Document:

Exhibit 10.10

    
      

      

    

    EXHIBIT
      10.10

    

    REGAL-BELOIT
      CORPORATION

    

    RESTRICTED
      STOCK AGREEMENT

    

    

    This
      Agreement, entered into as of the Agreement Date (as defined in paragraph 1)
      by
      and between the Participant and REGAL-BELOIT CORPORATION (the
“Company”).

    

    WITNESSETH
      THAT:

    

    Whereas,
      the Company maintains the REGAL-BELOIT CORPORATION 2003 Equity Incentive Plan
      (the “Plan”), which is incorporated into and forms a part of this Agreement and
      the Participant has been selected by the Compensation and Human Resource
      Committee of the Board of Directors administering the Plan (the “Committee”) to
      receive a Restricted Stock Award under the Plan;

    

    Now,
      therefore, it is agreed, by and between the Company and the Participant, as
      follows:

    

    1.   
      Terms
      of Award
      - For
      the following terms used in this Agreement shall have the meanings set forth
      in
      this paragraph 1; 

     

    a.
      The
      Participant is: 

    

    b.
      The
      Agreement Date is the date the Participant was awarded the Restricted Stock
      by
      the Board of Directors. The 

       
      Agreement Date is: _____________________________

    

    c.
      The
      Restricted Period is the period beginning on the Agreement Date and ending
      on:
      ______________________

    

    d.
      The
      number of shares of Restricted Stock awarded under this Agreement shall be:
      _______ shares.

    

    Other
      terms used in this Agreement are defined in paragraph 6 or elsewhere in this
      Agreement.

    

    
      	
              2.

            	
              Award
                -
                The Participant is hereby granted the number of shares of Restricted
                Stock
                set forth in paragraph 1.

            

    

    

    
      	
              3.

            	
              Dividends
                and Voting Rights
                -
                The Participant is not entitled to receive any quarterly dividends
                paid
                with respect to shares of Restricted Stock until the end of the Restricted
                Period. The Participant is not allowed to vote the shares of Restricted
                Stock until the end of the Restricted
                Period.

            

    

    

    
      	
              4.

            	
              Payments
                in Lieu of Dividends
                -
                While the Participant is not entitled to dividends, the Participant
                will
                receive payments equivalent to dividends, which will be paid as ordinary
                income on a pay date on or near the pay date for dividends of the
                Company’s common stock.

            

    

    

    
      	
              5.

            	
              Record
                of Restricted Stock Awards
                -
                The Company will maintain records with the names and amounts of each
                Participant’s Restricted Stock
                Awards.

            

    

    

    
      
         

      

      
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              6.

            	
              Transfer
                and Forfeiture of Shares
                -
                If the Participant’s Date of Termination (as defined below) does not occur
                during the Restricted Period, then, at the end of the Restricted
                Period,
                the Participant shall become vested in the shares of Restricted Stock
                and
                shall own the shares free of all restriction otherwise imposed by
                this
                Agreement. The Participant shall become vested in the shares of Restricted
                Stock and become owner of the shares free of all restrictions otherwise
                imposed by this Agreement prior to the end of the Restricted Period,
                as
                follows:

            

    

    

    
      	 	
              a.

            	
              In
                the event a Participant terminates his or her employment or service
                with
                the Company as a result of death, disability, or retirement, the
                Committee
                shall have the discretion to modify the Restricted Period of each
                previously granted and unexpired or uncancelled Grant. The Committee
                shall
                also have discretion to determine whether such Grant(s) shall become
                immediately exercisable in full pursuant to Section 20(c) of the
                2003
                Equity Incentive Plan.

            

    

    

    
      	 	
              b.

            	
              The
                Participant shall become vested in the shares of Restricted Stock
                as of
                the date of a Change in Control, if the Change in Control occurs
                prior to
                the end of the Restricted Period and the Participant’s Date of Termination
                does not occur before the Change in Control
                date.

            

    

    

    Shares
      of
      Restricted Stock may not be sold, assigned, transferred, pledged, or otherwise
      encumbered until the expiration of the Restricted Period or, if earlier, until
      the Participant is vested in the shares. Except as otherwise provided in this
      paragraph 5, if the Participant’s Date of Termination occurs prior to the end of
      the Restricted Period, the Participant shall forfeit the Restricted Stock as
      of
      the Participant’s Date of Termination.

    

    
      	
              7.

            	
              Definitions
                -
                For purposes of this Agreement, the terms listed below shall be defined
                as
                follows:

            

    

    

    
      	 	
              a.

            	
              Change
                in Control
                -
                Refer to section 22, paragraph (c) of the REGAL-BELOIT CORPORATION
                2003
                Equity Incentive Plan.

            

    

    

    
      	 	
              b.

            	
              Retirement
                -
                normal retirement is no earlier than age
                62.

            

    

    

    
      	
              7.

            	
              Disability
                -
                is the date upon which the Participant is deemed eligible for disability
                payments from Social Security Administration and/or the provider
                of
                long-term disability insurance under the Company’s insurance
                program.

