200 State Street
Beloit, Wisconsin 53511
(608) 364-8800
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective and the date on which all other conditions to the Spin-Off and Merger described in the enclosed joint proxy statement/​prospectus-information statement have been satisfied or waived.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission acting pursuant to said Section 8(a), may determine.

The information in this joint proxy statement/prospectus-information statement is not complete and may be changed. We may not sell the securities offered by this joint proxy statement/prospectus-information statement until the registration statement filed with the Securities and Exchange Commission (“SEC”) is effective. This joint proxy statement/prospectus-information statement does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where an offer or solicitation is not permitted.

2.

a proposal to approve an amendment and restatement of Regal’s Articles of Incorporation to effect a change in Regal’s legal name from “Regal Beloit Corporation” to “Regal Rexnord Corporation” ​(which amendment and restatement will not be implemented if the Merger is not consummated);

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3.

a proposal to approve an amendment and restatement of Regal’s Articles of Incorporation to increase the number of authorized shares of Regal common stock from 100,000,000 to 150,000,000 (which amendment and restatement will not be implemented if the Merger is not consummated); and

​

4.

a proposal to approve the adjournment of the Regal Special Meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the Regal Special Meeting to approve the Regal Share Issuance Proposal.

​

The Regal board of directors recommends that Regal shareholders vote “FOR” each of the proposals to be considered at the Regal Special Meeting.

At the Rexnord Special Meeting, Rexnord stockholders will be asked to consider and vote upon:

1.

a proposal to approve the transactions contemplated by the Merger Agreement and the transactions contemplated by the Separation and Distribution Agreement, dated as of February 15, 2021, as may be amended from time to time (which we refer to as the “Separation Agreement”) (which proposal we refer to as the “Rexnord Separation and Merger Proposal”);

​

2.

a proposal to approve, on a non-binding basis, the compensation of Rexnord's named executive officers with respect to the Accelerated Rexnord PSUs (as defined herein) (which proposal we refer to as the “Rexnord Compensation Proposal”); and

​

3.

a proposal to approve the adjournment of the Rexnord Special Meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the Rexnord Special Meeting to approve the Rexnord Separation and Merger Proposal.

​

The Rexnord board of directors recommends that Rexnord stockholders vote “FOR” each of the proposals to be considered at the Rexnord Special Meeting.

We cannot complete the transactions contemplated by the Merger Agreement and the Separation Agreement unless the Regal Share Issuance Proposal is approved by the requisite Regal shareholders and the Rexnord Separation and Merger Proposal is approved by the requisite Rexnord stockholders. Your vote on these matters is very important, regardless of the number of shares you own.

Whether or not you expect to attend your company’s respective special meeting, to ensure your representation at such special meeting, we urge you to authorize the individuals named on your proxy card to vote your shares as promptly as possible by (1) accessing the website listed on the proxy card, (2) calling the toll-free number listed on the proxy card or (3) submitting your proxy card by mail by using the provided self-addressed, stamped envelope. If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with your voting instruction form.

This joint proxy statement/prospectus-information statement is a proxy statement by Regal and Rexnord for use in soliciting proxies for their respective special meetings. This joint proxy statement/prospectus-information statement provides specific information concerning the Merger Agreement, the Merger and the special meetings. We urge you to review this entire document carefully. In particular, you should also consider the matters discussed under “Risk Factors” beginning on page 37 of this joint proxy statement/​prospectus-information statement.

We are very excited about the opportunities offered by the proposed transaction, and we thank you for your consideration and ongoing support.

Sincerely,

Neither the SEC nor any state securities commission has approved or disapproved of the securities to be issued in connection with the Merger and the other transactions contemplated by the Merger Agreement or passed upon the adequacy or accuracy of this joint proxy statement/prospectus-information statement. Any representation to the contrary is a criminal offense.

This joint proxy statement/prospectus-information statement is dated [•], 2021 and is first being mailed to Regal shareholders and Rexnord stockholders on or about [•], 2021.

 

REGAL BELOIT CORPORATION

200 STATE STREET
BELOIT, WISCONSIN 53511
(608) 364-8800

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON [•], 2021

To the Shareholders of Regal Beloit Corporation:

You are hereby notified that Regal Beloit Corporation (which we refer to as “Regal”) will hold a special meeting of its shareholders on [•] at [•] a.m., Central Time (we refer to such special meeting, and any adjournment or postponement thereof, as the “Regal Special Meeting”) at the James L. Packard Learning Center located at Regal’s corporate headquarters, 200 State Street, Beloit, Wisconsin 53511, for the following purposes:

1.

to consider and vote upon a proposal to approve the issuance of shares of Regal common stock (which proposal we refer to as the “Regal Share Issuance Proposal”) pursuant to the Agreement and Plan of Merger, dated as of February 15, 2021, by and among Regal, Phoenix 2021, Inc., Rexnord Corporation and Land Newco, Inc., as may be amended from time to time (which we refer to as the “Merger Agreement”);

​

2.

to consider and vote upon a proposal to approve an amendment and restatement of Regal’s Articles of Incorporation to effect a change in Regal’s legal name from “Regal Beloit Corporation” to “Regal Rexnord Corporation” ​(which amendment and restatement will not be implemented if the merger contemplated by the Merger Agreement (which we refer to as the “Merger”) is not consummated) (which proposal we refer to as the “Regal Name Change Proposal”);

​

3.

to consider and vote upon a proposal to approve an amendment and restatement of Regal’s Articles of Incorporation to increase the number of authorized shares of Regal common stock from 100,000,000 to 150,000,000 (which amendment and restatement will not be implemented if the Merger is not consummated) (which proposal we refer to as the “Regal Share Authorization Proposal”); and

​

4.

to consider and vote upon a proposal to approve the adjournment of the Regal Special Meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the Regal Special Meeting to approve the Regal Share Issuance Proposal (which proposal we refer to as the “Regal Meeting Adjournment Proposal”).

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The approval of the Regal Share Issuance Proposal is the only approval of Regal shareholders required for completion of the transactions contemplated by the Merger Agreement. Regal will transact no other business at the Regal Special Meeting other than the proposals described above, except such business as may properly be brought before the Regal Special Meeting or any adjournment or postponement thereof.

The Regal board of directors has fixed the close of business on [•], 2021 as the record date for the Regal Special Meeting. Only Regal shareholders of record as of the Regal record date are entitled to receive notice of, and to vote at, the Regal Special Meeting or any adjournment or postponement thereof. A complete list of such shareholders will be available for inspection by any Regal shareholders for any purpose germane to the Regal Special Meeting during ordinary business hours beginning two business days after the date of this notice and until the date of the Regal Special Meeting at Regal’s principal executive offices located at 200 State Street, Beloit, Wisconsin 53511. The list of eligible Regal shareholders will also be available at the Regal Special Meeting for examination by any Regal shareholder present at such meeting.

Due to the continuing public health impact of the COVID-19 pandemic, and to support the health and safety of Regal’s employees and shareholders, Regal will provide Internet and audio access to the Regal Special Meeting. To attend the Regal Special Meeting, you must be a registered Regal shareholder as of the Regal record date, or, if your shares are held through a bank, broker or other nominee, you must obtain a legal proxy from such holder and follow the instructions set forth in the accompanying joint proxy

 

 

statement/prospectus-information statement. Instructions for accessing the live audio and webcast are provided in the accompanying joint proxy statement/prospectus-information statement. Please note that Regal shareholders will not be able to vote or revoke a proxy through the live audio or webcast, nor participate actively. For those Regal shareholders who decide to attend the Regal Special Meeting in person, health and safety measures consistent with U.S. Center for Disease Control and Prevention and other federal, state and local guidelines will be in place in order to limit exposure to the virus.

THE REGAL BOARD OF DIRECTORS HAS APPROVED THE MERGER AGREEMENT, THE MERGER, THE REGAL SHARE ISSUANCE, THE AMENDMENT AND RESTATEMENT OF REGAL’S ARTICLES OF INCORPORATION TO CHANGE REGAL’S LEGAL NAME AND THE AMENDMENT AND RESTATEMENT OF REGAL’S ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF REGAL COMMON STOCK AND RECOMMENDS THAT REGAL SHAREHOLDERS VOTE “FOR” THE REGAL SHARE ISSUANCE PROPOSAL, “FOR” THE REGAL NAME CHANGE PROPOSAL, “FOR” THE REGAL SHARE AUTHORIZATION PROPOSAL AND “FOR” THE REGAL MEETING ADJOURNMENT PROPOSAL.

Regardless of how you choose to participate, it is important that your shares are represented at the Regal Special Meeting. Your vote is very important. Whether or not you expect to attend the Regal Special Meeting in person, to ensure your representation at the Regal Special Meeting, we urge you to authorize the individuals named on your proxy card to vote your shares as promptly as possible by (1) accessing the website listed on the proxy card ([•]), (2) calling the toll-free number listed on the proxy card (1-800-[•]-[•]) or (3) submitting your proxy card by mail by using the provided self-addressed, stamped envelope. If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with your voting instruction form. Regal shareholders may revoke their proxy in the manner described in the accompanying joint proxy statement/prospectus-information statement before it has been voted at the Regal Special Meeting.

 

 

REXNORD CORPORATION

511 W FRESHWATER WAY
MILWAUKEE, WISCONSIN 53204
(414) 643-3739

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON [•], 2021

To the Stockholders of Rexnord Corporation:

You are hereby notified that Rexnord Corporation (which we refer to as “Rexnord”) will hold a special meeting of its stockholders at its corporate offices at 511 W. Freshwater Way, Milwaukee, Wisconsin 53204 on [•] at [•] a.m., Central Time (we refer to such special meeting, and any adjournment thereof, as the “Rexnord Special Meeting”), for the following purposes:

1.

to consider and vote upon a proposal to approve the transactions contemplated by the Agreement and Plan of Merger, dated as of February 15, 2021, by and among Regal Beloit Corporation (which we refer to as “Regal”), Phoenix 2021, Inc., Rexnord and Land Newco, Inc. (which we refer to as “Land”), as may be amended from time to time (which we refer to as the “Merger Agreement”), and the transactions contemplated by the Separation and Distribution Agreement, dated as of February 15, 2021, by and among Rexnord, Regal and Land, as may be amended from time to time (which we refer to as the “Separation Agreement”) (which proposal we refer to as the “Rexnord Separation and Merger Proposal”);

​

2.

to consider and vote upon a proposal to approve, on a non-binding basis, the compensation of Rexnord's named executive officers with respect to the Accelerated Rexnord PSUs (as defined herein) (which proposal we refer to as the “Rexnord Compensation Proposal”); and

​

3.

to consider and vote upon a proposal to approve the adjournment of the Rexnord Special Meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the Rexnord Special Meeting to approve the Rexnord Separation and Merger Proposal (which proposal we refer to as the “Rexnord Meeting Adjournment Proposal”).

​

The approval of the Rexnord Separation and Merger Proposal is the only approval of Rexnord stockholders required for completion of the transactions contemplated by the Merger Agreement and the Separation Agreement. Rexnord will transact no other business at the Rexnord Special Meeting except such business as may properly be brought before the Rexnord Special Meeting or any adjournment thereof.

The Rexnord board of directors has fixed the close of business on [•], 2021 as the record date for the Rexnord Special Meeting. Only Rexnord stockholders of record as of the Rexnord record date are entitled to receive notice of, and to vote at, the Rexnord Special Meeting or any adjournment thereof. A complete list of such stockholders will be open to the examination of any Rexnord stockholder for any purpose germane to the Rexnord Special Meeting for a period of at least 10 days prior to the Rexnord Special Meeting during ordinary business hours at Rexnord’s principal executive offices located at 511 W Freshwater Way, Milwaukee, Wisconsin 53204. The list of eligible Rexnord stockholders will also be available during the duration of the Rexnord Special Meeting for examination by any Rexnord stockholders present at such meeting.

THE REXNORD BOARD OF DIRECTORS HAS APPROVED THE TRANSACTIONS CONTEMPLATED BY THE SEPARATION AGREEMENT AND THE MERGER AGREEMENT, AND RECOMMENDS THAT REXNORD STOCKHOLDERS VOTE “FOR” THE REXNORD SEPARATION AND MERGER PROPOSAL, “FOR” THE REXNORD COMPENSATION PROPOSAL AND “FOR” THE REXNORD MEETING ADJOURNMENT PROPOSAL

Regardless of how you choose to participate, it is important that your shares are represented at the Rexnord Special Meeting. Your vote is very important. Whether or not you expect to attend the Rexnord Special Meeting in person, to ensure that your shares are represented, we urge you to authorize the individuals named on your proxy card to vote your shares as promptly as possible by (1) accessing the website listed on the

 

 

proxy card ([•]), (2) calling the toll-free number listed on the proxy card (1-800-[•]-[•]) or (3) submitting your proxy card by mail by using the provided self-addressed, stamped envelope. If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with your voting instruction form. Rexnord stockholders may revoke their proxy in the manner described in the accompanying joint proxy statement/prospectus-information statement before it has been voted at the Rexnord Special Meeting.

 

 

 

should not assume that the information contained in this joint proxy statement/prospectus-information statement is accurate as of any date other than the date hereof. You should not assume that the information contained in any document incorporated by reference herein is accurate as of any date other than the date of such document. Any statement contained in a document incorporated or deemed to be incorporated by reference into this joint proxy statement/prospectus-information statement will be deemed to be modified or superseded to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated by reference into this joint proxy statement/prospectus-information statement modifies or supersedes such statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this joint proxy statement/prospectus-information statement. Neither the mailing of this joint proxy statement/prospectus-information statement to the shareholders of Regal or the stockholders of Rexnord, nor the taking of any actions contemplated hereby by Regal or Rexnord at any time, will create any implication to the contrary.

 

 

 

 

 

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QUESTIONS AND ANSWERS

The following are brief answers to certain questions that you, as a Regal shareholder or Rexnord stockholder, may have regarding the Transactions and the matters being considered at the Regal Special Meeting or the Rexnord Special Meeting, as applicable. You are urged to carefully read this joint proxy statement/prospectus-information statement and the other documents referred to in this joint proxy statement/prospectus-information statement in their entirety because this section may not provide all the information that is important to you regarding these matters. See “Summary” for a summary of important information regarding the Merger Agreement, the Merger and the Transactions. Additional important information is contained in the annexes to, and the documents incorporated by reference into, this joint proxy statement/prospectus-information statement. You may obtain the information incorporated by reference into this joint proxy statement/prospectus-information statement, without charge, by following the instructions under “Where You Can Find More Information; Incorporation by Reference.”

Q:

Why am I receiving this joint proxy statement/prospectus-information statement?

​

A:

You are receiving this joint proxy statement/prospectus-information statement because the parties have agreed that Regal will acquire Rexnord’s PMC Business through the separation of the PMC Business into Land pursuant to the Reorganization, the Spin-Off of Land to stockholders of Rexnord and the merger of Merger Sub with and into Land (which we refer to as the “Merger”), with Land continuing as the surviving corporation in the Merger and becoming a wholly-owned subsidiary of Regal. The Merger Agreement, which governs the terms and conditions of the Merger, is attached as Annex A hereto. The Separation Agreement, which governs the Reorganization and Spin-Off, is attached as Annex B hereto.

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Your vote is required in connection with the Transactions. Regal and Rexnord are sending these materials to their shareholders and stockholders, respectively, to help them decide how to vote their shares with respect to the Regal Share Issuance Proposal, in the case of Regal, and the Rexnord Separation and Merger Proposal, in the case of Rexnord, and other important matters.

Q:

What matters am I being asked to vote on?

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A:

Regal:

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In order to implement the Merger, Regal shareholders are being asked to consider and vote upon a proposal to approve the issuance of shares of Regal common stock pursuant to the Merger Agreement (which proposal we refer to as the “Regal Share Issuance Proposal”). Regal shareholders are also being asked to consider and vote upon a proposal to approve an amendment and restatement of Regal’s Articles of Incorporation to effect a change in Regal’s legal name from “Regal Beloit Corporation” to “Regal Rexnord Corporation” ​(which amendment and restatement will not be implemented if the Merger is not consummated) (which proposal we refer to as the “Regal Name Change Proposal”), a proposal to approve an amendment and restatement of Regal’s Articles of Incorporation to increase the number of authorized shares of Regal common stock from 100,000,000 to 150,000,000 (which amendment and restatement will not be implemented if the Merger is not consummated) (which proposal we refer to as the “Regal Share Authorization Proposal”) and a proposal to approve the adjournment of the special meeting of Regal shareholders, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the Regal Special Meeting to approve the Regal Share Issuance Proposal (which proposal we refer to as the “Regal Meeting Adjournment Proposal”).

The approval of the Regal Share Issuance Proposal is the only approval of Regal shareholders required for completion of the transactions contemplated by the Merger Agreement.

Rexnord:

In order to implement the Transactions, Rexnord stockholders are being asked to consider and vote upon a proposal to approve the transactions contemplated by the Merger Agreement and the Separation Agreement (which proposal we refer to as the “Rexnord Separation and Merger Proposal”). Rexnord stockholders are also being asked to consider and vote upon a proposal to

 

1

 

approve, on a non-binding basis, the compensation of Rexnord’s named executive officers with respect to the Accelerated Rexnord PSUs (as defined below) (which proposal we refer to as the “Rexnord Compensation Proposal”), and a proposal to approve the adjournment of the special meeting of Rexnord stockholders, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the Rexnord Special Meeting to approve the Rexnord Separation and Merger Proposal (which proposal we refer to as the “Rexnord Meeting Adjournment Proposal”).

The approval of the Rexnord Separation and Merger Proposal is the only approval of Rexnord stockholders required for completion of the transactions contemplated by the Merger Agreement and the Separation Agreement.

Q:

Why are Rexnord stockholders being asked to consider and vote on a proposal to approve, by non-binding, advisory vote, the compensation with respect to the Accelerated Rexnord PSUs (as defined herein) (i.e., the Rexnord Compensation Proposal)?

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A:

Under SEC rules, Rexnord is required to seek a non-binding, advisory vote of its stockholders with respect to the Accelerated Rexnord PSUs (as defined herein) that may be paid or become payable to Rexnord’s named executive officers.

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Q:

When and where will each of the special meetings take place?

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A:

Regal:

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The Regal Special Meeting will be held on [•] at [•] a.m., Central Time at the James L. Packard Learning Center located at Regal’s corporate headquarters, 200 State Street, Beloit, Wisconsin 53511.

Due to the continuing public health impact of the COVID-19 pandemic, and to support the health and safety of Regal’s employees and shareholders, Regal will provide Internet and audio access to the Regal Special Meeting. To attend the Regal Special Meeting, you must be a registered Regal shareholder as of the Regal record date, or, if your shares are held through a bank, broker or other nominee, you must obtain a legal proxy from such holder and follow the instructions set forth in this joint proxy statement/prospectus-information statement. Instructions for accessing the live audio and webcast are provided on page 58 of this joint proxy statement/prospectus-information statement. Please note that Regal shareholders will not be able to vote or revoke a proxy through the live audio or webcast, nor participate actively. For those Regal shareholders who decide to attend the Regal Special Meeting in person, health and safety measures consistent with U.S. Center for Disease Control and Prevention and other federal, state and local guidelines will be in place in order to limit exposure to the virus.

Rexnord:

The Rexnord Special Meeting will be held at Rexnord’s corporate offices at 511 W. Freshwater Way, Milwaukee, Wisconsin 53204 on [•] at [•] a.m., Central Time.

To attend the Rexnord Special Meeting, you must be a registered Rexnord stockholder as of the Rexnord record date, or, if your shares are held through a bank, broker or other nominee, you must obtain a legal proxy from such holder and follow the instructions set forth in this joint proxy statement/prospectus-information statement.

Q:

Where can I access the live webcast?

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A:

Regal:

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The live webcast for the Regal Special Meeting can be accessed at [•]. Please note that Regal shareholders will not be able to vote or revoke a proxy through the live audio or webcast, nor participate actively.

Rexnord:

There will be no live webcast for the Rexnord Special Meeting. The Rexnord Special Meeting will be held in person at Rexnord’s corporate offices at 511 W. Freshwater Way, Milwaukee, Wisconsin 53204.

 

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Q:

What constitutes a quorum at the special meetings?

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A:

Regal:

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To conduct the Regal Special Meeting, a majority of the shares of Regal common stock entitled to vote must be present in person or by proxy. This is referred to as a “quorum.” If a Regal shareholder submits a properly executed proxy card or vote by the Internet or telephone, then such Regal shareholder will be considered present at the Regal Special Meeting for purposes of determining the presence of a quorum. Abstentions and broker “non-votes” will be counted as present and entitled to vote for purposes of determining the presence of a quorum. A broker “non-vote” occurs when a bank, broker or other nominee who holds shares for another person has not received voting instructions from the owner of the shares and, under NYSE rules, does not have discretionary authority to vote on a proposal. We expect the Regal Name Change Proposal to be treated as a “routine” matter. As a result, absent specific instructions from the beneficial owner, banks, brokers and other nominee record holders will have discretionary authority to vote those “street name” shares in connection with the Regal Name Change Proposal, and will be considered present for purposes of determining a quorum. As such, Regal expects that there will be broker “non-votes” at the Regal Special Meeting.

Rexnord:

To conduct the Rexnord Special Meeting, a majority of the shares of Rexnord issued and outstanding common stock entitled to vote at the Rexnord Special Meeting must be present in person or by duly authorized proxy. This is referred to as a “quorum.” If a Rexnord stockholder submits a properly executed proxy card or submits a proxy to vote by Internet or telephone, then such Rexnord stockholder will be considered present at the Rexnord Special Meeting for purposes of determining the presence of a quorum. Abstentions will be counted as present and entitled to vote for purposes of determining the presence of a quorum. A broker “non-vote” occurs when a bank, broker or other nominee who holds shares for another person has not received voting instructions from the owner of the shares and, under NYSE rules, does not have discretionary authority to vote on a proposal. None of the Rexnord Separation and Merger Proposal, the Rexnord Compensation Proposal, or the Rexnord Meeting Adjournment Proposal are routine matters. As a result, absent specific instructions from the beneficial owner, banks, brokers and other nominee record holders do not have discretionary authority to vote those “street name” shares in connection with any of the proposals, and will not be considered present for purposes of determining a quorum. As such, Rexnord does not expect there to be any broker “non-votes” at the Rexnord Special Meeting.

