DEF 14A 1 ea145007-def14a_rbcbearings.htm DEFINITIVE PROXY STATEMENT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

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RBC BEARINGS INCORPORATED

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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One Tribology Center

Oxford, Connecticut 06478

July 30, 2021

To our stockholders:

You are cordially invited to attend the RBC Bearings Incorporated annual meeting of stockholders at 9:00 a.m., local time, on Wednesday, September 8, 2021 at the offices of RBC Bearings Incorporated, Building B, 102 Willenbrock Road, One Tribology Center, Oxford, CT 06478. The attached Notice of Annual Meeting and Proxy Statement describe all known items to be acted upon by stockholders at the meeting.

It is important that your shares are represented at the annual meeting, whether or not you plan to attend. To ensure your shares will be represented, please vote your shares as soon as possible.

If you are a registered stockholder and plan to attend the annual meeting, you will be required to present the detachable bottom portion of the enclosed proxy form to gain admission. If you hold shares through a broker or other nominee, you will be required to present a current statement from that institution showing an RBC Bearings Incorporated stockholding. Please note that the document used to gain entry to the meeting is non-transferable.

Please vote your shares promptly and join us at the meeting.

Sincerely,

Dr. Michael J. Hartnett

Chairman and Chief Executive Officer

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To our stockholders:

The 2021 annual meeting of stockholders of RBC Bearings Incorporated will be held at Building B, 102 Willenbrock Road, One Tribology Center, Oxford, CT 06478, on Wednesday, September 8, 2021, beginning at 9:00 a.m. local time. At the meeting, the holders of the Company’s outstanding common stock will consider and vote on the following matters:

(1)

election of three directors in Class II to serve a term of three years;

(2)

ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2022;

(3)

approval of our 2021 Long-Term Incentive Plan;

(4)

approval, on a non-binding advisory basis, of the compensation of our named executive officers; and

(5)

any other matter that may properly come before the meeting or any adjournment or postponement thereof.

Stockholders of record at the close of business on July 12, 2021 are entitled to notice of and to vote at the annual meeting and at any postponements or adjournments thereof. The directions to the meeting can be found in Appendix A of the attached proxy statement.

YOUR VOTE IS IMPORTANT:

Whether or not you expect to be present at the meeting, please vote your shares. You can find voting instructions in the proxy statement or in the materials you received for the meeting. Any person voting by proxy has the power to revoke it, at any time prior to its exercise at the meeting, in accordance with the procedures described in the attached proxy statement.

IF YOU PLAN TO ATTEND:

Please note that space limitations make it necessary to limit attendance to stockholders and one guest. Admission to the meeting will be on a first-come, first-served basis. Registration will begin at 8:00 a.m., and seating will begin at 8:30 a.m. Each stockholder may be asked to present valid picture identification, such as a driver’s license or passport. Stockholders holding stock in brokerage accounts (i.e., “street name” holders) will also need to bring a copy of a brokerage statement reflecting RBC stock ownership as of the record date. Cellular phones, cameras, recording devices and other electronic devices will not be permitted at the meeting. Due to the COVID-19 pandemic, you may be required to complete a COVID-19 screening form upon your arrival and/or wear a mask at the meeting. If you are required to wear a mask, one will be provided at the door.

	By order of the Board of Directors,

	Dr. Michael J. Hartnett
	Chairman and Chief Executive Officer

July 30, 2021

ONE TRIBOLOGY CENTER

OXFORD, CONNECTICUT 06478

ANNUAL MEETING OF STOCKHOLDERS

To Be Held September 8, 2021

PROXY STATEMENT

The Board of Directors of RBC Bearings Incorporated (the “Company”) is soliciting proxies from our stockholders to be used at the annual meeting of stockholders to be held on Wednesday, September 8, 2021, beginning at 9:00 a.m., local time, at Building B, 102 Willenbrock Road, One Tribology Center, Oxford, CT 06478, and at any postponements or adjournments thereof. This proxy statement, a proxy card and the Company’s Annual Report on Form 10-K for fiscal 2021 are being mailed, or made available via the internet as described below, to stockholders on or about July 30, 2021.

Our fiscal years end on the Saturday closest to March 31 each year. Fiscal 2021 ended on April 3, 2021 and fiscal 2022 will end on April 2, 2022. As used in this proxy statement, the terms “we,” “us,” “our,” “RBC” and “the Company” mean RBC Bearings Incorporated and its subsidiaries, unless the context indicates another meaning.

The Company is furnishing proxy materials to stockholders via the internet. If you received a Notice of Internet Availability of Proxy Materials (the “Notice”) by mail, you will not receive a printed copy of the proxy materials unless you specifically request one. The Notice instructs you on how to access and review all of the important information contained in this proxy statement and our annual report as well as how to submit your proxy over the internet. If you received the Notice and would still like to receive a printed copy of our proxy materials, you should follow the instructions for requesting these materials included in the Notice. We plan to mail the Notice to stockholders on or about July 30, 2021. We will mail a printed copy of this proxy statement and form of proxy to certain stockholders and we expect that mailing to also begin on or about July 30, 2021.

ABOUT THE ANNUAL MEETING

Why did I receive these materials?

We are soliciting proxies for our 2021 annual meeting of stockholders. You are receiving a proxy statement because you owned shares of our common stock on July 12, 2021 (the “Record Date”), which entitles you to vote at the meeting. By use of a proxy, you can vote whether or not you attend the meeting. This proxy statement describes the matters on which you may vote and provides information on those matters so that you can make an informed decision.

What information is contained in this proxy statement?

The information in this proxy statement relates to the proposals to be voted on at the annual meeting, the voting process, our Board of Directors (the “Board”) and committees thereof, the compensation of directors and executive officers, and other information that the Securities and Exchange Commission (SEC) requires us to provide annually to our stockholders.

How may I obtain RBC Bearings’ 10-K and other financial information?

Stockholders may find the 2021 Form 10-K and our other filings with the SEC, as well as corporate governance and other information regarding the Company, including Environmental/Social/Governance information, on the investor relations page of our website at http://investor.rbcbearings.com. If you received our proxy statement in the mail, a copy of our 2021 Annual Report on Form 10-K was enclosed with the proxy statement. Stockholders may request a free copy of our 2021 Form 10-K from the Corporate Secretary, RBC Bearings Incorporated, One Tribology Center, Oxford, CT 06478.

Who is entitled to vote at the meeting?

Only stockholders of record at the close of business on the Record Date are entitled to receive notice of and to vote at the annual meeting. If you were a stockholder of record on the Record Date, you will be entitled to vote all of the shares that you held on that date at the meeting, or any postponements or adjournments of the meeting.

How many votes do I have?

You will be entitled to one vote on each matter considered at the meeting for each outstanding share of RBC Bearings Incorporated common stock you owned as of the Record Date on each matter considered at the meeting. There is no cumulative voting.

Who can attend the meeting?

Subject to space availability, all stockholders as of the Record Date, or their duly appointed proxies, may attend the meeting, and each may be accompanied by one guest. Since seating is limited, admission to the meeting will be on a first-come, first-served basis. Registration will begin at 8:00 a.m., and seating will begin at 8:30 a.m. If you attend, please note that you may be asked to present valid picture identification, such as a driver’s license or passport. Cell phones, cameras, recording devices and other electronic devices will not be permitted at the meeting. Due to the COVID-19 pandemic, you may be required to complete a COVID-19 screening form upon your arrival and/or wear a mask at the meeting. If you are required to wear a mask, one will be provided at the door.

Please also note that if you hold your shares in “street name” (that is, through a broker, bank or other nominee), you will also need to bring a copy of a brokerage statement reflecting your RBC stock ownership as of the Record Date and check in at the registration desk at the meeting.

Please let us know if you plan to attend the meeting when you vote.

What constitutes a quorum?

The presence at the meeting, in person or by proxy, of the holders of a majority of the shares of our common stock outstanding on the Record Date will constitute a quorum, permitting the conduct of business at the meeting. As of July 12, 2021, there were 25,156,833 shares of common stock, representing the same number of votes, outstanding and eligible to vote. Thus, the presence of the holders of common stock representing at least 12,578,417 votes will be required to establish a quorum.

Proxies received by the Company but marked as abstentions and broker non-votes will be included in the calculation of the number of shares considered to be present at the meeting for purposes of determining if we have a quorum.

How do I vote?

If you are a holder of record (that is, your shares are registered in your own name with our transfer agent), you can vote either in person at the annual meeting or by proxy without attending the annual meeting. We urge you to vote by proxy even if you plan to attend the annual meeting so that we will know as soon as possible that enough votes will be present for us to hold the meeting. If you attend the meeting in person, you may vote at the meeting and your proxy will not be counted. You can vote by proxy over the Internet (at www.ProxyVote.com), by telephone (call 1-800-579-1639) or, if you received paper copies of our proxy materials in the mail, by completing, dating and signing a proxy card and returning it in the enclosed postage-paid envelope.

If you hold your shares in “street name,” you must either direct the bank, broker or other record holder of your shares as to how to vote your shares, or obtain a proxy from the bank, broker or other record holder to vote at the meeting. Please refer to the materials provided by your bank, broker or other record holder for specific instructions on methods of voting available to you.

Your shares will be voted as you indicate. If you submit a proxy but you do not indicate your voting preferences, then the individuals acting as proxy holders will vote your shares in accordance with the recommendations of the Board. The Board and management do not intend to present any matters at the annual meeting other than those outlined in the Notice of the Annual Meeting of Stockholders. Should any other matter requiring a vote of stockholders arise, the proxy holders will have discretionary authority to vote on such other matter in the manner the proxy holders consider appropriate.

If you properly submit a proxy, your shares will be voted in accordance with your instructions. If you submit a proxy but do not specify how you want to vote your shares, the proxy holders will vote them FOR the election of all nominees for director as set forth under Item 1, FOR the ratification of the appointment of the independent registered public accounting firm under Item 2, FOR the approval of the 2021 Long-Term Incentive Plan under Item 3, and FOR the non-binding, advisory approval of our named executive officer compensation under Item 4.

Can I change my vote after I vote?

Yes. If you are a stockholder of record, you may revoke or change your vote at any time before the proxy is exercised by filing with the Secretary of the Company a notice of revocation or a duly executed proxy card bearing a later date, by voting again over the Internet or by telephone, or by attending the annual meeting and voting in person. For shares you hold beneficially in “street name,” you may change your vote by submitting new voting instructions to your broker, bank or other nominee or, if you have obtained a legal proxy from your broker, bank or other nominee giving you the right to vote your shares, by attending the meeting and voting in person. In either case, the powers of the proxy holders will be suspended if you attend the meeting in person and so request, although attendance at the meeting will not by itself revoke a previously granted proxy.

Who counts the votes?

Votes will be counted by employees of Broadridge Financial Solutions, Inc. and certified by the Inspector of Election present at the meeting.

What are the Board’s recommendations?

The Board’s recommendations are set forth in this proxy statement together with the description of each item to be voted upon. In summary, the Board recommends a vote FOR each of the proposals. Unless you give other instructions when you vote, the persons acting as proxy holders will vote in accordance with the recommendations of the Board.

Will stockholders be asked to vote on any other matters?

To the knowledge of the Company, stockholders will vote only on the matters described in this proxy statement. However, if any other matters properly come before the meeting, the persons acting as proxy holders will vote on those matters in the manner they consider appropriate.

What vote is required to approve each item?

Election of Directors (Item 1): Directors are elected by a majority of the votes cast. Each share of our common stock is entitled to one vote for each of the director nominees. A properly executed proxy marked “withhold authority” with respect to the election of one or more directors will not be voted with respect to the director or directors indicated, although it will be counted for purposes of determining whether there is a quorum.

Approval of Independent Registered Public Accounting Firm (Item 2): The ratification of the appointment of Ernst & Young LLP to serve as the Company’s independent registered public accounting firm for fiscal 2022 requires the affirmative vote of a majority of the shares represented at the meeting.

Approval of 2021 Long-Term Incentive Plan (Item 3): The approval of our 2021 Long-Term Incentive Plan requires the affirmative vote of a majority of the shares represented at the meeting.

Approval of the Say-on-Pay proposal (Item 4): The approval of the resolution regarding the stockholder advisory vote on named executive officer compensation (i.e., the say-on-pay proposal) requires the affirmative vote of a majority of the shares represented at the meeting.

A properly executed proxy marked “abstain” with respect to any matter will not be voted, although it will be counted for purposes of determining whether there is a quorum. Accordingly, an abstention will have the effect of a negative vote.

How are votes counted?

In the election of directors (Item 1), you may vote FOR each nominee or your vote may be WITHHELD with respect to that nominee. You may not cumulate your votes for the election of directors.

For the ratification of Ernst & Young LLP to serve as the Company’s independent registered public accounting firm for fiscal 2022 (Item 2), the approval of our 2021 Long-Term Incentive Plan (Item 3), and the stockholder advisory vote on named executive officer compensation (i.e., the say-on-pay proposal) (Item 4), you may vote FOR, AGAINST or ABSTAIN.

If you elect to ABSTAIN, the abstention has the same effect as a vote AGAINST. If you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items.

If you hold your shares in “street name” through a broker, bank or other nominee rather than directly in your own name, then your broker, bank or other nominee is considered the stockholder of record, and you are considered the beneficial owner of your shares. The Company has supplied copies of its proxy materials for the 2021 annual meeting of stockholders to the broker, bank or other nominee holding your shares of record, and they have the responsibility to send these proxy materials to you. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote your shares at the annual meeting. If you are a beneficial owner and your broker, bank or other nominee holds your shares in its name, the broker, bank or other nominee is permitted to vote your shares on the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm (Item 2), even if the broker, bank or other nominee does not receive voting instructions from you.

If the broker, bank or other nominee does not receive voting instructions from you, your shares may constitute “broker non-votes.” Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. In tabulating the voting result for any particular proposal, shares that constitute broker non-votes are not considered present and entitled to vote on that proposal. If a quorum is present at the annual meeting, the persons receiving the affirmative vote of a majority of the shares of common stock present in person or represented by proxy at the annual meeting will be elected to serve as directors. As a result, broker non-votes will not affect the outcome of the voting on the election of directors (Item 1), the approval of our 2021 Long-Term Incentive Plan (Item 3), and the stockholder advisory vote on named executive officer compensation (i.e., the say-on-pay proposal) (Item 4). Shares represented by broker non-votes will, however, be counted in determining whether there is a quorum, but will not be considered voted with regard to or treated as present with respect to those proposals to which the broker non-votes relate. The ratification of the appointment of the Company’s independent registered public accounting firm (Item 2) requires the affirmative vote of a majority of the shares of common stock present in person or represented by proxy at the annual meeting and entitled to vote on the proposal. Brokers are allowed to vote on behalf of beneficial owners without instruction on Item 2, but are not permitted to vote on any other proposals without voting instructions from you.

Shares represented by proxies that indicate that the stockholders ABSTAIN as to the election of directors or to other proposals will be treated as being present for the purpose of determining the presence of a quorum and, other than for the election of directors, the number of votes cast with respect to each proposal. Consequently, an abstention will have the effect of a vote against with respect to proposals other than the election of directors.

What should I do if I receive more than one set of voting materials?

You may receive more than one Notice or set of proxy materials. For example, if you hold your shares in more than one brokerage account, you may receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one Notice or proxy card. Please vote with respect to each Notice or set of proxy materials that you receive.

Where can I find the voting results of the annual meeting?

The Company intends to announce the preliminary voting results at the annual meeting and publish the final results in a Current Report on Form 8-K that will be filed with the SEC within four business days after the meeting.

What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders?

You may submit proposals for consideration at future stockholder meetings. For a stockholder proposal to be considered for inclusion in our proxy statement for the annual meeting next year, our Corporate Secretary must receive the written proposal at our principal executive offices no later than April 1, 2022. Such proposals also must comply with Rule 14a-8 of the regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Proposals should be addressed to:

Corporate Secretary

RBC Bearings Incorporated

One Tribology Center

Oxford, CT 06478

For a stockholder proposal that is not intended to be included in our proxy statement, the stockholder must give timely notice to the Corporate Secretary in accordance with our by-laws, which require that the notice be received by the Corporate Secretary not less than 60 nor more than 90 days prior to the next meeting, except that if less than 70 days’ notice or prior public announcement of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the tenth day following the date on which such notice of the date of the annual meeting was mailed or such public announcement was made.

How may I recommend or nominate individuals to serve as directors?

You may propose director candidates for consideration by the Board’s Nominating and Corporate Governance Committee. Any such recommendations should include the nominee’s name and qualifications for Board membership and should be directed to the Corporate Secretary at the address of our principal executive offices set forth above.

In addition, our by-laws permit stockholders to nominate directors for election at an annual stockholder meeting. To nominate a director, a stockholder must deliver timely written notice to the Corporate Secretary of such stockholder’s intent to make such nomination. To be timely, a stockholder’s notice must be delivered to or mailed and received at our principal executive offices not less than 60 nor more than 90 days prior to the date of the anniversary of the previous year’s annual meeting. In the event that the date of the annual meeting is changed by more than 30 days from such anniversary date, notice by the stockholder to be timely must be received not later than the close of business on the tenth day following the earlier of the day on which notice of the date of the meeting was mailed or public disclosure of the meeting was made. To be in proper form, a stockholder’s notice must include the items set forth in “Director Nominations to be Considered by the Board” below. Such notice must be accompanied by each proposed nominee’s written consent to being named as a nominee and to serve as a director if elected.

How may I obtain a copy of RBC Bearings’ by-law provisions regarding stockholder proposals and director nominations?

You may contact the Corporate Secretary at our principal executive offices for a copy of the relevant by-law provisions regarding the requirements for making stockholder proposals and nominating director candidates.