            

    

    

    In
      Witness Whereof, the company, by its duly authorized representative, and the
      eligible Participant have executed this Agreement as of the Effective
      Date.

    

    

    Participant:                 REGAL-BELOIT
      CORPORATION

    

    

    

    ______________________________     ________________________________

    Chief
      Executive Officer

    

    

    

    Date:
      _________________________

    

    
      
         

      

      
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          65 of
          83Exhibit 10.11

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      EXHIBIT
        10.11

    

    

    
      	 

              REGAL-BELOIT
                CORPORATION

              

              TARGET
                (SUPPLEMENTAL) RETIREMENT PLAN

               

            

    

     

    

    

    

    

    
      	
               

               I.

            	
               

              PURPOSE

            
	
               

              II.

            	
               

              DEFINITIONS

            
	
               

               III.

            	
               

               ELIGIBILITY
                - PARTICIPATION

            
	
               

              IV.

            	
               

              BENEFITS

            
	
               

              V.

            	
               

              CLAIMS
                PROCEDURE

            
	
               

              VI.

            	
               

              ADMINISTRATION

            
	
               

              VII.

            	
               

              AMENDMENT
                AND TERMINATION

            
	
               

              VIII.

            	
               

              MISCELLANEOUS

            

    

    

    
 

    
      
        
        

      

      
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    REGAL-BELOIT
      CORPORATION

    

    TARGET
      (SUPPLEMENTAL) RETIREMENT PLAN

    

    

    I. PURPOSE

    

    REGAL-BELOIT
      CORPORATION desires to provide Plan Participants with a retirement benefit
      which
      is adequate and competitive, when compared to peer company employers. The Plan
      is intended to provide a mechanism to provide supplemental retirement benefits
      to existing and newly hired employees of the Company who become eligible to
      participate, and to supplement retirement benefits payable from the Company's
      qualified retirement plan(s) to executives who are hired mid-career. By
      providing such benefits, the Company will remain able to attract and retain
      exceptional senior management personnel, and provide for orderly management
      succession.

     

    II. DEFINITIONS

    

    2.01 "Actuarial
      Equivalent" means a form of benefit differing in time, period, or manner of
      payment, but having the same value as the form of benefit payment expected
      to be
      paid to a Participant over his or her remaining lifetime, commencing on the
      first day of the month coincident with or next following his or her Normal
      Retirement Date. An Actuarial Equivalent determined hereunder shall be based
      on
      the mortality table, assumed rate of interest, and other factors utilized by
      the
      Pension Benefit Guaranty Corporation (PBGC), and in effect at the time a benefit
      payment amount is determined. PBGC factors to be utilized in determining the
      value of a benefit will be those factors used by the PBGC to value annuities
      for
      a single employer, trusteed plan terminating as of the first day of the month
      that includes the date in which the Participant attains (or would have attained)
      his or her Normal Retirement Date.

    

    2.02 "Administrative
      Committee" and "Committee" mean the Committee appointed pursuant to Article
      VI
      to administer the Plan.

    

    2.03 "Agreement"
      means the REGAL-BELOIT CORPORATION Target (Supplemental) Retirement Plan
      Agreement between a Participant and the Company, whereby a Participant agrees
      to
      the terms and provisions of the Plan, and the Company agrees to pay benefits
      in
      accordance with the Plan. An Agreement shall be executed by and between the
      Company when a Participant first becomes eligible to participate in the
      Plan.

    

    2.04 "Change
      of Control" means that a "Change in Control of the Company" has been deemed
      to
      occur pursuant to a Change in Control Agreement in effect between the Company
      and its Chief Executive Officer. If the Company is not a party to such a Change
      in Control Agreement, "Change of Control" means the purchase or other
      acquisition by any person, entity or group of persons, within the meaning of
      Sections 13(d) or 14(d) of the Securities Exchange Act of 1934 or any comparable
      successor provision, or a beneficial ownership (within the meaning of Rule
      13d-3
      promulgated under the Act) of 30% or more of either the outstanding shares
      of
      common stock or the combined voting power of Company's then outstanding voting
      securities entitled to vote generally, or the approval by the stockholders
      of
      Company of a reorganization, merger, or consolidation, in each case, with
      respect to which persons who were stockholders of the Company immediately prior
      to such reorganization, merger or consolidation do not, immediately thereafter,
      own more than 50% of the combined voting power entitled to vote generally in
      the
      election of directors of the reorganized, merged or consolidated Company's
      then
      outstanding securities, or a liquidation or dissolution of Company or of
      disposition by the sale or otherwise of all or substantially all of the
      Company's assets.

    

    
      
         

      

      
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    2.05 "Company"
      means REGAL-BELOIT CORPORATION, a Wisconsin Corporation, its successors and
      assigns, and any affiliated companies which grant participation hereunder to
      an
      employee with the Company's consent. References to "Company" in the Plan refer
      to the Company or, if appropriate, the participating affiliate of the Company
      which employs the Participant.

    

    2.06 "Early
      Retirement Date" and "Early Retirement" mean the date of Termination of Service
      of a Participant for reasons other than death before age sixty-five (65), but
      at
      or after age sixty-two (62) with fifteen (15) Years of Service, or Termination
      of Service under circumstances which the Company, in its sole discretion, elects
      to treat as an Early Retirement under the Plan.