Q:

Who can vote at the special meetings?

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A:

Regal:

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The Regal board of directors has fixed the close of business on [•], 2021 as the record date for the Regal Special Meeting. Only Regal shareholders of record as of the Regal record date are entitled to receive notice of, and to vote at, the Regal Special Meeting or any adjournment or postponement thereof. As of the Regal record date, there were [•] shares of Regal common stock issued and outstanding and entitled to vote at the Regal Special Meeting.

Rexnord:

The Rexnord board of directors has fixed the close of business on [•], 2021 as the record date for the Rexnord Special Meeting. Only Rexnord stockholders of record as of the Rexnord record date are entitled to receive notice of, and to vote at, the Rexnord Special Meeting or any adjournment thereof. As of the Rexnord record date, there were [•] shares of Rexnord common stock issued and outstanding and entitled to vote at the Rexnord Special Meeting.

Q:

What vote is required to approve each proposal?

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A:

Regal:

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•

Regal Share Issuance Proposal—The affirmative vote of a majority of the votes represented in person or by proxy at the Regal Special Meeting, where a quorum is present, is required to approve the Regal Share Issuance Proposal.

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Regal Name Change Proposal—The affirmative vote of a majority of the votes represented in person or by proxy at the Regal Special Meeting, where a quorum is present, is required to approve the Regal Name Change Proposal.

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Regal Share Authorization Proposal— The affirmative vote of a majority of the votes represented in person or by proxy at the Regal Special Meeting, where a quorum is present, is required to approve the Regal Share Authorization Proposal.

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Regal Meeting Adjournment Proposal—The affirmative vote of a majority of the votes represented in person or by proxy at the Regal Special Meeting, where a quorum is present, is required to approve the Regal Meeting Adjournment Proposal.

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Approval of each proposal is not conditioned on the approval of any other proposal; however, the Regal Name Change Proposal and the Regal Share Authorization Proposal will not be implemented if the Merger is not completed.

Rexnord:

•

Rexnord Separation and Merger Proposal—The affirmative vote of a majority of the outstanding stock entitled to vote thereon is required to approve the Rexnord Separation and Merger Proposal.

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•

Rexnord Compensation Proposal—Assuming a quorum is present, the results of the advisory vote to approve the compensation of Rexnord’s named executive officers will be determined by a majority of shares voting at the Rexnord Special Meeting. This is an advisory vote and is not binding on Rexnord.

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•

Rexnord Meeting Adjournment Proposal—The affirmative vote of a majority of shares represented in person or by proxy, and entitled to vote thereon, at the Rexnord Special Meeting, assuming a quorum is present, is required to approve the Rexnord Meeting Adjournment Proposal.

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Approval of each proposal is not conditioned on the approval of any other proposal.

See “What if a holder does not vote or abstains from voting?” below for information regarding the treatment of abstentions and broker non-votes, as well as for the impact of not voting on a specific proposal.

Q:

How do holders of record vote?

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A:

Regal:

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Regal shareholders may submit a proxy to vote before the Regal Special Meeting in one of the following ways: (1) accessing the website listed on the proxy card ([•]), (2) calling the toll-free number listed on the proxy card (1-800-[•]-[•]) or (3) submitting the proxy card by mail by using the provided self-addressed, stamped envelope.

Regal shareholders may also vote by attending the Regal Special Meeting in person and voting their shares at the meeting.

Rexnord:

Rexnord stockholders may submit a proxy to vote before the Rexnord Special Meeting in one of the following ways: (1) accessing the website listed on the proxy card ([•]), (2) calling the toll-free number listed on the proxy card (1-800-[•]-[•]) or (3) submitting the proxy card by mail by using the provided self-addressed, stamped envelope.

Rexnord stockholders may also vote by attending the Rexnord Special Meeting in person and voting their shares at the meeting.

 

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Q:

How do beneficial holders vote?

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A:

Regal:

​

Beneficial shareholders who hold Regal shares in “street name” through a bank, broker or other nominee, must give instructions to that nominee to vote on their behalf. Please follow the instructions on the voting form from the broker, bank or other nominee who holds your shares.

Rexnord:

Beneficial stockholders who hold Rexnord shares in “street name” through a broker, bank or other nominee, must give instructions to that nominee to vote on their behalf. Please follow the instructions on the voting form from the bank, broker or other nominee who holds your shares.

Q:

If a holder’s shares are held in “street name” through a broker, bank or other nominee, will the broker vote the shares for the holder?

​

A:

Regal:

​

Under the rules applicable to banks, brokers and other nominee record holders holding shares in “street name” have the authority to vote on routine proposals when they have not received instructions from beneficial owners. However, banks, brokers and other nominee record holders are precluded from exercising their voting discretion with respect to the approval of non-routine matters. Regal expects the Regal Name Change Proposal to be considered a routine matter and, as a result, absent specific instruction from the beneficial holder, a bank, broker or other nominee record holder will have discretionary authority to vote those “street name” shares in connection with the Regal Name Change Proposal. However, since the Regal Share Issuance Proposal, the Regal Share Authorization Proposal and the Regal Meeting Adjournment Proposal are non-routine matters, absent specific instructions from the beneficial owner, banks, brokers and other nominee record holders are not empowered to vote those “street name” shares in connection with such proposals.

Rexnord:

Under the rules applicable to banks, brokers and other nominee record holders holding shares in “street name” have the authority to vote on routine proposals when they have not received instructions from beneficial owners. However, banks, brokers and other nominee record holders are precluded from exercising their voting discretion with respect to the approval of non-routine matters. None of the Rexnord Separation and Merger Proposal, the Rexnord Compensation Proposal, or the Rexnord Meeting Adjournment Proposal are routine matters. As a result, absent specific instructions from the beneficial owner, banks, brokers and other nominee record holders are not empowered to vote those “street name” shares in connection with any of the proposals.

Q:

If a holder is not going to attend the special meeting, should that holder return his or her proxy card or otherwise submit a proxy to vote his or her shares?

​

A:

Regal:

​

Yes. Completing, signing, dating and returning the proxy card by mail or submitting a proxy by accessing the website listed on the proxy card or calling the toll-free number listed on the proxy card ensures that the holder’s shares will be represented and voted at the Regal Special Meeting, even if the holder is unable to or does not attend in person.

Rexnord:

Yes. Completing, signing, dating and returning the proxy card by mail or submitting a proxy by accessing the website listed on the proxy card or calling the toll-free number listed on the proxy card ensures that the holder’s shares will be represented and voted at the Rexnord Special Meeting, even if the holder is unable to or does not attend in person.

 

5

 

Q:

Who may attend the Regal Special Meeting?

​

A:

Only shareholders of record as of the close of business on [•], or their proxy holders or the underlying beneficial owners, may attend the Regal Special Meeting. However, seating is limited and will be on a first arrival basis.

​

To attend the Regal Special Meeting, please follow these instructions:

•

Bring proof of ownership of Regal common stock and a form of photo identification; or

​

•

If a broker or other nominee holds your shares, bring proof of ownership of Regal common stock on or about the Regal record date through such broker or nominee (or a proxy received from such holder) and a form of photo identification.

​

Q:

Who may attend the Rexnord Special Meeting?

​

A:

Only stockholders of record as of the close of business on [•], or their proxy holders or the underlying beneficial owners, may attend the Rexnord Special Meeting. However, seating is limited and will be on a first arrival basis.

​

To attend the Rexnord Special Meeting, please follow these instructions:

•

Bring proof of ownership of Rexnord common stock and a form of photo identification; or

​

•

If a broker or other nominee holds your shares, bring proof of ownership of Rexnord common stock on or about the Rexnord record date through such broker or nominee (or a proxy received from such holder) and a form of photo identification.

​

Q:

Can holders change their vote?

​

A:

Regal:

​

Yes. Holders of record of Regal common stock who have properly completed and submitted their proxy card or proxy by Internet or telephone can change their vote or revoke their proxy in any of the following ways:

•

notifying Regal’s Corporate Secretary in writing (at Regal’s address set forth in this joint proxy statement/prospectus-information statement, which must be received prior to the proxy’s exercise of the proxy at the Regal Special Meeting);

​

•

voting again by Internet or telephone (prior to [•], 2021 at 11:59 p.m. Central Time), since only the latest vote will be counted;

​

•

signing and returning, prior to the prior proxy’s exercise at the Regal Special Meeting, another proxy card that is dated after the date of the first proxy card; or

​

•

voting while attending the Regal Special Meeting in person (attending the Regal Special Meeting alone will not revoke your proxy).

​

Beneficial holders of Regal common stock who hold shares in “street name” should contact their bank, broker or other nominee for instructions on how to revoke their proxies. Simply attending the Regal Special Meeting will not revoke a proxy.

Rexnord:

Yes. Holders of record of Rexnord common stock who have properly completed and submitted their proxy card or proxy by Internet or telephone can change their vote or revoke their proxy in any of the following ways:

•

notifying Rexnord’s Corporate Secretary in writing (at Rexnord’s address set forth in this joint proxy statement/prospectus-information statement, which must be received prior to the proxy’s exercise of the proxy at the Rexnord Special Meeting);

​

•

submitting a later dated proxy by Internet or telephone (prior to [•], 2021 at 11:59 p.m. Central Time), since only the latest proxy will be counted;

​

 

6

 

•

signing and returning, prior to the prior proxy’s exercise at the Rexnord Special Meeting, another proxy card that is dated after the date of the first proxy card; or

​

•

voting while attending the Rexnord Special Meeting in person.

​

Beneficial holders of Rexnord common stock who hold shares in “street name” should contact their bank, broker or other nominee for instructions on how to revoke their proxies. Simply attending the Rexnord Special Meeting will not revoke a proxy.

Q:

What if a holder does not vote or abstains from voting?

​

A:

Regal:

​

Holders of record on the Regal record date for the Regal Special Meeting may vote “FOR,” “AGAINST” or “ABSTAIN” with respect to each proposal. For the purposes of a Regal shareholder vote, an abstention will have the same effect as a vote against the Regal Share Issuance Proposal, the Regal Name Change Proposal, the Regal Share Authorization Proposal and the Regal Meeting Adjournment Proposal. Failure to vote shares by a Regal shareholder of record will have no effect on the Regal Share Issuance Proposal, the Regal Share Authorization Proposal and the Regal Meeting Adjournment Proposal (assuming a quorum is present and assuming that the shareholder is not present in person or represented by proxy). Failure to instruct your broker that holds your shares how to vote, resulting in a “broker non-vote,” will have the same effect as a vote against the Regal Share Issuance Proposal, the Regal Name Change Proposal, the Regal Share Authorization Proposal and the Regal Meeting Adjournment Proposal (assuming a quorum is present). All properly signed proxies that are received prior to their exercise at the Regal Special Meeting and that are not revoked will be voted at the Regal Special Meeting according to the instructions indicated on the proxies. If a proxy is returned without an indication as to how shares of Regal common stock represented are to be voted with regard to a particular proposal, the shares of Regal common stock represented by the proxy will be voted in accordance with the recommendation of the Regal board of directors. Therefore, such shares will be voted “FOR” the Regal Share Issuance Proposal, “FOR” the Regal Name Change Proposal, “FOR” the Regal Share Authorization Proposal and, if necessary, “FOR” the Regal Meeting Adjournment Proposal.

Rexnord:

Holders of record on the Rexnord record date for the Rexnord Special Meeting may vote “FOR,” “AGAINST” or “ABSTAIN” with respect to each proposal. For the purposes of a Rexnord stockholder vote, an abstention will have the same effect as a vote against the Rexnord Separation and Merger Proposal, the Rexnord Compensation Proposal and the Rexnord Meeting Adjournment Proposal. Failure to vote by a Rexnord stockholder of record will have the same effect as a vote against the Rexnord Separation and Merger Proposal. Failure to vote by a Rexnord stockholder of record will have no effect on the Rexnord Compensation Proposal and the Rexnord Meeting Adjournment Proposal (assuming a quorum is present and assuming that the stockholder is not present in person or represented by proxy). Failure to instruct your broker that holds your shares how to vote will have the same effect as a vote against the Rexnord Separation and Merger Proposal, and will have no effect on the outcome of the Rexnord Compensation Proposal and the Rexnord Meeting Adjournment Proposal (assuming a quorum is present). All properly signed proxies that are received prior to their exercise at the Rexnord Special Meeting and that are not revoked will be voted at the Rexnord Special Meeting according to the instructions indicated on the proxies. If a proxy is returned without an indication as to how shares of Rexnord common stock represented are to be voted with regard to a particular proposal, the shares of Rexnord common stock represented by the proxy will be voted in accordance with the recommendations of the Rexnord board of directors. Therefore, such shares will be voted “FOR” the Rexnord Separation and Merger Proposal, “FOR” the Rexnord Compensation Proposal and, if necessary, “FOR” the Rexnord Meeting Adjournment Proposal.

 

7

 

Q:

Does the Regal board of directors support the Merger?

​

A:

Yes. The Regal board of directors has approved the Merger Agreement and the Merger and recommends that Regal shareholders vote “FOR” the Regal Share Issuance Proposal, “FOR” the Regal Name Change Proposal, “FOR” the Regal Share Authorization Proposal and “FOR” the Regal Meeting Adjournment Proposal.

​

Q:

Does the Rexnord board of directors support the Transactions?

​

A:

Yes. The Rexnord board of directors has approved the transactions contemplated by the Merger Agreement and the Separation Agreement and recommends that Rexnord stockholders vote “FOR” the Rexnord Separation and Merger Proposal, “FOR” the Rexnord Compensation Proposal and “FOR” the Rexnord Meeting Adjournment Proposal.

​

Q:

What should holders of Regal and Rexnord common stock do now?

​

A:

After carefully reading and considering the information contained in this joint proxy statement/​prospectus-information statement, holders of Regal common stock and Rexnord common stock should submit a proxy by mail, via the website or by telephone to vote their shares as soon as possible so that their shares will be represented and voted at the respective special meeting. Holders should follow the instructions set forth on the enclosed proxy card or on the voting instruction form provided by the record holder if their shares are held in the name of a bank, broker or other nominee.

​

Q:

What are the Transactions described in this joint proxy statement/prospectus-information statement?

​

A:

The Transactions are designed to effect the transfer of the PMC Business to Regal. References to the “Transactions” are to the Merger, the Distributions the Spin-Off, the Reorganization and the related transactions contemplated by the Merger Agreement, the Separation Agreement and the other Transaction Documents, as described under “The Transactions” and elsewhere in this joint proxy statement/prospectus-information statement.

​

Q:

What will happen in the Reorganization?

​

A:

Prior to the Distributions and the Merger, certain subsidiaries of Rexnord will undergo an internal restructuring to separate and consolidate the PMC Business under Land pursuant to the Separation Agreement. In the Reorganization, Rexnord will transfer (or cause to be transferred) to Land substantially all of the assets, and Land will assume substantially all of the liabilities, of the PMC Business. See “The Transactions-Overview” beginning on page 66 and “The Transaction Agreements-The Separation Agreement” beginning on page 169.

​

Q:

What will happen in the Distributions that occur prior to the Merger?

​

A:

Following the Reorganization, all of the issued and outstanding shares of Land common stock held by an indirect subsidiary of Rexnord will be distributed in a series of distributions to Rexnord’s stockholders. The final distribution of Land common stock from Rexnord to Rexnord’s stockholders will be made pro rata for no consideration (which we refer to as the “Spin-Off”). See “The Transactions” beginning on page 66.

​

Q:

What will happen in the Merger?

​

A:

Immediately after the Spin-Off, in accordance with the terms of the Merger Agreement, Merger Sub, a wholly-owned subsidiary of Regal, will be merged with and into Land, with Land surviving the Merger as a wholly-owned subsidiary of Regal. Pursuant to the Merger, the Land common stock held by Rexnord stockholders will be converted into the right to receive shares of Regal common stock based on an exchange ratio specified in the Merger Agreement. See “The Transactions-Calculation and Adjustments to the Exchange Ratio; Amount of Regal Special Dividend” beginning on page 69.

​

 

8

 

Q:

Will the Distributions and Merger occur on the same day?

​

A:

Yes. The Merger will occur immediately after the Spin-Off, the last step of the Distributions.

​

Q:

How will the post-Merger ownership of Regal between Rexnord stockholders and pre-Merger Regal shareholders be determined?

​

A:

The post-Merger ownership of Regal will be the result of a negotiated value exchange between Rexnord and Regal, which was based upon each party’s independent valuations of pre-Merger Regal and the PMC Business, the cash payment by Land (or another member of the Land Group) to Rexnord (or one of its affiliates other than any member of the Land Group) and debt incurred in connection therewith, the Regal Special Dividend paid by Regal to its pre-Merger shareholders and the tax requirements for a Reverse Morris Trust transaction structure (as described below).

​

The proposed transaction is a Reverse Morris Trust acquisition structure, which generally involves a series of distributions to position a subsidiary (here, Land) as the direct subsidiary of a parent company (here, Rexnord), followed by the final distribution, or spin-off, of the issued and outstanding common stock of a subsidiary (here, Land) from its ultimate parent company (here, Rexnord) to such ultimate parent company’s stockholders, and, pursuant to the same plan, the subsequent merger or other combination of such subsidiary (here, Land) with a third party (here, Merger Sub, a subsidiary of Regal). The spin-off of the subsidiary stock to the ultimate parent company stockholders is intended to qualify as a tax-free transaction under Section 355 of the Internal Revenue Code of 1986, as amended (which we refer to as the “Code”). The subsequent merger of the distributed subsidiary with the acquiring third party is intended to qualify as a tax-free reorganization under Section 368 of the Code. Such a transaction can qualify as tax-free for U.S. federal income tax purposes for the ultimate parent company group, the ultimate parent company’s stockholders and the acquiring third party’s shareholders if the transaction structure meets all applicable requirements, including that, in order for the spin-off to qualify as tax-free to the ultimate parent company group (though not a prerequisite for tax-free treatment to the parent company’s stockholders), the ultimate parent company stockholders own, for tax purposes, more than 50% of the stock of the combined entity immediately after the merger. Therefore, in order to meet all applicable requirements of the Code, Rexnord stockholders must own, for tax purposes, more than 50% of the Regal common stock outstanding immediately following the Merger.

As further explained below under “Q: What is the IRS Ruling and what does that process entail?”, the parties agreed that Rexnord would seek the IRS Ruling (as defined below). If the IRS Ruling is received, Rexnord (relying on the IRS Ruling and the Rexnord Tax Opinion) will be able to take into account the number of shares of Rexnord common stock and Regal common stock owned by certain categories of investors who are both Rexnord stockholders and Regal shareholders in determining the number of shares of Regal common stock that Rexnord stockholders must receive to satisfy the 50% requirement imposed by Section 355(e) of the Code, as determined in accordance with the provisions of the Merger Agreement (we refer to such shares as “Overlap Shares” and we refer to the holders of Overlap Shares as “Overlap Shareholders”). The former shares of Land common stock will be converted into between approximately 38.6% and 50.1% of the outstanding shares of Regal common stock immediately following the Merger, depending on the Exchange Ratio, and any adjustments thereto as provided in the Merger Agreement. Prior to the adjustments provided in the Merger Agreement, the Merger Agreement provides that the Exchange Ratio is equal to a fraction (we refer to such fraction as the “Exchange Ratio”) obtained by dividing (a) the New Share Issuance (as defined below) by (b) the number of shares of Land common stock issued and outstanding immediately prior to the effective time of the Merger (which number of shares the Merger Agreement provides will be the same as the number of shares of Rexnord common stock outstanding as of the Rexnord record date for the Spin-Off). “New Share Issuance” means (i) the number of shares of Regal common stock issued and outstanding immediately prior to the effective time of the Merger multiplied by (ii) a fraction, the numerator of which is 38.6 and the denominator of which is 61.4.

 

9

 

For information about the material tax consequences to Rexnord stockholders resulting from the Reverse Morris Trust structure of the Transactions, see “Material U.S. Federal Income Tax Consequences of the Transactions” beginning on page 268. For information about the material risks that the Distributions, the Merger or both could be taxable to Rexnord stockholders or the Distributions could be taxable to Rexnord, see “Risk Factors-Risks Related to the Transactions-If the Reorganization and the Distributions do not qualify as tax-free under Sections 355 and 368(a) of the Code, including as a result of an error in the determination of Overlap Shareholders or subsequent acquisitions of stock of Rexnord or Regal, then Rexnord and Rexnord stockholders may be required to pay substantial U.S. federal income taxes, and Land (then a subsidiary of Regal) may be obligated to indemnify Rexnord for such taxes imposed on Rexnord” beginning on page 41.

Q: What is the IRS Ruling and what does that process entail?

