Exhibit 10.1

December 9, 2008

A. O. Smith Corporation

11270 West Park Place

Milwaukee, WI 53224

Attention: James F. Stern

Ladies and Gentlemen:

Smith Investment Company, a Nevada corporation (“SICO”), Smith Investment
Company LLC, a Delaware limited liability company (“SpinCo”), A. O. Smith
Corporation (the “Company”), and SICO Acquisition, LLC, a Delaware limited
liability company and a wholly-owned subsidiary of the Company (“Merger Sub”),
are parties to an Agreement and Plan of Merger, dated as of the date hereof (as
the same may be amended, supplemented, modified or waived from time to time, the
“Merger Agreement”), providing for, among other things, the merger of SICO with
and into Merger Sub (the “Merger”), in which all of the outstanding shares of
common stock, par value $0.10 per share, of SICO held by the shareholders of
SICO are being converted into a right to receive shares of Class A common stock,
par value $5.00 per share, of the Company (“Class A Common Stock”) and shares of
Common Stock, par value $1.00 per share, of the Company (“Common Stock”; and
together with the Class A Common Stock, the “Company Common Stock”). Capitalized
terms that are used but not otherwise defined in this support agreement
(“Support Agreement”) will have the meanings ascribed to them in the Merger
Agreement.

As a condition to the willingness of the Company to enter into and perform its
obligations under the Merger Agreement, the Company has required that SICO enter
into this Support Agreement. SICO is further entering into this Support
Agreement to express its support for the Merger and the other transactions
contemplated by the Merger Agreement.

In consideration of the foregoing and the mutual covenants and agreements set
forth herein and in the Merger Agreement, and intending to be legally bound
hereby, the parties hereto agree as follows:

1. SICO represents and warrants that Schedule I annexed hereto sets forth as of
the date hereof the number of shares of Company Common Stock owned beneficially
or of record by SICO (the “Covered Shares”). SICO represents and warrants that,
as of the date hereof and except as disclosed on Schedule II annexed hereto,
SICO owns the Covered Shares free and

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clear of all liens, charges, encumbrances, voting agreements and commitments of
every kind. As of the date of this Support Agreement, except as expressly
permitted or provided in this Support Agreement or the Merger Agreement and
except as disclosed on Schedule II annexed hereto, SICO has sole voting power
and sole dispositive power with respect to all of the Covered Shares. SICO
agrees, while this Support Agreement is in effect, to promptly notify the
Company of the number of any new shares of Company Common Stock with respect to
which SICO acquires beneficial or record ownership. Any such shares shall
automatically become Covered Shares and subject to the terms of this Support
Agreement as though owned by SICO as of the date hereof.

2. SICO has all necessary legal capacity, power and authority to execute and
enter into this Support Agreement, and this Support Agreement is the legally
valid and binding agreement of SICO, and is enforceable against SICO in
accordance with its terms, subject to the Bankruptcy and Equity Exception.

3. SICO agrees that, during the term of this Support Agreement, it will not, and
will not agree to, sell, transfer, assign, pledge, encumber or otherwise dispose
of any of the Covered Shares, or any interest therein, or otherwise enter into
any contract, option or other arrangement or understanding with respect to the
sale, transfer, assignment, pledge, encumbrance of other disposition of, or
limitation on the voting rights of, any of the Covered Shares (any such action a
“Transfer”); provided however, that nothing herein shall prevent SICO from
consummating a Transfer (i) as specifically required by a court order, which
SICO shall use its reasonable best efforts to avoid, (ii) pursuant to this
Support Agreement or the Merger Agreement or the transactions and other
agreements contemplated thereby, or (iii) with the Company’s prior written
consent. Any action taken in violation of the foregoing sentence shall be null
and void ab initio and SICO agrees that any such prohibited action may and
should be enjoined. If any involuntary Transfer of any of the Covered Shares
shall occur, the transferee (which term, as used herein, shall include any and
all transferees and subsequent transferees of the initial transferee) shall take
and hold the Covered Shares subject to all of the restrictions, liabilities and
rights under this Support Agreement, which shall continue in full force and
effect until valid termination of this Support Agreement.

4. SICO agrees that, during the term of this Support Agreement, at any meeting
of shareholders of the Company, however called, or any adjournment or
postponement thereof, SICO shall be present (in person or by proxy) and vote (or
cause to be voted) all of the Covered Shares (1) in favor of (a) the Merger and
the other transactions contemplated thereby, including the Merger Agreement and
(b) any other matter that is on the ballot in furtherance of or for the purpose
of facilitating the Merger, including any matter that is required by law or
regulatory authority to be approved by the stockholders of the Company to
facilitate the Merger or any transaction contemplated by the Merger Agreement;
and (2) against any proposal that would reasonably be expected to prevent or
materially delay the consummation of the Merger.

5. SICO hereby agrees not to commence or participate in, and agrees to take all
actions necessary to opt out of any class in any class action with respect to
any claim, derivative or otherwise, against the Company, Merger Sub, or any of
their respective successors relating to the negotiation, execution or delivery
of this Support Agreement, the Merger Agreement or the consummation of the
Merger, including any claim (a) challenging the validity

 

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of, or seeking to enjoin the operation of, any provision of this Support
Agreement, the Merger Agreement or any transactions contemplated by the Merger
Agreement, or (b) alleging a breach of any fiduciary duty of any officers or
directors of the Company or Merger Sub in connection with this Support
Agreement, the Merger or any of the transactions contemplated by the Merger,
including the Merger Agreement. For the avoidance of doubt, the parties agree
that this Paragraph 5 shall not preclude SICO from being a party to any
litigation between or among the Company, Merger Sub, the Surviving Entity,
SpinCo, the Shareholders’ Representative, any Smith Family Member or any other
Former Company Shareholder concerning any provision of the Merger Agreement or
any Ancillary Agreement or to resolve any dispute regarding any provision of the
Merger Agreement or any Ancillary Agreement.