    

    2.07 "ERISA
      Funded" means that the Plan is prevented from meeting the "unfunded" criterion
      of the exceptions to the application of Parts 2 through 4 of Subtitle B of
      Title
      I of the Employee Retirement Income Security Act of 1974, as amended
      (ERISA).

    

    2.08 "Final
      Average Compensation" means the average result produced by dividing the total
      Salary paid by the Company to a Participant during the sixty (60) consecutive
      month period immediately preceding his or her Termination of Service by the
      lesser of:

    

    (a) sixty
      (60), or

    

    (b) the
      actual number of months of the Participant's service with the Company, as
      determined pursuant to the Participant's Agreement to participate in the
      Plan.

    

    2.09 "IRC"
      means the Internal Revenue Code of 1986, as amended.

    

    2.10 "Normal
      Retirement Date" and "Normal Retirement" mean the date of Termination of Service
      of the Participant coincident with or following the date he or she attains
      age
      sixty-five (65).

    

    2.11 "Other
      Retirement Plans", "Other Retirement Plans' Benefit" mean the aggregate of
      the
      retirement benefit which is attributable to the Hypothetical Investment Account,
      or its Actuarial Equivalent, to which a Participant would be entitled if monthly
      payments were made to him in the form of a single life annuity commencing on
      the
      first day of the month immediately following the Participant's Normal Retirement
      Date. For purposes of the Plan, the "Hypothetical Investment Account" shall
      consist of an amount equal to the hypothetical value of the Participant's Profit
      Sharing Plan Account, as hereinafter described. A Participant's Hypothetical
      Investment Account shall consist of the beginning balance of the Participant's
      Profit Sharing Plan Account as of the Profit Sharing Plan's most recent
      valuation date immediately preceding the Participant's date of eligibility
      for
      participation in this Plan, as specified in the Participant's Agreement. The
      beginning balance of each Participant's Hypothetical Investment Account shall
      be
      increased by Hypothetical Company Contributions, if any, and by Hypothetical
      Investment Earnings. "Hypothetical Company Contributions" shall be calculated
      and determined assuming an annual increase in Salary of one percentage point
      higher than the cost-of-living adjustments applied under IRC Section
      415(b)(1)(A), and Company contributions determined as follows: (a) For
      periods prior to the date the REGAL-BELOIT CORPORATION Profit Sharing Plan
      was
      merged with the predecessor plan to the Regal-Beloit 401(k) Plan, a four percent
      (4%) Profit Sharing Plan contribution; (b) For periods on and after the
      date the REGAL-BELOIT CORPORATION Profit Sharing Plan was merged with the
      predecessor plan to the Regal-Beloit 401(k) Plan, a Company matching
      contribution equal to 1.5% of a Participant's Salary plus a Company base
      contribution of 2% of a Participant's Salary; provided, however, that the
      hypothetical base contribution shall not be credited unless the Participant
      is
      employed on the last day of the Plan Year; and (c) Any other Company
      contributions to a qualified retirement plan in which the employee has been
      a
      Participant if specified in the Participant's Agreement. "Hypothetical
      Investment Earnings" shall be calculated and determined assuming investment
      earnings equal to the most recent 12-month average yield on corporate bonds.
      Hypothetical Company Contributions and Hypothetical Investment Earnings shall
      be
      credited to a Participant's Hypothetical Investment Account at the same time
      and
      in the same manner as prescribed by the Profit Sharing Plan. For purposes of
      this Section, the "average yield on corporate bonds" means the composite average
      yield for the preceding calendar year of industrial and public utility bonds,
      rated Aaa through Baa, as determined from "Moody's Bond Record" published
      monthly by Moody's Investor's Service, Inc. (or any successor thereto), or,
      if
      such yield is no longer available, a substantially similar average selected
      by
      the Administrative Committee.

    

    
      
         

      

      
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    2.12 "Participant"
      means an employee of the Company who is designated to be eligible pursuant
      to
      Section 3.01 hereof and who signs and delivers an Agreement to the
      Company.

    

    2.13 "Plan"
      means the REGAL-BELOIT CORPORATION Target (Supplemental) Retirement Plan, as
      amended from time to time.

    

    2.14 "Plan
      Year" means the Company's fiscal year, which, unless and until changed, is
      January 1 to December 31.

    

    2.15 "Profit
      Sharing Plan" means either the REGAL-BELOIT CORPORATION Profit Sharing Plan,
      as
      amended from time to time, or the Regal-Beloit 401(k) Plan and its predecessor,
      as amended from time to time. Unless the context requires otherwise, definitions
      as used herein shall have the same meaning as in the Profit Sharing Plan when
      applied to said Plan.

    

    2.16 "Retirement
      Date" means a Participant's Early Retirement Date or Normal Retirement
      Date.

