total cash compensation (salary and actual annual cash incentive);

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Grant‐date value of annual long‐term incentives; and

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Target total direct compensation (sum of target cash and long‐term incentives).

In keeping with the Committee approved methodology, Towers Watson analyzed each element of target total direct compensation for our NEOs compared to the market median from the two different data sources. Towers Watson reported on the methodology that it used in its analysis, provided a summary of its findings, and its observations on our programs relative to the data and market trends in executive compensation. In connection with this review, Towers Watson also analyzed our annual share utilization rate and dilution relative to market practice. The Committee did not review peer group data relating to supplemental benefits and perquisites in 2014. The Committee’s policy is to review such data every three years and it last did so in 2013.

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