PROPOSALS SUBMITTED FOR STOCKHOLDER VOTE

Item 1: Election of Directors

The Board currently is composed of eight directors serving staggered three-year terms and divided into three classes: Class I currently consists of Michael H. Ambrose, Daniel A. Bergeron and Edward D. Stewart; Class II consists of Richard R. Crowell, Dr. Steven H. Kaplan and Alan B. Levine; and Class III consists of Dr. Michael J. Hartnett and Dolores J. Ennico. Class I, Class II and Class III directors will serve until our annual meetings of stockholders in 2022, 2021 and 2023, respectively. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class (including vacancies created by an increase in the number of directors) will serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified, or until the director’s resignation or removal.

Our Nominating and Corporate Governance Committee has nominated Richard R. Crowell, Dr. Steven H. Kaplan and Alan B. Levine for election as the three Class II directors at the annual meeting. Mr. Crowell, Dr. Kaplan and Mr. Levine are currently Class II directors and were first appointed to the Board in 2002, 2018 and 2005, respectively. The Nominating and Corporate Governance Committee reviewed the qualifications of the nominees for election to this class and unanimously recommended to the Board that these nominees be submitted for election. If elected at the meeting, each of Mr. Crowell, Dr. Kaplan and Mr. Levine would serve until the 2024 annual meeting and until a successor is duly elected and qualified, or until their resignation or removal.

If any of Mr. Crowell, Dr. Kaplan or Mr. Levine should for any reason become unavailable to serve as a director prior to the annual meeting, the Board will, prior to the annual meeting, (i) reduce the size of the Board to eliminate the position for which that person was nominated, (ii) nominate a new candidate in place of such person, in which case the proxy holders will vote for the new candidate, or (iii) leave the place vacant to be filled at a later time.

The following paragraphs provide information as of the date of this proxy statement about each nominee for director. The information presented includes information each director has provided us about their positions held, principal occupation and business experience for the past five years, and the names of other publicly-held companies for which they serve or served as a director during the past five years. We have also provided below information regarding additional experience, qualifications, attributes and skills that lead the Board to the conclusion that each person should serve as a director. We believe that each of our director nominees has a reputation for integrity, honesty and adherence to high ethical standards. They each have demonstrated business acumen and ability to exercise sound judgment, as well as a commitment of service to the Company and the Board.

Richard R. Crowell has been a director since 2002 and Chairman of the Compensation Committee since 2005. Mr. Crowell is a Managing Partner of Vance Street Capital LLC, a private equity investment firm he founded in 2007. Previously he was the President of Aurora Capital Group, a private equity investment firm he co-founded in 1991. Prior to establishing Aurora, Mr. Crowell was a Partner and President of Acadia Partners, a New York-based investment fund. From 1983 to 1987, he was a Managing Director, Corporate Finance for Drexel Burnham Lambert. He serves on the Executive Committee of the Board of Visitors of the University of California at Los Angeles Anderson School of Management. Mr. Crowell is a director of Micronics, Inc., IAC Industries, EAS Industries and Jet Parts Aviation, all of which are private companies in the businesses of filtration products, aerospace parts, precision manufacturing, engineered solutions, and related services. Mr. Crowell earned a Bachelor of Arts degree from the University of California at Santa Cruz and a Master of Business Administration degree from UCLA’s Anderson School. Mr. Crowell brings broad business, financial and executive leadership experience to the Board developed through his leadership roles at Vance Street Capital LLC, Aurora Capital Group LLC, Acadia Partners and Drexel Burnham Lambert. He has extensive experience with a number of precision manufacturing and aerospace companies. In addition, Mr. Crowell’s experience in private investment enables him to bring a valuable investor’s view to the Board and his relationships across the financial community strengthen the Company’s access to capital markets. His board memberships provide deep understanding of trends in the precision manufacturing and aerospace sectors, both of which present ongoing challenges and opportunities for the Company.

Dr. Steven H. Kaplan has been a director since 2018. He has been the president of the University of New Haven since 2004 and has led the University through a period of remarkable growth and development. In 2015, in recognition of his contributions to transforming the University, Dr. Kaplan was presented the Chief Executive Leadership Award by the Council for Advancement and Support of Education (CASE) District I. He also was named “Businessman of the Year” by Business New Haven magazine in 2008. Dr. Kaplan was awarded the 2011 William M. Burke Presidential Award for Experiential Education by the National Society for Experiential Education. Previously, Dr. Kaplan was chancellor and professor of English at the University of Virginia’s College at Wise. Dr. Kaplan began his teaching career in 1982 as an Instructor of English at the University of Maryland, European Division. From 1985 to 1989, he served as Visiting Lecturer in American Studies at Eberhard-Karls Universität, Tübingen, Germany, one of the oldest and most highly regarded universities in Europe. After completing his doctoral studies at Eberhard-Karls Universität, he returned to the U.S. to teach English at the University of Southern Colorado. Dr. Kaplan also served as Dean of Arts and Humanities at the State University of New York at Buffalo and as Dean of the College of Liberal Arts and Sciences at Butler University. In addition to earning his Ph.D. in Comparative Literature at Eberhard-Karls Universität, Dr. Kaplan holds a Master of Arts degree (with a concentration in philosophy, German and English) from Eberhard-Karls Universität and a Bachelor of Arts degree from the University of California at Los Angeles. This knowledge and chief executive experience allows Dr. Kaplan to provide the Company with a wealth of valuable international executive experience and a perspective that provides the Board a critical resource for management. His association with U.S. companies and global academia provides the Company with a valuable state of the art executive management resource.

Alan B. Levine has been a director and chairman of our Audit Committee since 2005. From 2007 to 2011, Mr. Levine served as Vice President and Chief Financial Officer of the Graduate Management Admission Council. Prior to that he served as Chief Financial Officer and Director of Virtual Access Networks, Inc. from 2001 to 2002 and Chief Financial Officer and Treasurer of Marathon Technologies Corporation from 1998 to 2001. Prior to this, Mr. Levine was with Ernst & Young LLP from 1974 to 1998, and was Partner from 1986 to 1998, where he established and directed an Entrepreneurial Services practice. Previously, Mr. Levine served as a director, chairman of the audit committee, and a member of the compensation and special committees of Dynasil Corporation of America, a director and chairman of the audit committees of MCK Communications and Nextera Enterprises, Inc., and a director, chairman of the audit committee, and a member of the compensation committee of Magnatek, Inc. Mr. Levine earned a Bachelor of Arts degree from the University of Vermont. He also holds a Master of Accounting degree from the University of Arizona and was a certified public accountant. As chairman of our Audit Committee Mr. Levine has demonstrated that he is valuable to the Audit Committee’s function. He is one of the Company’s designated “audit committee financial expert” as defined by SEC regulations. Mr. Levine brings to the Board extensive demonstrated expert knowledge and experience in accounting and finance from his Master of Accounting degree and as a former partner with Ernst & Young LLP and a former chief financial officer. This knowledge and experience gives Mr. Levine a perspective that he is able to use to help the Audit Committee and Board understand the highly technical issues management confronts on a daily basis and to serve as a critical resource for management.

Directors are elected by a majority of the votes cast at the meeting. Accordingly, Mr. Crowell, Dr. Kaplan and Mr. Levine will be elected if they receive the affirmative vote of a majority of the votes cast.

The Board recommends a vote FOR the election to the Board of Directors of the nominees listed above.

Item 2: The Ratification of the Appointment of Ernst & Young LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal 2022

The Audit Committee has appointed Ernst & Young LLP as our independent registered public accounting firm for fiscal 2022, and has further directed that the Board submit the selection of Ernst & Young LLP for ratification by the stockholders at the annual meeting. During fiscal 2021, Ernst & Young LLP served as the Company’s independent registered public accounting firm. See “Principal Accountant Fees and Services” below.

This proposal is put before the stockholders because the Audit Committee and the Board believe that it is good corporate practice to seek stockholder ratification of the Audit Committee’s appointment of the independent registered public accounting firm. If the appointment of Ernst & Young LLP is not ratified, the Audit Committee will consider the stockholders’ vote when determining whether to continue the firm’s engagement, but may ultimately determine to continue the engagement of the firm or another audit firm without re-submitting the matter to stockholders. Even if the appointment of Ernst & Young LLP is ratified, the Audit Committee may in its sole discretion terminate the engagement of the firm and direct the appointment of another independent registered public accounting firm at any time during the year if the Audit Committee determines that such an appointment would be in the best interests of the Company and our stockholders.

Representatives of Ernst & Young LLP are expected to attend the annual meeting, where they will be available to respond to appropriate questions and, if they desire, make a statement.

Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal 2022 requires the affirmative vote of a majority of the shares of the Company’s common stock present in person or represented by proxy at the annual meeting and entitled to vote on the proposal.

The Board recommends a vote FOR the ratification of the appointment of Ernst & Young LLP as the
Company’s independent registered public accounting firm for fiscal 2022.

ITEM 3: The approval of our 2021 Long-Term Incentive Plan.

The Board and the Compensation Committee of the Board have determined that it is in the best interests of the Company and its stockholders to adopt a new equity incentive plan under which the Company’s directors, officers and other employees and other persons who provide services to the Company are eligible for grants of stock options, restricted stock, stock appreciation rights and performance awards. This 2021 Long-Term Incentive Plan, under which 1,500,000 shares of RBC common stock are issuable (the “New Plan”), has been approved by the Board subject to being submitted to the stockholders of the Company for their approval at the annual meeting. The New Plan will not become effective unless stockholder approval is obtained.

Size of Equity Compensation Program

In administering our equity compensation program, we consider both our “burn rate” and our “overhang”:

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We define “burn rate” in a given year as (i) the total number of shares of common stock that underlie the equity compensation awards granted in that year divided by (ii) the undiluted weighted average shares outstanding during the year. Our three-year average burn rate during fiscal 2019, fiscal 2020 and fiscal 2021 was approximately 1.1%.

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We define “overhang” on a given date as (i) the sum of the total number of shares of common stock that underlie outstanding equity awards plus the total number of shares available for issuance under our equity compensation plans as of such date (in aggregate these are referred to as “total plan shares”) divided by (ii) the sum of total plan shares and shares outstanding as of such date. Our overhang as of April 3, 2021 was approximately 6.4%, and on a pro forma basis (assuming the 1,500,000 shares issuable under the New Plan) would have been approximately 11.3%.

We believe that our burn rate and our overhang (both on an actual basis and on a pro forma basis) are reasonable and in line with our peer group and reflect a judicious use of equity for compensation purposes.

The amount of awards to be made under the New Plan is not presently determinable.

In addition to the New Plan, the Company has other stock-based compensation plans in place: the RBC Bearings Incorporated 2013 Long-Term Incentive Plan; and the RBC Bearings Incorporated 2017 Long-Term Incentive Plan. See “Executive Compensation – Equity Incentive Plans” below.

Description of the New Plan

The principal terms of the New Plan are summarized below. This summary is qualified in its entirety by reference to the full text of the New Plan, a copy of which is attached hereto as Exhibit 1.

Purpose. The New Plan provides for grants of stock options, stock appreciation rights, restricted stock and performance awards. The purpose of the New Plan is to provide our directors, officers and other employees and persons who engage in services for us with incentives to maximize stockholder value and otherwise contribute to our success and to enable us to attract, retain and reward the best available persons for positions of responsibility.

Administration. The New Plan is administered by the Board’s Compensation Committee, which consists solely of two or more “non-employee directors” (as defined in Rule 16b-3 under the Exchange Act). The Compensation Committee may make all decisions and determinations regarding the New Plan as it deems necessary or advisable for the administration of the New Plan. The Board also has the authority to administer the New Plan and to take all actions that the Compensation Committee is otherwise authorized to take under the New Plan. The terms and conditions of each award made under the New Plan, including vesting requirements, will be set forth consistent with the New Plan in a written agreement with the grantee.

Number of Shares. A total of 1,500,000 shares of our common stock are issuable under the New Plan, subject to adjustment in the event of a reorganization, stock split, merger or similar change in our corporate structure or the outstanding shares of common stock. These shares will be used for future awards to eligible persons at the discretion of the Compensation Committee. The Board and the Compensation Committee believe that the 1,500,000 shares are sufficient to accomplish the objectives of the New Plan. The New Plan prohibits share recycling. If any award under the New Plan expires or terminates unexercised, becomes unexercisable or is forfeited as to any shares, or is tendered or withheld as to any shares in payment of the exercise price of the award or taxes payable with respect to the award or the vesting or exercise thereof, then such unpurchased, forfeited, tendered or withheld shares may not thereafter be available for further awards under the New Plan. A restricted stock and stock option award to an eligible executive under the New Plan for a year cannot exceed 100,000 shares.

Stock Options. The Compensation Committee or the Board may grant incentive stock options (ISOs) and non-qualified stock options. The Compensation Committee also has the authority to grant options that will become fully vested and exercisable automatically upon a change in control. The Compensation Committee may not, however, grant to any one person in any calendar year options to purchase common stock equal to more than 10% of the total number of shares authorized under the New Plan, and it may not grant incentive stock options first exercisable in any calendar year whose underlying shares have a fair market value greater than $100,000 determined at the time of grant.

The Compensation Committee determines the exercise price and term of any option in its discretion, provided that the exercise price may not be less than 100% of the fair market value of a share of common stock on the date of grant. In the case of any incentive stock option, the option must be exercised within 10 years of the date of grant. The exercise price of an incentive option awarded to a person who owns stock constituting more than 10% of our voting power may not be less than 110% of fair market value on the grant date and the option must be exercised within five years of the grant date.

Restricted Stock. The Compensation Committee may grant restricted stock subject to the conditions and restrictions, and for the duration that it determines in its discretion. The number of shares that may be used for restricted stock or restricted unit grants under the New Plan may not exceed 50% of the total authorized number of Shares pursuant to the New Plan.

Stock Appreciation Rights. The Compensation Committee may grant stock appreciation rights (SARs) subject to the terms and conditions contained in the New Plan. Under the New Plan, the exercise price of an SAR must equal the fair market value of a share of our common stock on the date the SAR is granted. Upon exercise of an SAR, the grantee will receive shares of our common stock having a value equal to the difference between the fair market value of a share of common stock on the date of exercise and the exercise price of the SAR, multiplied by the number of shares as to which the SAR is exercised.

Performance Awards. The Compensation Committee may grant performance awards contingent upon achievement by the grantee or by us of set goals and objectives regarding specified performance criteria over a specified performance cycle. Awards may include specific dollar-value target awards and/or performance units the value of which is established at the time of grant, and/or performance shares the value of which is equal to the fair market value of a share of common stock on the date of grant. The value of a performance award may be fixed or fluctuate on the basis of specified performance criteria. A performance award may be paid out in cash and/or shares of common stock or other securities.

Eligibility. Our directors, officers and other employees, as well as persons who provide services to us, are eligible for grants under the New Plan.

Amendment, Termination and Expiration. The Board may amend or terminate the New Plan in its discretion. If not previously terminated by the Board, the New Plan will expire on September 8, 2031.

Federal Income Tax Consequences

The following is a discussion of certain U.S. federal income tax consequences relevant to the Company and to participants in the New Plan who are subject to federal income tax. It is not intended to be a complete description of all possible tax consequences with respect to awards granted under the New Plan and does not address state, local or foreign tax consequences. Accordingly, holders of awards granted under the New Plan should consult their own tax advisers for specific advice with respect to all federal, state or local tax effects before exercising any options or SARs, and before disposing of any shares of stock acquired pursuant to an award. Moreover, the Company does not represent that the foregoing tax consequences apply to any particular participant’s specific circumstances or will continue to apply in the future and makes no undertaking to maintain the tax status (such as an ISO) of any award.

Non-Qualified Stock Option. A participant who is granted a non-qualified stock option will not recognize income, and the Company will not receive a tax deduction, at the time the option is granted. Upon the exercise of the option, however, the excess, if any, of the market value of the common stock on the date of exercise over the option price will be treated as ordinary income to the participant, and the Company will generally be entitled to an income tax deduction in the same year in an amount measured by the amount of ordinary income taxable to the participant. The participant will be entitled to a cost basis for the option shares for income tax purposes equal to the amount paid for the option shares plus the amount of ordinary income taxable at the time of exercise. Upon a subsequent sale of option shares, the participant will recognize short-term or long-term capital gain or loss, depending upon his or her holding period for such shares.

Incentive Stock Options. A participant who is granted an ISO satisfying the requirements of the Tax Code will not recognize income, and the Company will not receive a tax deduction, at the time the option is granted, and the participant generally will not recognize income upon exercise of the option provided such participant was an employee of the Company or a subsidiary at all times from the date of grant until three months prior to exercise. The excess of the fair market value over the option exercise price is, however, included in determining the participant’s alternative minimum tax as of the date of exercise. If the participant does not dispose of shares received upon exercise of the option for one year after exercise and two years after grant of the option (the “Holding Period”), upon the disposition of such shares the participant will recognize long-term capital gain or loss based on the difference between the option exercise price and the fair market value of the option shares on the date of disposition. In such event, the Company is not entitled to a deduction for income tax purposes in connection with the exercise of the option. If the participant disposes of the option shares without satisfying the Holding Period, the participant will generally recognize ordinary income equal to the lesser of (i) the fair market value of the option shares at the date of exercise of the option over the exercise price or (ii) the amount realized upon the disposition of such shares over the exercise price. Any further appreciation is taxed as short-term or long-term capital gain, depending on the participant’s Holding Period. If the disposition fails to satisfy the Holding Period, the Company would be entitled to an income tax deduction in the same year in an amount measured by the amount of ordinary income taxable to the participant.

Share Appreciation Rights. A participant will generally not be taxed at the time an SAR is granted, and the Company will not receive a tax deduction. Upon exercise of an SAR, a participant will recognize taxable income equal to the fair market value of the shares received on the exercise date, and the Company will be entitled to an income tax deduction in the amount of such income recognized by the participant. SARs that are paid in cash may be subject to taxation at vesting rather than at exercise because the tax treatment of certain SARs is unsettled under Section 409A of the Tax Code (see the discussion below).