    

    2.17 "Salary"
      for purposes of the Plan shall be the total of the Participant's base yearly
      salary paid by the Company during a Plan Year, and considered "wages" for FICA
      and federal income tax withholding, plus any bonus payments from the Company
      earned by the Participant for the Plan Year (even if not paid in that Plan
      year)
      and any amounts deferred by the Participant under an unfunded, nonqualified
      plan
      maintained by the Company. For purposes of this Section, Salary amounts
      considered shall exclude reimbursements or other expense allowances (whether
      or
      not includable in gross income, and including but not limited to car
      allowances), (cash or non-cash) fringe benefits (including but not limited
      to
      contest prizes), moving expenses, welfare benefits (including but not limited
      to
      imputed income on life insurance coverage, unused and/or accrued vacation pay
      and severance pay), and any distribution of stock (excluding proceeds from
      any
      stock options, stock appreciation rights, or any other stock or equity based
      management incentive plan. Salary amounts considered shall include any amounts
      by which the Participant's Salary is reduced by a salary reduction or similar
      arrangement under any qualified plan described in IRC Section 401(a) or any
      cafeteria plan (as described in IRC Section 125) maintained by the
      Company.

    

    2.18 "Social
      Security Retirement Benefit" means the monthly amount of the primary Social
      Security benefit payable, or projected to be payable, to a Participant
      (regardless of whether such Social Security benefit is or has been applied
      for)
      at his or her Normal Retirement Date. The Social Security Retirement Benefit
      shall include a benefit payable to the Participant under any other similar
      retirement program sponsored by the United States government to which the
      Company contributed (at least in part) or which the Company funded (in whole
      or
      in part) by tax or similar levy.

    

    2.19 "Surviving
      Spouse" means the spouse of a Participant on his or her Retirement Date, who
      is
      entitled to receive payments under Section 4.04 hereof, and who survives the
      Participant to receive any Surviving Spouse's benefit payable under the Plan.
      For purposes of the Plan, a "Spouse" is a the Participant's husband or wife
      under a legal union recognized by applicable state or federal law.

    

    
      
         

      

      
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    2.20 "Target
      (Supplemental) Retirement Plan Trust" and "Trust" mean any irrevocable grantor
      trust or trusts established by the Company with an independent trustee for
      the
      benefit of persons entitled to receive payments hereunder.

    

    2.21 "Tax
      Funded" means that the interest of a Participant in the Plan will be includable
      in the gross income of the Participant for federal income tax purposes before
      actual receipt of Plan benefits by the Participant.

    

    2.22 "Termination
      for Cause" means a Termination of Service of the Participant resulting from
      the
      Participant's fraud, misappropriation, embezzlement, or theft of Company
      property, conviction of a felony, or violation of restrictive covenants
      contained in any employment agreement between him and the Company, or a willful
      and repeated violation of published standards of conduct of the Company, the
      determination of which shall be made solely by the Company.

    

    2.23 "Termination
      of Service" means the cessation of Participant's employment with the Company
      for
      any reason whatsoever, whether voluntarily or involuntarily, including by reason
      of retirement, death, or disability; provided, however, that a Participant
      who
      is entitled to long-term disability benefits under a long-term disability plan
      sponsored by the Company shall not be deemed to have incurred a Termination
      of
      Service until the earlier of the first anniversary of the date the Participant
      became entitled to long-term disability benefits, or the date the Participant
      no
      longer qualifies
      for
      long-term disability benefits, including loss of qualification due to
      death.

    

    2.24 "Years
      of
      Service" means periods of service credited to a Participant based on the period
      beginning with the Participant's employment commencement date, as specified
      in
      the Participant's Agreement, and ending on the date the Participant incurs
      a
      Termination of Service. Nonsuccessive periods of service of less than whole
      year
      periods of service shall be aggregated, with 12 months of service or
      365 days of service equaling a whole year of service. In its sole
      discretion, the Committee may award additional Years of Service to a Participant
      at any time prior to his or her Retirement Date as specified in the
      Participant's Agreement.

     

    III. ELIGIBILITY;
      PARTICIPATION

    

    3.01 Eligibility.
      Participation in the Plan shall be limited to employees of the Company who
      meet
      all of the following conditions:

    

    (a) each
      employee must be a corporate officer or other key employee of the Company who
      is
      designated as eligible to participate in the Plan by the Administrative
      Committee. The determination of which corporate officers and other key employees
      shall be designated eligible shall be made solely by the Committee;

    

    (b) each
      employee designated eligible to participate must file an Agreement with the
      Company in order to become a Participant in the Plan.

    

    An
      employee who meets all of the requirements of this Section shall become a
      Participant in the Plan. Except as otherwise provided in Section 3.02, once
      an
      employee becomes a Participant in the Plan, he or she shall remain a Participant
      until his or her Termination of Service, and thereafter until all benefit
      payments, if any, to the Participant (or his or her Surviving Spouse) have
      been
      made.

    

    3.02 Continuing
      Eligibility.
      If for
      any reason, a Participant's Salary has been reduced, or if he or she has had
      a
      material reduction in job responsibility, job description, or job duties, his
      or
      her participation in the Plan may be terminated as determined in the sole
      discretion of the Committee. In the event of such termination, a Participant
      shall be deemed to have incurred a Termination of Service. Unless such
      termination occurs on or after the Participant's Early Retirement Date, or
      Normal Retirement Date, no benefit shall be payable to or on behalf of the
      Participant under the Plan.