6. Whenever possible, each provision or portion of any provision of this Support
Agreement will be interpreted in such manner as to be effective and valid under
applicable law but if any provision or portion of any provision of this Support
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or portion of any provision
in such jurisdiction, and this Support Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.

7. Each of the parties hereto recognizes and acknowledges that a breach by SICO
of any covenants or agreements contained in this Support Agreement will cause
the Company to sustain damages for which it would not have an adequate remedy at
law for money damages, and therefore each of the parties hereto agrees that in
the event of any such breach the Company shall be entitled to the remedy of
specific performance of such covenants and agreements and injunctive and other
equitable relief in addition to any other remedy to which they may be entitled,
at law or in equity.

8. Notwithstanding any other provision herein, the obligations of SICO set forth
in this Support Agreement shall not be effective or binding until after such
time as the Merger Agreement is executed and delivered by the Company, Merger
Sub, SpinCo and SICO. This Support Agreement shall terminate immediately upon
the earlier of (a) termination of the Merger Agreement in accordance with its
terms, (b) the Parent Recommendation having been withdrawn or modified in a
manner that would permit SICO to terminate the Merger Agreement in accordance
with its terms, and (c) the Effective Time. Upon such termination, this Support
Agreement shall immediately become void, there shall be no liability hereunder
on the part of SICO and all rights and obligations of the parties to this
Support Agreement shall cease, in all cases so long as SICO is not in breach of
its covenants or agreements under this Support Agreement; provided, however,
that Paragraphs 5 through 14 hereof shall survive termination of this Support
Agreement (it being understood that Section 7 shall survive solely to the extent
necessary to effect the provisions of Section 5).

9. Any notice, request, instruction or other document to be given hereunder by
any party to the other parties shall be in writing and shall be deemed to have
been duly given on the next business day after the same is sent, if delivered
personally or sent by telecopy or overnight delivery, or three calendar days
after the same is sent, if sent by registered or certified

 

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mail, return receipt requested, postage prepaid, as set forth below, or to such
other persons or addresses as may be designated in writing in accordance with
the terms hereof by the party to receive such notice.

If to SICO:

Smith Investment Company

11270 West Park Place,

Milwaukee, WI 53224

Telecopier: 414-359-4198

Attention: Bruce M. Smith

with a copy (which shall not constitute notice) to:

Latham & Watkins LLP

233 South Wacker Drive, Suite 5800

Chicago, Illinois 60606

Facsimile: 312-993-9767

Attention: Mark D. Gerstein

with a copy (which shall not constitute notice) to:

Reinhart Boerner Van Deuren s.c.

1000 North Water Street, Suite 1700

Milwaukee, Wisconsin 53202

Facsimile: 414-298-8097

Attention: James M. Bedore

If to the Company:

A. O. Smith Corporation

11270 West Park Place

Milwaukee, WI 53224

Telecopier No.: 414-359-7450

Attention: General Counsel

10. This Support Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without reference to principles of
conflicts of law. The parties hereto (a) agree that any action or proceeding
arising out of or in connection with this Agreement shall be brought only in the
Court of Chancery of the State of Delaware (the “Court”) and not in any other
state or federal court in the United States of America or any court in any other
country; (b) consent to submit to the exclusive jurisdiction of the Delaware
Court for purposes of any action or proceeding arising out of or in connection
with this Agreement; (c) agree that mailing of process or other papers in
connection with such action, suit or proceeding in the manner provided in
Paragraph 9 hereof or in such other manner as may be permitted by law will have
the same legal force and validity as if served upon such party personally within
the

 

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State of Delaware; (d) waive any objection to the laying of venue of any such
action or proceeding in the Court; and (e) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Court has been
brought in an improper or inconvenient forum, or is subject (in whole or in
part) to a jury trial.

11. This Support Agreement may be executed in any number of counterparts and by
the parties hereto on separate counterparts but all such counterparts shall
together constitute one and the same Support Agreement.

12. This Support Agreement, together with the Merger Agreement and the other
agreements contemplated thereby, constitutes the entire agreement among the
parties with respect to the subject matter of this Support Agreement and
supersedes all prior written and oral and all contemporaneous oral agreements
and understandings with respect to the subject matter of this Support Agreement.

13. This Support Agreement may not be amended except by an instrument in writing
signed on behalf of all the parties.

14. This Support Agreement is not intended to confer any rights or remedies upon
any Person other than the Parties to this Support Agreement.

[signature page follows]

 

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Please confirm that the foregoing correctly states the understanding between
SICO and the Company by signing and returning to us a counterpart hereof.

 

Very truly yours, SMITH INVESTMENT COMPANY By:  

/s/ Bruce M. Smith

Name:   Bruce M. Smith Title:   Chairman, President and Chief Executive Officer

 

Confirmed as of the date first above written: A. O. SMITH CORPORATION By:  

/s/ James F. Stern

Name:   James F. Stern Title:  
Executive Vice President, General Counsel and Secretary SICO ACQUISITION, LLC
By:  

/s/ James F. Stern

Name:   James F. Stern Title:  
Executive Vice President, General Counsel and Secretary

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SCHEDULE I

 

Stockholder

   Shares of Class A
Common Stock    Shares of
Common Stock

Smith Investment Company

   8,067,252    1,559,076