A:

For purposes of determining whether there is a 50% or greater change of ownership in Land as compared to its ownership immediately following the Spin-Off and before the Merger as required by the rules applicable to a Reverse Morris Trust transaction, Section 355(e) of the Code provides that the amount of any Overlap Shareholder’s ownership percentage in Land immediately prior to the Merger that does not decrease as a result of the Merger is not taken into account as a change of ownership. However, no formal guidance exists regarding the manner in which the Overlap Shareholders may be identified or such Overlap Shareholders’ ownership percentages may be determined for these purposes. Absent guidance from the U.S. Internal Revenue Service (which we refer to as the “IRS”), Rexnord will not be able to make the assumptions about beneficial ownership needed to treat specified investors as Overlap Shareholders. Accordingly, in connection with the Transactions, the parties have agreed that Rexnord will seek a private letter ruling from the IRS (which such private letter ruling we refer to as the “IRS Ruling”) with respect to certain tax aspects of the proposed Transactions, including matters relating to the nature and extent of shareholders who may be counted as Overlap Shareholders for purposes of determining the Exchange Ratio in the Merger. The Merger Agreement provides that, unless the parties otherwise agree, the closing of the Merger shall not occur earlier than the third business day following the earlier of (a) nine months from the date of the Merger Agreement or (b) the date on which (i) the IRS Ruling is received from the IRS, (ii) the IRS informs Rexnord and Regal in writing that the IRS has declined to issue a private letter ruling that satisfies requirements agreed in the Merger Agreement or (iii) Rexnord, with the written consent of Regal, withdraws its request for the IRS ruling. The extent of the Overlap Shareholders that may be counted in determining the Exchange Ratio will depend on whether an IRS Ruling is received and the contents of such IRS Ruling.

​

Q:

What is the Regal Special Dividend?

​

A:

In the event that additional shares of Regal common stock are required to be issued as a result of the Exchange Ratio adjustment mechanism described on page 69 of this joint proxy statement/​prospectus-information statement, the Merger Agreement provides that, prior to the closing of the Merger, the Regal board of directors will declare a special dividend (which we refer to as the “Regal Special Dividend”) pro rata to the holders of Regal common stock as of a record date prior to the closing of the Merger. The amount of the Regal Special Dividend will depend in part on the number of shares of Regal common stock to be issued to Rexnord stockholders as a result of the adjustment to the Exchange Ratio. The number of shares of Regal common stock to be issued to Rexnord stockholders in turn depends on, among other factors, the amount of Overlap Shares. The extent of the Overlap Shares that may be counted in determining the Exchange Ratio will depend on whether an IRS Ruling is received and the contents of such IRS Ruling. As such, the amount of the Regal Special Dividend will not be known at the time of the Regal Special Meeting or the Rexnord Special Meeting, as described in more detail under “Calculation and Adjustments to the Exchange Ratio; Amount of Regal Special Dividend” beginning on page 69; based on assumptions described therein, the Regal Special Dividend could range from $0.00 per share to $48.16 per share of Regal common stock. Rexnord stockholders who receive Regal common stock in the Merger will not be entitled to the Regal Special Dividend since the record date will be prior to the effective time of the Merger. The receipt of the Regal Special Dividend generally will

​

 

10

 

result in taxable income to Regal shareholders. For information related to the material U.S. federal income tax consequences of the Regal Special Dividend to U.S. and non-U.S. holders of Regal common stock, see “Material U.S. Federal Income Tax Consequences of the Transactions- Material Tax Consequences of the Merger and the Regal Special Dividend.” For more information on the Regal Special Dividend, see the section of this document entitled “The Transaction Agreements-The Merger Agreement-Merger Consideration; Regal Special Dividend.”

Q:

What are the possible outcomes of the Exchange Ratio adjustment?

​

A:

(1)

Represents the number of Regal shares issuable and the Regal Special Dividend payable if Overlap Shares are at the midpoint of the range of Overlap Shares in the Partial Counting Scenario and the Full Counting Scenario.

​

Q:

What will be the indebtedness of Regal and the PMC Business (which we refer to as the “combined company”), following completion of the Transactions?

​

A:

The amount of indebtedness of the combined company following the Transactions will depend in large part on the extent of the adjustment, if any, to the Exchange Ratio. See “The Transactions-Calculation and Adjustments to the Exchange Ratio; Amount of Regal Special Dividend” beginning on page 69.

​

Q:

What are the parties’ reasons for the Transactions?

​

A:

Regal:

​

In reaching a decision to proceed with the Transactions, the Regal board of directors considered, among other things, (i) that the Transactions will provide significant value creation and financial benefits for Regal and Regal shareholders; (ii) the expectation that the combined company will be a more compelling partner for distributors and will be able to provide complete drive train solutions across all major applications for customers; (iii) the expectation that the combined company will represent an attractive value proposition for both customers and end users; (iv) the expectation that the Transactions will create new avenues for growth through expanded focus outside of North America and improve end market diversity; (v) the expectation that the combined

 

11

 

company’s portfolio will be more balanced; (vi) the expectation that the combined research and development efforts of Regal and the PMC Business would fuel the growth of next-generation products and faster development of value-added features through enhanced innovation and reinvestment; (vii) the expectation that Regal would achieve approximately $120 million of estimated annual cost synergies anticipated to be realized within three years; (viii) the expectation that the PMC Business employees’ experience and knowledge will drive improvement in the Regal Business System, and enhance Regal’s ability to achieve, certain of its strategic objectives; (ix) the expectation that the cash flow from the combined businesses after the Transactions would be strong enough to allow Regal to maintain its current quarterly dividends and to repay indebtedness incurred to finance the Transactions; (x) the expectation that the combination with the PMC Business would enhance Regal’s overall credit quality over time; and (xi) the fact that a significant portion of the consideration payable by Regal in the Transactions consists of Regal’s common stock, which, assuming no material adjustment to the Exchange Ratio, will enable Regal to acquire the PMC Business without incurring the additional indebtedness. See “The Transactions-Regal’s Reasons for the Merger; Recommendation of Regal’s Board of Directors” beginning on page 95.

Rexnord:

In reaching a decision to proceed with the Transactions, the Rexnord board of directors considered, among other things, (i) that the Transactions could provide more value to Rexnord and Rexnord stockholders than other potential strategic options for the company or the PMC Business, including a sale of the entire company, retaining the PMC Business, and various alternative transactions; (ii) the Rexnord board of directors’ belief that the Transactions provide the most attractive option with respect to the PMC Business and unlock opportunities for a stand-alone water business; (iii) the Rexnord board of directors’ belief that Regal’s earnings and prospects, and the synergies potentially available in the Transactions, would create the opportunity for the combined company to have superior future earnings and prospects compared to the PMC Business’s earnings and prospects on a stand-alone basis; (iv) the complementary nature of the cultures of the two companies, and Rexnord’s management’s belief that the complementary cultures will facilitate the successful integration and implementation of the Transactions; (v) fact that two independent directors from the Rexnord board of directors mutually agreeable to Rexnord and Regal would be appointed to the Regal board of directors in connection with the closing of the Merger; and (vi) the expanded possibilities for growth that would be available to the combined company, given its larger size, asset base, capital, and footprint. The Rexnord board of directors and its senior management also considered that the Transactions generally would result in a tax-efficient disposition of the PMC Business for Rexnord and its stockholders, while a sale of the PMC Business for cash would result in a taxable disposition of the PMC Business, making such a transaction potentially financially less attractive to Rexnord or requiring potential counterparties to pay additional consideration in order for such a taxable transaction to be competitive with a Reverse Morris Trust transaction. See “The Transactions-Rexnord’s Reasons for the Reorganization, Distributions and the Merger; Recommendation of Rexnord’s Board of Directors” beginning on page 97.

Q:

Why did the parties decide to structure the Transactions as a Reverse Morris Trust?

​

A:

The parties determined that the Reverse Morris Trust structure was the superior choice for the Transactions because, among other things, the anticipated tax-free nature of the Spin-Off provides a tax efficient method to acquire the PMC Business that is not provided by other structures, thereby making the Reverse Morris Trust structure economically more appealing to all parties as compared to alternative transaction structures. Further, the parties determined that a Reverse Morris Trust transaction that included the counting of Overlap Shares was preferable because it is expected to permit Regal to issue fewer shares of its common stock in the Merger and therefore pay a smaller special dividend to Regal shareholders. For more information about Regal and Rexnord’s reasons for the Transactions, see “The Transactions-Regal’s Reasons for the Merger; Recommendation of Regal’s Board of Directors” beginning on page 95 and “The Transactions-Rexnord’s Reasons for the Reorganization, Distributions and the Merger; Recommendation of Rexnord’s Board of Directors” beginning on page 97.

​

 

12

 

Q:

What will Regal shareholders receive in the Merger?

​

A:

Immediately after the Merger, Regal shareholders will continue to own shares in Regal, which will then include the PMC Business (including the approximately $486.8 million of debt referred to above expected to be incurred by Land in connection with the Transactions). In the event that additional shares of Regal common stock are required to be issued to the former stockholders of Land as a result of the Exchange Ratio adjustment mechanism, the Merger Agreement provides that, prior to the closing of the Merger, the Regal board of directors will declare the Regal Special Dividend. See “The Transactions-Calculation and Adjustments to the Exchange Ratio; Amount of Regal Special Dividend” beginning on page 69 and “Risk Factors” beginning on page 37.

​

Q:

What will Rexnord stockholders receive in the Transactions?

​

A:

In connection with the Merger, each Rexnord stockholder will ultimately receive shares of Regal common stock. Rexnord stockholders will not be required to pay for the shares of Land common stock distributed in the Distributions or the shares of Regal common stock issued in the Merger. Rexnord stockholders will receive cash in lieu of any fractional shares of Regal common stock to which such stockholders would otherwise be entitled. The former shares of Land common stock will be converted into between approximately 38.6% and 50.1% of the outstanding shares of Regal common stock immediately following the Merger, depending on the Exchange Ratio and any adjustments thereto as provided in the Merger Agreement (including as a result of the IRS Ruling not being received or the contents of the IRS Ruling). Rexnord stockholders who receive Regal common stock in the Merger will not be entitled to the Regal Special Dividend since the record date for the Regal Special Dividend will be prior to the effective time of the Merger. See “The Transactions-Calculation and Adjustments to the Exchange Ratio; Amount of Regal Special Dividend” beginning on page 69.

​

Q:

Will Rexnord stockholders who sell their shares of Rexnord common stock shortly before the completion of the Distributions and Merger still be entitled to receive shares of Regal common stock with respect to the shares of Rexnord common stock that were sold?

​

A:

Rexnord common stock is currently listed on the NYSE under the ticker symbol “RXN.” It is currently expected that beginning not earlier than one business day before the Rexnord record date to be established for the Distribution, and continuing through the closing date of the Merger, there will be two markets in Rexnord common stock on the NYSE: a “regular way” market and an “ex-distribution” market.

​

•

If a Rexnord stockholder sells common stock of Rexnord in the “regular way” market under the symbol “RXN” during this time period, such Rexnord stockholder will be selling both his or her common stock of Rexnord and the right to receive shares of Land common stock that will be converted into shares of Regal common stock, and cash in lieu of fractional shares (if any), at the closing of the Merger. Rexnord stockholders should consult their brokers before selling their common stock of Rexnord in the “regular way” market during this time period to be sure they understand the effect of the NYSE “due-bill” procedures.

​

•

If a Rexnord stockholder sells common stock of Rexnord in the “ex-distribution” market during this time period, such Rexnord stockholder will be selling only his or her common stock of Rexnord, and will retain the right to receive shares of Land common stock that will be converted into shares of Regal common stock, and cash in lieu of fractional shares (if any), at the closing of the Merger.

​

After the closing date of the Merger, the common stock of Rexnord will no longer trade in the “ex-distribution” market, and any shares of common stock of Rexnord that is sold in the “regular way” market will no longer reflect the right to receive shares of Land common stock that will be converted into shares of Regal common stock, and cash in lieu of fractional shares (if any), at the closing of the Merger. See “The Transactions-Trading Markets” beginning on page 74.

 

13

 

Q:

In what ways will being a stockholder of both Rexnord and Regal differ from being a Rexnord stockholder?

​

A:

Following the Transactions, Rexnord stockholders will continue to own all of their shares of Rexnord common stock. Their rights as Rexnord stockholders will not change, except that their shares of Rexnord common stock will represent an interest in Rexnord that no longer includes the PMC Business. Rexnord stockholders will also separately own shares of Regal common stock, which will include the PMC Business and the pre-Merger Regal business. The rights of Regal shareholders and Rexnord stockholders will be different. For more information, see “Comparison of Rights of Stockholders Before and After the Merger” beginning on page 191.

​

Q:

Will the Reorganization, Distributions or Merger affect employees and former employees of Rexnord who hold other Rexnord equity-based awards?

​

A:

Yes.

​

Equity Awards Held by Employees Other Than Land Transferred Employees. The equity awards held by employees or former employees of Rexnord who are not Land Transferred Employees will not be converted into or substituted with awards relating to Regal stock. Instead, those awards will remain outstanding as awards for shares of Rexnord, subject to adjustment to reflect the Transactions in such manner as determined by the Rexnord board of directors or its compensation committee The Transactions will not automatically result in the accelerated vesting of any of these awards.

Equity Awards Held by Land Transferred Employees: Certain employees of Rexnord hold equity awards that may be settled in, or whose value is otherwise determined by reference to the value of, Rexnord common stock.

•

Rexnord Stock Options: All vested and unvested Rexnord stock options held by a Land Transferred Employee which are outstanding immediately prior to the effective time of the Reorganization will be converted as of the effective time of the Merger into, or substituted with, an option to purchase shares of Regal common stock which has terms and conditions substantially similar to those applicable to the Rexnord stock options outstanding immediately prior to the effective time of the Reorganization, subject to certain adjustments and exceptions.

​

•

Rexnord Phantom Stock Options: All vested and unvested Rexnord phantom stock options held by a Land Transferred Employee which are outstanding immediately prior to the effective time of the Reorganization will be converted as of the effective time of the Merger into, or substituted with, an option to receive cash based on a number of shares of Regal common stock which has terms and conditions substantially similar to those applicable to the Rexnord phantom stock options outstanding immediately prior to the effective time of the Reorganization, subject to certain adjustments and exceptions.

​

•

Rexnord Restricted Stock Units: Each Rexnord restricted stock unit held by a Land Transferred Employee immediately prior to the effective time of the Reorganization will be converted into, or substituted with, an award of a number of Regal restricted stock units of substantially equivalent value which has terms and conditions substantially similar to those applicable to the Rexnord restricted stock unit outstanding immediately prior to the effective time of the Reorganization, subject to certain adjustments and exceptions.

​

•

Rexnord Performance Stock Units: Each Rexnord performance stock unit held by a Land Transferred Employee immediately prior to the effective time of the Reorganization will be converted into, or substituted with, a number of Regal restricted stock units (based on the actual level of performance under such Rexnord performance stock unit through the effective time of the Reorganization, or such other level of performance deemed achieved, as determined in the sole discretion of Rexnord’s board of directors or compensation committee thereof) of substantially equivalent value which has terms and conditions substantially similar to those applicable to the corresponding Rexnord performance stock unit outstanding immediately prior to the effective time of the Reorganization, subject to certain adjustments and exceptions. However, the Rexnord board of directors or its compensation committee may, in its sole

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discretion, accelerate the time-based vesting condition, in which case such Rexnord performance stock unit will be settled immediately prior to the Distributions in the form of Rexnord common stock and will not be converted into or substituted with Regal restricted stock units.

Following the closing of the Merger, Regal may in certain limited circumstances be permitted to adjust the Regal substitute awards described above in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made thereunder.

Q:

How will the Transactions affect employees and former employees of Rexnord who invest in the Rexnord Stock Fund through the Rexnord LLC 401(k) Plan?

​

A:

The Rexnord Stock Fund in the Rexnord LLC 401(k) Plan (which we refer to as the “Rexnord 401(k) Plan”) holds shares of Rexnord common stock. Current and former Rexnord employees invested in the Rexnord Stock Fund hold units in the Rexnord 401(k) Plan, which are primarily comprised of shares of Rexnord common stock. Like other Rexnord common stockholders, as a result of the Transactions, the Rexnord 401(k) Plan will receive shares of Regal common stock. These shares will be set aside under a separate Regal Stock Fund within the Rexnord 401(k) Plan and participants invested in the Rexnord Stock Fund will receive corresponding units in the Regal Stock Fund. This new fund will be frozen to new investments; however, participants in the Regal Stock Fund can transfer the investments out of this fund to another fund at any time. After the closing of the Transaction, the plan fiduciary responsible for evaluating the propriety of investment options may conclude that the Rexnord 401(k) Plan will no longer maintain the Regal Stock Fund, in which case the Rexnord 401(k) Plan will be frozen as to all transactions in the Regal Stock Fund except for participants’ sale of shares of Regal common stock, to be followed by a liquidation of the Regal common stock in the Rexnord 401(k) Plan over some period of time, with no action required on the part of participants. If participants in the Rexnord 401(k) Plan do not move funds out of the Regal Stock Fund, the balance in the Regal Stock Fund is expected to be transferred to an age-appropriate target date fund and no action would be required on their part.

​

Q:

Has Rexnord set a record date for the Spin-Off?

​

A:

No. Rexnord will publicly announce the Rexnord record date for the Spin-Off when the Rexnord record date has been determined. This announcement will be made prior to the completion of the Spin-Off and the Merger.

​

Q:

What are the material U.S. federal income tax consequences to Regal shareholders and Rexnord stockholders resulting from the Reorganization, Distributions and Merger?

​

A:

Assuming the Reorganization and Distributions (including the Spin-Off) qualify as tax-free transactions under Sections 368(a), 361 and 355 of the Code, Rexnord stockholders will not recognize any taxable income, gain or loss as a result of the Reorganization or Distributions (including the Spin-Off) for U.S. federal income tax purposes. Assuming the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, U.S. holders (as defined below) of Land common stock who receive Regal common stock in the Merger will not recognize any gain or loss for U.S. federal income tax purposes (except with respect to cash in lieu of fractional shares). Regal shareholders will not receive any stock or other consideration in respect of their shares of Regal common stock pursuant to the Merger (other than the Regal Special Dividend, as described elsewhere in this joint proxy statement/prospectus-information statement), and accordingly will not recognize any gain or loss in respect of their shares of Regal common stock. The receipt of the Regal Special Dividend generally will result in taxable income to Regal shareholders. A “U.S. holder” means any beneficial owner that for U.S. federal income tax purposes is an individual U.S. citizen or resident; a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; an estate the income of which is subject to U.S. federal income taxation regardless of its source; or a trust that (i) is subject to the primary supervision of a court within the United States and subject to the authority of one or more U.S. persons to control all substantial trust decisions, or (ii) was in existence on August 20, 1996, and has properly

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elected under applicable Treasury Regulations to be treated as a U.S. person. For more information, see “Material U.S. Federal Income Tax Consequences of the Transactions” beginning on page 268.

Q:

Are there risks associated with the pendency and the closing of the Merger?

​

A:

Regal:

​

Yes. Regal may not realize the expected benefits of the Merger because of the risks and uncertainties discussed in the section entitled “Risk Factors” beginning on page 37 and the section entitled “Cautionary Statement Concerning Forward-Looking Statements” beginning on page 54. Those risks include, among others, risks relating to the uncertainty that the Merger will close and the uncertainty that Regal will be able to integrate the PMC Business successfully.

Rexnord:

Yes. Rexnord may not realize the expected benefits of the Merger because of the risks and uncertainties discussed in the section entitled “Risk Factors” beginning on page 37 and the section entitled “Cautionary Statement Concerning Forward-Looking Statements” beginning on page 54. Those risks include, among others, risks relating to the uncertainty that the Merger will close and risks relating to the tax consequences of the Merger.

Q:

Will the instruments that govern the rights of Regal shareholders and Rexnord stockholders with respect to their shares of the combined company’s common stock after the Merger be different from those that govern the rights of current Regal shareholders?

​

A:

No. The rights of the shareholders of the combined company with respect to their shares of the combined company’s common stock after the Merger will continue to be governed by applicable laws and Regal’s then existing governing documents.

​

Q:

Who will serve on the combined company’s board of directors following completion of the Merger?

​

A:

Following the Merger, Regal’s board of directors will consist of the members of the Regal board of directors immediately prior to the Merger, plus two independent directors from the Rexnord board of directors, who will be appointed to the combined company’s board of directors upon the consummation of the Merger and serve until the next annual meeting of Regal’s shareholders. Rakesh Sachdev is expected to continue as non-executive chairman of the combined company’s board of directors.

​

Q:

Who will manage the business of the combined company after the Transactions?

​

A:

Following the Merger, management of the combined company is expected to be led by Regal’s existing chief executive officer, Louis Pinkham.

​

For more information about the expected executive officers, see “Information About Regal-Directors and Executive Officers of Regal” beginning on page 204.

Q:

Does Regal or Rexnord have to pay anything to the other party if the Merger Agreement is terminated?

​

A:

Depending on the reasons for termination of the Merger Agreement, Regal and Rexnord may be required to pay the other a termination fee equal to $150 million (which we refer to as the “Termination Fee”) in specified limited circumstances. For a discussion of the circumstances under which the Termination Fee would be payable by one party to the other, see “The Transaction Agreements-The Merger Agreement” beginning on page 151.

​

Q:

Can Regal shareholders or Rexnord stockholders demand appraisal rights of their shares?

​

A:

Neither Regal’s shareholders nor Rexnord’s stockholders will be entitled to exercise appraisal or dissenters’ rights under the WBCL or the DGCL in connection with the Reorganization, the Distributions or the Merger.

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Q:

What is the current relationship between Land and Regal?

​

A:

Land is currently a wholly-owned indirect subsidiary of Rexnord and was incorporated as a Delaware corporation in February 2021 to effectuate the Reorganization, Distributions and the Merger. Other than in connection with the Transactions, there is no relationship between Land and Regal.

​

Q:

When will the Merger be completed?