    

    
      
         

      

      
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    3.03 Reemployment.
      Any
      Participant who incurs a Termination of Service shall not be eligible to
      participate in the Plan on reemployment, unless the Committee so determines.
      In
      such event, the Committee shall specify the effective date of the Participant's
      renewed eligibility, and the conditions of his or her participation, including
      any adjustments in Years of Service, accrued benefit earned on the date of
      his
      or her reparticipation, if any, and other factors to reflect his or her break
      in
      continued participation. The Committee shall notify each reemployed Participant
      of his or her eligibility, of the effective date, and the conditions of
      participation, as specified by the Participant's Agreement.

    

    IV. BENEFITS

    

    4.01 Retirement
      Benefit.
      A
      Participant whose Termination of Service occurs on his or her Normal Retirement
      Date or Early Retirement Date shall be eligible for a retirement benefit,
      payable in monthly installments as provided in Section 4.03. The monthly benefit
      payable shall equal:

    

    (a) 2.0%
      of
      the Participant's Final Average Compensation, multiplied by his or her Years
      of
      Service (up to a maximum of 30) determined as of the Participant's Retirement
      Date, less

    

    (b) the
      Participant's Other Retirement Plans' benefit; and

    

    (c) the
      Participant's Social Security Retirement Benefit.

    

    4.02 Benefit
      Commencement Other Than on Normal Retirement Date.
      The
      Retirement Benefit of a Participant whose Retirement Date is on his or her
      Early
      Retirement Date, but before his or her Normal Retirement Date, shall commence
      on
      the first day of the month immediately following his or her Normal Retirement
      Date; provided, however, that a Participant who terminates on his or her Early
      Retirement Date may, with the consent of the Committee, elect that the benefit
      determined under Section 4.01 commence on the first day of any month following
      his or her Early Retirement Date (but not after his or her Normal Retirement
      Date). 

    

    4.03 Form
      and Commencement of Benefit Payment.
      An
      aggregate number of no more than one hundred and eighty (180) monthly benefit
      payments shall be payable under the Plan. Any benefit payable to the Participant
      under the Plan shall be payable commencing on the first day of the month
      immediately following the Participant's Normal Retirement Date, or an earlier
      date if elected by a Participant eligible for Early Retirement pursuant to
      Section 4.02. Monthly benefit payments shall continue on the first day of
      each month thereafter, until the first of the following dates:

    

    (a) the
      last
      payment date immediately preceding the death of the Participant who dies without
      a Surviving Spouse;

    

    (b) the
      last
      payment date immediately preceding the death of the Surviving Spouse of the
      Participant; or

    

    (c) the
      date
      the one hundred and eightieth (180th) payment has been made to the Participant
      and/or his or her Surviving Spouse.

    

    
      
         

      

      
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    4.04 Surviving
      Spouse Benefit.
      The
      Company shall pay the Surviving Spouse of a Participant:

    

    (a) Death
      During Employment.
      In the
      event a Participant dies while employed by the Company, but on or after the
      Participant has become eligible for Early or Normal Retirement, a Surviving
      Spouse benefit equal to 1/2 of the Participant's retirement benefit shall be
      payable as provided in this subsection. The monthly amount of the Surviving
      Spouse's benefit payable shall be calculated and determined as if the
      Participant had retired on the date of his or her death. Payment of the
      Surviving Spouse benefit shall commence on the first day of the month
      immediately following the date of the Participant's death, and shall be payable
      until the one hundred and eightieth (180th) monthly installment has been paid,
      or until the last payment immediately preceding the Surviving Spouse's date
      of
      death, whichever occurs first. No Surviving Spouse benefit shall be paid to
      a
      Participant who dies while employed by the Company but prior to becoming
      eligible for Early or Normal Retirement.

    

    (b) Death
      After Retirement Date.
      In the
      event a Participant dies on or after his or her Retirement Date, a Surviving
      Spouse benefit shall be payable as provided in this subsection. One-half (1/2)
      of the monthly amount of any of the one hundred and eighty (180) installments
      payable under the Plan remaining unpaid to the Participant on the date of his
      or
      her death, if any, shall be payable to the Participant's Surviving Spouse.
      Payment of the Surviving Spouse benefit shall commence on the first day of
      the
      month immediately following the date of the Participant's death, and shall
      continue monthly until the one hundred and eightieth (180th) monthly installment
      has been paid, including installments paid prior to the Participant's death,
      or
      until the last payment immediately preceding the Surviving Spouse's date of
      death, whichever occurs first. No benefits shall be paid upon the death of
      a
      Participant who has no Surviving Spouse.