Restricted Stock and Restricted Stock Units. A participant will not recognize any income, and the Company will not receive a tax deduction, at the time an award of restricted stock or restricted stock units is granted. In the year in which restrictions on the restricted stock lapse, the participant will recognize ordinary income in an amount equal to the excess of the fair market value of the stock on the date of vesting over the amount, if any, the participant paid for the stock. Similarly, upon the vesting of restricted stock units, the participant will recognize ordinary income in an amount equal to the fair market value of the stock received. With respect to awards of both restricted stock and restricted stock units, the Company will be entitled to a tax deduction at the same time and in the same amount as the participant recognizes income.

Performance Awards. A participant who is awarded performance shares will not recognize income, and the Company will not receive a tax deduction, at the time that the award is made. When a participant receives payment for performance shares in common shares, the fair market value of the shares received will be ordinary income to the participant. If payment is made in cash, the amount of cash received will be ordinary income to the participant. In either case, the Company will be entitled to a tax deduction in the amount of such income recognized by the participant.

Dividend Equivalents. A participant who is awarded dividend equivalents generally will not recognize taxable income, and the Company will not receive a tax deduction, until shares or cash are distributed pursuant to the award. When the participant receives payment for dividend equivalents in common shares or cash, the fair market value of the shares or the amount of cash received will be ordinary income to the participant and the Company will be entitled to a deduction in the amount of such income recognized by the participant.

The Compensation Committee will require payment of any amount it may determine to be necessary to withhold for federal, state, local or other taxes as a result of the grant, vesting or exercise of an award.

Section 409A of the Tax Code. Certain awards under the New Plan may be subject to Tax Code Section 409A, which imposes requirements on a participant’s election to defer compensation and the participant’s selection of the timing and form of distribution of the deferred compensation with respect to certain awards under the New Plan. Also, Section 409A generally provides that the distributions must be made on or following the occurrence of certain events (i.e., the participant’s “separation from service” (as defined in Section 409A), a predetermined date, or the participant’s death). Section 409A imposes restrictions on a participant’s ability to change his or her distribution timing or form with respect to awards under the New Plan after the compensation has been deferred. For certain participants who are officers of the Company or its subsidiary corporations and who would otherwise receive a distribution upon separation from service, Section 409A requires that such participant’s distribution commence no earlier than six months after such officer’s separation from service.

Stock options granted pursuant to the New Plan will be structured such that they are not subject to Section 409A. SARs that are distributable in shares of common stock, and restricted stock awards granted under the New Plan generally will not be considered deferred compensation subject to Section 409A. Restricted share unit awards and other awards may be subject to Section 409A, depending on the terms of the award. The Company intends that awards made under the New Plan that are subject to Section 409A will comply with the requirements of Section 409A.

A nonqualified deferred compensation plan must satisfy the requirements of Section 409A in form and in operation. If the New Plan fails to satisfy the requirements of Section 409A, a participant in the New Plan may recognize ordinary income on the amounts deferred under the New Plan, to the extent vested, prior to when the compensation is actually or “constructively” received. Also, if the New Plan fails to comply, Section 409A imposes an additional 20% federal income tax on compensation recognized as ordinary income, as well as certain interest on amounts treated as tax underpayments related to such deferred compensation. Awards granted under the New Plan are intended to comply with Section 409A to the extent applicable.

The New Plan is not subject to any provision of ERISA, nor is it a qualified employee benefit plan under Section 401(a) of the Tax Code.

The Board recommends a vote FOR the approval of the 2021 Long-Term Incentive Plan with
the number of shares issuable under the Plan equal to 1,500,000.

Item 4: Non-Binding Vote on Executive Compensation

The Exchange Act requires the Company to hold a separate non-binding advisory stockholder vote (commonly known as a say-on-pay proposal) to approve the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules.

The Company is committed to the interests of our stockholders and the delivery of long-term value through an executive compensation program and governance actions that attract, motivate and retain a highly-qualified executive team. Our objective is to ensure that our compensation program

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Drives outstanding Company performance,

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Properly aligns CEO pay to Company performance,

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Ensures that no problematic pay practices exist (such as excessive change-in-control or severance packages, benchmarking compensation above peer medians, re-pricing or backdating of options, excessive perquisites, or tax gross-ups), and

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Reflects appropriate communication with and responsiveness to stockholders.

As part of this commitment, we maintain a periodic dialogue with our stockholders to address any concerns they may have. Our most recent formal stockholder outreach took place in July 2021 when we extended invitations to 17 of our largest stockholders (collectively representing more than 70% of our outstanding stock) to get their feedback on our executive compensation program. Seven of these stockholders accepted our invitation and engaged with a member of our Compensation Committee and members of our senior management. Since this outreach was conducted after the end of our fiscal year, the compensation that is the subject of this year’s say-on-pay vote does not take into consideration the feedback we received from these stockholder. However, the Compensation Committee will be giving consideration to this feedback in their determination of whether any prospective changes should be made to the design of our executive compensation program.

In past years the stockholder outreach program has led us to develop and implement the following compensation policies, practices and procedures:

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Selecting compensation peers based on a range of relevant factors: The Company’s selected peer group is intended to ensure that the Company is not compared to other companies on an arbitrary basis and is not inappropriately limited based on Global Industry Classification Standard (GICS) industry classifications. The Company’s selected peer group takes into consideration a number of relevant factors, such as membership in the highly-engineered product/manufacturing industries, revenue ranges, market capitalization, and eight digit GICS codes for Company-selected peers.

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The CEO’s employment agreement: The Company’s employment agreement with our CEO, Dr. Hartnett, does not include a (i) guaranteed minimum annual increase in base salary or (ii) discretionary performance bonus. Dr. Hartnett’s annual performance bonus is determined by a formula based on the Company’s performance in relation to an approved operating plan. Effective as of fiscal 2018, the employment agreement was amended to provide for a targeted 20% reduction in total compensation. Accordingly, his base salary was reduced by 20% and his target incentive bonus matrix and his target restricted stock and stock option matrices were revised to target a corresponding 20% reduction. Despite his employment agreement calling for this new base salary, Dr. Hartnett voluntarily took a further reduction in his base salary of approximately 20% for the last eleven months of fiscal 2021 so that the Company could reduce operating costs during the COVID-19 pandemic.

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All CEO long-term incentive awards are performance-based: All grants of stock options, restricted stock, or restricted stock units to Dr. Hartnett are made pursuant to a pay-for-performance-based program with no discretionary awards.

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Stock Ownership Guidelines: The Board maintains stock ownership guidelines for non-employee directors and for the Company’s executive officers.

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Prohibiting share recycling and adopting share grant limits: The Company’s current stock incentive plans prohibit share recycling, limit the number of shares that may be used for restricted stock or restricted stock unit grants to 50% of the total authorized number of shares pursuant to the plan, and limit the expiration date of any stock option to no more than seven years from the date it is granted.

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Clawback policy: The Board maintains a “clawback” policy applicable to all executive officers.

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An ROIC metric for our equity compensation program: The equity compensation program for our CEO and COO includes a substantial portion of the potential restricted stock and stock option grants based on return on invested capital (ROIC) as the measurement metric.

See “Executive Compensation – Stockholder Engagement” below for more information about our stockholder engagement program.

As discussed in the “Compensation Discussion and Analysis” section below, the Company’s compensation program is designed to reward executives based on favorable performance and results. Compensation policies and plans (including benefits) are designed to attract and retain top quality and experienced executives by providing the opportunity to earn competitive cash compensation based on corporate, business unit and individual performance, plus the opportunity to accumulate stock-based wealth commensurate with the long-term growth and value created for the Company’s stockholders.

Dr. Hartnett is the Company’s founder and has served as our Chief Executive Officer since 1992. Dr. Hartnett is widely regarded as a technology visionary and one of the industry’s most successful business executives. Under Dr. Hartnett’s leadership the Company’s revenues have grown from $82 million in fiscal 1996 to $609 million in fiscal 2021. Dr. Hartnett is also one of our significant stockholders, owning approximately 1.3% of the outstanding shares of our common stock, directly aligning his interests with those of all our stockholders.

The Compensation Committee approved Dr. Hartnett’s compensation in the amounts disclosed in this proxy statement because he is not only our CEO with overall responsibility for our business strategy, operations and corporate vision, he is also our founder who has guided the Company for nearly 30 years, and the Compensation Committee believes he is extremely important to our success. The Compensation Committee believes that given Dr. Hartnett’s role in our operations, strategy and growth, it is appropriate for Dr. Hartnett to receive competitive compensation that performs both retentive and incentivizing functions. Dr. Hartnett voluntarily took an approximately 20% reduction in his base salary for the last eleven months of fiscal 2021 so that the Company could reduce operating costs during the COVID-19 pandemic.

The Compensation Committee approved the specific compensation amounts for fiscal 2021 disclosed in this proxy statement based on our executive compensation philosophy and the Compensation Committee’s subjective evaluation of Dr. Hartnett’s performance, the unique contributions he makes to the Company as its founder, and the various other factors described above.

The Company seeks to attract executive talent by offering competitive base salaries and annual and long-term performance incentive opportunities. The Company provides incentives that promote both the short-term and long-term financial and strategic objectives of the Company. Achievement of short-term objectives is rewarded through base salary and annual performance incentives, while long-term incentive grants (primarily stock options and restricted stock) encourage executives to focus on and align themselves with the Company’s long-term goals as well. These incentives are based on financial objectives of importance to the Company, including revenue and earnings growth and creation of stockholder value. The Company’s compensation program also accounts for individual performance, which enables the Company to differentiate among executives and emphasize the link between personal performance and compensation.

The Board believes that our compensation program for our named executive officers is appropriately based upon our performance and the individual performance and level of responsibility of the executive officers. We explain this in more detail in the “Executive Compensation” section below.

We are asking our stockholders to indicate their support for our named executive officers’ compensation. This proposal gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we will ask our stockholders to vote FOR the following resolution at the 2021 annual meeting:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in the Company’s proxy statement for the 2021 annual meeting of stockholders pursuant to Item 402 of SEC Regulation S-K (including the Compensation Discussion and Analysis, the compensation tables and narrative discussion contained therein), is hereby APPROVED.”

The say-on-pay vote is advisory, and therefore not binding on the Company, the Board or the Compensation Committee. However, the Company, the Board and the Compensation Committee value the opinions of our stockholders and to the extent there is any significant vote against the named executive officers’ compensation as disclosed in this proxy statement, we will consider our stockholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.

The next say-on-pay advisory vote will be held at our 2022 annual meeting of stockholders.

The Board of Directors recommends a vote FOR the approval of the compensation of our named
executive officers.

Item 5: Other Matters

As of the date of this proxy statement, the Company knows of no business that will be presented for consideration at the 2021 annual meeting other than the four items referred to above. If any other matter is properly brought before the meeting for action by stockholders, proxies in the enclosed form returned to the Company will be voted in accordance with the recommendation of the Board or, in the absence of such a recommendation, in the manner the proxy holder considers appropriate.

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Number of Meetings of the Board of Directors

The Board held four meetings during fiscal 2021. The standing committees of the Board held an aggregate of eight meetings during fiscal 2021. Each director attended all of the meetings of the Board and the Board committees on which he or she served during fiscal 2021.

Attendance at Annual Meetings of the Stockholders

All directors are encouraged to attend the annual meeting of stockholders. All of the directors attended the 2020 annual meeting of stockholders either in person or by teleconference.

Director Independence

Certain Nasdaq rules require that the Board be comprised of a majority of “independent” directors, and each of the Company’s Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee be comprised solely of “independent” directors as defined under Nasdaq rules.

Based upon the information submitted by each of the directors, and following the recommendation of the Nominating and Corporate Governance Committee, the Board has made a determination that all of our current directors, with the exception of Dr. Hartnett and Mr. Bergeron, satisfy the “independence” requirements of Nasdaq, SEC regulations and the Company’s Corporate Governance Guidelines. The standards for determining independence are those set forth in the Nasdaq listing standards and the Company’s Corporate Governance Guidelines. The Company’s Corporate Governance Guidelines can be found on our website at http://investor.rbcbearings.com.

Executive Sessions

The Company’s Corporate Governance Guidelines require the non-employee directors to meet in executive sessions on a periodic basis without management. The presiding director, for purposes of leading these meetings, is the Chairman of the Audit Committee. The non-employee members of the Board and the Audit Committee, respectively, met in executive session during one of the Board meetings and four of the Audit Committee meetings held in fiscal 2021.

Communications Between Stockholders and the Board

Stockholders may send communications to the Company’s directors as a group or individually, by writing to those individuals or the group at the following address: RBC Bearings Incorporated, c/o the Corporate Secretary, One Tribology Center, Oxford, CT 06478. The Corporate Secretary will review all correspondence received and will forward all correspondence that is relevant to the duties and responsibilities of the Board or the business of the Company to the intended director(s). Examples of inappropriate communication include business solicitations, advertising, and communication that is frivolous in nature, relates to routine business matters (such as product inquiries, complaints or suggestions), or raises grievances that are personal to the person submitting the communication. Upon request, any director may review any communication that is not forwarded to the directors pursuant to this policy.

The Board has a policy for submitting concerns regarding the Company’s accounting or auditing matters. Reports may be sent to the Audit Committee through either of the following means: (i) calling the Company’s Ethics Hotline at 1-866-247-5449 (which is available 24 hours per day, 365 days per year) and leaving a recorded message, which is transcribed by a third-party service provider to insure the caller’s anonymity, or (ii) sending a written communication marked “Private & Confidential” to the Audit Committee, RBC Bearings Incorporated, c/o the General Counsel, One Tribology Center, Oxford, CT 06478. In each case, reports will be received by the Company’s General Counsel who will forward the message to the Audit Committee. The confidentiality of all reports will be maintained to the extent consistent with applicable law.

Committees of the Board of Directors

The Board currently has an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. The composition, duties and responsibilities of these committees are described below. Committee members hold office for a term of one year. The charters for each of the committees are available on the Company’s website at http://investor.rbcbearings.com/governance-highlights.

Audit Committee. The Audit Committee is responsible for (i) selecting our independent registered public accounting firm, (ii) approving the overall scope of the audit, (iii) assisting the Board in monitoring the integrity of our financial statements, the independent registered public accounting firm’s qualifications and independence, the performance of the independent registered public accounting firm and our internal audit function, and our compliance with legal and regulatory requirements, (iv) annually reviewing the independent registered public accounting firm’s report describing the auditing firms’ internal quality-control procedures, and any material issues raised by the most recent internal quality-control review, or peer review, of the registered public accounting firm, (v) discussing the annual audited financial and quarterly statements with management and the independent registered public accounting firm, (vi) discussing earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies, (vii) discussing policies with respect to risk assessment and risk management, (viii) meeting separately, periodically, with management and the independent registered public accounting firm, (ix) reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response, (x) setting clear hiring policies for employees or former employees of the independent registered public accounting firm, (xi) handling such other matters that are specifically delegated to the Audit Committee by the Board from time to time, and (xii) reporting regularly to the full Board. Our Audit Committee currently consists of Messrs. Ambrose, Levine and Stewart, each of whom satisfies the current financial literacy requirements and independence requirements for audit committee members of Nasdaq and the SEC. The Board has determined that each of Messrs. Levine and Stewart qualifies as an “audit committee financial expert,” as such term is defined in the regulations under the Exchange Act. The Audit Committee held four meetings in fiscal 2021.

Compensation Committee. The Compensation Committee is responsible for (i) reviewing key employee compensation goals, policies, plans and programs, (ii) reviewing and approving the compensation of our directors, chief executive officer and other executive officers, (iii) reviewing and approving employment contracts and other similar arrangements between the Company and our executive officers, (iv) reviewing and consulting with the Board on the selection of the chief executive officer and evaluation of such officer’s executive performance and other related matters, (v) administration of stock plans and other incentive compensation plans, (vi) approving overall compensation policies for the Company, and (vii) handling such other matters that are specifically delegated to the Compensation Committee by the Board from time to time. Our Compensation Committee currently consists of Messrs. Crowell and Levine and Ms. Ennico, each of whom satisfies the independence requirements of Nasdaq. The Compensation Committee held two meetings in fiscal 2021.

Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee is responsible for (i) evaluating the composition, size and governance of the Board and its committees and making recommendations regarding future planning and the appointment of directors to committees, (ii) establishing a policy for considering stockholder nominees for election to the Board, (iii) evaluating and recommending candidates for election to the Board, (iv) overseeing the Board’s performance and self-evaluation process and developing continuing education programs for our directors, (v) reviewing our corporate governance principles and policies and providing recommendations to the Board regarding possible changes, and (vi) reviewing and monitoring compliance with the Company’s Code of Business Conduct and Ethics and our Insider Trading Policy. Our Nominating and Corporate Governance Committee consists of Dr. Kaplan and Mr. Stewart, each of whom satisfies the independence requirements of Nasdaq. The Nominating and Corporate Governance Committee held two meetings during fiscal 2021.

The Board seeks to have a diverse group of members who possess the background, skills and expertise to make a significant contribution to the Board, the Company and our stockholders. Desired qualities include (i) high-level leadership experience in business or administrative activities, and significant accomplishment, (ii) breadth of knowledge about issues affecting the Company, (iii) proven ability and willingness to contribute special competencies to Board activities, (iv) personal integrity, (v) loyalty to the Company and concern for its success and welfare, (vi) willingness to apply sound and independent business judgment, (vii) awareness of a director’s vital role in assuring the Company’s good corporate citizenship and corporate image, (viii) no present conflicts of interest, (ix) availability for meetings and consultation on Company matters, (x) enthusiasm about the prospect of serving, (xi) willingness to assume broad fiduciary responsibility, and (xii) willingness to become a Company stockholder.