​

A:

The Merger is expected to close sometime in the fourth quarter of 2021, subject to the completion or waiver of certain specified closing conditions described in this joint proxy statement/prospectus-information statement. Regal and Rexnord are working to complete the Merger as quickly as practicable after closing conditions are met. Assuming that the Regal Share Issuance Proposal is approved by the requisite Regal shareholders at the Regal Special Meeting and the Rexnord Separation and Merger Proposal is approved by the requisite Rexnord stockholders at the Rexnord Special Meeting, other important conditions to the closing of the Merger exist, including, among other things, the consummation of the Reorganization and the Distributions. However, it is possible that factors outside Regal’s and Rexnord’s control could require Rexnord to complete the Reorganization and Distributions and Regal and Rexnord to complete the Merger at a later time or not complete them at all. In addition, the Merger Agreement provides that the Merger cannot occur sooner than (i) the third business day following the receipt of the IRS Ruling, notification by the IRS that it has declined to issue the IRS Ruling, withdrawal by Rexnord (with the written consent of Regal) of its request for the IRS Ruling, or (ii) November 15, 2021, which date was subject to extension in the event of outstanding regulatory approvals, but as of the date of this joint proxy statement/prospectus-information statement, all such approvals have been received. For a discussion of the conditions to the Merger, see “The Transactions-Regulatory Approvals” beginning on page 148, “The Transaction Agreements-The Merger Agreement-Conditions to the Merger” beginning on page 158, and “The Transaction Agreements-The Separation Agreement-Conditions to the Distributions” beginning on page 175.

​

Q:

Who will bear the cost of soliciting votes for the special meetings?

​

A:

Regal:

​

Regal has engaged Kingsdale Shareholder Services, U.S., Inc. (which we refer to as “Kingsdale”) to assist in the solicitation of proxies for the Regal Special Meeting. Regal estimates that it will pay Kingsdale $12,500, plus additional fees to be determined at the conclusion of the solicitation and reimbursement of reasonable expenses. Regal has agreed to indemnify Kingsdale against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

Rexnord:

Rexnord has engaged Morrow Sodali LLC (which we refer to as “Morrow Sodali”) to assist in the solicitation of proxies for the Rexnord Special Meeting. Rexnord estimates that it will pay Morrow Sodali $17,000, plus additional fees to be determined at the conclusion of the solicitation and reimbursement of reasonable expenses. Rexnord has agreed to indemnify Morrow Sodali against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

Q:

Who can answer my questions?

​

A:

Regal:

​

If you have any questions about the Regal Special Meeting or need to obtain proxy cards or other information, please contact:

Kingsdale Shareholder Services, U.S., Inc.
Email: contactus@kingsdaleadvisors.com
Phone: (855) 682-2019.

 

17

 

Rexnord:

If you have any questions about the Rexnord Special Meeting or need to obtain proxy cards or other information, please contact:

Morrow Sodali LLC
Email: RXN@info.morrowsodali.com
Phone: (800) 662-5200 (Toll-Free)
          (203) 658-9400.

Q:

Where can I find more information about Regal, Rexnord, Land and the Transactions?

​

A:

You can find out more information about Regal, Rexnord, Land and the Transactions by reading this joint proxy statement/prospectus-information statement and, with respect to Regal and Rexnord, from various sources described in “Where You Can Find More Information; Incorporation by Reference” beginning on page 289.

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HISTORICAL MARKET PRICE DATA AND DIVIDEND INFORMATION FOR REGAL

Historical Market Price Data

Historical market price data for Land has not been presented because Land is currently a wholly-owned indirect subsidiary of Rexnord and its equity interests are not publicly traded.

Regal common stock is listed and traded on the NYSE under the symbol “RBC.” On June 7, 2021, the last practicable trading day prior to the date of this joint proxy statement/prospectus-information statement, there were 40,694,063 shares of Regal common stock outstanding.

The following table presents the last reported sale price of a share of Regal common stock, as reported on the NYSE on February 12, 2021, the last full trading day prior to the public announcement of the proposed transactions, and on [•], the last practicable trading day prior to the date of this joint proxy statement/​prospectus-information statement:

​	​	​	Regal				​
February 12, 2021	​	​	​	$	128.95	​	​
[•]	​	​	​	​	[•]	​	​

Dividend Policy

Regal has paid regular, quarterly dividends on its shares of common stock each quarter since and including the calendar year ended December 31, 2018. On April 26, 2021, Regal’s board of directors declared a cash dividend of $0.33 per share, payable on July 16, 2021, to Regal shareholders of record at the close of business on July 2, 2021. Regal may, in the future, decide to pay dividends on its common stock. Any future determination to pay dividends will be at the discretion of the combined company’s board of directors and will depend on, among other things, its results of operations, cash requirements, financial condition, contractual restrictions contained in current or future financing instruments and other factors that its board of directors deem relevant. Per the terms of the Merger Agreement, without Rexnord’s consent, Regal is currently restricted from declaring and paying any dividends prior to the effective time of the Merger, with the exception of regular quarterly dividends consistent with its past practice.

HISTORICAL MARKET PRICE DATA AND DIVIDEND INFORMATION FOR REXNORD

Historical Market Price Data

No trading market currently exists or ever will exist for Land common stock. Rexnord and Rexnord stockholders will not be able to trade Land common stock before or after it is automatically converted into the right to receive shares of Regal common stock in the Merger.

Rexnord common stock is listed and traded on the NYSE under the symbol “RXN.” Following the Merger, Rexnord intends to change its corporate name and have its common stock continue to be listed on the NYSE. On June 7, 2021, the last practicable trading day prior to the date of this joint proxy statement/​prospectus-information statement, there were 120,845,484 shares of Rexnord common stock outstanding.

The following table presents the last reported sale price of a share of Rexnord common stock, as reported on the NYSE on February 12, 2021, the last full trading day prior to the public announcement of the proposed transactions, and on [•], the last practicable trading day prior to the date of this joint proxy statement/​prospectus-information statement:

​	​	​	Rexnord				​
February 12, 2021	​	​	​	$	41.52	​	​
[•]	​	​	​	​	[•]	​	​

Dividend Policy

In calendar year 2020, Rexnord’s board of directors declared, and Rexnord paid, four quarterly cash dividends on its common stock of $0.08 per share ($0.32 for the year). These dividends represented the first

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Exchange Ratio. The extent of the Overlap Shareholders that may be counted in determining the exchange ratio for the Merger will depend on whether an IRS Ruling is received and the contents of such IRS Ruling.

In the event that the number of shares that Regal will issue at the closing of the Transactions is increased in the manner described above, including as a result of Regal’s failure to be able to count the Overlap Shareholders, the Merger Agreement also provides that Regal will declare a special dividend to its shareholders in an amount that will depend on the number of shares being issued, but which may range in amount between zero and approximately $2.0 billion.

The extent of the Overlap Shareholders is outside of Regal’s and Rexnord’s control and will not be known until the closing of the Transactions occurs. In addition, the grant of the IRS Ruling is within the discretion of the IRS. Regal, Rexnord and Land can offer no assurance concerning the extent of the Overlap Shareholders at the closing of the Transactions or assurance that the IRS Ruling will be received.

The amount of debt that Regal and Land may incur in connection with the Transactions is uncertain and may be substantial.

In connection with the Transactions, Regal, Rexnord and Land have agreed that Land, prior to the Spin-Off, will incur approximately $486.8 million of indebtedness in order to fund a cash payment to Rexnord LLC. Following the closing, this indebtedness would be indebtedness of Regal’s wholly-owned subsidiary. In addition, as part of the Transactions, Regal has agreed to assume approximately $92 million of unfunded pension liabilities of the PMC Business and approximately $76 million of other indebtedness of the PMC Business. Further, as part of the Transactions, Regal may be required pay the Regal Special Dividend, depending on the number of additional shares of Regal common stock that may be issued in connection with the Transactions in order to satisfy tax requirements applicable to a Reverse Morris Trust transaction. If the Regal Special Dividend is paid, Regal expects to fund it with new indebtedness, and Regal has entered into the Regal Commitment Letter to fund that amount, which is described in more detail under “The Transaction Agreements-Debt Financing”. The size of the Regal Special Dividend is uncertain and will remain so until the closing of the Transactions. Regal has also entered into other financing arrangements in connection with the Transactions and expects to pay substantial fees and expenses in connection with them.

In the event that Regal’s debt levels and debt service obligations increase substantially in connection with the Transactions, Regal will have less cash flow available for its business operations, it could become increasingly vulnerable to general adverse economic and industry conditions and interest rate trends, and its ability to obtain future financing may be limited.

Regal’s failure to successfully integrate the PMC Business and realize forecasted synergies from the Transactions and any future acquisitions into its business within its expected timetable could adversely affect the combined company’s future results and the market price of Regal common stock following the completion of the Transactions.

The success of the Transactions will depend, in large part, the ability of the combined company following the completion of the Transactions to realize the anticipated benefits of the Transactions and on the sales and profitability of the combined company. To realize these anticipated benefits, the combined company must successfully integrate its businesses. This integration will be complex and time-consuming. The failure to successfully integrate and manage the challenges presented by the integration process may result in its failure to achieve some or all of the anticipated benefits of the Transactions.

Potential difficulties that may be encountered in the integration process include, among others:

•

the failure to implement the business plan for the combined company and for the combined company to recognize synergies between Regal and the PMC Business;

​

•

lost sales and customers as a result of Regal customers or customers of the PMC Business deciding not to do business with the combined company;

​

•

risks associated with managing the larger and more complex combined company;

​

•

integrating Regal’s personnel and the personnel of the PMC Business while maintaining focus on providing consistent, high-quality products and service to customers;

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•

the loss of key employees;

​

•

unanticipated issues in integrating manufacturing, logistics, information, communications and other systems;

​

•

unexpected liabilities of the PMC Business;

​

•

possible inconsistencies in standards, controls, procedures, policies and compensation structures;

​

•

the impact on Regal’s internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002; and

​

•

potential unknown liabilities and unforeseen expenses or delays associated with the Transactions.

​

If any of these events were to occur, Regal’s ability to maintain relationships with customers, suppliers and employees or Regal’s ability to achieve the anticipated benefits of the Transactions could be adversely affected, or could reduce Regal’s sales or earnings or otherwise adversely affect its business and financial results after the Transactions and, as a result, adversely affect the market price of Regal common stock.

Apart from the Transactions, as part of Regal’s growth strategy, Regal has made and the combined company is expected to continue to make, acquisitions. Regal’s continued growth may depend on its ability to identify and acquire companies that complement or enhance its business on acceptable terms, but Regal may not be able to identify or complete future acquisitions. Regal may not be able to integrate successfully its recent acquisitions, or any future acquisitions, operate these acquired companies profitably, or realize the potential benefits from these acquisitions.

Regal and Rexnord will incur significant costs related to the Transactions that could have an adverse effect on their liquidity, cash flows and operating results.

Regal and Rexnord expect to incur significant one-time costs in connection with the Transactions, including the cost of financing and other transaction costs, integration costs, and other costs that Regal’s and Rexnord’s respective managements teams believe are necessary to realize the anticipated synergies from the Transactions. In connection with the termination of the Merger Agreement under specified circumstances, Regal may be required to pay to Rexnord a termination fee of $150 million, and under certain specified circumstances, Rexnord may be required to pay Regal a termination fee of $150 million. For more information, see “The Transaction Agreements-The Merger Agreement-Termination Fee Payable in Certain Circumstances.” The incurrence of these costs may have a material adverse effect on Regal’s and/or Rexnord’s liquidity, cash flows and operating results in the periods in which they are incurred.

Businesses that Regal has acquired or that it may acquire in the future, including the PMC Business, may have liabilities which are not known to Regal.

Regal has assumed liabilities of acquired businesses, including the PMC Business, and may assume liabilities of businesses that it acquires in the future. There may be liabilities or risks that Regal fails, or is unable, to discover, or that Regal underestimates, in the course of performing its due diligence investigations of acquired businesses. Additionally, businesses that Regal has acquired or may acquire in the future may have made previous acquisitions, and Regal will be subject to certain liabilities and risks relating to these prior acquisitions as well. Regal cannot assure you that its rights to indemnification contained in definitive acquisition agreements that it has entered or may enter into will be sufficient in amount, scope or duration to fully offset the possible liabilities associated with the business or property acquired. Any such liabilities, individually or in the aggregate, could have a material adverse effect on Regal’s business, financial condition or results of operations. As Regal begins to operate acquired businesses, it may learn additional information about them that adversely affects Regal, such as unknown or contingent liabilities, issues relating to compliance with applicable laws or issues related to ongoing customer relationships or order demand.

The Merger consideration payable in the Merger will not be adjusted in the event the value of the PMC Business or its assets or the value of Regal changes before the Merger is completed.

The calculation of the number of shares of Regal common stock to be issued to Rexnord stockholders pursuant to the Merger Agreement is based on fixed percentages and will not be adjusted in the event the

 

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value of the PMC Business or its assets or the value of Regal changes, including as a result of the regulatory approval process. If the value of the PMC Business or its assets or the value of Regal changes after the Regal shareholders approve the Regal Share Issuance Proposal or after the Rexnord stockholders approve Rexnord Separation and Merger Proposal, the market price of the common stock of the combined company following completion of the Merger may be less than Regal shareholders anticipated when they considered the Regal Share Issuance Proposal or less than the Rexnord stockholders anticipated when they considered Rexnord Separation and Merger Proposal. Regal may not be permitted to terminate the Merger Agreement because of changes in the value of the PMC Business or its assets. Regal will not be permitted to terminate the Merger Agreement solely because of changes in the market price of Regal common stock.

The market price of Regal common stock or Rexnord common stock may decline as a result of the Transactions and the market price of Regal common stock or Rexnord common stock after the consummation of the Transactions may be affected by factors different from those affecting the price of Rexnord common stock or Regal common stock before the Merger.

The market price of Regal common stock may decline as a result of the Merger if the combined company does not achieve the perceived benefits of the Merger or if the effect of the Merger on the combined company’s financial results are not consistent with the expectations of financial or industry analysts. Similarly, the market price of Rexnord common stock may decline as a result of the Transactions if Rexnord does not achieve the perceived benefits of the Transactions or if the effect of the Transactions on Rexnord’s financial results are not consistent with the expectations of financial or industry analysts.

In addition, upon completion of the Merger, Regal shareholders will own interests in the combined company operating an expanded business with a different mix of assets, risks and liabilities, and Rexnord’s stockholders will own interests in the combined company that will have a different mix of assets, risks and liabilities than held currently by Rexnord and will not include the businesses not part of the PMC Business. Regal’s current shareholders and Rexnord’s current stockholders may not wish to continue to invest in the combined company, or for other reasons may wish to dispose of some or all of their common stock in the combined company. If, following the effective time of the Merger, large amounts of common stock of the combined company are sold, the price of the common stock of the combined company could decline.

Further, the combined company’s and Rexnord’s respective results of operations, as well as the market price of each company’s common stock after the Transactions, may be affected by factors in addition to those currently affecting Regal’s, the PMC Business’s or Rexnord’s results of operations and the market prices of Regal common stock and Rexnord common stock, and other differences in assets and capitalization. Accordingly, Regal’s and Rexnord’s historical market prices and financial results may not be indicative of these matters for the combined company or Rexnord after the consummation of the Transactions.

The pendency of the Transactions could adversely affect Regal’s, Rexnord’s and the PMC Business’s business and operations.

In connection with the pending Merger, some of Regal’s, Rexnord’s or the PMC Business’s current or prospective customers, borrowers, managers or vendors may delay or defer decisions related to their business dealings with Regal, Rexnord and/or the PMC Business, which could negatively impact Regal’s, Rexnord’s and/or the PMC Business’s revenues, earnings, cash flows and expenses, regardless of whether the Merger is completed. In addition, under the Merger Agreement, Regal and Rexnord with respect to the PMC Business are each subject to certain restrictions on the conduct of its respective business prior to completing the Transactions. These restrictions may prevent Regal, Rexnord or the PMC Business from taking certain actions with respect to capital stock or equity awards, amending organizational documents, taking certain actions with respect to material contracts and benefit plans, pursuing certain strategic transactions, acquiring and disposing assets, undertaking certain capital projects, undertaking certain financing transactions or incurring certain indebtedness, changing accounting or tax filing practices, settling certain legal proceedings, failing to maintain insurance, abandoning or selling certain material intellectual property and otherwise pursuing other actions that are not in the ordinary course of business, even if such actions could prove beneficial. These restrictions may impede Regal’s, Rexnord’s or the PMC Business’s growth which could negatively impact its respective revenue, earnings and cash flows. Additionally, the pendency of the Transactions may make it more difficult for Regal, Rexnord or the PMC Business to effectively retain and incentivize key personnel.

 

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Investors holding shares of Regal common stock immediately prior to the completion of the Merger will, in the aggregate, have a significantly reduced ownership and voting interest in Regal after the Merger and will exercise less influence over management.

Investors holding shares of Regal common stock immediately prior to the completion of the Merger will, in the aggregate, own a significantly smaller percentage of the combined company immediately after the completion of the Merger. Immediately following the completion of the Merger, it is expected that the former shares of Land common stock will be converted into between approximately 38.6% and 50.1% of the outstanding shares of Regal common stock immediately following the Merger. There will be no effect on the outstanding shares of Regal common stock immediately prior to the Merger and, accordingly, it is expected that such shares will represent between approximately 49.9% and 61.4% of the outstanding shares of Regal common stock immediately following the Merger. In no event will the former stockholders of Land hold less than approximately 38.6% of the outstanding shares of Regal common stock immediately after the Merger. Consequently, Regal shareholders, collectively, will be able to exercise less influence over the management and policies of the combined company than they are currently able to exercise over Regal’s management and policies.

Sales of Regal common stock after the completion of the Merger may negatively affect its market price.

The shares of Regal common stock to be issued in the Merger to Rexnord stockholders will generally be eligible for immediate resale. The market price of Regal common stock could decline as a result of sales of a large number of shares of Regal common stock in the market after the completion of the Merger or the perception in the market that these sales could occur.

If the Reorganization and the Distributions do not qualify as tax-free under Sections 355 and 368(a) of the Code, including as a result of an error in the determination of Overlap Shareholders or subsequent acquisitions of stock of Rexnord or Regal, then Rexnord and Rexnord stockholders may be required to pay substantial U.S. federal income taxes, and Land (then a subsidiary of Regal) may be obligated to indemnify Rexnord for such taxes imposed on Rexnord.

The obligation of Rexnord and Land to complete the Transactions is conditioned on receipt of the Rexnord Tax Opinion, which will include an opinion to the effect that the Reorganization, together with the Distributions, will qualify as tax-free to Rexnord, Land and the Rexnord stockholders, as applicable, for U.S. federal income tax purposes except, in the case of Rexnord, to the extent the Land Cash Payment exceeds RBS Global Inc.’s adjusted tax basis in the Land Common Stock. The Rexnord Tax Opinion will be based on, among other things, certain representations and assumptions as to factual matters and certain covenants made by Regal, Land and Rexnord. The failure of any factual representation, assumption or covenant to be true, correct and complete in all material respects could adversely affect the validity of the opinion of counsel. An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the opinion. In addition, the opinion will be based on current law, and cannot be relied upon if current law changes with retroactive effect.

The Spin-Off will be taxable to Rexnord pursuant to Section 355(e) of the Code if there is a 50% or greater change in ownership of either Rexnord or Land, directly or indirectly, as part of a plan or series of related transactions that include the Spin-Off. For this purpose, any acquisitions of Land, Rexnord or Regal stock within the period beginning two years before the Spin-Off and ending two years after the Spin-Off are presumed to be a part of such plan, although Rexnord and Regal may be able to rebut that presumption. Rexnord has requested a private letter ruling from the IRS (which we refer to as the “IRS Ruling”) with respect to certain tax aspects of the Transactions, including matters relating to the nature and extent of shareholders who may be counted for tax purposes as Overlap Shareholders for purposes of determining the Exchange Ratio in the Merger Agreement. Assuming the IRS Ruling is received, the Merger Agreement provides that the number of shares of Regal common stock that may be issued in the Merger is subject to increase at closing such that the former stockholders of Land (taking into account the Overlap Shareholders) own at least 50.8% of the outstanding Regal common stock for tax purposes immediately following the closing of the Merger. This percentage is reduced to 50.1% if the IRS Ruling is not received or in certain other circumstances in which Overlap Shareholders are not counted for this purpose. If the IRS Ruling is received, the continuing validity of such ruling will be subject to the accuracy of factual representations and

 

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assumptions made in the ruling request. Moreover, the IRS Ruling, if received, will only describe the time, manner and methodology for measuring Overlap Shareholders and may be subject to varying interpretations. The actual determination and calculation of Overlap Shareholders will be made by Regal, Rexnord and their respective advisors based on the IRS Ruling, but no assurance can be given that the IRS will agree with these determinations or calculations. If the IRS were to determine that the Merger, as a result of an error in the determination of Overlap Shareholders, or other acquisitions of Land, Rexnord or Regal stock, either before or after the Spin-Off, resulted in a 50% or greater change in ownership and were part of a plan or series of related transactions that included the Spin-Off, such determination could result in significant tax to Rexnord. In certain circumstances and subject to certain limitations, under the Tax Matters Agreement, Land (then a subsidiary of Regal) is required to indemnify Rexnord for 100% of the taxes that result if the Distributions become taxable as a result of certain actions by Land or Regal and for 90% of the taxes that result as a result of a miscalculation of the Overlap Shareholders. If this occurs and Land is required to indemnify Rexnord, this indemnification obligation could be substantial and could have a material adverse effect on Land and Regal, including with respect to financial condition and results of operations given that Regal has guaranteed the indemnification obligations of Land.

See “Material U.S. Federal Income Tax Consequences of the Transactions.”

If the Merger does not qualify as a tax-free reorganization under Section 368(a) of the Code, the stockholders of Rexnord may be required to pay substantial U.S. federal income taxes.

