Annual Cash Retainers for Chairperson, Lead Independent Director and Committee Service

Cash Retainers. Each Nonemployee Director is eligible to receive cash retainers at the applicable rates set forth in the following table for each full year of service as # a chairperson and/or member of the Board and # a chairperson of a committee of the Board (“Committee”):

Research and Development Committee. A Non-Employee Director serving as Chairperson of the Research and Development Committee shall receive an additional annual retainer of $10,000 for such service. A Non-Employee Director serving as a member other than the Chairperson of the Research and Development Committee shall receive an additional annual retainer of $5,000 for such service.

Chairperson of the Compensation Committee of the Board of Directors Accepted and Agreed:

“Director Cash Compensation” means the total annual retainer, committee chairperson and committee member retainers, retainer for serving as chairperson of the Board and any other fees (but not reimbursement of expenses that would be payable to a Director in cash during a Plan Year absent a deferral election pursuant to [Section 4.1].

Effective January 1, 2018, compensation paid to non-employee directors of A. O. Smith Corporation is as follows: Directors will receive a cash annual retainer of $65,000, paid in quarterly amounts of $16,250. The lead director retainer of $20,000 annually remains unchanged. Each Personnel and Compensation Committee and Investment Policy Committee member receives an annual retainer of $13,000, paid quarterly, and each member of the Nominating and Governance Committee receives $10,500 annually, with the Chairperson of each of these Committees receiving an additional $7,000 annual retainer. Each Audit committee member receives an annual retainer of $22,000, paid quarterly with the Chairperson receiving an additional $5,000 annual retainer. The award of shares of Common Stock to each director remained unchanged. Each director receives Common Stock with a market value of $125,000 on the date of the award. The retainers were calculated to be comparable to the directors’ total compensation under the previous system, while simplifying record keeping and reporting.

Committee. “Committee” means the Compensation and Management Development Committee of the Board, or a sub-committee of that Committee.

COMMITTEE. This Plan shall be administered by the Committee.

Committee. The Directors and Corporate Governance Committee of the Board of Directors, or any successor committee of the Board of Directors that is charged with matters relating to the compensation of non-employee directors.

Committee. The Plan shall be administered by the Board of Directors of the Corporation (the “Board of Directors”) or a committee of two or more members appointed by the Board of Directors (the “Committee”). If the Board of Directors does not appoint a Committee, reference to the Committee hereinbelow, shall mean the Board of Directors. At the time that the Corporation has a class of equity securities which are registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or is a publicly-held corporation under Internal Revenue Code Section 162(m), membership in the Committee is limited to Non-Employee Directors as defined in Rule 16b-3 promulgated under Section 16 of the Exchange Act and outside directors as defined in Treasury Regulation § 1.162-27(e)(3). The Committee shall select one of its members as Chairman and shall appoint a Secretary, who need not be a member of the Committee. The Committee shall hold meetings at such times and places as it may determine and minutes of such meetings shall be recorded. Acts by a majority of the Committee in a meeting at which a quorum is present and acts approved in writing by a majority of the members of the Committee shall be valid acts of the Committee.