In evaluating candidates, the Nominating and Corporate Governance Committee reviews all candidates in the same manner, regardless of the source of the recommendation. The policy of the Committee is to consider individuals recommended by stockholders for nomination as a director in accordance with the procedures described under “Director Nominations to be Considered by the Board” below.

Corporate Governance Guidelines

The Board maintains Corporate Governance Guidelines, which, among other things, set forth the Company’s expectations and policies with respect to the roles and responsibilities of the Board, director affiliations and conflicts, director compensation, standards of director conduct, and the qualifications and other criteria for director nominees. The Nominating and Corporate Governance Committee is responsible for periodically reviewing and reassessing the adequacy of these guidelines and recommending changes to the Board for approval. Our Corporate Governance Guidelines are available on the Company’s website at http://investor.rbcbearings.com/governance-highlights.

Code of Business Conduct and Ethics

The Company’s employees, officers and directors are required to abide by the Company’s Code of Business Conduct and Ethics (the “Code of Ethics”), which is intended to ensure that the Company’s business is conducted in a consistently legal and ethical manner. The Code of Ethics covers areas of professional conduct such as conflicts of interest, fair dealing, the protection of confidential information, and compliance with laws, regulations and rules. Any waiver of the policies or procedures set forth in the Code of Ethics in the case of officers or directors may be granted only by the Board and must be promptly disclosed as required by applicable law or the rules and regulations of Nasdaq. The Code of Ethics is available on the Company’s website at http://investor.rbcbearings.com/governance-highlights.

Board Risk and Compensation Risk Oversight

The Board has oversight responsibility of the processes established to report and monitor systems for material risks applicable to the Company. The Board focuses on the Company’s general risk management strategy and the most significant risks facing the Company and ensures that appropriate risk mitigation strategies are implemented by management. The Board has delegated to its various committees the oversight of risk management practices for categories of risk relevant to their functions. For example, the Audit Committee oversees risks associated with the Company’s systems of disclosure controls and internal controls over financial reporting, compliance with legal and regulatory requirements, and risks associated with foreign exchange, insurance, credit and debt. The Nominating and Corporate Governance Committee oversees risks associated with sustainability. The Compensation Committee considers risks related to the attraction and retention of talent, and risks related to the design of the compensation program. The full Board is responsible for considering strategic risks and succession planning and receives reports from each Committee as to risk oversight within their areas of responsibility.

The Company’s senior management periodically reports on risk management policies and practices to the relevant Board committee or to the full Board so that any decisions can be made as to any required changes to the Company’s risk management and mitigation strategies or to the Board’s oversight of these.

Finally, as part of its oversight of the Company’s executive compensation program, the Compensation Committee considers the impact of the Company’s executive compensation program, and the incentives created by the compensation awards that it administers, on the Company’s risk profile. In addition, the Compensation Committee reviews all of the Company’s compensation policies and procedures, including the incentives that they create and factors that may reduce the likelihood of excessive risk-taking, to determine whether they present a significant risk to the Company. Based on this review, the Company has concluded that its compensation policies and procedures are not reasonably likely to have a material adverse effect on the Company.

Board Diversity

The Company’s policy on Board diversity relates to the selection of nominees for the Board. In selecting a nominee for the Board, the Nominating and Corporate Governance Committee considers the skills, expertise and background that would complement the existing Board and ensure that its members are of sufficiently diverse and independent backgrounds, recognizing that the Company’s businesses and operations are diverse and global in nature. When assessing candidates for the Board, the Nominating and Corporate Governance Committee considers various kinds of diversity such as diversity of professional background and capabilities, knowledge of specific industries and geographic experience, as well as the more traditional diversity concepts of race, gender and national origin, when considering whether to nominate an individual for Board membership. The Nominating and Corporate Governance Committee assesses the effectiveness of this objective when evaluating new director candidates and when assessing the composition of the Board. The Board believes it is important that its members represent diverse viewpoints and perspectives in their application of judgment to Company matters. The Board will consider diversity as a key factor when considering future candidates for director when Board vacancies exist.

Board Leadership Structure

The Board has no formal policy with respect to the separation of the offices of the Chairman and the Chief Executive Officer, which are currently combined. However, the Board understands that no single leadership model is right for all companies and at all times. The Board believes that it should have the flexibility to make decisions as to the Chairman position from time to time in the way that it believes will best provide effective leadership for the Company. Accordingly, the Board periodically reviews its leadership structure, including whether these offices should be separate. The Board has determined that the current structure consisting of combined roles of Chairman and Chief Executive Officer is an effective and appropriate leadership structure for the Company at this time. All the current members of the Board are independent, except for the CEO and COO, and all of our Board committees are composed entirely of independent directors.

To promote open discussion among the independent directors, the independent directors routinely meet in executive session without the participation of management. The Board does not have a lead independent director. The Chairman of the Audit Committee leads the sessions of the Board in which management directors and other members of management are not present.

Environmental, Social and Governance Values

We know that caring about our impact on the environment and society and how we govern RBC are essential to generating long-term value for the Company and our stakeholders, and we are constantly looking for ways to improve our performance in all three areas. More information regarding our environmental, social and governance values is available at http://investor.rbcbearings.com/ESG.

DIRECTOR COMPENSATION

Non-employee members of the Board usually receive $50,000 per year, payable quarterly, although in response to the COVID-19 pandemic, in May 2020 the Compensation Committee recommended and the Board approved a 25% reduction in the cash component of the non-employee directors’ fiscal 2021 compensation. The Chairs of the Compensation and Audit Committees receive an additional $5,000 per year for serving in that capacity. Each non-employee directors also receive an annual grant of stock options and restricted stock for their services at the discretion of the Compensation Committee and upon approval of the Board. During fiscal 2021, each non-employee director was granted 1,000 stock options, which vest over five years, and 1,500 shares of restricted stock, which vest over three years. Directors are entitled to reimbursement for reasonable out-of-pocket expenses incurred in connection with attendance at Board and committee meetings. The Compensation Committee reviews non-employee director compensation annually and recommends changes to the Board for approval. During fiscal 2021 the non-employee directors received the following compensation:

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)(1)(2)		Option Awards ($)(1)(3)		Total ($)
Michael H. Ambrose		37,500		206,160		49,250		292,910
Richard R. Crowell		42,500		206,160		49,250		297,910
Dolores J. Ennico (4)		16,667		190,995		46,530		254,192
Dr. Amir Faghri (5)		20,833		206,160		49,250		276,243
Dr. Steven H. Kaplan		37,500		206,160		49,250		292,910
Alan B. Levine		42,500		206,160		49,250		297,910
Edward D. Stewart		37,500		206,160		49,250		292,910

(1)

The amounts represent the fair market value on the date of grant of restricted shares and non-qualified stock options granted during the fiscal year. For additional information on the valuation assumptions regarding the restricted stock and stock option awards, refer to Note 16 to our financial statements for fiscal 2021 included in the Company’s Annual Report on Form 10-K enclosed with this proxy statement.

(2)

The amounts reflect a fair market value of $127.33 per share in the case of the grant to Ms. Ennico and a fair market value of $137.44 per share in the case of the grants to the other directors. The total number of restricted shares held by each director as of the end of fiscal 2021 was: Mr. Ambrose – 2,500; Mr. Crowell – 3,000; Ms. Ennico – 1,500; Dr. Faghri – 0; Dr. Kaplan – 3,000; Mr. Levine – 3,000; Mr. Stewart – 3,000.

(3)

The amounts reflect a fair market value of $46.53 per option in the case of the grant to Ms. Ennico and a fair market value of $49.25 per option in the case of the grants to the other directors. The total number of stock options held by each director as of the end of fiscal 2021 was: Mr. Ambrose – 2,000; Mr. Crowell – 6,600; Ms. Ennico – 1,000; Dr. Faghri – 0; Dr. Kaplan – 2,800; Mr. Levine – 7,800; Mr. Stewart – 7,400.

(4)

Ms. Ennico became a director in September 2020.

(5)

Dr. Faghri ceased to be a director in September 2020, at which time his stock and option awards identified above terminated.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Since April 2, 2020 we have not been a party to, nor have we currently proposed, any transaction or series of similar transactions in which the amount exceeds $120,000 and in which any director, executive officer, holder of more than 5% of our common stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than compensation agreements and other agreements that are described in the “Executive Compensation” section of this proxy statement. The Company’s directors and executive officers are subject to annual related-party certifications and the Code of Ethics, which requires that an employee or director avoid placing himself or herself in a position in which his or her personal interests could interfere in any way with the interests of the Company.

We have not made payments to directors other than the fees to which they are entitled as directors (described under the heading “Director Compensation” above) and the reimbursement of expenses relating to their services as directors. We have not made any loans to any director or officer nor have we purchased any shares of the Company from any director or officer, other than the repurchase of shares from officers at fair market value to cover taxes relating to the vesting of shares of restricted stock.

PRINCIPAL STOCKHOLDERS

The following table sets forth information known to the Company regarding beneficial ownership of the Company’s common stock, as of July 1, 2021, by each director, each of the executive officers identified in the Summary Compensation table in the “Executive Compensation” section of this proxy statement, and by all of our directors and executive officers as a group (12 persons). Information in the table is derived from SEC filings made by such persons under Section 16(a) of the Exchange Act and other information received by the Company.

Name of Beneficial Owner	Amount and Nature of Beneficial Ownership (1)(2)		Percent of Class (3)
Michael J. Hartnett		319,703		1.3	%
Michael H. Ambrose		4,900		*
Daniel A. Bergeron		204,030		*
Richard R. Crowell		29,970		*
Dolores J. Ennico		3,000		*
Dr. Steven H. Kaplan		7,400		*
Alan B. Levine		24,427		*
Edward D. Stewart		28,783		*
Patrick S. Bannon		34,356		*
Richard J. Edwards		24,216		*
John J. Feeney		2,323		*
Robert M. Sullivan		10,373		*
All directors and executive officers as a group (12 persons)		693,481		2.7	%

(1)

Each person in this table has sole voting and dispositive power with respect to his or her shares.

(2)

Includes the following unissued shares that are subject to stock options that are exercisable within 60 days of July 1, 2021: Dr. Hartnett – 36,000; Mr. Ambrose – 400; Mr. Bergeron – 103,149; Mr. Crowell – 1,400; Ms. Ennico – 0; Dr. Kaplan – 1,000; Mr. Levine – 4,400; Mr. Stewart – 5,200; Mr. Bannon – 15,000; Mr. Edwards – 14,000; Mr. Feeney – 498; Mr. Sullivan – 4,800; all directors and executive officers as a group – 185,847.

(3)

Based on 25,420,621 shares of common stock outstanding as of July 1, 2021 plus the unissued option shares of each person referred to in footnote (2).

Less than 1.0%.

The following table sets forth each stockholder that, as of July 1, 2021, was known by us to be the beneficial owner of more than 5% of our common stock. Information in the table is derived from SEC filings made by such persons pursuant to Section 13 of the Exchange Act.

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent of Class (1)
The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355		2,171,067	(2)		8.5	%
Kayne Anderson Rudnick Inv. Mgmt. LLC 1800 Avenue of the Stars, 2^nd floor, Los Angeles, CA 90067		1,973,095	(3)		7.8	%
BlackRock Inc. 55 East 52^nd Street, New York, NY 10055		1,940,503	(4)		7.6	%
Wasatch Advisors, Inc. 505 Wakara Way, Salt Lake City, UT 84108		1,646,590	(5)		6.5	%
Neuberger Berman Group LLC 1290 Avenue of the Americas, New York, NY 10104		1,470,682	(6)		5.8	%

(1)

Based on 25,420,621 shares of common stock outstanding as of July 1, 2021.

(2)

A Form 13G/A filed February 10, 2021 indicates that it has (i) sole voting power over zero shares, (ii) shared voting power over 57,095 shares, (iii) sole dispositive power over 2,094,693 shares, and (iv) shared dispositive power over 76,374 shares.

(3)

A Form 13G/A filed February 11, 2021 indicates that it has (i) sole voting and dispositive power over 1,473,825 shares, and (ii) shared voting and dispositive power over 499,270 shares.

(4)

A Form 13G/A filed February 1, 2021 indicates that it has (i) sole voting power over 1,912,304 shares, (ii) sole dispositive power over 1,940,503 shares, and (iii) shared voting and dispositive power over zero shares.

(5)

A Form 13G/A filed February 11, 2021 indicates that it has (i) sole voting and dispositive power over 1,646,590 shares, and (ii) shared voting and dispositive power over zero shares.

(6)

A Form 13G/A filed February 11, 2021 indicates that it has (i) sole voting and dispositive power over zero shares, (ii) shared voting power over 1,457,490 shares, and (iii) shared dispositive power over 1,470,682 shares.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires that the Company’s executive officers, directors and greater than 10% stockholders file reports of ownership and changes of ownership of the Company’s common stock with the SEC. Based on a review of ownership reports filed during fiscal 2021, the Company believes that all Section 16(a) filing requirements were met during the year on a timely basis except that (i) a Form 4 for Mr. Crowell’s sale of 5,000 shares on June 4, 2020 was inadvertently filed ten days after it was due, and (ii) a Form 4 for Dr. Hartnett’s sale of 9,882 shares on November 27, 2020 was inadvertently filed two days after it was due.

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth information concerning our directors and executive officers as of July 1, 2021. Each director is elected for a term specified in this proxy statement or until such person’s successor is duly elected and qualified.

Name	Age	Positions
Dr. Michael J. Hartnett	75	Chairman, President and Chief Executive Officer
Michael H. Ambrose	59	Director
Daniel A. Bergeron	61	Director, Vice President and Chief Operating Officer (1)
Richard R. Crowell	66	Director
Dolores J. Ennico	68	Director
Dr. Steven H. Kaplan	68	Director
Alan B. Levine	77	Director
Edward D. Stewart	78	Director
Patrick S. Bannon	56	Vice President and General Manager
Richard J. Edwards	65	Vice President and General Manager
John J. Feeney	52	Vice President, General Counsel and Secretary (2)
Robert M. Sullivan	37	Vice President and Chief Financial Officer (2)

(1)

Also Chief Financial Officer until October 2020.

(2)

Appointed in October 2020.

Dr. Michael J. Hartnett has been the Company’s President and Chief Executive Officer since 1992 and Chairman of the Board since 1993. Prior to that, Dr. Hartnett served as President and General Manager of our Industrial Tectonics Bearings Corporation, or ITB, subsidiary from 1990, following 18 years at The Torrington Company, one of the three largest bearings manufacturers in the U.S. While at The Torrington Company, Dr. Hartnett held the position of Vice President and General Manager of the Aerospace Business Unit and was, prior to that, Vice President of the Research and Development Division. Dr. Hartnett holds an undergraduate degree from the University of New Haven, a Master’s degree from Worcester Polytechnic Institute and a Doctoral degree in Applied Mechanics from the University of Connecticut. Dr. Hartnett has developed numerous patents, authored more than two dozen technical papers and is well known for his contributions to the field of tribology, the study of friction. Dr. Hartnett served as a director of ATC Technology Corporation, a publicly-owned third-party logistics and automotive aftermarket service provider, until 2010, and served as a director of Process Fab Inc., a private company in the business of precision manufacturing and related services, until 2014. Dr. Hartnett provides the Board with significant leadership and executive experience. His proven leadership capability and his strong knowledge of the complex financial and operational issues facing mid-sized companies provides the Board with a unique and necessary perspective.

Daniel A. Bergeron has been a director since 2013 and has been with the Company since 2003 when he joined us as Vice President, Finance and later that same year was appointed Chief Financial Officer. In 2017, he was additionally appointed Chief Operating Officer and in October 2020 he relinquished the position of Chief Financial Officer. From 2002 until 2003, he served as Vice President and Chief Financial Officer of Allied Healthcare International, Inc., a publicly-held provider of healthcare staffing services. Mr. Bergeron served as Vice President and Chief Financial Officer at Paragon Networks International, Inc., a telecommunications company, from 2000 to 2002. From 1998 to 2000, he served as Vice President and Chief Financial Officer of Tridex Corporation, a publicly-held software company. From 1987 to 1998, Mr. Bergeron held various financial reporting positions with Dorr-Oliver Inc., an international engineering and manufacturing company, including Vice President and Chief Financial Officer. Mr. Bergeron holds a Bachelor of Science degree in Finance from Northeastern University and a Master of Business Administration degree from the University of New Haven. Mr. Bergeron provides the Board with significant financial leadership and executive experience. His proven leadership capability and his strong knowledge of the complex financial and operational issues facing mid-sized companies provides the Board with a unique and necessary perspective.

Michael H. Ambrose has been a director since September 2019. He has served as Vice President of Engineering and Technology for Sikorsky Aircraft, a Lockheed Martin Company, since 2017. From 2013 to 2017 he was Vice President of Aircraft Design and Manufacturing Engineering for Sikorsky, and before that held executive positions in International Government Programs and Manufacturing Operations at Sikorsky. Mr. Ambrose joined Sikorsky in 1984, working in all areas of complex aerospace design and manufacturing operations. He is currently responsible for leading over 3,000 engineers in support of all aspects of design, research & development, manufacturing engineering, and engineering customer support. Mr. Ambrose is also the co-chair of the Sikorsky senior safety board and has responsibility for air worthiness at Sikorsky. He serves on the Board of Governors of the University of New Haven and the Board of Directors of the Vertical Flight Society. Mr. Ambrose holds a Bachelor of Science degree in Mechanical Engineering from the University of New Haven and a Master of Science degree in Engineering Management from the Massachusetts Institute of Technology. Mr. Ambrose’s many years of experience in aerospace engineering and manufacturing operations is of tremendous value to the Board.

