2014 Regal-Beloit Proxy

! We have implemented stock ownership guidelines for certain executives, including our NEOs, which we believe help to focus our executives on long‐term stock price appreciation and sustainability. ! We have adopted a clawback policy requiring us to recoup incentive compensation paid to our executive officers on the basis of financial results that are subsequently subject to a material restatement. ! We have adopted a policy prohibiting our employees, including our NEOs, from trading in puts, calls and other derivative securities relating to our common stock. The prohibition includes the purchase of any financial instruments designed to hedge or offset any decease in the market value of our common stock. In addition to the SVA‐based annual cash incentive plans discussed above, we maintain revenue‐ based sales incentive compensation programs for certain of our non‐executive officer employees at select business units or functions. The eligible employees are generally engaged in sales functions and our general philosophy regarding their compensation is to provide a portion of their compensation on a variable basis to create incentives for them to bring in new customers and/or increase sales to existing customers. We designed the programs to limit the risks that participants will seek to increase their payouts through low‐quality sales or short‐term revenue accompanied by long‐term costs or additional risks by capping the amount of compensation participants may earn under the programs and by not giving the individual participants final authority over which sales are accepted. We monitor the programs periodically to determine whether our risk‐management objectives are being addressed by these features and intend to modify the programs if necessary to reflect changes to our risk profile.

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