2014 Regal-Beloit Proxy

What were the NEOs’ target cash incentive amounts for 2014 and how much did they earn? For each NEO, the target cash incentive amount is based on a percentage of the base salary paid to him or her. The Committee, in consultation with Towers Watson and our CEO (other than with respect to his own compensation), set annual cash incentive targets under our SVA Cash Incentive Plan near the median level with respect to each respective position held by our NEOs relative to our peer group. As a result, our NEOs were given the opportunity to earn above median annual cash incentive awards for generating improvements in our SVA while at the same time facing below median awards (or no awards at all) for failing to meet that objective. For 2014, the target cash incentive amounts for each of our NEOs were as follows:

Name

Target % of Base Salary

Target Amount

Mark J. Gliebe

115%

$ 1,063,750 $ 356,250 $ 431,250 $ 256,750 $ 172,500

Charles A. Hinrichs Jonathan J. Schlemmer Peter C. Underwood

75% 75% 65% 50%

Terry R. Colvin

Based on our performance in 2014, we achieved Actual SVA of $29.8 million. This was below the threshold performance goal, and the Committee therefore determined that no cash incentives would be earned for 2014. The target cash incentive levels set by the Committee did not affect decisions regarding other compensation elements. Long‐Term Incentives Do you provide long‐term incentives? If so, how are they structured? We provide long‐term incentives to our NEOs in the form of equity‐based compensation. Consistent with our compensation philosophy, we believe long‐term equity incentives help to ensure that our NEOs have a continuing stake in the long‐term success of our company and allow our NEOs to earn above‐median compensation only if our shareholders experience appreciation in their equity holdings. Other than in the case of newly hired executives, we generally make determinations concerning long‐term equity‐based awards in April of each year at the same time we complete our annual performance reviews. In any event, we grant all equity‐based awards effective two days after the release of either our quarterly or annual company financial results.

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