Dolores J. Ennico has been a director since September 2020. She was Chief Human Resources Officer of Olin Corporation from 2009 to 2018 and prior to that served Olin in a variety of capacities from 1974 including Vice President, Administration from 2004 to 2009, Director, Corporate Employee Relations from 2000 to 2004, and Director of Retail Marketing, Pool Chemicals from 1997 to 2000. Ms. Ennico is a member of the Board of Governors of the University of New Haven, and chairs its Academic and Student Affairs Committee, is a member of the Advisory Council of Sacred Heart Academy in Hamden, Connecticut, and is a member of the Board of the Girl Scouts of Connecticut. She earned a Bachelor of Science degree in Microbiology and a Master of Science degree in Biochemistry from Southern Connecticut State University, and a Master of Business Administration degree from the University of New Haven. Ms. Ennico’s vast experience in human capital management, including executive compensation, and her C-suite experience with a Fortune 500 company are valuable resources for the Board.

Alan B. Levine has been a director and chairman of our Audit Committee since 2005. From 2007 to 2011, Mr. Levine served as Vice President and Chief Financial Officer of the Graduate Management Admission Council. Prior to that, he served as Chief Financial Officer and Director of Virtual Access Networks, Inc. from 2001 to 2002 and Chief Financial Officer and Treasurer of Marathon Technologies Corporation from 1998 to 2001. Prior to that, Mr. Levine was with Ernst & Young LLP from 1974 to 1998, and was Partner from 1986 to 1998, where he established and directed an Entrepreneurial Services practice. Previously, Mr. Levine served as a director, chairman of the audit committee, and a member of the compensation and special committees of Dynasil Corporation of America, a director and chairman of the audit committees of MCK Communications and Nextera Enterprises, Inc., and a director, chairman of the audit committee, and a member of the compensation committee of Magnatek, Inc. Mr. Levine earned a Bachelor of Arts degree from the University of Vermont. He also holds a Master of Accounting degree from the University of Arizona and was a certified public accountant. As chairman of our Audit Committee Mr. Levine has demonstrated that he is valuable to the Audit Committee’s function. He is the Company’s designated “audit committee financial expert” as defined by SEC regulations. Mr. Levine brings to the Board extensive demonstrated expert knowledge and experience in accounting and finance from his Master of Accounting degree and as a former partner with Ernst & Young LLP and a former chief financial officer. This knowledge and experience gives Mr. Levine a perspective that he is able to use to help the Audit Committee and Board understand the highly technical issues management confronts on a daily basis and to serve as a critical resource for management.

Edward D. Stewart has been a director since 2013. Mr. Stewart is the former Chairman of the Board of ATC Technology Corporation and has served on other company boards and audit committees. Mr. Stewart has many years of financial and operational experience with General Electric Company including as Executive Vice President of GE Capital and Chief Financial Officer of a number of other GE businesses. Mr. Stewart formerly served as a member of the Board of Directors of Nordstrom fsb, a formerly wholly-owned subsidiary of Nordstrom, Inc., and a member of its Audit and Investment Committees. Mr. Stewart earned a Bachelor of Arts degree in Economics from Tufts University. His extensive financial experience qualifies him as a “Financial Expert” for our Audit Committee. In addition, his service as a director of other publicly-traded and private companies is a valuable resource to the Board.

Set forth below is information concerning our executive officers who are not directors.

Patrick S. Bannon has been with the Company since 1991. He was appointed Vice President and General Manager in 2017. He started his career as a manufacturing engineering manager with the Company’s ITB business in 1991 and then transferred to the Heim Bearings business as a manufacturing manager in 1995, and was promoted to plant manager of the Company’s ITB business in 1997. In 2002 he also assumed responsibility for the Company’s operations in Mexico. He was promoted to plant manager of the Company’s Aircraft Products operations in 2004 maintaining responsibility for Mexico and the Company’s engineered components business and was subsequently promoted to General Manager in 2008. In 2016 he also added General Manager responsibility for the Company’s AeroStructures and AeroComponents businesses. In 2017, he added management responsibilities for the Company’s Heim Bearings business. Mr. Bannon has a Bachelor of Science degree in Mechanical Engineering from Worcester Polytechnic Institute.

Richard J. Edwards has been with the Company since 1990 when he joined us as Manufacturing Manager for the Hartsville, South Carolina facility. After holding the positions of Plant Manager for the Hartsville Plant, and Director of Operations for the RBC Divisions, he was named Vice President and General Manager for the RBC Divisions in 1996. Prior to joining us, Mr. Edwards spent six years with The Torrington Company as Materials Manager, and later Plant Superintendent in the Tyger River plant. He holds a Bachelor of Science degree in Management from Arizona State University.

John J. Feeney joined RBC as Assistant General Counsel in 2014 and in October 2020 was appointed Vice President, General Counsel and Secretary. Prior to that he was Associate Counsel for Conair Corporation, a privately held consumer products company in Stamford Connecticut, from 2008 to 2014, and from 2005 to 2008 Mr. Feeney was Staff Counsel at Volt Information Sciences, Inc., a publicly-owned staffing company. From 2000 to 2005 he was with the New York City Law Department, where he focused on litigation. Mr. Feeney has a Bachelor of Arts degree in History from St. Joseph’s University, a Master of Arts degree from St. John’s University, and a Juris Doctor from SUNY Buffalo, School of Law.

Robert M. Sullivan joined the Company in 2016 as Assistant Corporate Controller, in 2017 was appointed Corporate Controller, and then in October 2020 was appointed Vice President and Chief Financial Officer. From 2013 to 2016 he worked at Sikorsky Aircraft Corporation in business development, program finance and financial planning and analysis. From 2007 until 2013 he was employed by Ernst & Young LLP as an Audit Manager. Mr. Sullivan holds a Bachelor of Science degree in Accounting from Fairfield University, a Master of Science degree in Accounting and Taxation from the University of Hartford, and a Master of Business Administration degree from the University of Connecticut. He is a licensed certified public accountant.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Overview

This Compensation Discussion and Analysis provides a detailed description of our executive compensation philosophy and program, the compensation decisions the Compensation Committee has made under this program, and the factors considered in making those decisions. This Compensation Discussion and Analysis focuses on the compensation of our named executive officers (NEOs) for fiscal 2021, who were:

Name		Position
Dr. Michael J. Hartnett		Chairman, President and Chief Executive Officer (our principal executive officer)

Daniel A. Bergeron		Director, Vice President and Chief Operating Officer (our principal financial officer for part of fiscal 2021)

Patrick S. Bannon		Vice President and General Manager (one of our three most highly compensated executive officers as of the end of fiscal 2021 other than our principal executive and financial officers)

Richard J. Edwards		Vice President and General Manager (one of our three most highly compensated executive officers as of the end of fiscal 2021 other than our principal executive and financial officers)

John J. Feeney		Vice President, General Counsel and Secretary (one of our three most highly compensated executive officers as of the end of fiscal 2021 other than our principal executive and financial officers)

Robert M. Sullivan		Vice President and Chief Financial Officer (our principal financial officer for part of fiscal 2021)

Compensation Committee Report on Executive Compensation

The Compensation Committee of the Board has reviewed and discussed with management the Compensation Discussion and Analysis. Based on that review and discussion, the members of the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.

Respectfully submitted,

The Compensation Committee of the Board of RBC Bearings Incorporated

Richard R. Crowell (Chairman)

Dolores J. Ennico

Alan B. Levine

Compensation Philosophy and Program

The Company’s core focus is on the delivery of sustainable Company performance and long-term stockholder value. The Company’s compensation program is designed to further and support this focus and to incentivize and reward executives for achieving outstanding performance and generating value for the Company’s stockholders. During the period between our 2017 and 2018 annual meetings, the Company conducted a thorough review of its compensation philosophy and program, as well as the Company’s performance and creation of value for our stockholders. The objective of this review was to assess whether our existing compensation program was in fact properly aligning executive compensation with stockholder interests and realizing the pay-for-performance philosophy that we embrace. Our conclusion, as described in greater detail below, was that based on the Company’s outstanding performance relative to our peers, our compensation program is properly incentivizing our executive leadership to drive the Company forward and generate value for our stockholders. As a result, the Compensation Committee has not made any changes to our executive compensation since that time.

Overview of Our Compensation Program

Overview of Governance Practices and Policies

● Compensation is delivered in the form of fixed pay, a cash incentive based on short-term performance and a mix of long-term equity incentives.

● All of the CEO’s variable compensation is performance-based.

● All NEO long-term incentives are stock-based, providing a direct tie to delivering sustainable long-term stockholder value.

● Long-term incentive awards vest over a period of three to five years.

● Corporate performance assessment is primarily based on EBITDA.

● Segment performance assessment for certain NEOs is based on: (i) divisional sales plus depreciation minus total factory costs for the fiscal year; (ii) divisional revenue growth relative to U.S. Gross Domestic Product; and (iii) non-financial and qualitative performance goals, such as customer services levels, development of human resources, and overall Company and individual performance.

● Short-term incentives for NEOs other than the CEO take account of individual performance.

● Modest perquisites.

● An annual stockholder say-on-pay vote.

● A pay-for-performance philosophy.

● Use of an appropriate comparator group, selected based on a range of factors.

● Significant stock ownership guidelines for the executive officers.

● A clawback policy that applies to all incentive compensation for the executive officers.

● Double-trigger provisions in the event of a change in control.

● Prohibition on share recycling under the long-term incentive plans.

● Retention of an independent external compensation consultant.

● No repricing or backdating of options.

● No employment agreements, other than for the CEO and COO.

● No “gross-ups.”

For fiscal 2021, the CEO’s total compensation was $8,892,078, of which $8,175,507 (or 91.9%) was pursuant to performance-based compensation programs. The following pay mix graph for the CEO demonstrates the focus on performance-based pay.

Stockholder Engagement

The Company is committed to maintaining a dialogue with our stockholders to understand any concerns they may have with our compensation program or otherwise. Toward that end, from time to time the Company has reached out to a number of stockholders to discuss our compensation program, explain the basis for our compensation decisions, and invite stockholder feedback regarding specific concerns with our compensation program. The Compensation Committee has then used this feedback when evaluating our compensation program design.

Our most recent stockholder outreach took place in July 2021 when we extended invitations to 17 of our largest stockholders. These stockholders collectively represent more than 70% of our outstanding stock and accounted for most of the votes cast against the say-on-pay proposal at our 2020 annual meeting. Seven of these stockholders accepted our invitation and engaged with a member of our Compensation Committee and members of our senior management. The feedback we received from the seven stockholders included the following:

●

Most of the participants are supportive of the general design of the incentive program for our CEO and COO (which is contractually pre-determined under their respective employment agreements) utilizing EBITDA and ROIC as the primary metrics to determine their performance-based incentive compensation;

●

Most of them expressed no major concern or reservation about the Company’s current self-selected peer group used for benchmarking executive compensation;

●

Several indicated a preference for a greater distinction between the performance metric weightings applied to the short- and long-term incentive programs, and suggested that perhaps a third Company-specific financial metric could be considered for addition to the mix in order to enhance the distinction;

●

Two participants expressed reservations about the fixed-share approach to making annual stock options awards to the CEO and COO;

●

Most of them acknowledged that the addition in 2017 of the ROIC metric, for the determination of performance-based incentive compensation, has proven to be a good decision and;

●

All of them acknowledged and expressed appreciation for the Company’s exceptional long-term financial performance and stock-price performance.

In prior years our discussions with our stockholders generally focus on their process for evaluating say-on-pay and pay-for-performance issues. In certain cases, stockholders have indicated they vote on compensation issues based on evaluations made by their internal staff, while others indicated they vote on compensation issues taking into consideration the recommendations made by whomever they use for proxy advisory services. Below we address the following issues raised in the past with respect to our compensation program by proxy advisory service providers:

●

The use of EBITDA as the primary incentive compensation metric with ROIC as a supplemental metric.

●

Maintaining our compensation comparator group.

●

Pay for performance philosophy.

Following this discussion, we set forth highlights of our fiscal year 2021 financial performance that demonstrate the effectiveness of our executive compensation program.

During 2017, our Compensation Committee, working with management, undertook a review of our executive compensation program. This effort included (i) discussions with 15 major institutional stockholders and their corporate governance groups regarding executive compensation, (ii) analysis of market practices at peer companies, and (iii) retention by the Compensation Committee of an independent compensation consultant. The objective of the investor outreach was to understand the factors our stockholders consider to be most important when evaluating our executive compensation program. We learned that stockholders were not seeking major changes to our executive compensation program, but rather that they had some ideas to refine and improve the program, often specific to CEO pay. Major stockholders were not prescriptive about plan design. Instead, they were more interested to see that the results and outcomes delivered by the plans were appropriately aligned with Company-wide and individual performance.

Key feedback we have received from our stockholders in the past and the actions we have taken in response are:

Feedback We Received		Action Taken by Compensation Committee

While our stockholders believed that the EBITDA measurement worked well for the Company given its financial performance, the stockholders recommended the Board consider adding one or two more metrics to the compensation plan, such as ROIC. The stockholders believed that management was in the best position to determine the best targets for how they manage the business. Certain stockholders indicated that total stockholder return (TSR) should not be used as a metric and do not follow the recommendations of the proxy advisor groups.		The Compensation Committee amended the Company’s equity compensation program for the CEO and COO in 2018 so that approximately 33% of their total equity compensation is based on ROIC as the measurement base. This applies to stock option grants as well as restricted stock grants. The CEO’s and COO’s compensation is now based on a combination of EBITDA and ROIC, two measurement factors that management and the Compensation Committee believe fit very well with how the business is managed and align compensation with both the short-term and the long-term performance of the Company.

Our stockholders believed it was reasonable to expect that Dr. Hartnett’s compensation should be higher than the peer group given that he is the Company founder, his length of service, and the Company’s superior long-term results.		Notwithstanding the stockholder’s belief as to the reasonableness of Dr. Hartnett’s compensation, Dr. Hartnett’s compensation was restructured in 2018 with the effect that his base salary and incentive bonus were reduced by 20% based on compensation targets.

Several stockholders expressed concern over the director majority vote issue.		The Company’s by-laws were amended in 2017 to require a majority vote for the election of each director.

The Use of EBITDA

EBITDA is the core measure used to assess Company operating performance under the variable pay program applicable to our named executive officers. EBITDA is defined as our consolidated operating income plus depreciation, amortization and incentive stock compensation, as adjusted for various unusual or non-recurring items. The Company and Compensation Committee believe that EBITDA is the most appropriate measure of operating performance for a number of reasons, and that, of the various performance metrics we could use under our variable pay program, EBITDA most closely aligns with our stockholders’ interests. The Compensation Committee uses EBITDA performance to determine the variable compensation of the CEO. The CEO’s annual performance incentive is based solely on EBITDA performance; the achievement of plan results in an annual incentive of 150% of base salary, with no incentive earned for achieving less than 80% of plan. EBITDA is also used to determine the size of awards under the long-term incentive program, requiring minimum performance of 75% of plan during the year to earn an award of both stock options and restricted stock. We continue to believe quite strongly that EBITDA is the most appropriate metric and that its use as the primary performance metric is a significant driver for our outstanding results and stock performance.

●

Our sole motivation in selecting performance metrics is to choose the metric that most accurately captures our performance as a company and the value that we are generating for our stockholders. We strongly believe that EBITDA is that metric.

●

EBITDA is the core foundation on which all of our business units run. Over the years we have developed a strong focus and discipline around cash management and capital allocation from the top of the organization to the bottom. We continue to apply this focus in operating the Company today.

●

EBITDA allows management, investors and others to evaluate and compare the Company’s core operating results, including return on capital and operating efficiencies, from period to period by removing the impact of the Company’s capital structure (interest expense from our outstanding debt), asset base (depreciation and amortization), tax consequences, changes in accounting reserves, other non-operating items, and share-based compensation.

●

EBITDA is the measure that guides the Company, through managing cash flow, operating cost and efficiency, and capital allocation, during periods of economic downturn and inhibits the manipulation of operating performance through excessive leverage or capital expenditures, the impact of which are more problematic during periods of economic downturn.

●

EBITDA is a key driver for debt covenants.

●

We use EBITDA for business planning purposes, to run the business, for capital allocation decisions, and to evaluate and price potential acquisitions.

●

In addition to its use by management, we also believe EBITDA is a measure widely used by securities analysts, investors, and others to evaluate the financial performance of the Company and other companies in our industry.

●

We view EBITDA as the most reliable bellwether of how well we are converting the Company’s revenue into value for our stockholders.

We have considered alternatives to the continued use of EBITDA, such as TSR (i.e., total stockholder return). We recognize that many companies use TSR as a performance metric under their compensation programs, and that its use is familiar to, and might be welcomed by, some stockholders. However, the feedback we have received from our stockholders recommended against using TSR, and upon considering how TSR would apply to RBC, we identified a number of challenges, particularly relating to the selection of an appropriate peer group with respect to TSR. Incorporating TSR as a performance metric would also be a major change internally to our organization and could disrupt how we run the business and achieve the results we have over the last several years. We have relied on EBITDA as our primary performance metric since our IPO in 2005, when our stock entered the market at $14.50 per share. On July 1, 2021, our stock closed at $201.77 per share. We believe we are unique among our peers in achieving this result for our stockholders.

Our adoption in 2018 of the ROIC metric for equity compensation was based on the belief that ROIC captures not just profitability but whether the magnitude of profitability is appropriate for the investments made. ROIC can also be compared across companies and industries and provides a closer link to key drivers of value creation. We also believe that ROIC works in close synergy with our primary EBITDA metric.

Maintaining Our Compensation Comparator Group

The Compensation Committee reviews the Company’s compensation comparator group (the “Comparator Group”) periodically to ensure it remains appropriate for the purposes of establishing executive compensation. In assessing the composition of the Comparator Group, we use a number of selection criteria, including industry focus, and company scope measured through revenue, market capitalization, headcount and financial growth. The Compensation Committee believes that this customized approach is preferable to an algorithmic GICS code approach to selecting a peer group, which lacks the precision and ability to take into account unique circumstances that we believe are crucial to devising a fairly representative peer group, particularly for companies like us that happen to be smaller than many of our competitors in the marketplace.