    

    4.05 Vesting.
      Except
      in the event of a Termination for Cause, and except as otherwise provided in
      Section 3.02, each Participant who is eligible for an Early or Normal Retirement
      Benefit (whether or not the Participant has retired), shall be one hundred
      percent (100%) vested in an Early or Normal Retirement Benefit, determined
      under
      Section 4.01 hereof, based on Years of Service, Final Average Compensation,
      and benefits payable from Other Retirement Plans as of any appropriate date
      after the Participant has become eligible for an Early or Normal Retirement
      Benefit. A Participant shall not be deemed vested in any benefits from the
      Plan
      for any reason prior to becoming eligible for Early or Normal
      Retirement.

    

    4.06 Termination
      for Cause.
      If a
      Participant's Termination of Service occurs as a result of a Termination for
      Cause, no benefit shall be payable under the Plan. Upon Termination for Cause,
      the provisions of Section 4.05 shall not apply, and the Participant shall
      immediately cease to be eligible for any benefit otherwise payable under Section
      4.01 of the Plan.

    

    4.07 Withholding;
      Employment Taxes.
      To the
      extent required by the law in effect at the time payments are made, the Company
      shall withhold any taxes required to be withheld by the federal, or any state
      or
      local, government.

    

    4.08 Facility
      of Payment.
      Any
      benefit payable hereunder to any person under a legal disability, or to any
      person who, in the judgment of the Administrative Committee, is unable to
      properly administer his or her financial affairs, may be paid to the legal
      representative of such person, or may be applied for the benefit of such person
      in a manner which the Committee may select.

    

    
      
         

      

      
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    V. CLAIM
      FOR
      BENEFITS PROCEDURE

    

    5.01 Claim
      for Benefits.
      Any
      claim for benefits under the Plan shall be made in writing to the Committee.
      If
      such claim for benefits is wholly or partially denied by the Committee, the
      Committee shall, within a reasonable period of time, but not later than ninety
      (90) days after receipt of the claim, notify the claimant of the denial of
      the
      claim. Such notice of denial shall be in writing and shall contain:

    

    (a) the
      specific reason or reasons for the denial of the claim;

    

    (b) a
      reference to the relevant Plan provisions upon which the denial is
      based;

    

    (c) a
      description of any additional material or information necessary for the claimant
      to perfect the claim, together with an explanation of why such material or
      information is necessary; and

    

    (d) an
      explanation of the Plan's claim review procedure.

    

    5.02 Request
      for Review of a Denial of a Claim for Benefits.
      Upon
      receipt by the claimant of written notice of denial of the claim, the claimant
      may within sixty (60) days file a written request to the Committee,
      requesting a review of the denial of the claim, which review shall include
      a
      hearing if deemed necessary by the Committee. In connection with the claimant's
      appeal of the denial of his or her claim, he or she may review relevant
      documents and may submit issues and comments in writing.

    

    5.03 Decision
      Upon Review of Denial of Claim for Benefits.
      The
      Committee shall render a decision on the claim review promptly, but no more
      than
      sixty (60) days after the receipt of the claimant's request for review, unless
      special circumstances (such as the need to hold a hearing) require an extension
      of time, in which case the sixty (60) day period shall be extended to one
      hundred-twenty (120) days. Such decision shall:

    

    (a) include
      specific reasons for the decision;

    

    (b) be
      written in a manner calculated to be understood by the claimant;
      and

    

    (c) contain
      specific references to the relevant Plan provisions upon which the decision
      is
      based.

    

    The
      decision of the Committee shall be final and binding in all respects on both
      the
      Company and the claimant. Legal action against the Plan may not be commenced
      more than 180 days after the Committee notifies the claimant of the
      determination upon review.

     

    VI. ADMINISTRATION

    

    6.01 Plan
      Administrative Committee.
      The
      Plan shall be administered by the Compensation Committee of the Board of
      Directors of the Company, which shall be the Administrative Committee of the
      Plan. The Administrative Committee may assign duties to an officer or other
      employees of the Company, and delegate such duties as it sees fit. No member
      of
      the Committee shall vote or act on matters relating solely to himself or
      herself, or his or her Plan benefits.

    

    6.02 General
      Rights, Powers and Duties of Administrative Committee.
      The
      Administrative Committee shall be responsible for the management, operation
      and
      administration of the Plan. In addition to any powers, rights, and duties set
      forth elsewhere in the Plan, it shall have the following powers and duties
      to:

    

    (a) adopt
      such rules and regulations consistent with the provisions of the Plan as it
      deems necessary for the proper and efficient administration of the
      Plan;

    

    
      
         

      

      
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    (b) administer
      the Plan in accordance with its terms and any rules and regulations it
      establishes;

    

    (c) maintain
      records concerning the Plan sufficient to prepare reports, returns, and other
      information required by the 

    Plan
      or
      by law;

    

    (d) construe
      and interpret the Plan, and to resolve all questions arising under the
      Plan;

    

    (e) direct
      the Company to pay benefits under the Plan, and to give such other directions
      and instructions as may be necessary for the proper administration of the
      Plan;

    

    (f) employ
      or
      retain agents, attorneys, actuaries, accountants or other persons who may also
      be employed by or represent the Company; and

    

    (g) be
      responsible for the preparation, filing, and disclosure on behalf of the Plan
      of
      such documents and reports as are required by any applicable federal or state
      law.

