2014 Regal-Beloit Proxy

Equity Incentive Plan Awards

As reflected in the tables above, the Committee granted equity‐based awards to our NEOs in 2014. The Committee granted these awards under our 2013 Equity Incentive Plan, or the 2013 Plan. Our equity incentive plans are administered by the Committee with respect to key employee participants, and the Committee generally has the authority to set the terms of awards under the plans except to the extent the plans specify such terms. Effective May 2014, the Committee awarded the RSUs indicated in the table above under the 2013 Plan. Pursuant to its practice of granting equity‐based awards only during an “open window” period following the release of our quarterly or annual financial results, the Committee awarded these RSUs with an effective grant date of May 7, 2014, which was the beginning of the first open window period following the Committee’s action. These RSUs had a grant date fair value of $75.76 per share as determined pursuant to ASC Topic 718, which is equal to the closing market price of a share of our common stock on the date of grant. All of the units granted to our NEOs during 2014 remain subject to forfeiture for three years following the date of grant. The Committee also granted the SARs shown in the table above under the 2013 Plan at a per share base price of $75.76. Pursuant to its practice of granting equity‐based awards only during an “open window” period following the release of our quarterly or annual financial results, the Committee awarded these SARs with an effective grant date of May 7, 2014, which was the beginning of the first open window period following the Committee’s action. The base price of the SARs equals the closing market price of a share of our common stock on the date of grant. The SARs vest and become exercisable over a five‐year period, with 40% vesting on the second anniversary of the grant date and 20% vesting on each of the third, fourth and fifth anniversaries of the grant date. The SARs will expire on May 7, 2024. The Committee also granted the PSUs shown in the table above under the 2013 Plan. The Committee approved the performance goals and maximum potential values for the awards in early 2014, and determined the final terms for the grants in April 2014. The PSUs have a three‐year performance period, from fiscal year 2014 to fiscal year 2016, and will be earned or forfeited based on a performance metric of total shareholder return relative to our peer group. Awards under the 2013 Plan and any rights under such awards are generally not assignable, alienable, saleable or transferable by participants. As reflected in the non‐equity incentive columns of the tables above, our NEOs participated in the SVA Cash Incentive Plan, which is designed to promote the maximization of shareholder value over the long term. The SVA Cash Incentive Plan provides annual cash incentive opportunities based on a comparison of actual annual SVA to target SVA for the year in question. Performance above target SVA earns an annual cash incentive more than the target annual cash incentive while performance below target SVA earns an annual cash incentive less than the target annual cash incentive. Under the SVA Cash Incentive Plan, the annual cash incentives earned up to 100% of the target amount are fully paid in cash following the end of that year. Annual cash incentive amounts earned above 100% of the target amount are paid in installments, with one‐third of the above‐target amount being paid to the participant in cash after the Shareholder Value Added Cash Incentive Plan

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