The Compensation Committee believes that offering competitive compensation packages to our leadership team is critical to retaining the talent that has driven the outstanding results we have achieved during the past several years. To be legitimately competitive, our compensation program must be benchmarked against the full array of our competitors, not solely against our similarly sized competitors. Details regarding the Comparator Group can be found below under “Compensation Governance and Policies – Policies.”

Pay-for-Performance Philosophy

The Company enthusiastically embraces the pay-for-performance philosophy. Over the last several years, the Company has achieved outstanding performance across numerous metrics and we believe this outstanding performance underscores the effectiveness of our compensation program. The program we have designed is incentivizing our executive team to drive the results that create value for our stockholders, and motivating our executive team to sustain that value creation in future fiscal years by rewarding the value created in the current fiscal year. We believe our compensation program exemplifies a properly functioning pay-for-performance approach to compensation. We have constructed a compensation program that incentivizes our executive team to outperform our peers, and they have delivered on that objective, thereby generating significant value for our stockholders. We believe that maintaining our compensation program is a key component to sustaining this value creation for our stockholders through future fiscal years.

Operating Performance Highlights and Stock Performance

While the Company’s operating results for fiscal 2021 were down from the prior year, they nevertheless demonstrated solid execution and strong operating performance in the face of the global COVID-19 pandemic. The amounts below are in millions, except per share amounts:

	Fiscal 2021		Fiscal 2020		Change
Net sales	$	609.0	$	727.5		(16.3	)%
Gross margin		234.1		289.1		(19.0	)%
Operating income		111.5		156.8		(28.9	)%
Net income		89.6		126.0		(28.9	)%
Diluted earnings per share		3.58		5.06		(29.2	)%

On July 26, 2021 we announced that we have entered into an agreement to purchase the Dodge mechanical power transmission business for $2.9 billion (subject to certain closing adjustments). Based on the operating results of RBC and Dodge for their respective most recently completed fiscal years, the acquisition would essentially double our revenue and adjusted EBITDA. This acquisition is expected to close before the end of 2021; however, the closing is subject to the satisfaction of various conditions so no assurance can be given that the transaction will be consummated.

The following graph shows the total return to our stockholders compared to the Russell 3000 Index and the Nasdaq Composite Index over the period from April 2, 2016 to April 3, 2021. Each line on the graph assumes that $100 was invested in our common stock on April 2, 2016 or in the respective indices at the closing price on April 2, 2016. The graph then presents the value of these investments, assuming reinvestment of dividends, through the close of trading on April 3, 2021.

The cumulative total return shown on the stock performance graph indicates historical results only and is not necessarily indicative of future results.

Compensation Governance and Policies

Objectives and Philosophy

The Company’s compensation program is designed to reward executives based on favorable performance and results. Compensation policies and plans (including benefits) are designed to attract and retain top quality and experienced executives by providing the opportunity to earn competitive cash compensation based on corporate, business unit and individual performance, plus the opportunity to accumulate stock-based wealth commensurate with the long-term growth and value created for the Company’s stockholders.

The Company seeks to attract executive talent by offering competitive base salaries and annual and long-term performance incentive opportunities. The Company provides incentives that promote both the short-term and long-term financial and strategic objectives of the Company. Achievement of short-term objectives is rewarded through base salary and annual performance incentives, while long-term incentive grants (primarily stock options and restricted stock) encourage executives to focus on and align themselves with the Company’s long-term goals as well. These incentives are based on an approved operating plan based on EBITDA, which by its nature captures financial objectives of importance to the Company including revenue and earnings growth, cash flow generation, and creation of stockholder value. The Company’s compensation program also accounts for individual performance, which enables the Company to differentiate among executives and emphasize the link between personal performance and compensation. In addition, an ROIC metric is used for a portion of the CEO’s and COO’s equity compensation.

Compensation Process

Constituent	Roles and Responsibilities
Compensation Committee (Comprised of the following three independent directors for fiscal 2021: Richard R. Crowell (Chairperson), Dolores J. Ennico (who joined the Committee in September 2020) and Alan B. Levine)	● Oversees the manner in which the Board discharges its responsibilities relating to the Company’s compensation policies and plans. ● Reviews and determines, as appropriate, the compensation of the Company’s executive officers. ● In consultation with the Board, the CEO and senior management, develops and approves the Company’s executive compensation philosophy. ● Reviews and approves corporate goals and objectives related to the CEO’s compensation and evaluates the CEO’s performance. ● Determines the CEO’s compensation and reviews and approves the CEO’s recommendations regarding the compensation of the other executive officers. ● Sole authority to retain and terminate executive compensation consultants engaged to provide advice to the Compensation Committee in connection with its responsibilities and to retain other professional advisors when necessary or appropriate. Details of the Compensation Committee’s duties are summarized in the “Board of Directors and Corporate Governance” section of this proxy statement, and are set out in full in the Compensation Committee Charter, which can be viewed at http://investor.rbcbearings.com.
Outside Advisors to the Compensation Committee	Assist the Compensation Committee when the Committee deems it necessary.
Company Management	● The CEO, who is in the best position to initially assess performance, makes recommendations to the Compensation Committee regarding compensation decisions applicable to the other executive officers. ● Company management provides input and feedback to the Compensation Committee regarding the Compensation Committee’s compensation process. ● Company management may be invited to attend Compensation Committee or Board meetings from time to time, or to contribute materials for such meetings.

Governance Policies

Interlocks and Insider Participation. No member of the Compensation Committee has ever been an officer or employee of the Company, or had any relationship with the Company requiring disclosure as a related-party transaction in the section “Certain Relationships and Related Transactions” of this proxy statement. No executive officer of the Company has served on the board of directors or compensation committee of any other entity that has or has had one or more executive officers who served as a member of the Board or the Compensation Committee during fiscal 2021.

Executive Compensation Clawback Policy. The Company maintains an Executive Compensation Clawback Policy to deter fraud and intentional illegal conduct that materially contributes to a restatement of our financial statements. The policy provides that if it is found that an executive officer engaged in fraud or intentional illegal conduct that materially contributed to the need to restate our financial statements, and the amount of any performance-based compensation actually paid or awarded to such executive officer would have been less had it been calculated based on such restated financial statements then, subject to certain exceptions set forth in the Policy, the Compensation Committee can seek to recover the after-tax portion of the difference between the amount actually paid and the amount that should have been paid. The full Executive Compensation Clawback Policy is filed as Exhibit 10.1 to our Current Report on Form 8-K dated July 25, 2013.

Stock Ownership Guidelines. We have stock ownership requirements for each of our executive officers and non-employee directors. These stock ownership requirements are designed to encourage stock ownership by our executive officers and non-employee directors and to further align their interests with our stockholders. Each executive officer and non-employee director must achieve and maintain ownership of ordinary stock or ordinary stock equivalents at or above a prescribed level. The requirements are as follows:

Position		Value of Stock
Chief Executive Officer		6x base salary
All other executive officers		3x base salary
Non-employee directors		3x annual retainer fee

Our stock-ownership program requires the accumulation of ordinary stock (or ordinary stock equivalents) over a five-year period following the date the person becomes subject to stock-ownership requirements. Executive officers who experience a change in base salary have three years from the date of such change to achieve the new level of ownership. Ownership credit is given for actual ordinary stock and restricted stock owned, whether or not vested. Stock options do not count toward meeting the stock-ownership target. The Compensation Committee reviews compliance with these guidelines on an annual basis.

The full text of the Company’s Stock Ownership Guidelines is filed as Exhibit 10.1 to our Current Report on Form 8-K dated June 17, 2013.

Maintaining a Compensation Comparator Group. The Compensation Committee compares the Company’s senior management compensation levels with those of companies in industries related to the Company and similar-sized companies in the industrial machinery, aerospace & defense, electronic equipment & instruments, electrical equipment, and semiconductor bearings industries. During 2016 the Compensation Committee undertook a review of our compensation peer group with the support of Radford, the Compensation Committee’s independent advisor at the time. Given the significant impact the 2015 Sargent acquisition had on the Company, updating the peer group was necessary due to our increased size and higher weighting within the aerospace sector. A number of criteria were identified to inform the selection of appropriate peers, including industry focus, and company scope measured through revenue, market capitalization, headcount and financial growth. As a result of the analysis, for 2016 six companies were removed from the previous peer group and seven companies were added. No changes have been made to the peer group since then.

Fiscal 2021 Comparator Group

AAR

Astronics

Barnes Group

CIRCOR International

Crane

Cognex

Curtiss-Wright

Esterline Technologies

FARO Technologies

FLIR Systems

Franklin Electric

Graco

HEICO

Hexcel

Kulicke and Soffa
Industries Moog

MTS Systems

Teledyne Technologies

Compensation Program Components and Pay Outcome for Fiscal 2021

The Compensation Committee regularly reviews and updates the Company’s compensation program for the executive officers to ensure that compensation levels and benefits are competitive and reasonable, as measured against the Comparator Group and using the guidelines described above.

The NEOs’ core compensation elements are base salary, an annual cash incentive, and a long-term equity incentive award in the form of restricted stock and stock options. Details and outcomes for fiscal 2021 are described below.

Base Salaries

Base salaries are reviewed annually by the Compensation Committee taking into account a number of factors including:

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The terms of his employment agreement in the case of the CEO;

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The CEO’s salary recommendations in the case of NEOs other than the CEO;

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Performance in role;

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Competitive positioning against market;

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Value to the Company and future potential;

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Scope of responsibility; and

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Prior experience.

In fiscal 2021 the Compensation Committee decided not to increase the salaries of any of the NEOs in light of the economic uncertainty caused by the COVID-19 pandemic. As a result, the NEOs’ base salaries remained at their fiscal 2020 levels:

Name	Base Salary
Dr. Michael J. Hartnett	$	775,020
Daniel A. Bergeron	$	551,250
Patrick S. Bannon	$	270,000
Richard J. Edwards	$	335,000
John J. Feeney	$	244,400
Robert M. Sullivan	$	165,000

However, in October 2020 (i) Mr. Feeney’s base salary was increased to $260,000 when he was promoted to Vice President, General Counsel and Secretary and (ii) Mr. Sullivan’s base salary was increased to $200,000 when he was promoted to Vice President and CFO.

In response to the COVID-19 pandemic, the Company reduced executive officer monthly base salaries by approximately 20% starting in May of fiscal 2021 and continuing through the end of the fiscal year. Executive officer base salaries returned to their regular levels at the start of fiscal 2022, and in June of fiscal 2022 the Compensation Committee adjusted the salaries of all the NEOs except the CEO as follows:

Name	Base Salary
Daniel A. Bergeron	$	578,813
Patrick S. Bannon	$	278,100
Richard J. Edwards	$	345,050
John J. Feeney	$	267,800
Robert M. Sullivan	$	206,000

Annual Incentive Compensation Plan

Under the Company’s annual incentive compensation plan (the “Annual Incentive Plan”), the Company pays performance-based annual cash incentive awards. The Annual Incentive Plan primarily assesses performance relative to stretching EBITDA goals on a formulaic and/or discretionary basis.

CEO. In accordance with the CEO’s employment agreement, the CEO is entitled to an annual performance incentive equal to a percentage of his fiscal year-end base salary as follows:

Percentage of EBITDA to Plan		Amount of Bonus
80.0% to 89.9%		75% of Base Salary
90.0% to 99.9%		100% of Base Salary
100.0% to 109.9%		150% of Base Salary
110.0% to 119.9%		200% of Base Salary
120.0% or higher		250% of Base Salary

COO. In accordance with his employment agreement, the Vice President and Chief Operating Officer is eligible for an annual performance incentive equal to a percentage of his fiscal year-end base salary as follows:

Percentage of EBITDA to Plan		Amount of Bonus
80.0% to 89.9%		45% of Base Salary
90.0% to 99.9%		60% of Base Salary
100.0% to 109.9%		90% of Base Salary
110.0% to 119.9%		120% of Base Salary
120.0% or higher		150% of Base Salary

Other Executive Officers. For executive officers other than the CEO and the COO, a broader range of performance measures, beyond EBITDA, are taken into account when determining their payments under the Annual Incentive Plan in order to reflect the areas for which they are directly accountable.

The Annual Incentive Plan payments for executive officers who are in charge of operating segments are based on the following three-part performance plan:

Divisional sales plus depreciation minus total factory costs for the fiscal year. This component is targeted at 50% of the total annual performance incentive (or 30% of their fiscal year-end base salary), subject to adjustment based on level of achievement as noted below

Percentage of Achievement of Target Goal		Amount of Bonus as Percentage of Target
0.0% to 80.0%		No bonus
80.1% to 99.9%		Pro rata portion of 100%
100.0%		100%
100.1% to 119.9%		Pro rata portion of 200%
120.0% or higher		200%

Divisional revenue growth relative to U.S. Gross Domestic Product. This component is equal to 25% of the total target annual performance incentive (or 15% of their fiscal year-end base salary). This component is earned upon achievement of divisional revenue growth that exceeds two times U.S. Gross Domestic Product.

Non-financial and qualitative performance goals. This component is equal to 25% of the total target annual performance incentive (or 15% of their fiscal year-end base salary) and is the only discretionary component of the annual performance incentive. The CEO reviews non-financial performance in areas critical to the long-term success of the business.

The Annual Incentive Plan payments for each executive officer who is not in charge of an operating segment (e.g., the Chief Financial Officer) is equal to a percent of his fiscal year-end base salary, determined at the discretion of the Compensation Committee based on the Company’s overall performance and the executive officer’s individual performance.

Based on the foregoing, the NEOs other than the CEO and the COO are eligible for the following cash incentive awards under the Annual Incentive Plan (expressed as percentages of fiscal year-end base salary):

Name	Target Bonus (% of Base Salary)			Maximum Bonus (% of Base Salary)			Performance Measures
Patrick S. Bannon		60	%		90	%		(1	)
Richard J. Edwards		60	%		90	%		(1	)
John J. Feeney		N/A			N/A			(2	)
Robert M. Sullivan		N/A			N/A			(2	)

(1)

Divisional sales plus depreciation minus total factory costs; Divisional revenue growth relative to U.S. Gross Domestic Product; non-financial and qualitative performance goals.

(2)

Overall Company and individual performance.

Discretionary Bonuses. In addition to Annual Incentive Plan compensation, the Compensation Committee may approve additional discretionary bonuses to the executive officers, other than the CEO, in the case of exceptional performance (which is determined by the Committee, with the CEO’s input, on performance relative to a number of factors including “Cash Flow,” “Cumulative Earnings Per Share Growth,” “Customer Service Levels” and “Debt (Net Debt) to Capital”).

Awards under the Annual Incentive Plan are subject to the Executive Compensation Clawback Policy.

Annual Incentive Plan Payments for Fiscal 2021. The EBITDA goal under the Annual Incentive Plan for fiscal 2021 was set at $155,277,000 in accordance with the operating plan. EBITDA achieved in fiscal 2021 was $174,255,000, which equated to 112.2% of the goal in the operating plan. Based on this performance, the Compensation Committee approved the following Annual Incentive Plan payments and discretionary bonuses for fiscal 2021:

Name	Annual Incentive		Discretionary Bonus		Total Bonus
Dr. Michael J. Hartnett	$	1,550,040	$	-	$	1,550,040
Daniel A. Bergeron	$	661,500	$	-	$	661,500
Patrick S. Bannon	$	125,550	$	24,450	$	150,000
Richard J. Edwards	$	120,600	$	29,400	$	150,000
John J. Feeney	$	104,000	$	-	$	104,000
Robert M. Sullivan	$	100,000	$	-	$	100,000

Dr. Michael J. Hartnett. Based on fiscal 2021 EBITDA being 112.2% of the operating plan, Dr. Hartnett received an annual incentive payment for fiscal 2021 equal to 200.0% of his base salary.

Daniel A. Bergeron. Based on fiscal 2021 EBITDA being 112.2% of the operating plan, Mr. Bergeron received an annual incentive payment for fiscal 2021 equal to 120.0% of his base salary.

Patrick S. Bannon. For fiscal 2021, Mr. Bannon achieved 101.4% of his goal under part 1 of his performance plan and therefore received a payment equal to 105.0% of the targeted amount under that part, which target is 30.0% of his base salary of $270,000; this amounted to a payment of $85,050 or 31.5% of his base salary. Mr. Bannon did not meet his goal under part 2 of his performance plan. Mr. Bannon received a payment under part 3 of his performance plan equal to 100.0% of the targeted amount under that part, which target is 15.0% of his base salary; this amounted to a payment of $40,500. Mr. Bannon’s total Annual Incentive Plan payment for fiscal 2021 was 46.5% of his base salary.

Richard J. Edwards. For fiscal 2021, Mr. Edwards achieved 93.8% of his goal under part 1 of his performance plan and therefore received a payment equal to 70.0% of the targeted amount under that part, which target is 30.0% of his base salary of $335,000 this amounted to a payment of $70,350 or 21.0% of his base salary. Mr. Edwards did not meet his goal under part 2 of his performance plan. Mr. Edwards received a payment under part 3 of his operating plan representing 100.0% of the targeted amount under that part, which target is 15.0% of his base salary; this amounted to a payment of $50,250 or 15.0% of his base salary. Mr. Edwards’s total Annual Incentive Plan payment for fiscal 2021 was 36.0% of his base salary.

John J. Feeney. Based on the CEO’s assessment of the Company’s overall performance and Mr. Feeney’s individual performance for fiscal 2021, he received an annual incentive payment of 40.0% of his base salary as of the end of the fiscal year, or $104,000.