    

    6.03 Information
      to be Furnished to Administrative Committee.
      The
      records of the Company shall be determinative of each Participant's period
      of
      employment, Retirement Date, Termination of Service and the reason therefore,
      disability, leave of absence, Years of Service, personal data, and Final Average
      Compensation. Participants and their Surviving Spouse shall furnish to the
      Committee such evidence, data or information, and execute such documents as
      the
      Committee requests.

    

    6.04 Responsibility.
      No
      member of the Committee shall be liable to any person for any action taken
      or
      omitted in connection with the administration of this Plan unless attributable
      to his or her own fraud or willful misconduct; nor shall the Company be liable
      to any person for any such action unless attributable to fraud or willful
      misconduct on the part of a director, officer or employee of the Company.
      Further, the Company shall hold harmless, defend and indemnify any individual
      in
      the employment of the Company and any Director of the Company against any claim,
      action, or liability asserted against him in connection with any action or
      failure to act regarding the Plan, except as and to the extent such liability
      may be based upon the individual's own willful misconduct or fraud. This
      indemnification shall not duplicate, but may supplement, any coverage available
      under any applicable insurance coverage. This indemnification provided hereunder
      shall continue as to a person who has ceased serving on the Committee or as
      an
      officer, employee, or director of the Company, and such person's rights shall
      inure to the benefit of his or her heirs and representatives.

     

    VII. AMENDMENT
      AND TERMINATION

     

    7.01 Amendment.
      The
      Plan may be amended in whole or in part by the Company at any time; provided,
      however, that the Committee may amend the Plan if the amendments are
      (a) within in the scope of the law, (b) will not have a material
      financial effect on the Company, and (c) are either immaterial changes in
      the provisions of the Plan or technical changes required by applicable law.
      Notice of any material amendment shall be given in writing to the Administrative
      Committee or the Company, as appropriate, and to each Participant and each
      Surviving Spouse of a deceased Participant. No amendment shall retroactively
      decrease a Participant's vested benefit determined as of the amendment date
      pursuant to Section 4.05.

    

    7.02 Company's
      Right to Terminate.
      The
      Company reserves the sole right to terminate the Plan at any time. Termination
      of the Plan shall not decrease a Participant's vested benefit determined as
      of
      the termination date pursuant to Section 4.05.

    

    
      
         

      

      
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    7.03 Special
      Termination.
      Any
      other provision of the Plan to the contrary notwithstanding, the Plan shall
      terminate if the Plan is held to be ERISA Funded or Tax Funded by a federal
      court, and appeals from that holding are no longer timely or have been
      exhausted. The Company may terminate the Plan if it determines, based on a
      legal
      opinion which is satisfactory to the Company, that either judicial authority
      or
      the opinion of the U.S. Department of Labor, Treasury Department or Internal
      Revenue Service (as expressed in proposed or final regulations, advisory
      opinions or rulings, or similar administrative announcements) creates a
      significant risk that the Plan will be held to be ERISA Funded or Tax Funded,
      and failure to so terminate the Plan could subject the Company or the
      Participants to material penalties or the inclusion of Plan benefits in taxable
      income prior to actual receipt of Plan benefits. Upon any such termination,
      the
      Company may:

    

    (a) transfer
      the rights and obligations of the Participants and the Company to a new plan
      established by the Company, which is not deemed to be ERISA Funded or Tax
      Funded, but which is similar in all other respect to this Plan, if the Company
      determines that it is possible to establish such a Plan;

    

    (b) if
      the
      Company, in its sole discretion, determines that it is not possible to establish
      the Plan in (a) above, the Company shall pay to each vested Participant a lump
      sum benefit equal to the Actuarial Equivalent of his or her vested benefit
      determined pursuant to Section 4.05;

    

    (c) pay
      a
      lump sum benefit equal to the Actuarial Equivalent of a Participant's vested
      benefit determined pursuant to Section 4.05 to the extent that a federal
      court has held that the interest of the Participant in the Plan is includable
      in
      the gross income of the Participant for federal income tax purposes prior to
      actual payment of Plan benefits. The Actuarial Equivalent of any remaining
      vested benefit shall remain as an obligation of the Company, to be paid to
      the
      Participant as provided in the Plan;

    

    (d) pursuant
      to Section 3.02, pay to a vested Participant a lump sum benefit equal to
      the Actuarial Equivalent of the value of a Participant's vested benefit if,
      based on a legal opinion satisfactory to the Company, there is a significant
      risk that such Participant will be determined not to be part of a "select group
      of management or highly compensated employees" for purposes of
      ERISA.

    

    VIII. MISCELLANEOUS

    

    8.01 Separation
      of Plan; No Implied Rights.
      The
      Plan shall not operate to increase any benefit payable to or on behalf of a
      Participant (or his or her Surviving Spouse) from any other plan maintained
      by
      the Company. Neither the establishment of the Plan nor any amendment thereof
      shall be construed as giving any Participant, Surviving Spouse, or any other
      person any legal or equitable right unless such right shall be specifically
      provided for in the Plan or conferred by specific action of the Company in
      accordance with the terms and provisions of the Plan. Except as expressly
      provided in the Plan, the Company shall not be required or be liable to make
      any
      payment under the Plan.

