REGAL BELOIT CORPORATION

TARGET (SUPPLEMENTAL) RETIREMENT PLAN

As Amended and Restated Effective January 1, 2009

REGAL BELOIT CORPORATION

TARGET (SUPPLEMENTAL) RETIREMENT PLAN

        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.

        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     “Affiliate” means each entity that is required to be aggregated with the Company pursuant to Code Section 414(b) or (c); provided that for purposes of determining if a Participant has incurred a Separation from Service, the phrase “at least 50 percent” shall be used in place of the phrase “at least 80 percent” each place it appears therein or in the regulations thereunder.

        2.04     “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.

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        2.05     “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 of all or substantially all of the Company’s assets.

        2.06     “Company” means Regal Beloit Corporation, a Wisconsin Corporation, its successors and assigns, and any Affiliate which grants 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.

        2.07     “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 fifty-eight (58) with fifteen (15) Years of Service, or a Separation from Service under circumstances which the Company, in its sole discretion and prior to the first day of the seventh (7th) month following the month in which the Separation from Service occurs, elects to treat as an Early Retirement under the Plan.

        2.08     “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).

        2.09     “Final Average Compensation” means the average result produced by dividing the total Salary of a Participant during the sixty (60) consecutive month period immediately preceding the earlier of his or her Termination of Service with the Company or Separation from 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.

        2.10     “IRC” means the Internal Revenue Code of 1986, as amended.

        2.11     “Normal Retirement Date” and “Normal Retirement” mean the date of Separation from Service of the Participant coincident with or following the date he or she attains age sixty-five (65).

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        2.12     “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 Account shall consist of the beginning balance of 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 form 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 form the Regal Beloit 401(k) Plan and ending December 31, 2008, 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; and (c) For periods beginning January 1, 2009 and later, a Company matching contribution equal to 3.5% of a Participant’s Salary plus, if the Participant is eligible for a Company base contribution under the Regal Beloit 401(k) plan, a Company base contribution of 2% or 1% of the Participant’s Salary (as specified for the Participant under the Regal Beloit 401(k) Plan); 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.

        2.13     “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.

        2.14     “Plan” means the Regal Beloit Corporation Target (Supplemental) Retirement Plan, as amended from time to time.

        2.15     “Plan Year” means the Company’s fiscal year, which, unless and until changed, is January 1 to December 31.

        2.16     “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.

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        2.17     “Retirement Date” means a Participant’s Early Retirement Date or Normal Retirement Date.

        2.18     “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 the amount of any target Company bonus opportunity for the Plan Year (whether or not earned or paid for such Plan Year) and any amounts deferred by the Participant under an unfunded, nonqualified plan maintained by the Company. Notwithstanding the foregoing, with respect to Participants who retired prior to January 1, 2008, the actual Company bonus earned for the Plan Year (even if not paid in such Plan Year) in lieu of the target bonus opportunity was used to determined Salary. 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.

        2.19     “Separation from Service” means a Participant’s termination of employment from the Company and all Affiliates within the meaning of Code Section 409A, including the following rules:

            (a)     If a Participant takes a leave of absence from the Company or an Affiliate for purposes of military leave, sick leave or other bona fide leave of absence, the Participant’s employment will be deemed to continue for the first six (6) months of the leave of absence, or if longer, for so long as the Participant’s right to reemployment is provided either by statute or by contract; provided that if the leave of absence is due to the Participant’s medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of six months or more, and such impairment causes the Participant to be unable to perform the duties of his position with the Company or an Affiliate or a substantially similar position of employment, then the leave period may be extended for up to a total of 29 months.

            (b)     A Participant shall be presumed to incur a Separation from Service when the level of bona fide services provided by the Participant to the Company and its Affiliates permanently decreases to a level of twenty percent (20%) or less of the level of services rendered by such individual, on average, during the immediately preceding 36 months.

            (c)     A Participant shall be presumed to not incur a Separation from Service when the level of bona fide services provided by the Participant to the Company and its Affiliates continues at a rate that is at least fifty percent (50%) of the level of services rendered by such individual, on average, during the immediately preceding 36 months.

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        2.20     “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.

        2.21     “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 Participant’s husband or wife under a legal union recognized by applicable state or federal law.

        2.22     “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.

        2.23     “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 as a result of the failure of the Plan to comply with Code Section 409A with respect to the Participant.

        2.24     “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.

        2.25     “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.

        2.26     “Years of Service” means years of service credited to a Participant based on the period beginning with the Participant’s employment commenceme