Robert M. Sullivan. Based on the CEO’s assessment of the Company’s overall performance and Mr. Sullivan’s individual performance for fiscal 2021, he received an annual incentive payment of 50.0% of his base salary as of the end of the fiscal year, or $100,000.

Long-Term Equity Incentive Program

The Company makes awards under its 2013 Long-Term Incentive Plan and 2017 Long-Term Incentive Plan (the “Long-Term Incentive Plans”). These plans provide for grants of stock options, restricted stock and other types of equity awards for executive officers and other key managers.

In fiscal 2021, as was the case in fiscal 2020, awards were made to the CEO and the other NEOs in the form of stock options and restricted stock. The purpose of these awards is to align management and stockholder interests over the long term, by creating a strong and direct long-term relationship between executive compensation, value creation and stockholder returns. Furthermore, any awards under the Long-Term Incentive Plans provide the recipients with an incentive to maximize stockholder value and contribute to our success, while simultaneously enabling us to attract, retain and reward the best available people to lead the Company.

The long-term incentive awards have the following design features:

Restricted Stock

Stock Options

● Typically vest over a three- to five-year period, in equal amounts each year

● Subject to Executive Compensation Clawback Policy

● Taxed at ordinary income tax rates (subject to withholding) when the stock vests, and the Company receives a corresponding tax deduction

● Exercise price equal to fair market value at grant date

● Typically vest over a three- to five-year period, in equal amounts each year

● Expire seven years after the date of grant

● Subject to Executive Compensation Clawback Policy

● Taxed at ordinary income tax rates (subject to withholding) on exercise, and the Company receives a corresponding tax deduction (i.e., non-qualified stock options rather than incentive stock options)

CEO and COO. Starting with fiscal 2018 the criteria for determining the award size for the CEO was changed to the following performance-based matrix, with the intent to implement a 20% reduction based on achievement of 100.0% of target:

Percentage of EBITDA to Plan	Amount of Restricted Shares Awarded		Amount of Stock Options Awarded
Less than 75.0%		None		None
75.0% to 84.9%		10,680		None
85.0% to 94.9%		16,020		26,000
95.0% to 104.9% (target)		21,360		52,000
105.0% to 114.9%		32,040		52,000
Over 114.9%		42,720		61,360

Starting with fiscal 2018 the criteria for determining the award size for the COO was changed from discretionary to the following performance-based matrix:

Percentage of EBITDA to Plan	Amount of Restricted Shares Awarded		Amount of Stock Options Awarded
Less than 75.0%		None		None
75.0% to 84.9%		5,000		None
85.0% to 94.9%		7,500		7,500
95.0% to 104.9% (target)		10,000		15,000
105.0% to 114.9%		15,000		15,000
Over 114.9%		20,000		17,700

In addition, based on feedback from our outreach program with stockholders, an ROIC-Based Equity Compensation Award Plan (the “ROICAP”) was put in place for the CEO and the COO starting in fiscal 2018. The CEO ROICAP provides target awards of 10,000 shares of restricted stock and 12,000 stock options while the COO ROICAP provides target awards of 5,000 shares of restricted stock and 10,000 stock options. The ROICAP is targeted to comprise approximately one-third of the CEO’s and/or the COO’s total equity incentive compensation in a year where ROIC targets are achieved. The types of grants authorized under the ROICAP are as follows:

●

Restricted Shares - one-third of the award (if earned and granted) vests on each of the first, second and third anniversary of the grant date.

●

Stock Options – one-fifth of the award (if earned and granted) vests and becomes exercisable on each of the first, second, third, fourth and fifth anniversary of the grant date. The exercise price is the closing price of the Company’s common stock on the date of grant and the options expire on the seventh anniversary of the date of grant.

Targets for the ROICAP are established annually by the Compensation Committee. ROIC is defined as adjusted operating income (AOI) tax effected divided by equity plus debt less cash. AOI is defined as operating income adjusted to eliminate the effects of asset impairments, restructurings, acquisitions, divestitures, various unusual or non-recurring items, plant closing costs, and the cumulative effect of tax or accounting changes, as determined in accordance with U.S. GAAP, as applicable. The number of performance-based restricted shares or stock options earned under the ROICAP for a fiscal year is determined as follows:

	ROIC as % of Plan			Award Multiple
Threshold		-0.75	%		50	%
Target		0	%		100	%
Maximum		+0.75	%		200	%
In Between		Straight Line			Straight Line

(Award Multiple x (TARGET NUMBER)) = number of shares / options actually granted.

For fiscal 2021, the ROICAP target was equal to 8.15% and ROIC achieved was 9.74%.

Other Executive Officers. When determining whether to make awards under the Long-Term Incentive Plans to the executive officers, other than the CEO and the COO, and when determining the size of any such awards, the Compensation Committee considers a number of factors:

●

Assessments by the CEO and the Compensation Committee of the achievement of applicable performance metrics;

●

The perceived incentive that any grant would provide to generate long-term stockholder value; and

●

The contribution of the individual.

Long-Term Equity Incentive Awards for Fiscal 2021. Based on the EBITDA achieved in fiscal 2021 equaling 112.2% of the operating plan, Dr. Hartnett was awarded 32,040 shares of restricted stock and 52,000 stock options, and Mr. Bergeron was awarded 15,000 shares of restricted stock and 15,000 stock options. Based on the ROIC percentage achieved for fiscal 2021 equaling 9.74%, Dr. Hartnett was awarded 20,000 shares of restricted stock and 24,000 stock options, and Mr. Bergeron was awarded 10,000 shares of restricted stock and 20,000 stock options.

The Compensation Committee approved the following awards under the Long-Term Incentive Plans in fiscal 2022 for performance in fiscal 2021:

Name	Restricted Stock Fair Value		Stock Options Fair Value
Dr. Michael J. Hartnett	$	10,364,286	$	5,820,840
Daniel A. Bergeron	$	4,979,000	$	2,680,650
Patrick S. Bannon	$	398,320	$	382,950
Richard J. Edwards	$	398,320	$	382,950
John J. Feeney	$	99,580	$	153,180
Robert M. Sullivan	$	199,160	$	382,950

For further information regarding base salary, performance-based annual cash incentive awards under the Annual Incentive Plan, and equity awards under the Long-Term Equity Incentive Plans for the NEOs, see “Summary Compensation” below. Note however that the information regarding Long-Term Equity Incentive Plan awards presented in the Summary Compensation table relates to awards made in fiscal 2021 based on fiscal 2020 performance, while the information provided above regarding the awards made in fiscal 2022 based on fiscal 2021 performance will be presented in the Summary Compensation table appearing in next year’s proxy statement.

Benefits and Perquisites

In addition to the core elements of compensation explained in the previous section (i.e., base salary, performance-based annual cash incentive awards under the Annual Incentive Plan, and equity awards under the Long-Term Equity Incentive Plans), NEOs are eligible for certain additional benefits, perquisites and plans, as described below.

Retirement Plans

The executive officers are entitled to participate in the Company’s 401(k) plan on the same terms and conditions as all other eligible employees subject to a 5% of eligible employee compensation participation limit for highly compensated employees. The plan is funded by eligible participants through employee contributions and by the Company through matching contributions equal to 50% of the first 3.5% of eligible employee compensation. The Company suspended the matching contribution during the last five months of fiscal 2021 as part of our COVID-19 pandemic cost reduction program. These contributions were reinstated at the start of fiscal 2022.

Supplemental Executive Retirement Plan

To attract and retain highly qualified senior executives, the Company maintains a Supplemental Executive Retirement Plan (SERP). The SERP is a non-qualified supplemental pension plan for executives selected by the CEO that provides pension benefits in excess of those provided by the Company’s 401(k) plan. The SERP allows eligible employees to elect to defer, until termination of their employment, the receipt of up to 75% of their current salary and up to 100% of their bonus compensation. The Company has historically made contributions equal to 25% of the deferral amount, up to the first 7% of the employees’ annual compensation, which vest in full after one year of service, but in light of the COVID-19 pandemic the Company suspended these contributions in August of fiscal 2021 and has not reinstated them.

Perquisite Programs

The Company’s executive officers are eligible to participate in the Company’s broad-based benefit programs, which are generally available to all employees, including health, disability and life insurance, and relocation programs.

The perquisites provided to the CEO are set out in his employment agreement and include a leased vehicle, healthcare expense reimbursements, and reimbursement of personal expenses of $50,000. The perquisites provided to the COO are set out in his employment agreement and include a leased vehicle, and healthcare and disability insurance expense reimbursements.

Certain NEOs may also receive certain Company-provided perquisites including reimbursement of certain personal expenses, or a leased vehicle or a vehicle allowance. These items are intended to provide those executives with a competitive perquisite program.

For further information regarding specific perquisites provided to the NEOs, see “Summary Compensation” below.

Employment Agreements

Dr. Hartnett’s current employment agreement, which went into effect in 2017 for an initial five-year term, automatically renews each year unless either party gives 90 days’ notice of nonrenewal. The agreement provides, among other things, for a base salary of $775,020 and that Dr. Hartnett is solely eligible for a formulaic annual performance bonus based on achievement of performance goals, with no eligibility for any discretionary annual performance bonus, as discussed above under “Compensation Program Components.” These provisions resulted in a 20% reduction in Dr. Hartnett’s base salary and formula-based annual incentive bonus compared to the terms of his prior employment agreement. The current agreement also sets forth the terms under which Dr. Hartnett is to receive awards under the Long-Term Incentive Plans and the various perquisites he is to receive. A copy of Dr. Hartnett’s employment agreement is filed as Exhibit 10.1 to our Current Report on Form 8-K dated June 7, 2017.

Mr. Bergeron’s current employment agreement, which went into effect in 2017 for an initial five-year term, automatically renews each year unless either party gives 90 days’ notice of nonrenewal. The agreement provides, among other things, for a specified base salary (initially $500,000 and now $578,813) and that Mr. Bergeron is solely eligible for a formulaic annual performance bonus based on achievement of performance goals, with no eligibility for any discretionary annual performance bonus, as discussed above under “Compensation Program Components.” The agreement also sets forth the terms under which Mr. Bergeron is to receive awards under the Long-Term Incentive Plans and the various perquisites he is to receive. A copy of the agreement is filed as Exhibit 10.2 to our Current Report on Form 8-K dated June 7, 2017.

Despite the base salary requirements of their employment agreements, Dr. Hartnett and Mr. Bergeron voluntarily took approximately 20% reductions in their base salaries for the last eleven months of fiscal 2021 so that the Company could reduce operating costs during the COVID-19 pandemic.

The other executive officers do not have employment agreements and are employed “at will.”

Change-in-Control Compensation Agreements

Change-in-control compensation agreements generally protect income for key executives who would likely be involved in decisions regarding and/or successful implementation of merger/acquisition activity and who are at risk for job loss if a takeover occurs. We believe it is in the best interests of the Company and our stockholders to have such an agreement with our CEO and other executive officers in order (i) for the Board to be able to receive and rely upon the executive’s advice and counsel as to the best interests of the Company and our stockholders without concern that they might be distracted or influenced by the personal uncertainties and risks created by merger/acquisition proposals or threats, and (ii) to encourage them to remain with the Company and to continue to devote full attention to the Company’s business.

Each of Dr. Hartnett’s and Mr. Bergeron’s employment agreements provides that in the event of his termination of employment due to a change in control of the Company, he will generally be entitled to a payment equal to 250% of his annual base salary plus 250% of his target incentive compensation in effect at termination.

The Company has entered into change-in-control letter agreements with each of Messrs. Edwards and Bannon. Each letter agreement entitles the executive officer to severance benefits if his employment with the Company is terminated under certain circumstances within 24 months after a change in control of the Company. The amount of severance will generally be equal to 150% of the executive officer’s annual base salary plus 150% of his target incentive compensation in effect at termination. In addition, the executive officer will be entitled to a pro rata annual bonus for the year in which his termination of employment occurs and to continue participating in the Company’s welfare benefit programs for up to 18 months following his termination of employment. The letter agreement also commits the executive officer to remain employed with the Company in the event of a tender or exchange offer and includes a non-compete covenant for 12 months following the executive’s termination of employment due to a change in control. The form of the change-in-control letter agreement is filed as Exhibit 10.1 to our Form 10-Q filed February 1, 2010.

In addition, the restricted stock grants and stock options held by the executive officers contain change-in-control provisions. The exact terms are set out and defined in the Long-Term Incentive Plans but, in summary, if a holder of these restricted stock grants or stock options ceases to be an employee because he or she is terminated without cause within 18 months after a change in control, all then unvested restricted stock and stock options will vest on the date the holder ceases to be an employee. In addition, if there is a change in control of the Company or similar event, the Compensation Committee may, in its discretion, provide for the lapsing of restrictions on a participant’s restricted stock and the vesting of stock options on such terms and conditions as it deems appropriate.

Compensation Committee Policy Regarding Compliance with Section 162(m) of the Code

The Compensation Committee considers the anticipated tax treatment to the Company and the executive officers in its review and establishment of the compensation program and payments. The deductibility of some types of compensation payments can depend upon the timing of an executive’s vesting or exercise of previously granted rights. Interpretations of and changes in applicable tax laws and regulations as well as other factors beyond the Compensation Committee’s control also can affect deductibility of compensation.

Prior to 2018, Section 162(m) of the Tax Code precluded a public corporation from taking a deduction for compensation in excess of $1 million in any taxable year for its chief executive officer or any of its four other highest paid executive officers, unless certain specific and detailed criteria were satisfied, although compensation that qualified as “performance-based” under Section 162(m) was deductible without regard to this $1 million limit.

In response to old Section 162(m), the Company’s Executive Officer Performance-Based Compensation Plan (the “162(m) Plan”) was established for executive officers selected by the Compensation Committee to receive an incentive bonus or a restricted stock grant based upon the Company’s meeting certain financial performance goals. The 162(m) Plan is intended to constitute qualified “performance-based compensation” for purposes of old Section 162(m). Dr. Hartnett was designated a participant under the 162(m) Plan by the Compensation Committee for fiscal 2012 and subsequent fiscal years. Mr. Bergeron was designated as a participant under the 162(m) Plan by the Compensation Committee for fiscal 2018 and subsequent fiscal years.

The Tax Cuts and Jobs Act eliminated old Section 162(m)’s performance-based compensation exception effective January 1, 2018, subject to a special rule that “grandfathers” certain awards and arrangements that were in effect on or before November 2, 2017, including awards under the 162(m) Plan and the incentive arrangements provided in the employment agreements with our CEO and COO. However, from and after January 1, 2018, compensation awarded in excess of $1 million to our other NEOs may not be deductible. While the Tax Cuts and Jobs Act may limit the deductibility of compensation paid to some of our NEOs, the Compensation Committee will, consistent with its past practice, design a compensation program that is in the best long-term interests of the Company and our stockholders, with deductibility of compensation being one of a variety of considerations taken into account. However, the Compensation Committee has determined that it will not necessarily seek to limit executive compensation to that deductible under Section 162(m).

The cost to the Company of the incentive bonus amounts to be paid or restricted stock grants to participants cannot be determined at this time because payout of incentive bonus amounts and restricted stock grants are based on the Company’s future financial performance, the related performance measures set by the Committee and the number of participants named by the Compensation Committee. The Committee envisions that future incentive bonus amounts to be paid or restricted stock grants to participants will be consistent with the compensation program approved by the Committee from time to time and described in the Company’s annual proxy statement.

The Compensation Committee will continue to monitor developments and assess alternatives for preserving the deductibility of compensation payments and benefits to the extent reasonably practicable, consistent with its compensation policies and as determined to be in the best interests of the Company and our stockholders.

SUMMARY COMPENSATION
Name and Principal Position (1)	Fiscal Year		Salary ($)(2)		Bonus ($)(3)		Stock Awards ($)(4)		Option Awards ($)(4)		Non-Equity Incentive Plan Compensation ($)(5)		All Other Compensation ($)			Total ($)

Michael J. Hartnett		2021		631,937		-		3,725,036		2,900,431		1,550,040		84,634	(6)		8,892,078
		2020		775,020		-		7,489,597		2,979,960		1,162,530		57,998	(6)		12,465,105
		2019		775,020		-		6,875,525		2,769,440		1,162,530		58,070	(6)		11,640,585

Daniel A. Bergeron		2021		449,479		-		1,769,128		1,021,593		661,500		35,138	(7)		3,936,838
		2020		551,250		-		3,598,000		1,372,350		496,125		41,003	(7)		6,058,728
		2019		525,000		-		3,303,000		1,275,400		472,500		35,630	(7)		5,611,530

Patrick S. Bannon		2021		239,885		24,450		687,200		738,750		125,550		8,846	(8)		1,824,681
		2020		270,000		-		719,600		588,150		178,200		10,557	(8)		1,766,507
		2019		250,000		97,500		660,600		364,400		127,500		9,013	(8)		1,509,013

Richard J. Edwards		2021		273,153		29,400		-		-		120,600		22,991	(9)		446,144
		2020		335,000		-		287,840		392,100		25,000		28,513	(9)		1,068,453
		2019		326,000		-		396,360		364,400		200,540		24,577	(9)		1,311,877

John J. Feeney		2021		205,579		-		81,711		19,130		104,000		4,151	(10)		414,571
		2020		244,400		-		-		-		40,000		6,754	(10)		291,154
		2019		235,000		-		40,659		7,744		35,000		5,398	(10)		323,801

Robert M. Sullivan		2021		148,672		-		343,600		492,500		100,000		4,768	(11)		1,089,540
		2020		165,000		-		143,920		274,470		70,000		4,739	(11)		658,129
		2019		150,000		-		66,060		182,200		45,000		3,731	(11)		446,991

(1)

The principal positions of the NEOs are as follows: Dr. Hartnett – Chairman, President and CEO; Mr. Bergeron – Vice President and COO; Mr. Bannon – Vice President and General Manager; Mr. Edwards – Vice President and General Manager; Mr. Feeney – Vice President, General Counsel and Secretary; Mr. Sullivan – Vice President and Chief Financial Officer.