The obligations of Land and Regal to consummate the Merger are conditioned, respectively, on Rexnord’s receipt of the Rexnord Tax Opinion and Regal’s receipt of the Regal Tax Opinion, in each case to the effect that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. These opinions will be based upon, among other things, certain representations and assumptions as to factual matters and certain covenants made by Regal, Rexnord, Land and Merger Sub. The failure of any factual representation, assumption or covenant to be true, correct and complete in all material respects could adversely affect the validity of the opinions. An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the opinion. In addition, the opinions will be based on current law, and cannot be relied upon if current law changes with retroactive effect. If the Merger were taxable, U.S. holders, as defined below, of Land would be considered to have made a taxable sale of their Land common stock to Regal, and such U.S. holders of Land would generally recognize taxable gain or loss on their receipt of Regal common stock in the Merger. Under the Tax Matters Agreement, Land (then a subsidiary of Regal) is required to indemnify Rexnord for 100% of the taxes that result if the Distributions become taxable as a result of certain actions by Land or Regal and for 90% of the taxes that result as a result of a miscalculation of the Overlap Shareholders.

See “Material U.S. Federal Income Tax Consequences of the Transactions.”

If the Merger is not completed by the outside date specified in the Merger Agreement, Regal or Rexnord may terminate the Merger Agreement.

Either Regal or Rexnord may terminate the Merger Agreement under certain circumstances, including if the Merger has not been consummated by November 15, 2021 (or any extensions of such date pursuant to the Merger Agreement, as described below). However, this termination right will not be available to a party if that party failed to fulfill its obligations under the Merger Agreement and that failure was the primary cause of the failure to consummate the Merger. If either party terminates the Merger Agreement, this could result in a material adverse impact on the results of operations of Regal and Rexnord.

Following consummation of the Transaction, Regal, Land and Rexnord will each be required to abide by potentially significant restrictions which could limit each company’s ability to undertake certain corporate actions (such as the issuance of common stock or the undertaking of certain business combinations) that otherwise could be advantageous.

The Tax Matters Agreement will impose certain restrictions on Regal, Land and Rexnord during the two-year period following the Spin-Off, subject to certain exceptions, with respect to actions that could cause the Reorganization and the Distributions to fail to qualify for their intended tax treatment. As a result of

 

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these restrictions, Regal’s, Land’s and Rexnord’s ability to engage in certain transactions, such as the issuance or purchase of stock or certain business combinations, may be limited.

If Regal, Land or Rexnord take any enumerated actions or omissions, or if certain events relating to Land, Regal or Rexnord occur that would cause the Reorganization or the Distributions to become taxable, the party whose actions or omissions (or event relating to) generally will be required to bear the cost of any resulting tax liability of Rexnord (but not its stockholders). If the Reorganization or the Distributions became taxable, Rexnord would be expected to recognize a substantial amount of gain, which would result in a material amount of taxes. Any such taxes would be expected to be material to Regal or Rexnord, as applicable, and could cause its business, financial condition and operating results to suffer. These restrictions may reduce Regal’s and Rexnord’s ability to engage in certain business transactions that otherwise might be advantageous to them, which could adversely affect Regal’s or Rexnord’s respective business, results of operations, or financial condition.

Risks Related to the Combined Company Following the Transactions

Risks Related to Operations and Strategy

The COVID-19 pandemic has adversely impacted Regal’s business and the PMC Business and could continue to have an adverse impact on the combined company’s business, results of operation, financial condition, liquidity, customers, suppliers, and the geographies in which it operates.

The COVID-19 pandemic has significantly increased economic, demand and operational uncertainty. Regal has, and the combined company will have, global operations, customers and suppliers, including in countries impacted by COVID-19. Authorities around the world have taken a variety of measures to attempt to slow the spread of COVID-19, including travel bans or restrictions, increased border controls or closures, quarantines, shelter-in-place orders and business shutdowns and such authorities may impose additional restrictions. Regal and the PMC Business have also taken actions to protect their employees and to mitigate the spread of COVID-19, including embracing guidelines set by the World Health Organization and the U.S. Centers for Disease Control and Prevention on social distancing, good hygiene, restrictions on employee travel and in-person meetings, and changes to employee work arrangements including remote work arrangements where feasible. The actions taken around the world to attempt slow the spread of COVID-19 have also impacted Regal’s and the PMC Business’s customers and suppliers, and future developments could cause further disruptions to the combined company due to the interconnected nature of the combined company’s business relationships.

The impact of COVID-19 on the global economy and the combined company’s customers, as well as recent volatility in commodity markets, has negatively impacted demand for Regal’s and the PMC Business’s products and could continue to do so in the future. Its effects could also result in disruptions to the combined company’s manufacturing operations, including higher rates of employee absenteeism, and supply chain, which could negatively impact the combined company’s ability to meet customer demand. Additionally, the potential deterioration and volatility of credit and financial markets could limit the combined company’s ability to obtain external financing. The extent to which COVID-19 will impact the combined company’s business, results of operations, financial condition or liquidity is highly uncertain and will depend on future developments, including the spread and duration of the virus, potential actions taken by governmental authorities, and how quickly economic conditions stabilize and recover.

The combined company may incur costs and charges as a result of restructuring activities such as facilities and operations consolidations and workforce reductions that are intended to reduce on-going costs, and those restructuring activities also may be disruptive to the combined company’s business and may not result in anticipated cost savings.

The combined company expects to review its overall manufacturing footprint, including potentially consolidating facilities and operations, in an effort to make its business more efficient. The combined company expects to incur additional costs and restructuring charges in connection with such consolidations, divestitures, workforce reductions and other cost reduction measures that could adversely affect the combined company’s future earnings and cash flows. Furthermore, such actions may be disruptive to the

 

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combined company’s business. This may result in production inefficiencies, product quality issues, late product deliveries or lost orders as the combined company begins production at consolidated facilities, which would adversely impact the combined company’s sales levels, operating results and operating margins. In addition, the combined company may not realize the cost savings that it expects to realize as a result of such actions.

These activities require substantial management time and attention and may divert management from other important work or result in a failure to meet operational targets. Divestitures may also give rise to obligations to buyers or other parties that could have a financial effect after the transaction is completed. Moreover, the combined company could encounter changes to, or delays in executing, any restructuring or divestiture plans, any of which could cause disruption and additional unanticipated expense.

The combined company’s ability to establish, grow and maintain customer relationships depends in part on its ability to develop new products and product enhancements based on technological innovation, such as IoT, and marketplace acceptance of new and existing products, including products related to technology not yet adopted or utilized in certain geographic locations in which it will do business.

The electric motor and power transmission industries in recent years have seen significant evolution and innovation, particularly with respect to increasing energy efficiency and control enhancements. The combined company’s ability to effectively compete in these industries depends in part on its ability to continue to develop new technologies and innovative products and product enhancements, including enhancements based on technological innovation such as IoT. Further, many large customers in these industries generally desire to purchase from companies that can offer a broad product range, which means the combined company must continue to develop its expertise in order to design, manufacture and sell these products successfully. This requires that the combined company make significant investments in engineering, manufacturing, customer service and support, research and development and intellectual property protection, and there can be no assurance that in the future the combined company will have sufficient resources to continue to make such investments. If the combined company is unable to meet the needs of its customers for innovative products or product variety, or if its products become technologically obsolete over time due to the development by its competitors of technological breakthroughs or otherwise, the combined company’s revenues and results of operations may be adversely affected. In addition, the combined company may incur significant costs and devote significant resources to the development of products that ultimately are not accepted in the marketplace, do not provide anticipated enhancements, or do not lead to significant revenue, all of which may adversely impact the combined company’s results of operations.

Further, such new products and technologies may create additional exposure or risk. The combined company cannot assure that it can adequately protect any of its own technological developments to produce a sustainable competitive advantage. Furthermore, the combined company could be subject to business continuity risk in the event of an unexpected loss of a material facility or operation. The combined company cannot ensure that it can adequately protect against such a loss.

The combined company’s dependence on, and the price of, raw materials may adversely affect its gross margins.

Many of the products the combined company will produce contain key materials such as steel, copper, aluminum and electronics. Market prices for those materials can be volatile due to changes in supply and demand, manufacturing and other costs, regulations and tariffs, economic conditions and other circumstances. The combined company may not be able to offset any increase in commodity costs through pricing actions, productivity enhancements or other means, and increasing commodity costs may have an adverse impact on the combined company’s gross margins, which could adversely affect its results of operations and financial condition.

In each of the combined company’s Climate Solutions and Commercial Systems segments, it depends on revenues from several significant customers, and any loss, cancellation or reduction of, or delay in, purchases by these customers may have a material adverse effect on the combined company’s business.

In each of Regal’s Climate Solutions and Commercial Systems segments, Regal depends on, and the combined company is expected to continue to depend on, revenues from several significant customers, and

 

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any loss, cancellation or reduction of, or delay in, purchases by these customers may have a material adverse effect on the combined company’s business.

The combined company is expected to derive a significant portion of the revenues of its motor businesses from several key OEM customers. The combined company’s success will depend on its continued ability to develop and manage relationships with these customers. The combined company will have long standing relationships with these customers and it expects these customer relationships will continue for the foreseeable future. The combined company’s reliance on sales from customers makes the relationship with each of these customers important to the combined company’s business. The combined company cannot assure you that it will be able to retain these key customers. Some of the combined company’s customers may in the future shift some or all of their purchases of products from the combined company to its competitors or to other sources. The loss of one or more of the combined company’s large customers, any reduction or delay in sales to these customers, the combined company’s inability to develop relationships successfully with additional customers, or future price concessions that the combined company may make could have a material adverse effect on the combined company’s results of operations and financial condition.

Goodwill and an indefinite-lived trade name intangible will comprise a significant portion of the combined company’s total assets, and if the combined company determines that goodwill and the indefinite-lived trade name intangible have become impaired in the future, the combined company’s results of operations and financial condition in such years may be materially and adversely affected.

Regal has, and the combined company will have, substantial intangible assets in respect of goodwill and indefinite-lived trade names. Goodwill represents the excess of cost over the fair market value of net assets acquired in business combinations. The indefinite-lived trade name intangible represents a long-standing brand acquired in a business combination and is assumed to have indefinite life. Regal reviews, and the combined company is expected to review, goodwill and the indefinite-lived trade name intangible at least annually for impairment and any excess in carrying value over the estimated fair value is charged to the results of operations. The combined company’s estimates of fair value will be based on assumptions about the future operating cash flows, growth rates, discount rates applied to these cash flows and current market estimates of value. A reduction in net income resulting from the write down or impairment of goodwill or the indefinite-lived trade name intangible would affect financial results. If the combined company is required to record a significant charge to earnings in its consolidated financial statements because an impairment of goodwill or the indefinite-lived trade name intangible is determined, the combined company’s results of operations and financial condition could be materially and adversely affected.

Portions of the combined company’s total sales are expected to come directly from customers in key markets and industries. A significant or prolonged decline or disruption in one of those markets or industries could result in lower capital expenditures by such customers, which could have a material adverse effect on the combined company’s results of operations and financial condition.

Portions of the combined company’s total sales are expected to be dependent directly upon the level of capital expenditures by customers in key markets and industries, such as HVAC, refrigeration, aerospace power generation, oil and gas, mining, cement and aggregates and unit material handling or water heating. A significant or prolonged decline or disruption in one of those markets or industries may result in some of such customers delaying, canceling or modifying projects, or may result in nonpayment of amounts that are owed to Regal or the combined company. These effects could have a material adverse effect on the combined company’s results of operations and financial condition.

The combined company is expected to sell certain products for high volume applications, and any failure of those products to perform as anticipated could result in significant liability and expenses that may adversely affect its business and results of operations.

The combined company is expected to manufacture and sell a number of products for high volume applications, including electric motors used in pools and spas, residential and commercial heating, ventilation and air conditioning, refrigeration equipment and enclosed gear drives for solar power generation. Any failure of those products to perform as anticipated could result in significant product liability, product recall or rework, or other costs. The costs of product recalls and reworks are not generally covered by insurance.

 

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If the combined company were to experience a product recall or rework in connection with products of high volume applications, its financial condition or results of operations could be materially adversely affected.

One of the combined company’s subsidiaries that Regal acquired in 2007 is subject to numerous claims filed in various jurisdictions relating to certain sub-fractional motors that were primarily manufactured through 2004 and that were included as components of residential and commercial ventilation units manufactured and sold in high volumes by a third party. These ventilation units are subject to regulation by government agencies such as the U.S. Consumer Product Safety Commission (which we refer to as “CPSC”). The claims generally allege that the ventilation units were the cause of fires. Based on the current facts, the combined company cannot assure you that these claims, individually or in the aggregate, will not have a material adverse effect on its or its subsidiary’s results of operations, financial condition or cash flows. The combined company cannot reasonably predict the outcome of these claims, the nature or extent of any CPSC or other remedial actions, if any, that it or its subsidiary may need to undertake with respect to motors that remain in the field, or the costs that may be incurred, some of which could be significant.

If the combined company’s business may not generate cash flow from operations in an amount sufficient to enable it to service its indebtedness or to fund its other liquidity needs, the combined company could become increasingly vulnerable to general adverse economic and industry conditions and interest rate trends, and its ability to obtain future financing may be limited.

As of January 2, 2021, Regal had $1.1 billion in aggregate debt outstanding under its various financing arrangements, $611.3 million in cash and cash equivalents and $499.8 million in available borrowings under its current revolving credit facility. Regal and the PMC Business may also incur substantial additional indebtedness in connection with the Transactions (see the section entitled “The Transaction Agreements-Debt Financing”). The combined company’s ability to make required payments of principal and interest on its debt levels will depend on its future performance, which, to a certain extent, is subject to general economic, financial, competitive and other factors that are beyond the combined company’s control. The combined company cannot assure you that its business will generate cash flow from operations or that future borrowings will be available under Regal’s current credit facilities in an amount sufficient to enable the combined company to service its indebtedness or to fund its other liquidity needs. In addition, the combined company’s credit facilities will contain financial and restrictive covenants that could limit the combined company’s ability to, among other things, borrow additional funds or take advantage of business opportunities. The combined company’s failure to comply with such covenants could result in an event of default that, if not cured or waived, could result in the acceleration of all of the combined company’s indebtedness or otherwise have a material adverse effect on the combined company’s business, financial condition, results of operations and debt service capability. The combined company’s indebtedness may have important consequences. For example, it could:

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make it more challenging for the combined company to obtain additional financing to fund its business strategy and acquisitions, debt service requirements, capital expenditures and working capital;

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increase the combined company’s vulnerability to interest rate changes and general adverse economic and industry conditions;

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require the combined company to dedicate a substantial portion of its cash flow from operations to service its indebtedness, thereby reducing the availability of its cash flow to finance acquisitions and to fund working capital, capital expenditures, manufacturing capacity expansion, business integration, research and development efforts and other general corporate activities;

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limit the combined company’s flexibility in planning for, or reacting to, changes in its business and its markets; and/or

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place the combined company at a competitive disadvantage relative to its competitors that have less debt.

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In addition, the combined company’s credit facilities will require it to maintain specified financial ratios and satisfy certain financial condition tests, which may require that the combined company take action to reduce its debt or to act in a manner contrary to its business strategies. If an event of default under the

 

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combined company’s credit facility or senior notes were to occur, the lenders could elect to declare all amounts outstanding under the applicable agreement, together with accrued interest, to be immediately due and payable.

The combined company is expected to depend on certain key suppliers, and any loss of those suppliers or their failure to meet commitments may adversely affect the combined company’s business and results of operations.

The combined company is expected to depend on a single or limited number of suppliers for some materials or components required in the manufacture of its products. If any of those suppliers fail to meet their commitments to the combined company in terms of delivery or quality, the combined company may experience supply shortages that could result in its inability to meet its customers’ requirements, or could otherwise experience an interruption in the combined company’s operations that could negatively impact its business and results of operations.

Sales of products incorporated into HVAC systems and other residential applications are seasonal and affected by the weather; mild or cooler weather could have an adverse effect on the combined company’s operating performance.

Many of Regal’s and the combined company’s motors are incorporated into HVAC systems and other residential applications that OEMs sell to end users. The number of installations of new and replacement HVAC systems or components and other residential applications is higher during the spring and summer seasons due to the increased use of air conditioning during warmer months. Mild or cooler weather conditions during the spring and summer season often result in end users deferring the purchase of new or replacement HVAC systems or components. As a result, prolonged periods of mild or cooler weather conditions in the spring or summer season in broad geographical areas could have a negative impact on the demand for the combined company’s HVAC motors and, therefore, could have an adverse effect on the combined company’s operating performance. In addition, due to variations in weather conditions from year to year, the combined company’s operating performance in any single year may not be indicative of its performance in any future year.

The combined company’s success will be highly dependent on qualified and sufficient staffing. The combined company’s failure to attract or retain qualified personnel, including its senior management team, could lead to a loss of revenue or profitability.

The combined company’s success will depend, in part, on the efforts and abilities of its senior management team and key associates and the contributions of talented associates in various operations and functions, such as engineering, finance, sales, marketing, manufacturing, etc. The skills, experience and industry contacts of the combined company’s senior management team significantly benefit its operations and administration. The failure to attract or retain members of its senior management team and key talent could have a negative effect on the combined company’s operating results.

Risks Related to the Combined Company’s Global Footprint

The combined company will operate in the highly competitive global electric motors and controls, power generation and power transmission industries.

The global electric motors and controls, power generation and power transmission industries are highly competitive. The combined company is expected to encounter a wide variety of domestic and international competitors due in part to the nature of the products it is expected to manufacture and the wide variety of applications and customers it is expected to serve. In order to compete effectively, the combined company must retain relationships with major customers and establish relationships with new customers, including those in developing countries. Moreover, in certain applications, customers exercise significant power over business terms. It may be difficult in the short-term for the combined company to obtain new sales to replace any decline in the sale of existing products that may be lost to competitors. The combined company’s failure to compete effectively may reduce its revenues, profitability and cash flow, and pricing pressures resulting from competition may adversely impact its profitability.

 

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Regal has continued to see a trend with certain customers who are attempting to reduce the number of vendors from which they purchase product in order to reduce their costs and diversify their risk. As a result, the combined company may lose market share to its competitors in some of the markets in which it is expected to compete.

In addition, some of the combined company’s competitors may be larger and have greater financial and other resources than it is expected to have. There can be no assurance that its products will be able to compete successfully with the products of these other companies.

The combined company may also choose to exit certain businesses, markets, or channels based on a variety of factors including its 80/20 initiatives.

The combined company is expected to manufacture a significant portion of its products outside the U.S., and political, societal or economic instability or public health crises may present additional risks to its business.

As of January 2, 2021, approximately 19,300 of Regal’s approximate 23,000 total associates and 35 of its principal manufacturing and warehouse facilities are located outside the U.S. and as of December 31, 2020 approximately 3,200 of the PMC Business’s approximate 5,500 total associates and 19 of its principal manufacturing and warehouse facilities are located outside of the U.S. International operations generally are subject to various risks, including political, societal and economic instability, local labor market conditions, public health crises, breakdowns in trade relations, the imposition of tariffs and other trade restrictions, lack of reliable legal systems, ownership restrictions, the impact of government regulations, the effects of income and withholding taxes, governmental expropriation or nationalization, and differences in business practices. The combined company may incur increased costs and experience delays or disruptions in product deliveries and payments in connection with international manufacturing and sales that could cause loss of revenue.

Unfavorable changes in the political, regulatory and business climates in countries where the combined company is expected to have operations could have a material adverse effect on its financial condition, results of operations and cash flows, including, for example, the uncertainty surrounding the effect of the United Kingdom’s exit from the European Union, commonly referred to as “Brexit,” trade relations between the U.S. and China, the implementation of the United States-Mexico-Canada Agreement (which we refer to as the “USMCA”), or the change in labor rates in Mexico.

In addition, as described in more detail above, the continued global spread of COVID-19 could continue to have an adverse effect on the combined company’s financial condition, results of operations and cash flows.

Disruptions caused by labor disputes or organized labor activities could adversely affect the business or financial results of the combined company.

The combined company is expected to have a significant number of employees in Europe and other jurisdictions where trade union membership is common. Although Regal and the PMC Business believe that their relations with their employees are strong, if the combined company’s unionized workers were to engage in a strike, work stoppage or other slowdown in the future, the combined company could experience a significant disruption of its operations, which could interfere with its ability to deliver products on a timely basis and could have other negative effects, such as decreased productivity and increased labor costs. In addition, if a greater percentage of its workforce becomes unionized as a result of legal or regulatory changes which may make union organizing easier, or otherwise, the combined company’s costs could increase and its efficiency be affected in a material adverse manner, negatively impacting its business and financial results. Further, many of the combined company’s direct and indirect customers and their suppliers, and organizations responsible for shipping its products, are expected to have unionized workforces and their businesses may be impacted by strikes, work stoppages or slowdowns, any of which, in turn, could have a material adverse effect on the combined company’s business, financial condition, results of operations or cash flows.

Economic and Financial Risks

The combined company may suffer losses as a result of foreign currency fluctuations.

The net assets, net earnings and cash flows from the combined company’s foreign subsidiaries are expected to be based on the U.S. dollar equivalent of such amounts measured in the applicable functional currency.

 

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These foreign operations have the potential to impact the combined company’s financial position due to fluctuations in the local currency arising from the process of re-measuring the local functional currency in the U.S. dollar. Any increase in the value of the U.S. dollar in relation to the value of the local currency, whether by means of market conditions or governmental actions such as currency devaluations, will adversely affect the combined company’s revenues from its foreign operations when translated into U.S. dollars. Similarly, any decrease in the value of the U.S. dollar in relation to the value of the local currency will increase the combined company’s operating costs in foreign operations, to the extent such costs are payable in foreign currency, when translated into U.S. dollars.

Commodity, currency and interest rate hedging activities may adversely impact the combined company’s financial performance as a result of changes in global commodity prices, interest rates and currency rates.