    

    8.02 No
      Right to Company Assets.
      Neither
      the Participant nor any other person shall acquire by reason of the Plan any
      right in or title to any assets, funds or property of the Company whatsoever,
      including, without limiting the generality of the foregoing, any specific funds,
      assets or other property which the Company, in its sole discretion, may set
      aside in anticipation of a liability hereunder. Any benefits which become
      payable hereunder shall be paid from the general assets of the Company or the
      Trust. The Participant shall have only a contractual right to the amounts,
      if
      any, payable hereunder, unsecured by any asset of the Company. Nothing contained
      in the Plan constitutes a guarantee by the Company that the assets of the
      Company shall be sufficient to pay any benefits to any person.

    

    
      
         

      

      
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    8.03 No
      Employment Rights.
      Nothing
      herein shall constitute a contract of employment or of continuing service or
      in
      any manner obligate the Company to continue the services of the Participant,
      or
      obligate the Participant to continue in the service of the Company, or as a
      limitation of the right of the Company to discharge any of its employees, with
      or without cause. Nothing herein shall be construed as fixing or regulating
      the
      compensation or other remuneration payable to the Participant.

    

    8.04 Offset.
      If, at
      the time payments or installments of payments are to be made hereunder, the
      Participant or the Surviving Spouse or both are indebted or obligated to the
      Company, then the payments remaining to be made to the Participant or the
      Surviving Spouse or both may, at the discretion of the Company, be reduced
      by
      the amount of such indebtedness or obligation; provided, however, that an
      election by the Company not to reduce any such payment or payments shall not
      constitute a waiver of its claim for such indebtedness or
      obligation.

    

    8.05 Protective
      Provisions.
      In
      order to facilitate the payment of benefits hereunder, each employee designated
      eligible shall cooperate with the Company by furnishing any and all information
      requested by the Company, and taking such other actions as may be requested
      by
      the Company. If the employee refuses to cooperate, he or she shall not become
      a
      Participant in the Plan and the Company shall have no further obligation to
      him
      or her under the Plan. In such event, no benefit shall be payable to the
      Participant or his or her Surviving Spouse.

    

    8.06 Non-assignability.
      Neither
      the Participant nor any other person shall have any voluntary or involuntary
      right to commute, sell, assign, pledge, anticipate, mortgage or otherwise
      encumber, transfer, hypothecate or convey in advance of actual receipt the
      amounts, if any, payable hereunder, or any part thereof, which are expressly
      declared to be unassignable and non-transferable. No part of the amounts payable
      shall be, prior to actual payment, subject to seizure or sequestration for
      the
      payment of any debts, judgments, alimony or separate maintenance owed by the
      Participant or any other person, or be transferable by operation of law in
      the
      event of the Participant's or any other person's bankruptcy or
      insolvency.

    

    8.07 Notice.
      Any
      notice required or permitted to be given under the Plan shall be sufficient
      if
      in writing and hand delivered, or sent by registered or certified mail to the
      last known address of the Participant if to the Participant, or, if given to
      the
      Company, to the principal office of the Company, directed to the attention
      of
      the Administrative Committee. Such notice shall be deemed given as of the date
      of delivery, or, if delivery is made by mail, as of the date shown on the
      postmark or the receipt for registration or certification.

    

    8.08 Governing
      Laws.
      The
      Plan shall be construed and administered according to the laws of the State
      of
      Wisconsin.

    

    8.09 Target
      (Supplemental) Retirement Plan Trust.
      

    

    (a) The
      Company shall establish a Trust or Trusts with (an) independent trustee(s),
      and
      shall comply with the terms of the Trust(s). The Company may transfer to the
      trustee(s) an amount of cash, marketable securities, or other property
      acceptable to the trustee(s) ("Trust Property") determined by REGAL-BELOIT
      CORPORATION, in its sole discretion, as it deems necessary or appropriate.
      Trust
      Property so transferred shall be held, managed, and disbursed by the trustee(s)
      in accordance with the terms of the Trust(s). To the extent that Trust Property
      shall be used to pay the Company's obligations under the Plan, such payments
      shall discharge obligations of the Company; however, the Company shall continue
      to be liable for amounts not paid by the Trust(s). Trust Property will
      nevertheless be subject to claims of the Company's creditors in the event of
      bankruptcy or insolvency, and the Participant's rights under the Plan and
      Trust(s) shall at all times be subject to the provisions of Section
      8.02.

    

    
      
         

      

      
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    (b) Upon
      a
      Change of Control, Company shall, as soon as possible, but in no event later
      than thirty (30) days following the Change of Control, as defined herein, make
      an irrevocable contribution to the Trust in an amount that is sufficient to
      pay
      each vested Plan Participant or their Surviving Spouses, the vested benefits
      to
      which Participants or their Surviving Spouses would be entitled pursuant to
      the
      terms of the Plan as of the date on which the Change of Control occurred. A
      Participant's or Surviving Spouse's vested benefit shall be determined pursuant
      to Section 4.05.

    

    

    

    
      
        
        

      

      
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