(2)

Includes amounts deferred by the officer pursuant to the 401(k) Plan.

(3)

Bonuses for fiscal 2021, 2020 and 2019 were paid under the Annual Incentive Plan and are reflected in column (g). Mr. Bannon received additional discretionary bonuses based on performance for fiscal 2021 and 2019. Mr. Edwards received additional discretionary bonuses based on performance for fiscal 2021.

(4)

Represent the fair market value on the date of grant of restricted shares and non-qualified stock options granted during the fiscal year. For additional information on the valuation assumptions regarding the restricted stock and stock option awards, refer to Note 16 to our financial statements for fiscal 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on May 21, 2021.

(5)

Consist of annual cash bonuses earned in fiscal 2021, 2020 and 2019 and paid in the following fiscal year under the Annual Incentive Plan. See “Compensation Program Components – Annual Incentive Compensation Plan” above.

(6)

Consists of a leased vehicle of $918 in fiscal 2021, $1,945 in fiscal 2020, and $1,655 in fiscal 2019; healthcare expense reimbursements of $9,372 in fiscal 2021, $3,793 in fiscal 2020, and $6,415 in fiscal 2019; reimbursement of personal expenses per Dr. Hartnett’s employment agreements of $50,000 in fiscal 2021, 2020 and 2019; and employer match contributed to Dr. Hartnett’s SERP account of $24,344 in fiscal 2021, and $2,260 in fiscal 2020.

(7)

Consists of a car allowance of $12,000 in fiscal 2021, a leased vehicle of $10,334 in fiscal 2020, and $8,200 in fiscal 2019; healthcare expense reimbursements of $9,452 in fiscal 2021, $10,000 in fiscal 2020, and $9,099 in fiscal 2019; employer match contributed to Mr. Bergeron’s SERP account of $10,714 in fiscal 2021, $17,341 in fiscal 2020, and $16,989 in fiscal 2019; employer match contributions to Mr. Bergeron’s 401(k) account of $2,576 in fiscal 2021, $2,932 in fiscal 2020, and $984 in fiscal 2019; and taxable costs of group-term life insurance of $396 in fiscal 2021, $396 in fiscal 2020, and $358 in fiscal 2019.

(8)

Consists of employer match contributed to Mr. Bannon’s SERP account of $4,681 in fiscal 2021, $8,523 in fiscal 2020, and $7,875 in fiscal 2019; employer match contributions to Mr. Bannon’s 401(k) account of $3,897 in fiscal 2021, $1,868 in fiscal 2020, and $963 in fiscal 2019; and taxable costs of group-term life insurance of $268 in fiscal 2021, $166 in fiscal 2020, and $175 in fiscal 2019.

(9)

Consists of Company-paid life insurance premiums of $5,634 in fiscal 2021, 2020, and 2019; a car allowance of $12,000 in fiscal 2021, a leased vehicle of $13,584 in fiscal 2020, and $9,062 in fiscal 2019; employer match contributed to Mr. Edwards’ 401(k) account of $3,226 in fiscal 2021, $2,160 in fiscal 2020, and $969 in fiscal 2019; employer match contributed to Mr. Edwards’ SERP account of $1,547 in fiscal 2021, $6,647 in fiscal 2020, and $8,417 in fiscal 2019; and taxable costs of group-term life insurance of $584 in fiscal 2021, $488 in fiscal 2020, and $495 in fiscal 2019.

(10)

Consists of an employer match contributed to Mr. Feeney’s SERP account of $1,261 in fiscal 2021, $4,780 in fiscal 2020, and $4,471 in fiscal 2019; employer match contributions to Mr. Feeney’s 401(k) account of $2,752 in fiscal 2021, $1,836 in fiscal 2020, and $802 in fiscal 2019; and taxable costs of group-term life insurance of $138 in fiscal 2021, $138 in fiscal 2020, and $125 in fiscal 2019.

(11)

Consists of an employer match contributed to Mr. Sullivan’s SERP account of $2,076 in fiscal 2021, $3,587 in fiscal 2020, and $3,194 in fiscal 2019; employer match contributions to Mr. Sullivan’s 401(k) account of $2,638 in fiscal 2021, $1,098 in fiscal 2020, and $475 in fiscal 2019; and taxable costs of group-term life insurance of $54 in fiscal 2021, $54 in fiscal 2020, and $62 in fiscal 2019.

GRANTS OF PLAN-BASED AWARDS
			Estimated Future Payouts Under Non-Equity Incentive Plan Awards									All Other Stock Awards: Number of Shares of Stock or		All Other Option Awards: Number of Securities Underlying		Exercise or Base Price of Option		Grant Date Fair Value of Stock and Stock Option
Name	Grant Date		Threshold ($)			Target ($)			Maximum ($)			Units (#)(8)		Options (#)(8)		Awards ($/Sh)		Awards ($)

Michael J. Hartnett		-		(1	)		1,162,530	(2)		1,937,550	(3)		-		-		-		-
		6/2/2020		-			-			-			27,103		-		-		3,725,036
		6/2/2020		-			-			-			-		58,892		137.44		2,900,431	(9)

Daniel A. Bergeron		-		(4	)		520,932	(5)		868,220	(6)		-		-		-		-
		6/2/2020		-			-			-			12,872		-		-		1,769,128
		6/2/2020					-			-			-		20,743		137.44		1,021,593	(9)

Patrick S. Bannon		-		-			168,600	(7)		252,900	(7)		-		-		-		-
		6/2/2020		-			-			-			5,000		-		-		687,200
		6/2/2020		-			-			-			-		15,000		137.44		738,750	(9)

Richard J. Edwards		-		-			207,030	(7)		310,545	(7)		-		-		-		-
		6/2/2020		-			-			-			-		-		-		-
		6/2/2020		-			-			-			-		-		-		-

John J. Feeney		-		-			N/A			N/A			-		-		-		-
		2/8/2021		-			-			-			450		-		-		81,711
		2/8/2021		-			-			-			-		280		181.58		19,130	(10)

Robert M. Sullivan		-		-			N/A			N/A			-		-		-		-
		6/2/2020		-			-			-			2,500		-		-		343,600
		6/2/2020		-			-			-			-		10,000		137.44		492,500	(9)

(1)

Under the Annual Incentive Compensation Plan, if the target is not met, the amount of the award is at the discretion of the Board of Directors. For fiscal 2021 the Company’s EBITDA performance was equal to 112.2% of the operating plan.

(2)

Equals 150% of base salary (100% to 109.9% of EBITDA to plan).

(3)

Equals 250% of base salary (120% or greater of EBITDA to plan).

(4)

If the target is not met, the amount of the award is at the discretion of the Compensation Committee.

(5)

Equals 90% of base salary (100% to 109.9% of EBITDA to plan).

(6)

Equals 150% of base salary (120% or higher of EBITDA to plan).

(7)

Target is 60% of base salary. The targeted percentage is made up of three parts: (1) 30% of base salary upon achieving 100% of the established annual revenue and profit plan, with a minimum threshold of more than 80% of plan and an opportunity to earn up to 60% of base salary if the achievement is equal to 120% of plan; (2) up to 15% of base salary based on year to year revenue growth achievement in excess of that percentage equal to two times U.S. Gross Domestic Product; and (3) up to 15% of base salary, at the discretion of the CEO, upon achievement of acceptable customer service levels, development of human resources and the Company’s overall performance.

(8)

Awarded under the 2017 Long-Term Equity Incentive Program.

(9)

The Grant Date Fair Value of restricted stock awards is based on the grant date closing price of $137.44.

(10)

The Grant Date Fair Value of restricted stock awards is based on the grant date closing price of $181.58.

Dr. Hartnett Employment Agreement

Dr. Hartnett’s current employment agreement provides for a base salary of $64,585 per month, which is subject to review by the Compensation Committee not later than December 1 of each year, after which the Committee may increase the base salary at its sole discretion. The Compensation Committee has not increased Dr. Hartnett’s base salary since his employment agreement was put in place in 2017. Although the Compensation Committee may not decrease Dr. Hartnett’s base salary, he voluntarily took an approximately 20% reduction in his base salary for the last eleven months of fiscal 2021 so that the Company could reduce operating costs during the COVID-19 pandemic. Dr. Hartnett’s employment agreement also entitles him to an annual performance bonus, with respect to each fiscal year during which he remains an employee, in an amount determined as a percentage of his base salary based on the extent to which the EBITDA target in our operating plan is achieved or exceeded as explained above.

Dr. Hartnett’s employment agreement also contains non-competition provisions prohibiting him from competing against us during the term of the employment agreement and for two years thereafter without our prior written consent. Dr. Hartnett is also entitled to certain additional benefits beyond those generally available to our employees including medical and hospitalization insurance and additional life insurance. We are also required to maintain an apartment in Los Angeles for use by Dr. Hartnett while on business.

Daniel Bergeron Employment Agreement

Mr. Bergeron’s current employment agreement provides a base salary that is subject to review by the Compensation Committee not later than December 1 of each year, after which the Committee may increase the base salary at its sole discretion. Mr. Bergeron’s base salary when his employment agreement was put in place in 2017 was $41,667 per month and is now $48,234 per month. Although the Compensation Committee may not decrease Mr. Bergeron’s base salary, he voluntarily took an approximately 20% reduction in his base salary for the last eleven months of fiscal 2021 so that the Company could reduce operating costs during the COVID-19 pandemic Mr. Bergeron is also entitled to an annual performance bonus with respect to each fiscal year during which he remains an employee, in an amount determined as a percentage of his base salary based on the extent to which the EBITDA target in our operating plan is achieved or exceeded as explained above.

Mr. Bergeron’s employment agreement also contains non-competition provisions prohibiting Mr. Bergeron from competing against us during the term of the employment agreement and for two years thereafter without our prior written consent. Mr. Bergeron is also entitled to certain additional benefits beyond those generally available to our employees including medical and hospitalization insurance and disability insurance.

Equity Incentive Plans

2013 Plan

Our 2013 Long-Term Incentive Plan was approved by our stockholders at the Company’s 2013 stockholder meeting. The plan provides for grants of stock options, stock appreciation rights, restricted stock and performance awards. Our directors, officers and other employees and persons who engage in services for us are eligible for grants under the plan. The purpose of the plan is to provide these individuals with incentives to maximize stockholder value and otherwise contribute to our success and to enable us to attract, retain and reward the best available persons for positions of responsibility.

Initially, 1,500,000 shares of our common stock were authorized for issuance under the plan, subject to adjustment in the event of a reorganization, stock split, merger or similar change in our corporate structure or the outstanding shares of common stock. Not more than 50% of the total authorized shares may be granted as restricted stock. During fiscal 2014, the Company issued 8,000 restricted stock grants. During fiscal 2015, the Company issued 223,750 options and 73,100 restricted stock grants. During fiscal 2016 the Company issued 211,500 stock options and 142,450 restricted stock grants. During fiscal 2017, the Company issued 249,750 stock options and 157,500 restricted stock grants. During fiscal 2018, the Company issued 217,280 stock options and 116,273 restricted stock grants. During fiscal 2019 the Company issued 2,750 stock options and 97,040 restricted stock grants. The Company issued no options or restricted stock grants during fiscal 2020, fiscal 2021 or fiscal 2022 through July 1, 2021. As of July 1, 2021 there were 190,843 options and 35,381 restricted stock grants outstanding under the plan, and 607 shares remained available for future grants.

2017 Plan

Our 2017 Long-Term Incentive Plan was approved by our stockholders at the Company’s 2017 stockholder meeting. The plan provides for grants of stock options, stock appreciation rights, restricted stock and performance awards. Our directors, officers and other employees and persons who engage in services for us are eligible for grants under the plan. The purpose of the plan is to provide these individuals with incentives to maximize stockholder value and otherwise contribute to our success and to enable us to attract, retain and reward the best available persons for positions of responsibility.

Initially, 1,500,000 shares of our common stock were authorized for issuance under the plan, subject to adjustment in the event of a reorganization, stock split, merger or similar change in our corporate structure or the outstanding shares of common stock. Not more than 50% of the total authorized shares may be granted as restricted stock. During fiscal 2018 the Company did not issue any stock options or restricted stock. During fiscal 2019 the Company issued 198,565 stock options and 46,980 restricted stock grants. During fiscal 2020, the Company issued 154,200 options and 97,640 restricted stock grants. During fiscal 2021, the Company issued 137,210 options and 94,205 restricted stock grants. During fiscal 2022 through July 1, 2021 the Company issued 135,250 stock options and 92,265 restricted stock grants. As of July 1, 2021 there were 503,785 options and 230,220 restricted stock grants outstanding under the plan, and 543,685 shares remained available for future grants.

Administration of the Plans

Our Compensation Committee administers the 2013 and 2017 plans. The Board also has the authority to administer the plans and to take all actions that the Compensation Committee is otherwise authorized to take under the plans. The terms and conditions of each award made under each plan, including vesting requirements, are set forth consistent with the plan in a written agreement with the grantee.

Stock Options. The Compensation Committee or the Board may award grants of incentive stock options and non-qualified stock options. The Compensation Committee also has the authority to grant options that will become fully vested and exercisable automatically upon a change in control. The Compensation Committee may not, however, award to any one person in any calendar year options to purchase common stock equal to more than 10% of the total number of shares authorized under the plan, and it may not award incentive stock options first exercisable in any calendar year whose underlying shares have a fair market value greater than $100,000 determined at the time of grant. The Compensation Committee will determine the exercise price and term of any option in its discretion, provided that, the exercise price may not be less than 100% of the fair market value of a share of common stock on the date of grant. In the case of any incentive stock option, the option must be exercised within ten years of the date of grant. The exercise price of an incentive stock option awarded to a person who owns stock constituting more than 10% of our voting power may not be less than 110% of fair market value on the grant date and the option must be exercised within five years of the date of grant.

Restricted Stock. The Compensation Committee may award restricted stock, subject to the conditions and restrictions, and for the duration that it determines in its discretion.

Stock Appreciation Rights. The Compensation Committee may grant stock appreciation rights (SARs), subject to the terms and conditions contained in the relevant plan. The exercise price of an SAR must equal the fair market value of a share of our common stock on the date the SAR is granted. Upon exercise of an SAR, the grantee will receive an amount in shares of our common stock equal to the difference between the fair market value of a share of common stock on the date of exercise and the exercise price of the SAR, multiplied by the number of shares as to which the SAR is exercised.

Performance Awards. The Compensation Committee may grant performance awards contingent upon achievement of set goals and objectives regarding specified performance criteria, over a specified performance cycle. Awards may include specific dollar-value target awards, performance units, the value of which is established at the time of grant, and/or performance shares, the value of which is equal to the fair market value of a share of common stock on the date of grant. The value of a performance award may be fixed or fluctuate on the basis of specified performance criteria. A performance award may be paid out in cash and/or shares of common stock or other securities.

Amendment, Termination and Expiration of the Plans. The Board may amend or terminate the 2013 or 2017 plan in its discretion, except that no amendment will become effective without prior approval of our stockholders if such approval is necessary for continued compliance with the performance-based compensation exception of Section 162(m) of the Tax Code or any Nasdaq listing requirements. If not previously terminated by the Board, each plan will expire on the tenth anniversary of its adoption.

Except as set forth above in “Compensation Components – Long-Term Equity Incentive Program” with respect to the CEO and COO, the Company does not have an established quantitative formula to determine the number of shares of stock options and/or restricted shares granted to each executive officer. The grants are based on the Compensation Committee’s subjective evaluation based on an understanding and assessment of each individual executive officer and a comparison to the competitive market for executive compensation. The factors taken into consideration by the Compensation Committee with respect to grants of stock options and/or restricted shares to executive officers include the officer’s responsibilities, experience level, retention risk, tenure, job performance and achievement of short-term and long-term goals.

The Compensation Committee typically reviews approval of equity grants on a fiscal year basis. The timing of the meeting is scheduled to allow the Compensation Committee time to review prior year performance and assemble all necessary information. The date is not selected or changed to increase the value of stock option. Grants are generally scheduled to follow the release of earnings for a quarter or fiscal year.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
	OPTION AWARDS											STOCK AWARDS
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable			Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)			Market Value of Shares or Units of Stock That Have Not Vested ($)(1)

Michael J. Hartnett		14,192		20,000	(2)		-		72.94		7/8/2023		-			-
		16,000		32,000	(3)		-		99.64		6/27/2024		-			-
		30,400		45,600	(8)		-		132.12		6/7/2025		-			-
		15,200		60,800	(12)		-		143.92		6/3/2026		-			-
		-		58,892	(17)		-		137.44		6/2/2027		-			-
		-		-			-		-		-		17,347	(24)		3,437,135
		-		-			-		-		-		34,693	(29)		6,874,071
		-		-			-		-		-		27,103	(34)		5,370,188

Daniel A. Bergeron		32,000		8,000	(2)		-		72.94		7/8/2023		-			-
		18,000		12,000	(4)		-		99.64		6/27/2024		-			-
		14,000		21,000	(9)		-		132.12		6/7/2025		-			-
		7,000		28,000	(13)		-		143.92		6/3/2026		-			-
		-		20,743	(18)		-		137.44		6/2/2027		-			-
		-		-			-		-		-		8,333	(24)		1,651,101
		-		-			-		-		-		16,667	(30)		3,302,399
		-		-			-		-		-		12,872	(35)		2,550,458

Patrick S. Bannon		12,000		8,000	(7)		-		126.56		2/1/2025		-			-
		4,000		6,000	(10)		-		132.12		6/7/2025		-			-
		3,000		12,000	(14)		-		143.92		6/3/2026		-			-
		-		15,000	(19)		-		137.44		6/2/2027		-			-
		-		-			-		-		-		1,000	(25)

SEC Form DEF 14A filed by RBC Bearings Incorporated