The combined company is expected to use derivative financial instruments in order to reduce the substantial effects of currency and commodity fluctuations and interest rate exposure on its cash flow and financial condition. These instruments may include foreign currency and commodity forward contracts, currency swap agreements and currency option contracts, as well as interest rate swap agreements. Regal has entered into, and the combined company is expected to continue to enter into, such hedging arrangements. By utilizing hedging instruments, the combined company may forgo benefits that might result from fluctuations in currency exchange, commodity and interest rates. The combined company is also expected to be exposed to the risk that counterparties to hedging contracts will default on their obligations. Any default by such counterparties might have an adverse effect on the combined company.

Worldwide economic conditions may adversely affect the combined company’s industry, business and results of operations.

General economic conditions and conditions in the global financial markets can affect the combined company’s results of operations. Deterioration in the global economy could lead to higher unemployment, lower consumer spending and reduced investment by businesses, and could lead the combined company’s customers to slow spending on its products or make it difficult for its customers, its vendors and the combined company to accurately forecast and plan future business activities. Worsening economic conditions could also affect the financial viability of the combined company’s suppliers, some of which could be considered key suppliers. If the commercial, industrial, residential HVAC, power generation and power transmission markets significantly deteriorate, the combined company’s business, financial condition and results of operations will likely be materially and adversely affected. Some of the industries that the combined company is expected to serve are highly cyclical, such as the aerospace, energy and industrial equipment industries. Additionally, the combined company’s stock price could decrease if investors have concerns that its business, financial condition and results of operations will be negatively impacted by a worldwide economic downturn.

The combined company is expected to be subject to tax laws and regulations in many jurisdictions and the inability to successfully defend claims from taxing authorities related to its current and/or acquired businesses could adversely affect the combined company’s operating results and financial position.

A significant amount of the combined company’s revenue is expected to be generated from customers located outside of the U.S., and a substantial portion of the combined company’s assets and associates are expected to be located outside of the U.S. which will require the combined company to interpret the income tax laws and rulings in each of those taxing jurisdictions. Due to the subjectivity of tax laws between those jurisdictions as well as the subjectivity of factual interpretations, the combined company’s estimates of income tax liabilities may differ from actual payments or assessments. Claims from taxing authorities related to these differences could have an adverse impact on the combined company’s operating results and financial position.

The combined company’s required cash contributions to its pension plans may increase further and the combined company could experience a change in the funded status of its pension plans and the amount recorded in its consolidated balance sheets related to such plans. Additionally, the combined company’s pension costs could increase in future years.

The funded status of the combined company’s defined benefit pension plans depends on such factors as asset returns, market interest rates, legislative changes and funding regulations. If the returns on the assets

 

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of any of the combined company’s plans were to decline in future periods, if market interest rates were to decline, if the Pension Benefit Guaranty Corporation were to require additional contributions to any such plans as a result of acquisitions or if other actuarial assumptions were to be modified, the combined company’s future required cash contributions and pension costs to such plans could increase. Any such increases could impact the combined company’s business, financial condition, results of operations or cash flows. The need to make contributions to such plans may reduce the cash available to meet the combined company’s other obligations, including the combined company’s obligations under its borrowing arrangements or to meet the needs of its business.

Risks Relating to the Legal and Regulatory Environment

The combined company is expected to be subject to litigation, including product liability and warranty claims that may adversely affect its financial condition and results of operations.

The combined company is expected to be, from time to time, a party to litigation that arises in the normal course of its business operations, including product warranty and liability claims, contract disputes and environmental, asbestos, employment and other litigation matters. It will face an inherent business risk of exposure to product liability and warranty claims in the event that the use of its products is alleged to have resulted in injury or other damage. Certain subsidiaries the combined company are co-defendants in various lawsuits in a number of U.S. jurisdictions alleging personal injury as a result of exposure to asbestos that was used in certain components of PMC Business products. The uncertainties of litigation and the uncertainties related to insurance and indemnification coverage make it difficult to accurately predict the ultimate financial effect of these claims.

While the combined company is expected to maintain general liability and product liability insurance coverage in amounts that it believes are reasonable, it cannot assure you that it will be able to maintain this insurance on acceptable terms or that this insurance will provide sufficient coverage against potential liabilities that may arise. Any product liability claim may also include the imposition of punitive damages, the award of which, pursuant to certain state laws, may not be covered by insurance. Any claims brought against the combined company, with or without merit, may have an adverse effect on its business and results of operations as a result of potential adverse outcomes, the expenses associated with defending such claims, the diversion of our management’s resources and time and the potential adverse effect to the combined company’s business reputation.

Infringement of the combined company’s intellectual property by third parties may harm its competitive position, and it may incur significant costs associated with the protection and preservation of its intellectual property.

The combined company will own or otherwise have rights in a number of patents and trademarks relating to the products it manufactures, which have been obtained over a period of years, and the combined company is expected to continue to actively pursue patents in connection with new product development and to acquire additional patents and trademarks through the acquisitions of other businesses. These patents and trademarks have been of value in the growth of the combined company’s business and may continue to be of value in the future. The combined company’s inability to protect this intellectual property generally, or the illegal breach of some or a large group of the combined company’s intellectual property rights, would have an adverse effect on the combined company’s business. In addition, there can be no assurance that the combined company’s intellectual property will not be challenged, invalidated, circumvented or designed-around, particularly in countries where intellectual property rights are not highly developed or protected. Regal has incurred in the past and the combined company is expected to incur in the future significant costs associated with defending challenges to its intellectual property or enforcing its intellectual property rights, which could adversely impact its cash flow and results of operations.

Third parties may claim that the combined company is infringing their intellectual property rights and the combined company could incur significant costs and expenses or be prevented from selling certain products.

The combined company may be subject to claims from third parties that its products or technologies infringe on their intellectual property rights or that the combined company has misappropriated intellectual

 

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property rights. If the combined company is involved in a dispute or litigation relating to infringement of third party intellectual property rights, it could incur significant costs in defending against those claims. The combined company’s intellectual property portfolio may not be useful in asserting a counterclaim, or negotiating a license, in response to a claim of infringement or misappropriation. In addition, as a result of such claims of infringement or misappropriation, the combined company could lose its rights to technology that are important to its business, or be required to pay damages or license fees with respect to the infringed rights or be required to redesign its products at substantial cost, any of which could adversely impact the combined company’s cash flows and results of operations.

The combined company may incur costs or suffer reputational damage due to improper conduct of its associates, agents or business partners.

The combined company will be subject to a variety of domestic and foreign laws, rules and regulations relating to improper payments to government officials, bribery, anti-kickback and false claims rules, competition, export and import compliance, money laundering and data privacy. If the combined company’s associates, agents or business partners engage in activities in violation of these laws, rules or regulations, it may be subject to civil or criminal fines or penalties or other sanctions, may incur costs associated with government investigations, or may suffer damage to its reputation.

The combined company’s operations are highly dependent on information technology infrastructure, and failures, attacks or breaches could significantly affect its business.

The combined company will depend heavily on its information technology infrastructure in order to achieve its business objectives. If the combined company experiences a problem that impairs this infrastructure, such as a computer virus, a problem with the functioning of an important IT application, or an intentional disruption of its IT systems by a third party, the resulting disruptions could impede its ability to record or process orders, manufacture and ship in a timely manner, or otherwise carry on its business in the ordinary course. Any such events could cause the combined company to lose customers or revenue and could require it to incur significant expense to eliminate these problems and address related security concerns, including costs relating to investigation and remediation actions.

IT security threats via computer malware and other “cyber-attacks,” which are increasing in both frequency and sophistication, could also result in unauthorized disclosures of information, such as customer data, personally identifiable information or other confidential or proprietary material, and create financial liability, subject the combined company to legal or regulatory sanctions, or damage its reputation. Moreover, because the techniques used to gain access to or sabotage systems often are not recognized until launched against a target, the combined company may be unable to anticipate the methods necessary to defend against these types of attacks, and it cannot predict the extent, frequency or impact these attacks may have. While the combined company is expected to seek to maintain robust information security mechanisms and controls, the impact of a material IT event could have a material adverse effect on its competitive position, results of operations, financial condition and cash flow.

The combined company is expected to have substantially completed the implementation of two Enterprise Resource Planning (which we refer to as “ERP”) systems that each redesigned and deployed common information systems. It will continue to implement the ERP systems throughout the business. The process of implementation can be costly and can divert the attention of management from the day-to-day operations of the business. As the combined company implements the ERP systems, some elements may not perform as expected. This could have an adverse effect on the combined company’s business.

The combined company may be adversely affected by environmental, health and safety laws and regulations.

The combined company will be subject to various laws and regulations relating to the protection of the environment and human health and safety and is expected to incur capital and other expenditures to comply with these regulations. Failure to comply with any environmental regulations, including more stringent environmental laws that may be imposed in the future, could subject the combined company to future liabilities, fines or penalties or the suspension of production. In addition, if environmental and human health

 

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and safety laws and regulations are repealed, made less burdensome or implemented at a later date, demand for the combined company’s products designed to comply with such regulations may be unfavorably impacted.

The combined company will be subject to changes in legislative, regulatory and legal developments involving income and other taxes.

The combined company will be subject to U.S. federal, state, and international income, payroll, property, sales and use, fuel, and other types of taxes. Changes in tax rates, enactment of new tax laws, revisions of tax regulations, and claims or litigation with taxing authorities, including claims or litigation related to the combined company’s interpretation and application of tax laws and regulations, could result in substantially higher taxes, could have a negative impact on its ability to compete in the global marketplace, and could have a significant adverse effect on its results or operations, financial conditions and liquidity.

It is difficult to predict the timing and effect that future tax law changes could have on the combined company’s earnings both in the U.S. and in foreign jurisdictions, including in connection with a new presidential administration in the United States in 2021. The Biden administration has provided informal guidance on certain tax law changes that it would support, which includes, among other things, raising tax rates on both domestic and foreign income and imposing a new alternative minimum tax on book income. Such changes could cause the combined company to experience an effective tax rate significantly different from previous periods or Regal and the PMC Business’s current estimates. If the combined company’s effective tax rate were to increase, the combined company’s financial condition and results of operations could be adversely affected.

General Risks

Changes in the method of determining LIBOR, or the replacement of LIBOR with an alternative reference rate, may adversely affect interest expense related to the combined company’s outstanding debt.

Amounts drawn under the combined company’s credit facilities may bear interest rates in relation to LIBOR, depending on the combined company’s selection of repayment options. On July 27, 2017, the Financial Conduct Authority in the United Kingdom announced that it would phase out LIBOR as a benchmark by the end of 2021. It is unclear whether new methods of calculating LIBOR will be established such that it continues to exist after 2021. The overall financing market may be disrupted as a result of the phase-out or replacement of LIBOR. Disruption in the financing market could have a material adverse effect on the combined company’s business, financial position, operating results, and interest expense related to its outstanding debt.

The combined company’s operations can be negatively impacted by natural disasters, terrorism, acts of war, international conflict, political and governmental actions which could harm its business.

Natural disasters, acts or threats of war or terrorism, international conflicts, and the actions taken by the U.S. and other governments in response to such events could cause damage or disrupt the combined company’s business operations, its suppliers, or its customers, and could create political or economic instability, any of which could have an adverse effect on the combined company’s business. Although it is not possible to predict such events or their consequences, these events could decrease demand for the combined company’s products, could make it difficult or impossible for it to deliver products, or could disrupt its supply chain. The combined company may also be negatively impacted by actions by the U.S. or foreign governments which could disrupt manufacturing and commercial operations, including policy changes affecting taxation, trade, immigration, currency devaluation, tariffs, customs, border actions and the like, including, for example, the effect of the United Kingdom’s exit from the European Union, commonly referred to as “Brexit,” trade relations between the U.S. and China, the implementation of the USMCA, or the change in labor rates in Mexico.

 

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The combined company’s stock may be subject to significant fluctuations and volatility.

The market price of shares of the combined company’s common stock may be volatile. Among the factors that could affect the combined company’s common stock price are those discussed above under “Risk Factors” as well as:

•

domestic and international economic and political factors unrelated to its performance;

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•

quarterly fluctuation in its operating income and earnings per share results;

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•

decline in demand for its products;

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•

significant strategic actions by its competitors, including new product introductions or technological advances;

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•

fluctuations in interest rates;

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•

cost increases in energy, raw materials, intermediate components or materials, or labor; and

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•

changes in revenue or earnings estimates or publication of research reports by analysts.

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In addition, stock markets may experience extreme volatility that may be unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of the combined company’s common stock.

 

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particularly in high volume applications or where such failures are alleged to be the cause of property or casualty claims; unanticipated liabilities of acquired businesses; unanticipated adverse effects or liabilities from business exits or divestitures; unanticipated costs or expenses that may be incurred related to product warranty issues; dependence on key suppliers and the potential effects of supply disruptions; infringement of intellectual property by third parties, challenges to intellectual property, and claims of infringement on third party technologies; effects on earnings of any significant impairment of goodwill or intangible assets; losses from failures, breaches, attacks or disclosures involving information technology infrastructure and data; cyclical downturns affecting the global market for capital goods; changes in the method of determining London Interbank Offered Rate (“LIBOR”), or the replacement of LIBOR with an alternative reference rate; and other risks and uncertainties including, but not limited, to those described in the section entitled “Risk Factors” beginning on page 37 of this joint proxy statement/prospectus-information statement, in Regal’s or Rexnord’s respective Annual Reports on Form 10-K on file with the SEC and from time to time in other filed reports including Regal’s and Rexnord’s Quarterly Reports on Form 10-Q. For a more detailed description of the risk factors associated with Regal and Rexnord, please refer to Regal’s Annual Report on Form 10-K for the fiscal year ended January 2, 2021 on file with the SEC, Regal's Quarterly Report on Form 10-Q for the period ended March 31, 2021 on file with the SEC, Rexnord’s Transition Report on Form 10-KT for the transition period from April 1, 2020 to December 31, 2020 filed with the SEC, Rexnord’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 filed with the SEC, and subsequent SEC filings. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this joint proxy statement/prospectus-information statement are made only as of the date of this joint proxy statement/prospectus-information statement, and Regal, Rexnord and Land undertake no obligation to update any forward-looking information contained in this communication or with respect to the announcements described herein to reflect subsequent events or circumstances.

 

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THE REGAL SPECIAL MEETING

This joint proxy statement/prospectus-information statement is furnished in connection with the solicitation of proxies by the Regal board of directors for use at the special meeting of Regal’s shareholders to be held on [•], 2021. When this joint proxy statement/prospectus-information statement refers to the Regal Special Meeting, it is also referring to any adjournments or postponements of the Regal Special Meeting. Regal intends to begin mailing this joint proxy statement/prospectus-information statement, the attached Notice of Special Meeting of Shareholders and the accompanying proxy card on or about [•], 2021.

Date, Time and Place of the Regal Special Meeting

The Regal Special Meeting will be held on [•] at [•] a.m., Central Time at the James L. Packard Learning Center located at Regal’s corporate headquarters, 200 State Street, Beloit, Wisconsin 53511.

Due to the continuing public health impact of the COVID-19 pandemic, and to support the health and safety of Regal’s employees and shareholders, Regal will provide Internet and audio access to the Regal Special Meeting. To attend the Regal Special Meeting, you must be a registered Regal shareholder as of the Regal record date, or, if your shares are held through a bank, broker or other nominee, you must obtain a legal proxy from such holder and follow the instructions set forth in this joint proxy statement/prospectus-information statement. Please note that Regal shareholders will not be able to vote or revoke a proxy through the live audio or webcast, nor participate actively. For those Regal shareholders who decide to attend the Regal Special Meeting in person, health and safety measures consistent with U.S. Center for Disease Control and Prevention and other federal, state and local guidelines will be in place in order to limit exposure to the virus.

Purpose of the Regal Special Meeting

At the Regal Special Meeting, Regal shareholders will be asked:

1.

Regal Share Issuance Proposal: to consider and vote upon a proposal to approve the issuance of shares of Regal common stock pursuant to the Merger Agreement;

​

2.

Regal Name Change Proposal: to consider and vote upon a proposal to approve an amendment and restatement of Regal’s Articles of Incorporation to effect a change in Regal’s legal name from “Regal Beloit Corporation” to “Regal Rexnord Corporation” ​(which amendment and restatement will not be implemented if the Merger is not consummated);

​

3.

Regal Share Authorization Proposal: to consider and vote upon a proposal to approve an amendment and restatement of Regal’s Articles of Incorporation to increase the number of authorized shares of Regal common stock from 100,000,000 to 150,000,000 (which amendment and restatement will not be implemented if the Merger is not consummated); and

​

4.

Regal Meeting Adjournment Proposal: to consider and vote upon a proposal to approve the adjournment of the Regal Special Meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the Regal Special Meeting to approve the Regal Share Issuance Proposal.

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APPROVAL OF THE REGAL SHARE ISSUANCE PROPOSAL IS REQUIRED FOR COMPLETION OF THE MERGER.

THE REGAL BOARD OF DIRECTORS HAS APPROVED THE MERGER AGREEMENT, THE MERGER, THE REGAL SHARE ISSUANCE, THE AMENDMENT AND RESTATEMENT OF REGAL’S ARTICLES OF INCORPORATION TO CHANGE REGAL’S LEGAL NAME AND THE AMENDMENT AND RESTATEMENT OF REGAL’S ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF REGAL COMMON STOCK AND RECOMMENDS THAT REGAL SHAREHOLDERS VOTE “FOR” EACH PROPOSAL LISTED ABOVE.

Regal Record Date and Outstanding Shares

The Regal board of directors has fixed the close of business on [•], 2021 (which we refer to as the “Regal record date”) as the record date for the Regal Special Meeting. Accordingly, only Regal shareholders of record

 

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on the record date are entitled to notice of and to vote at the Regal Special Meeting or at any adjournment or postponement of the Regal Special Meeting. Each share of Regal common stock entitles the holder to one vote on each of the proposals to be considered at the Regal Special Meeting.

As of the close of business on the Regal record date, there were approximately [•] shares of Regal common stock outstanding and entitled to vote at the Regal Special Meeting.

A list of Regal shareholders as of the Regal record date will be available for review during the Regal Special Meeting to any shareholder present at the Regal Special Meeting.

Record holders of Regal common stock on the Regal record date may vote their shares of Regal common stock in person at the Regal Special Meeting or by proxy as described below under “The Regal Special Meeting-Voting by Proxy or while attending the Regal Special Meeting.”

Quorum

To conduct the Regal Special Meeting, a majority of the shares of Regal common stock entitled to vote must be present in person or by proxy. This is referred to as a “quorum.” If a Regal shareholder submits a properly executed proxy card or vote by the Internet or telephone, then such Regal shareholder will be considered present at the Regal Special Meeting for purposes of determining the presence of a quorum. Abstentions and broker “non-votes” will be counted as present and entitled to vote for purposes of determining the presence of a quorum. A broker “non-vote” occurs when a broker or other nominee who holds shares for another person has not received voting instructions from the owner of the shares and, under NYSE rules, does not have discretionary authority to vote on a proposal.

Required Vote

Regal shareholders of record on the Regal record date for the Regal special meeting may vote “FOR,” “AGAINST” or “ABSTAIN” with respect to each proposal.

Regal Share Issuance Proposal. The affirmative vote of a majority of the votes represented in person or by proxy at the Regal Special Meeting, where a quorum is present, is required to approve the Regal Share Issuance Proposal.

An abstention will have the same effect as a vote against the Regal Share Issuance Proposal. If a quorum is present and a shareholder is not otherwise present or represented by proxy at the Regal Special Meeting, a failure to vote such shareholder’s shares will have no effect on the outcome of the Regal Share Issuance Proposal, (unless such failure to vote results in a broker non-vote, in which case this failure will have the effect of a vote against the Regal Share Issuance Proposal).

Regal Name Change Proposal. The affirmative vote of a majority of the votes represented in person or by proxy at the Regal Special Meeting, where a quorum is present, is required to approve the Regal Name Change Proposal.

An abstention will have the same effect as a vote against the Regal Name Change Proposal. If a quorum is present and a shareholder is not otherwise present or represented by proxy at the Regal Special Meeting, a failure to vote such shareholder’s shares will have no effect on the outcome of the Regal Name Change Proposal. Because Regal expects the Regal Name Change Proposal to be treated as a routine matter, a broker, bank or other nominee record holder will have discretionary authority to vote “street name” shares in connection with the Regal Name Change Proposal and there will be no broker non-votes in connection with the Regal Name Change Proposal.

Regal Share Authorization Proposal. The affirmative vote of a majority of the votes represented in person or by proxy at the Regal Special Meeting, where a quorum is present, is required to approve the Regal Share Authorization Proposal.

An abstention will have the same effect as a vote against the Regal Share Authorization Proposal. If a quorum is present and a shareholder is not otherwise present or represented by proxy at the Regal Special Meeting, a failure to vote such shareholder’s shares will have no effect on the outcome of the Regal Share

 

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Authorization Proposal (unless such failure to vote results in a broker non-vote, in which case this failure will have the effect of a vote against the Regal Share Authorization Proposal).

Regal Meeting Adjournment Proposal. The affirmative vote of a majority of the votes represented in person or by proxy at the Regal Special Meeting, where a quorum is present, is required to approve the Regal Meeting Adjournment Proposal.

An abstention will have the same effect as a vote against the Regal Meeting Adjournment Proposal. If a quorum is present and a shareholder is not otherwise present or represented by proxy at the Regal Special Meeting, a failure to vote such shareholder’s shares will have no effect on the outcome of the Regal Meeting Adjournment Proposal (unless such failure to vote results in a broker non-vote, in which case this failure will have the effect of a vote against the Regal Meeting Adjournment Proposal).

The Merger will not occur unless the Regal Share Issuance Proposal is approved. Approval of each proposal is not conditioned on the approval of any other proposal.

A vote of Rexnord stockholders is required in connection with the Spin-Off, the Merger and the other transactions contemplated by the Merger Agreement and the Separation Agreement described in this joint proxy statement/prospectus-information statement. See “The Rexnord Special Meeting” on page 61.

Voting by Proxy or while attending the Regal Special Meeting

Giving a proxy means that a Regal shareholder authorizes the persons named in the enclosed proxy card to vote his or her shares at the Regal Special Meeting in the manner such shareholder directs. A Regal shareholder may cause his or her shares to be voted by granting a proxy in advance of the Regal Special Meeting or by voting while attending the Regal Special Meeting in person. Even if you plan to attend the Regal Special Meeting in person, we urge you to promptly follow the instructions on the enclosed proxy card to vote on the matters to be considered at the Regal Special Meeting.

Regal shareholders may vote their shares as follows:

1.

Internet—go to the website printed on the enclosed proxy card ([•]) and follow the instructions outlined on the secured website using certain information provided on the front of the proxy card. If you vote using the Internet, there is no need to mail in your proxy card.

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2.

Telephone—calling the toll-free number that is listed on the enclosed proxy card (1-800-[•]-[•]). Please follow the instructions on your proxy card. If you vote using the telephone, there is no need to mail in your proxy card

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3.

Proxy Card—completing, signing, dating and mailing the proxy card and returning it in the postage-paid, self-addressed envelope provided.

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4.

Attending the Regal Special Meeting in Person—voting in person at the Regal Special Meeting if you are a shareholder of record or if you are a beneficial owner and have a legal proxy from the shareholder of record. Please note that Regal shareholders will not be able to vote or revoke a proxy through the live audio or webcast.

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Submitting a proxy by Internet or by telephone provides the same authority to vote shares as if the shareholder had returned his or her proxy card by mail.

Each properly signed proxy received prior to the Regal Special Meeting and not revoked before exercised at the Regal Special Meeting will be voted at the Regal Special Meeting according to the instructions indicated on the proxy or, if no instructions are given on a properly signed proxy, the shares represented by such proxy will be voted “FOR” the Regal Share Issuance Proposal, “FOR” the Regal Name Change Proposal, “FOR” the Regal Share Authorization Proposal and “FOR” the Regal Meeting Adjournment Proposal.

Regal requests that Regal shareholders complete, date and sign the accompanying proxy card and return it to Regal in the enclosed postage-paid, self-addressed envelope or submit the proxy by telephone or the Internet as soon as possible.

 

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If a Regal shareholder’s shares are held in “street name” by a broker, bank or other nominee, such shareholder must obtain a voting instruction form from the nominee that holds such shares and follow the voting instructions given by that nominee.

If a Regal shareholder plans to attend the Regal Special Meeting and wishes to vote while attending the Regal Special Meeting, such shareholder will be able to do so. If a Regal shareholder’s shares are held in “street name” ​(through a bank, broker or other nominee), such shareholder must obtain a legal proxy from the record holder to vote such shares while attending the Regal Special Meeting. Whether or not a Regal shareholder plans to attend the Regal Special Meeting in person, Regal requests that each Regal shareholder complete, sign, date and return the enclosed proxy card in the enclosed postage-paid, self-addressed envelope, or submit a proxy through the Internet or by telephone as described in the instructions accompanying this joint proxy statement/prospectus-information statement as soon as possible. This will not prevent any Regal shareholder from voting while attending the Regal Special Meeting, but will assure that such shareholder’s vote is counted if such shareholder is unable to attend the Regal Special Meeting in person.

Revocability of Proxies and Changes to a Regal Shareholder’s Vote

Regal shareholders of record may revoke their proxies and change their votes at any time prior to the time their shares are voted at the Regal Special Meeting. A Regal shareholder can revoke his or her proxy or change his or her vote by:

•

notifying Regal’s Corporate Secretary in writing (at Regal’s address set forth in this joint proxy statement/prospectus-information statement, which must be received prior to the proxy’s exercise of the proxy at the Regal Special Meeting);

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•

voting again by Internet or telephone (prior to [•], 2021 at 11:59 p.m. Central Time), since only the latest vote will be counted;

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•

signing and returning, prior to the prior proxy’s exercise at the Regal Special Meeting, another proxy card that is dated after the date of the first proxy card; or

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•

voting in person while attending the Regal Special Meeting in person (attending the Regal Special Meeting alone will not revoke your proxy).

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Beneficial holders of Regal common stock who hold shares in “street name” should contact their broker, bank or other nominee for instructions on how to revoke their proxies. Simply attending the Regal Special Meeting will not revoke a proxy.

Abstentions and Broker Non-Votes

Under NYSE rules, abstentions will have the effect of a vote “against” the Regal Share Issuance Proposal, the Regal Name Change Proposal, the Regal Share Authorization Proposal and the Regal Meeting Adjournment Proposal. Under the rules applicable to brokers, banks and other nominee record holders holding shares in “street name” have the authority to vote on routine proposals when they have not received instructions from beneficial owners. Regal expects the Regal Name Change Proposal to be a routine matter and as a result, absent specific instructions from the beneficial holder, a broker, bank or other nominee record holder will have discretionary authority to vote those “street name” shares in connection with the Regal Name Change Proposal. However, brokers, banks and other nominee record holders are precluded from exercising their voting discretion with respect to the approval of non-routine matters such as the Regal Share Issuance Proposal, the Regal Share Authorization Proposal and the Regal Meeting Adjournment Proposal. As a result, absent specific instructions from the beneficial owner, brokers, banks and other nominee record holders are not empowered to vote those “street name” shares in connection with the Regal Share Issuance Proposal, the Regal Share Authorization Proposal or the Regal Meeting Adjournment Proposal, but will be considered present at the Regal Special Meeting for the purposes of determining a quorum to the extent they submit proxies. As a result, broker non-votes will have the effect of a vote against the outcome of the Regal Share Issuance Proposal, the Regal Share Authorization Proposal and the Regal Meeting Adjournment Proposal.

 

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All beneficial owners of Regal common stock are urged to submit their proxy to indicate their votes or to contact the record holder of their shares to determine how to vote.

Solicitation of Proxies

This joint proxy statement/prospectus-information statement is being furnished in connection with the solicitation of proxies by the Regal board of directors and Rexnord board of directors. All costs of soliciting proxies, including reimbursement of fees of certain brokers, fiduciaries and nominees in obtaining voting instructions from beneficial owners and the preparation, assembly, printing and mailing of this joint proxy statement/prospectus-information statement and any additional materials furnished to Regal shareholders and Rexnord stockholders, will be borne jointly by Regal and Rexnord.

In addition, Regal has retained Kingsdale to assist in the solicitation of proxies for a fee of approximately $12,500, plus additional fees to be determined at the conclusion of the solicitation and reimbursement of reasonable expenses. Regal has also agreed to indemnify Kingsdale for certain liabilities related to its engagement.

Proxies may be solicited by mail, telephone, facsimile and other forms of electronic transmission and may also be solicited by directors, officers and other employees of Regal without additional compensation. Copies of solicitation materials will be furnished to banks, brokerage houses and other agents holding shares in their names that are beneficially owned by others so that they may forward this solicitation materials to these beneficial owners. In addition, if asked, Regal will reimburse these persons for their reasonable expenses in forwarding the solicitation materials to the beneficial owners. Regal has requested banks, brokerage houses and other custodians, nominees and fiduciaries to forward all solicitation materials to the beneficial owners of the shares they hold of record.

Certain Ownership of Regal Common Stock

As of the Regal record date, Regal’s directors and executive officers beneficially owned [•] shares of Regal common stock, representing approximately [•]% of the shares outstanding as of such date.

Regal currently expects that each of its directors and executive officers will vote their shares of Regal common stock “FOR” the Regal Share Issuance Proposal, “FOR” the Regal Name Change Proposal, “FOR” the Regal Share Authorization Proposal and “FOR” the Regal Meeting Adjournment Proposal, although none of them has entered into an agreement requiring them to do so.

Other Matters

As of the date of this joint proxy statement/prospectus-information statement, the Regal board of directors is not aware of any other matters that will be presented for consideration at the Regal Special Meeting other than as described in this joint proxy statement/prospectus-information statement.

This joint proxy statement/prospectus-information statement and the proxy card are first being sent to Regal shareholders on or about [•], 2021.

The matters to be considered at the Regal Special Meeting are of great importance to Regal shareholders. Accordingly, Regal shareholders are urged to read and carefully consider the information presented in this joint proxy statement/prospectus-information statement and the attachments hereto, and to complete, date, sign and promptly return the enclosed proxy card in the enclosed postage-paid, self-addressed envelope, or vote by Internet or telephone, following the instructions on the enclosed proxy card.

 

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THE REXNORD SPECIAL MEETING

This joint proxy statement/prospectus-information statement is furnished in connection with the solicitation of proxies by the Rexnord board of directors for use at the Rexnord Special Meeting and any adjournments thereof. When this joint proxy statement/prospectus-information statement refers to the Rexnord Special Meeting, it is also referring to any adjournments of the Rexnord Special Meeting. Rexnord intends to begin mailing this joint proxy statement/prospectus-information statement, the attached Notice of Special Meeting of Stockholders and the accompanying proxy card on or about [•], 2021.

Date, Time and Place of the Rexnord Special Meeting

The Rexnord Special Meeting will be held at Rexnord’s corporate offices at 511 W. Freshwater Way, Milwaukee, Wisconsin 53204 at [•] Central Time, on [•], 2021.

Purpose of the Rexnord Special Meeting

At the Rexnord Special Meeting, Rexnord stockholders will be asked:

1.

Rexnord Separation and Merger Proposal: to approve the transactions contemplated by the Merger Agreement and the Separation Agreement;

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2.

Rexnord Compensation Proposal: to approve, on a non-binding, advisory basis, the compensation of Rexnord’s named executive officers with respect to the Accelerated Rexnord PSUs; and

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3.

Rexnord Meeting Adjournment Proposal: to approve the adjournment of the Rexnord Special Meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the Rexnord Special Meeting to approve the Rexnord Separation and Merger Proposal.

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APPROVAL OF THE REXNORD SEPARATION AND MERGER PROPOSAL IS REQUIRED FOR COMPLETION OF THE TRANSACTIONS.

THE REXNORD BOARD OF DIRECTORS HAS APPROVED THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND THE SEPARATION AGREEMENT, AND RECOMMENDS THAT REXNORD STOCKHOLDERS VOTE “FOR” EACH PROPOSAL LISTED ABOVE.

Record Date and Outstanding Shares

The Rexnord board of directors has fixed the close of business on [•], 2021 (the “Rexnord record date”) as the record date for the Rexnord Special Meeting. Accordingly, only Rexnord stockholders of record on the Rexnord record date are entitled to notice of and to vote at the Rexnord Special Meeting or at any adjournment of the Rexnord Special Meeting. Each share of Rexnord common stock entitles the holder to one vote on each of the proposals to be considered at the Rexnord Special Meeting.

As of the close of business on the Rexnord record date, there were approximately [•] shares of Rexnord common stock outstanding and entitled to vote at the Rexnord Special Meeting.

A list of Rexnord stockholders entitled to vote at the Rexnord Special Meeting as of the Rexnord record date will be available for review during the Rexnord Special Meeting to any stockholder present at the Rexnord Special Meeting.

Record holders of Rexnord common stock on the Rexnord record date may vote their shares of Rexnord common stock at the Rexnord Special Meeting or by proxy as described below under “The Rexnord Special Meeting-Voting by Proxy or while attending the Rexnord Special Meeting.”

Quorum

To conduct the Rexnord Special Meeting, a majority of the shares of Rexnord issued and outstanding common stock entitled to vote at the Rexnord Special Meeting must be present in person or by proxy. This is referred to as a “quorum.” If a Rexnord stockholder submits a properly executed proxy card or submits a

 

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proxy to vote by Internet or telephone, then such Rexnord stockholder will be considered present at the Rexnord Special Meeting for purposes of determining the presence of a quorum. Abstentions will be counted as present and entitled to vote for purposes of determining the presence of a quorum. A broker “non-vote” occurs when a broker or other nominee who holds shares for another person has not received voting instructions from the owner of the shares and, under NYSE rules, does not have discretionary authority to vote on a proposal. None of the Rexnord Separation and Merger Proposal, the Rexnord Compensation Proposal, or the Rexnord Meeting Adjournment Proposal are routine matters. As a result, absent specific instructions from the beneficial owner, brokers, banks and other nominee record holders will not have discretionary authority to vote those “street name” shares in connection with any of the proposals, and will not be considered present for determining purposes of a quorum.

Required Vote

Rexnord stockholders of record on the Rexnord record date for the Rexnord Special Meeting may vote “FOR,” “AGAINST” or “ABSTAIN” with respect to each proposal.

Rexnord Separation and Merger Proposal. The affirmative vote of a majority of the outstanding stock entitled to vote thereon is required to approve the Rexnord Separation and Merger Proposal.

An abstention will have the same effect as a vote against the Rexnord Separation and Merger Proposal. If a quorum is present and a stockholder is not otherwise present or represented by proxy at the Rexnord Special Meeting, a failure to vote such stockholder’s shares will have the same effect as a vote against the Rexnord Separation and Merger Proposal.

Rexnord Compensation Proposal. Assuming a quorum is present, the results of the advisory vote to approve the compensation of Rexnord’s named executive officers will be determined by a majority of shares voting at the Rexnord Special Meeting. Abstentions and broker non-votes will not affect this vote, except insofar as they reduce the number of shares that are voted. This is an advisory vote and is not binding on Rexnord. However, the compensation committee of the Rexnord board of directors, the Rexnord board and Rexnord will review the voting results carefully and consider them when making future decisions regarding executive compensation.

Rexnord Meeting Adjournment Proposal. The affirmative vote of a majority of the shares represented in person or by proxy, and entitled to vote, at the Rexnord Special Meeting, assuming a quorum is present, is required to approve the Rexnord Meeting Adjournment Proposal.

An abstention will have the same effect as a vote against the Rexnord Meeting Adjournment Proposal. If a quorum is present and a stockholder is not otherwise present or represented by proxy at the Rexnord Special Meeting, a failure to vote such stockholder’s shares will have no effect on the outcome of the Rexnord Meeting Adjournment Proposal.

The Merger will not occur unless the Rexnord Separation and Merger Proposal is approved. Approval of each proposal is not conditioned on the approval of any other proposal.

A vote of Regal shareholders is required in connection with the Transactions contemplated by the Merger Agreement described in this joint proxy statement/prospectus-information statement. See “The Regal Special Meeting” on page 56.

Voting by Proxy or while attending the Rexnord Special Meeting

Giving a proxy means that a Rexnord stockholder authorizes the persons named in the enclosed proxy card to vote his or her shares at the Rexnord Special Meeting in the manner such stockholder directs. A Rexnord stockholder may cause his or her shares to be voted by granting a proxy in advance of the Rexnord Special Meeting or by voting while attending the Rexnord Special Meeting in person. A holder in “street name” may attend and vote at the meeting only if such holder received a valid proxy. Even if you plan to attend the Rexnord Special Meeting in person, we urge you to promptly submit a proxy to vote on the matters to be considered at the Rexnord Special Meeting.

 

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Rexnord stockholders may vote or submit a proxy to vote their shares as follows:

1.

Internet—go to the website printed on the enclosed proxy card ([•]) and follow the instructions outlined on the secured website using certain information provided on the front of the proxy card. If you submit a proxy using the Internet, there is no need to mail in your proxy card.

​

2.

Telephone—calling the toll-free number, that is listed on the enclosed proxy card (1-800-[•]-[•]). Please follow the instructions on your proxy card. If you submit a proxy using the telephone, there is no need to mail in your proxy card

​

3.

Proxy Card—completing, signing, dating and mailing the proxy card and returning it in the postage-paid, self-addressed envelope provided.

​

4.

Attending the Rexnord Special Meeting—voting in person at the Rexnord Special Meeting if you are a stockholder of record or if you are a beneficial owner and have a legal proxy from the stockholder of record.

​

Submitting a proxy by Internet or by telephone provides the same authority to vote shares as if the stockholder had returned his or her proxy card by mail.

Each properly signed proxy received prior to the Rexnord Special Meeting and not revoked before exercised at the Rexnord Special Meeting (or revoked by appearing in person and voting at the Rexnord Special Meeting) will be voted at the Rexnord Special Meeting according to the instructions indicated on the proxy or, if no instructions are given on a properly signed proxy, the shares represented by such proxy will be voted “FOR” the Rexnord Separation and Merger Proposal, “FOR” the Rexnord Compensation Proposal and “FOR” the Rexnord Meeting Adjournment Proposal.

Rexnord requests that Rexnord stockholders complete, date and sign the accompanying proxy card and return it to Rexnord in the enclosed postage-paid, self-addressed envelope or submit a proxy by telephone or Internet as soon as possible.

If a Rexnord stockholder’s shares are held in “street name” by a broker, bank or other nominee, such stockholder must obtain a voting instruction form from the nominee that holds such shares and follow the voting instructions given by that nominee.

If a Rexnord stockholder plans to attend the Rexnord Special Meeting and wishes to vote while attending the Rexnord Special Meeting, such stockholder will be able to do so. If a Rexnord stockholder’s shares are held in “street name” ​(through a bank, broker or other nominee), such stockholder must obtain a legal proxy from the record holder to vote such shares while attending the Rexnord Special Meeting. Whether or not a Rexnord stockholder plans to attend the Rexnord Special Meeting, Rexnord requests that each Rexnord stockholder complete, sign, date and return the enclosed proxy card in the enclosed postage-paid, self-addressed envelope, or submit a proxy through the Internet or by telephone as described in the instructions accompanying this joint proxy statement/prospectus-information statement as soon as possible. This will not prevent any Rexnord stockholder from voting while attending the Rexnord Special Meeting, but will assure that such stockholder’s vote is counted if such stockholder is unable to attend the Rexnord Special Meeting.

Revocability of Proxies and Changes to a Rexnord Stockholder’s Vote

Rexnord stockholders of record may revoke their proxies and change their votes at any time prior to the time their shares are voted at the Rexnord Special Meeting. A Rexnord stockholder can revoke his or her proxy or change his or her vote by:

•

notifying Rexnord’s Corporate Secretary in writing (at Rexnord’s address set forth in this joint proxy statement/prospectus-information statement, which must be received prior to the proxy’s exercise of the proxy at the Regal Special Meeting) prior to [•], 2021;

​

•

submitting a later dated proxy by Internet or telephone (prior to [•], 2021 at 11:59 p.m. [•] Time), since only the latest proxy will be counted;

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•

signing and returning, prior to the prior proxy’s exercise at the Rexnord Special Meeting, another proxy card that is dated after the date of the first proxy card; or

​

•

voting in person while attending the Rexnord Special Meeting (attending the Rexnord Special Meeting alone will not by itself revoke your proxy).

​

Beneficial holders of Rexnord common stock who hold shares in “street name” should contact their broker, bank or other nominee for instructions on how to revoke their proxies. Simply attending the Rexnord Special Meeting will not revoke a proxy.

Abstentions and Broker Non-Votes

Abstentions will have the effect of a vote “against” each of the Rexnord Separation and Merger Proposal, the Rexnord Compensation Proposal and the Rexnord Meeting Adjournment Proposal. Under the rules applicable to broker-dealers, brokers, banks and other nominee record holders holding shares in “street name” have the authority to vote on routine proposals when they have not received instructions from beneficial owners. However, brokers, banks and other nominee record holders are precluded from exercising their voting discretion with respect to the approval of non-routine matters. None of the Rexnord Separation and Merger Proposal, the Rexnord Compensation Proposal, or the Rexnord Meeting Adjournment Proposal are routine matters. As a result, absent specific instructions from the beneficial owner, brokers, banks and other nominee record holders are not empowered to vote those “street name” shares in connection with any of the proposals, and will not be considered present at the Rexnord Special Meeting. As a result, broker non-votes will have the effect of a vote against the outcome of the Rexnord Separation and Merger Proposal, and will have no effect on the outcome of the Rexnord Compensation Proposal or the Rexnord Meeting Adjournment Proposal.

All beneficial owners of Rexnord common stock are urged to submit their voting instructions or to contact the record holder of their shares to determine how to vote.

Solicitation of Proxies

This joint proxy statement/prospectus-information statement is being furnished in connection with the solicitation of proxies by the Rexnord board of directors and the Regal board of directors. All costs of soliciting proxies, including reimbursement of fees of certain brokers, fiduciaries and nominees in obtaining voting instructions from beneficial owners and the preparation, assembly, printing and mailing of this joint proxy statement/prospectus-information statement and any additional materials furnished to Rexnord stockholders and Regal shareholders, will be borne jointly by Regal and Rexnord.

In addition, Rexnord has retained Morrow Sodali LLC (which we refer to as “Morrow Sodali”) to assist in the solicitation of proxies for a fee of approximately $17,000, plus reimbursement of expenses. Rexnord has also agreed to indemnify Morrow Sodali for certain liabilities related to its engagement.

Proxies may be solicited by mail, telephone, facsimile and other forms of electronic transmission and may also be solicited by directors, officers and other employees of Rexnord without additional compensation. Copies of solicitation materials will be furnished to banks, brokerage houses and other agents holding shares in their names that are beneficially owned by others so that they may forward this solicitation materials to these beneficial owners. In addition, if asked, Rexnord will reimburse these persons for their reasonable expenses in forwarding the solicitation materials to the beneficial owners. Rexnord has requested banks, brokerage houses and other custodians, nominees and fiduciaries to forward all solicitation materials to the beneficial owners of the shares they hold of record.

Certain Ownership of Rexnord Common Stock

As of the Rexnord record date, Rexnord’s directors and executive officers beneficially owned [•] shares of Rexnord common stock, representing approximately [•]% of the shares outstanding as of such date.

Rexnord currently expects that each of its directors and executive officers will vote their shares of Rexnord common stock “FOR” the Rexnord Separation and Merger Proposal, “FOR” the Rexnord Compensation

 

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Proposal and “FOR” the Rexnord Meeting Adjournment Proposal, although none of them has entered into an agreement requiring them to do so.

Other Matters

As of the date of this joint proxy statement/prospectus-information statement, the Rexnord board of directors is not aware of any other matters that will be presented for consideration at the Rexnord Special Meeting other than as described in this joint proxy statement/prospectus-information statement.

This joint proxy statement/prospectus-information statement and the proxy card are first being sent to Rexnord stockholders on or about [•], 2021.

The matters to be considered at the Rexnord Special Meeting are of great importance to Rexnord stockholders. Accordingly, Rexnord stockholders are urged to read and carefully consider the information presented in this joint proxy statement/prospectus-information statement and the attachments hereto, and to complete, date, sign and promptly return the enclosed proxy card in the enclosed postage-paid, self-addressed envelope, or submit a proxy by Internet or telephone, following the instructions on the enclosed proxy card.

 

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THE TRANSACTIONS

Overview

On February 16, 2021, Regal and Rexnord announced a plan to combine Rexnord’s PMC Business with Regal. In order to effect the Reorganization, the Distributions and the Merger, Regal, Rexnord, Land and Merger Sub entered into a number of agreements, including the Merger Agreement and the Separation Agreement. These agreements, which are described in greater detail in this joint proxy statement/prospectus-information statement, provide for (1) the separation of the PMC Business from Rexnord’s other business, (2) the delivery to the distribution agent for the Distributions a book-entry authorization representing the Land common stock being distributed in the Spin-Off for the account of the Rexnord stockholders that are entitled thereto and (3) the merger of Land with Merger Sub, with Land continuing as the surviving corporation of the Merger and a wholly-owned subsidiary of Regal.

Transaction Sequence

Below is a step-by-step list illustrating the material events relating to the Reorganization, Distributions and the Merger:

Step 1 Reorganization

Prior to the Distributions and the Merger, Rexnord will transfer (or cause to be transferred) to Land substantially all of the assets, and Land will assume substantially all of the liabilities, of the PMC Business.

Step 2 Incurrence of the DDTL Facility

Prior to the Distributions and the Merger, it is expected that Land will incur debt under the DDTL Facility in an aggregate principal amount of approximately $486.8 million. The proceeds of the DDTL Facility will be used by Land to make a payment to Rexnord LLC under the terms of the Separation Agreement, in the amount of approximately $486.8 million, subject to certain adjustments set forth in the Separation Agreement.

The material terms of the DDTL Facility are described in more detail under “The Transaction Agreements-Debt Financing.”

Step 3 Incurrence of Regal Bridge Facility

In connection with the closing of the Merger, Regal may incur new indebtedness in the form of the Regal Bridge Facility in an aggregate principal amount of up to $2.126 billion. The proceeds under the Regal Bridge Facility may be used by Regal to (i) pay the Regal Special Dividend (as defined below), (ii) redeem Regal’s senior notes due 2023 under the existing note purchase agreement, dated July 14, 2011 (as amended), by and between Regal and the purchasers thereto and (iii) pay fees and expenses in connection with the Transactions.

Step 4 Distributions

Following the Reorganization, all of the issued and outstanding shares of Land common stock held by a subsidiary of Rexnord will be distributed in a series of distributions to Rexnord’s stockholders. The final distribution of Land common stock from Rexnord to Rexnord’s stockholders will be made pro rata for no consideration.

Step 5 Merger

Following the Distributions, Merger Sub will merge with and into Land, whereby the separate corporate existence of Merger Sub will cease and Land will continue as the surviving corporation and as a wholly-owned subsidiary of Regal. The Merger Agreement provides that, immediately before the effective time of the Merger, each share of Land common stock issued and outstanding (except for any such shares held as treasury stock, or held by Rexnord, Land, Regal or Merger Sub, which will be cancelled) will be automatically converted into the right to receive a number of shares of Regal common stock equal to the Exchange

 

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Ratio (defined below) and subject to any adjustments. Prior to the adjustments provided in the Merger Agreement, the Merger Agreement provides that the Exchange Ratio is equal to a fraction obtained by dividing (a) the New Share Issuance (as defined below) by (b) the number of shares of Land common stock issued and outstanding immediately prior to the effective time of the Merger (which number of shares the Merger Agreement provides will be the same as the number of shares of Rexnord common stock outstanding as of the record date for the Spin-Off). “New Share Issuance” means (i) the number of shares of Regal common stock issued and outstanding immediately prior to the effective time of the Merger multiplied by (ii) a fraction, the numerator of which is 38.6 and the denominator of which is 61.4. Prior to the adjustment described below, the Exchange Ratio is designed to result in the outstanding shares of Regal common stock, immediately following the Merger, being owned approximately 38.6% by the former stockholders of Land and approximately 61.4% by the shareholders of Regal immediately prior to the Merger.

However, in order to preserve the tax-free nature of the Spin-Off, the Merger Agreement generally provides that the Exchange Ratio will be adjusted and increased in a manner designed to ensure that, immediately following the closing of the Merger, the former stockholders of Land (including certain categories of investors who are both Rexnord stockholders and Regal shareholders immediately prior to the Distributions and the Merger) own, for tax purposes, at least 50.8% of the outstanding shares of Regal common stock (including for this purpose Share Equivalents (as defined below)). Alternatively, if the parties are not able to obtain a private letter ruling from the IRS, as requested by Rexnord (which we refer to as the “IRS Ruling”) that addresses certain aspects of the determination of the nature and extent of Overlap Shareholders prior to the closing of the Merger or if the adjustment of the Exchange Ratio would otherwise result in the number of shares of Regal common stock issuable in the Merger (together with Share Equivalents) being greater than 50.1% of all issued and outstanding shares of Regal common stock immediately following the effective time of the Merger, then the concept of Overlap Shareholders will be disregarded for purposes of determining the Exchange Ratio and the Exchange Ratio will instead be adjusted so that the number of shares of Regal common stock issued in the Merger will be increased and a proportionate dividend will be payable to holders of Regal common stock outstanding prior to the closing of the Merger. “Share Equivalents” means any instruments that are treated as stock for U.S. federal income tax purposes and any stock that may be issued after the effective time of the Merger pursuant to the exercise or settlement of certain options or contracts entered into on or prior to the effective time of the Merger that would be regarded as having been acquired or entered into before the effective time of the Merger as part of a “plan” of which the Spin-Off is a part within the meaning of Section 355(e) of the Code.

In the event that additional shares of Regal common stock are required to be issued as a result of the Exchange Ratio adjustment mechanism described above, the Merger Agreement provides that, prior to the closing of the Merger, the Regal board of directors will declare a special dividend pro rata to the holders of Regal common stock as of a record date prior to the closing of the Merger. The amount of the Regal Special Dividend will depend in part on the number of shares of Regal common stock to be issued to Rexnord stockholders as a result of the adjustment to the Exchange Ratio. The number of shares of Regal common stock to be issued to Rexnord stockholders in turn depends, among other factors, on the amount of Overlap Shareholders. The extent of the Overlap Shareholders that may be counted in determining the Exchange Ratio will depend on whether an IRS Ruling is received and the contents of such IRS Ruling. Rexnord stockholders who receive Regal common stock in the Merger will not be entitled to the Regal Special Dividend because the record date will be prior to the effective time of the Merger.

Set forth below are diagrams that graphically illustrate, in simplified form, the existing corporate structure of the parties to the Transactions, the corporate structure of the parties immediately following the Reorganization and the Distributions, but before the Merger, and the final corporate structure immediately following the consummation of the Merger.

 

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Existing Structure:

Structure Following the Reorganization and the Distributions, but Before the Merger:

Structure Following the Merger:

The Reorganization and the Distributions

Prior to the Distributions and the Merger, certain subsidiaries of Rexnord will undergo an internal restructuring to separate and consolidate the PMC Business under Land pursuant to the Separation Agreement. In the Reorganization, Rexnord will transfer (or cause to be transferred) to Land substantially

 

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all of the assets, and Land will assume substantially all of the liabilities, of the PMC Business. Following the Reorganization, all of the issued and outstanding shares of Land common stock held by an indirect subsidiary of Rexnord will be distributed in a series of distributions up to Rexnord and then to Rexnord’s stockholders. The final distribution of Land common stock from Rexnord to Rexnord’s stockholders will be made pro rata for no consideration.

The Merger

Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger, Merger Sub will be merged with and into Land. By virtue of the Merger, at the effective time of the Merger, the separate existence of Merger Sub will cease and Land will continue as the surviving corporation in the Merger and as a wholly-owned subsidiary of Regal, and will succeed to and assume all the property, rights, privileges, powers and franchises and be subject to all of the restrictions, debt and duties of Merger Sub in accordance with the DGCL.

The certificate of incorporation and bylaws of Land in effect immediately prior to the Merger will, following the Merger, continue as the certificate of incorporation and bylaws of Land.

Calculation and Adjustments to the Exchange Ratio; Amount of Regal Special Dividend

Overview

The Merger Agreement provides that following the completion of the Spin-Off, Merger Sub will merge with and into Land with each share of Land common stock converted into the right to receive a number of shares of Regal common stock equal to the Exchange Ratio. Pursuant to the Merger Agreement, the Exchange Ratio is defined to result in Regal issuing in the Merger shares that represent 38.6% of the issued and outstanding shares of Regal common stock immediately following the Merger. As described below and more fully set out in the Merger Agreement, under certain circumstances, the Exchange Ratio will be adjusted to the extent necessary to ensure that the Merger will not cause the Spin-Off to fail to qualify as a tax-free distribution under Section 355 of the Code. If the Exchange Ratio is adjusted and the number of shares of Regal common stock that Regal issues in the Merger would represent greater than 38.6% of the issued and outstanding shares of Regal common stock immediately following the Merger, then Regal would pay a cash dividend to the Regal shareholders who held shares of Regal common stock as of the Regal Special Dividend Record Date, which record date will be a date prior to the date of the Merger. While the Regal Special Dividend will be paid only to shareholders of record of Regal common stock as of the Regal Special Dividend Record Date, which will be a date before the Merger, Regal expects the payment date for any Regal Special Dividend would be following the closing of the Merger. The Regal Special Dividend, based on the Signing Share Price, is designed to preserve the nominal economic allocation between the Land stockholders (in their capacity as such) and the Regal shareholders (in their capacity as such) that would have resulted from the Exchange Ratio if it were not adjusted.

As described in more detail under “Material U.S. Federal Income Tax Consequences of the Transaction—​Material Tax Consequences of the Reorganization and the Distributions—Material U.S. Federal Income Tax Consequences of the Reorganization and the Distributions to Rexnord” beginning on page 270, the Spin-Off would not be treated as a tax-free distribution if, among other reasons, the Merger results in one or more persons acquiring a 50% or greater interest (by vote or value) in the stock of Land. However, for purposes of such a determination, if a stockholder of Land is also a shareholder of Regal immediately prior to the Merger (an Overlap Shareholder), the net increase in the Overlap Shareholder’s ownership of Land as a result of the Merger and by virtue of being a shareholder of Regal is offset by its net decrease in such ownership percentage by reason of being a Land stockholder immediately prior to the Merger. Accordingly, Regal and Rexnord have agreed that the Exchange Ratio will be increased if and to the extent necessary so that the number of shares of Regal common stock issued in the Merger will result in holders of issued and outstanding shares of Land common stock immediately prior to the Merger, taking into account in the case of Overlap Shareholders their Overlap Shares, receiving shares of Regal common stock that in the aggregate represent 50.8% of the issued and outstanding shares of Regal common stock immediately following the Merger. If the IRS Ruling is not received by the third business day prior to closing or if such adjustment described in the immediately preceding sentence would result in the number of shares of Regal common

 

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stock issued in the Merger being greater than 50.1% of the issued and outstanding shares of Regal common stock immediately following the Merger, then Overlap Shareholders will not be taken into account in calculating any adjustment to the Exchange Ratio and the number of shares of Regal common stock to be issued in the Merger will instead be a number that equals 50.1% of the issued and outstanding shares of Regal common stock immediately following the Merger.

Most of the ownership in Regal and Rexnord held by Overlap Shareholders is held in “street name” through banks and brokers, rather than ownership interests appearing directly in each company’s stock ledger. As a result, determination of the extent of these holdings generally relies on public information, including filings with the SEC. The IRS Ruling requests a ruling from the IRS on the substantive and procedural criteria that may be used by Regal and Rexnord in determining the extent of the Overlap Shareholders.

The need and the extent of any adjustment to the Exchange Ratio is dependent on a number of factors, many of which will not be known until shortly prior to closing. Among other factors, the extent of the adjustment, if any, depends on:

•

whether the IRS Ruling is received by the requisite date;

​

•

assuming the IRS Ruling is received, which of the rulings requested by Rexnord in its private letter ruling request are included in the final IRS Ruling, including which categories of shareholders may be counted as Overlap Shareholders for purposes of Section 355(e) of the Code (we refer to such categories of shareholders as “Qualifying Overlap Shareholders”);

​

•

based on the rulings received in the IRS Ruling, whether certain shareholders meet the criteria outlined in the IRS Ruling to qualify as Qualifying Overlap Shareholders; and

​

•

based on the rulings received in the IRS Ruling and the determinations made by Regal and Rexnord at or shortly prior to closing, the number of Overlap Shares owned by Qualifying Overlap Shareholders.

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Potential Illustrative Scenarios

The extent of any adjustment to the Exchange Ratio and corresponding amount of any Regal Special Dividend will vary materially depending on the outcome of each of these factors. Set forth below are examples of several potential outcomes of the variables and any resulting adjustment to the Exchange Ratio, the number of shares of Regal common stock to be issued in the Merger, the amount, if any, of the Regal Special Dividend to be paid and the amount of net indebtedness (meaning the total indebtedness less cash on hand) of Regal immediately following the Merger and after giving effect to the amount of Land net indebtedness that becomes indebtedness of the combined company as a result of the Merger.

The information, determinations and estimates set forth in this section could change following the date of this joint proxy statement/prospectus-information statement and before the special meetings and could change again between the special meetings and the date of the closing of the Merger.

The below scenarios use the following information, determinations, estimates and assumptions and are for illustrative purposes only:

•

assuming (a) a Partial Counting Scenario as described below and (b) based on the expectations of Regal and Rexnord, with respect to Overlap Shares as of June 30, 2021 of 6,773,003 owned by the shareholders that Regal and Rexnord consider for these purposes would qualify as Qualifying Overlap Shareholders in a Partial Counting Scenario (the “Partial Counting Scenario Qualifying Overlap Shareholders”);

​

•

assuming (a) a Full Counting Scenario as described below and (b) Regal and Rexnord can verify that certain shareholders (such as private investment funds and certain government owned funds) who are not Partial Counting Scenario Qualifying Overlap Shareholders satisfy the criteria in the IRS Ruling to be considered Qualifying Overlap Shareholders under a Full Counting Scenario, estimated Overlap Shares as of June 30, 2021 of 8,239,381 owned by the shareholders that Regal and Rexnord consider would qualify as Qualifying Overlap Shareholders in a Full Counting Scenario assuming such verifications;

​

 

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•

shares of Regal common stock issued and outstanding of 40,695,041 (which represented the number of shares of Regal common stock issued and outstanding as of June 30, 2021);

​

•

shares of Land common stock issued and outstanding of 121,065,912, which is based on the 121,065,912 shares of Rexnord common stock issued and outstanding as of June 30, 2021;

​

•

$408 million of net indebtedness of Regal outstanding as of June 5, 2021, and prior to the incurrence of indebtedness to pay the Regal Special Dividend and without taking into account the net indebtedness of Land that becomes indebtedness of the combined company as a result of the Merger;

​

•

estimated $36 million - $48 million of additional transaction and financing fees as of June 5, 2021, depending on scenario; and

​

•

estimated $365 million of net indebtedness of Land as of March 31, 2021, and following the incurrence of indebtedness of the Land debt under the DDTL Facility and the payment of the Land Cash Payment.

​

•

Partial Counting Scenario. In this illustrative scenario, the IRS provides an IRS Ruling that allows Regal and Rexnord to count for purposes of Section 355(e) of the Code as Qualifying Overlap Shareholders only certain categories of shareholders (for example, widely held index funds and mutual funds meeting specified criteria). Under this scenario, based on Regal’s and Rexnord’s calculation of the estimated shareholdings of such Qualifying Overlap Shareholders using the information as set forth above and other information as of June 30, 2021, if there were no change in the number of such Overlap Shares, then as of closing of the Merger:

​

◦

The Exchange Ratio would be adjusted so that Regal would issue in the Merger shares of Regal common stock that would represent 41.0% of the issued and outstanding Regal common stock immediately following the Merger, which would result in the issuance of approximately 28,252,190 shares of Regal common stock;

​

◦

Regal would pay to the owners of Regal common stock in respect of their shares of Regal common stock owned as of the Regal Special Dividend Record Date a cash dividend of approximately $12.17 per share; and

​

◦

Regal would have outstanding net indebtedness of approximately $1,307 million following the payment of the Regal Special Dividend and the assumption of the Land net indebtedness.

​

•

Full Counting Scenario. In this illustrative scenario, the IRS provides an IRS Ruling that allows Regal and Rexnord to count for purposes of Section 355(e) of the Code as Qualifying Overlap Shareholders not only the categories of shareholders included in the Partial Counting Scenario, but also certain additional categories of shareholders (for example, certain private investment funds and certain government owned funds), assuming Regal and Rexnord can verify and agree that such additional categories of shareholders satisfy certain requirements. Under this scenario, assuming Regal and Rexnord are able to verify and agree such requirements are satisfied, based on Regal’s and Rexnord’s calculation of the estimated share holdings of such Qualifying Overlap Shareholders using the assumptions set forth above and other information as of June 30, 2021, if there were no change in the number of such Overlap Shares, then as of closing of the Merger:

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The Exchange Ratio would be adjusted so that Regal would issue in the Merger shares of Regal common stock that would represent 38.6% of the issued and outstanding Regal common stock immediately following the Merger, which would result in the issuance of approximately 25,583,527 shares of Regal common stock;

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Regal would not pay any Regal Special Dividend; and

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Regal would have outstanding net indebtedness of approximately $808 million following the Merger and taking into account the net indebtedness of Land that becomes indebtedness of the combined company as a result of the Merger.

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•

No Counting Scenario. In this illustrative scenario, the IRS does not provide any private letter ruling and Overlap Shareholders are not taken into account. Under this scenario,

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The Exchange Ratio would be adjusted so that Regal would issue in the Merger shares of Regal common stock that would represent 50.1% of the issued and outstanding Regal common stock immediately following the Merger, which would result in the issuance of approximately 40,858,147 shares of Regal common stock;

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Regal would pay to the owners of Regal common stock in respect of their shares of Regal common stock owned as of the Regal Special Dividend Record Date a cash dividend of approximately $48.16 per share; and

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Regal would have outstanding net indebtedness of approximately $2,781 million following the payment of the Regal Special Dividend and taking into account the net indebtedness of Land that becomes indebtedness of the combined company as a result of the Merger.

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•

Full Counting and Increased Overlap. In this illustrative scenario, the IRS provides an IRS Ruling that allows Regal and Rexnord to count as Qualifying Overlap Shareholders for purposes of Section 355(e) of the Code the categories of shareholders included in the Full Counting Scenario, assuming Regal and Rexnord can verify and agree that such additional categories of shareholders included under a Full Counting Scenario satisfy certain requirements. This scenario also assumes that the number of Overlap Shares held by Qualifying Overlap Shareholders increases by 0.5%. Under this scenario, assuming Regal and Rexnord are able to verify and agree such requirements of such private investment funds and governmental funds are satisfied, based on Regal’s and Rexnord’s calculations of the shareholdings of the Qualifying Overlap Shareholders, using the information as set forth above and other information as of June 30, 2021 and assuming such 0.5% increase in such holdings described above, then as of closing of the Merger:

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The Exchange Ratio would not be adjusted and Regal would issue in the Merger shares of Regal common stock that would represent 38.6% of the issued and outstanding Regal common stock immediately following the Merger, which would result in the issuance of approximately 25,583,527 shares of Regal common stock;

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Regal would not pay any Regal Special Dividend; and

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◦

Regal would have outstanding net indebtedness of approximately $808 million following the Merger and taking into account the net indebtedness of Land that becomes indebtedness of the combined company as a result of the Merger.

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While there can be no assurance as to the outcome of any of the variables and it is not a condition to the closing of the Merger that any particular amount of Qualifying Shareholder Overlap exist, each of Regal and Rexnord believes that, as of the date of this joint proxy statement/prospectus-information statement, it is a reasonable assumption that the outcome of the variables will likely result in an outcome somewhere between the Partial Counting Scenario and the Full Counting Scenario. Using the midpoint of the range of Overlap Shares represented in the Partial Counting Scenario and the Full Counting Scenario, or an estimated 7,506,192 Overlap Shares, and calculating the number of shares of Regal common stock issuable and the amount of the Regal Special Dividend payable under the Merger Agreement using such figures, the information set forth above and other information as of June 30, 2021 and June 5, 2021 that would result in the following as of the closing of the Merger:

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The Exchange Ratio would be adjusted so that Regal would issue in the Merger shares of Regal common stock that would represent 39.7% of the issued and outstanding Regal common stock immediately following the Merger, which would result in the issuance of approximately 26,761,968 shares of Regal common stock;

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Regal would pay to the owners of Regal common stock in respect of their shares of Regal common stock owned as of the Regal Special Dividend Record Date a cash dividend of approximately $5.67 per share; and

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Regal would have outstanding net indebtedness of approximately $1,041 million following the payment of the Regal Special Dividend and taking into account the net indebtedness of Land that becomes indebtedness of the combined company as a result of the Merger.

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The above scenarios are summarized as follows: