SEC Filing | A. O. Smith Corporation

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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant /X/

Filed by a party other than the registrant / /

Check the appropriate box:

/ / Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))

/X/ Definitive proxy statement

/ / Definitive additional materials

/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

A. O. Smith Corporation
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(Name of Registrant as Specified in Its Charter)

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

Payment of filing fee (Check the appropriate box):

/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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/ / Fee paid previously with preliminary materials.

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/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid:

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(2) Form, schedule or registration statement no.:

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(3) Filing party:

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(4) Date filed:

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LOGO

PROXY

P.O. BOX 23973
MILWAUKEE, WI 53223-0973

NOTICE AND PROXY STATEMENT

NOTICE OF 1995 ANNUAL MEETING OF STOCKHOLDERS

PLEASE TAKE NOTICE that the annual meeting of the stockholders of A. O.
SMITH CORPORATION will be held on Wednesday, April 5, 1995 at 9:00 A.M. Eastern
Time, at the Hotel du Pont, 11th and Market Streets, Wilmington, Delaware for
the following purposes:

(1) To elect seven directors chosen by the holders of Class A Common Stock.

(2) To elect three directors chosen by the holders of Common Stock.

(3) To consider and act upon a proposal to amend the Restated Certificate
of Incorporation to increase the number of authorized shares of Class A
Common Stock from 7,000,000 to 14,000,000 shares and the number of
authorized shares of Common Stock from 24,000,000 to 60,000,000.

(4) To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for 1995.

(5) To consider and vote on the stockholder proposal set forth in the proxy
statement, if properly presented at the meeting.

(6) To transact such other business and act upon such other matters which
may properly come before the meeting or any adjournments thereof.

Only holders of record of the Class A Common Stock and the Common Stock of
the Company at the close of business on February 22, 1995, will be entitled to
notice of and to vote at the meeting. The list of stockholders entitled to vote
at the meeting will be available as of March 24, 1995 for examination by
stockholders for purposes related to the meeting at the offices of Morris,
Nichols, Arsht & Tunnell, 1201 North Market Street, Wilmington, Delaware.

YOU ARE INVITED TO ATTEND THE MEETING IN PERSON; HOWEVER, EVEN IF YOU PLAN
TO ATTEND THE MEETING IN PERSON, PLEASE TAKE A FEW MINUTES TO COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU
ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
YOUR ATTENTION IS DIRECTED TO THE PROXY STATEMENT ENCLOSED WITHIN.

W. David Romoser
Secretary

March 1, 1995
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LOGO
----------------------------------------------

P. O. BOX 23973
MILWAUKEE, WISCONSIN 53223-0973
----------------------------------------------

PROXY STATEMENT

GENERAL INFORMATION

This proxy statement is furnished to stockholders of A. O. Smith
Corporation (the "Company") in connection with the solicitation by its Board of
Directors of proxies for use at the annual meeting of stockholders of the
Company to be held on Wednesday, April 5, 1995 at 9:00 A.M., Eastern Time, at
Wilmington, Delaware.

The record date for stockholders entitled to notice of and to vote at the
meeting is the close of business on February 22, 1995 (the "Record Date"). As of
the Record Date, the Company had issued 5,983,634 shares of Class A Common
Stock, par value $5 per share, 5,980,174 shares of which were outstanding and
entitled to one vote each for Class A Common Stock directors and other matters.
As of the Record Date, the Company had issued 15,716,016 shares of Common Stock,
par value $1 per share, 14,933,247 shares of which were outstanding and entitled
to one vote each for Common Stock directors and one-tenth ( 1/10) vote each for
other matters.

The Notice of 1995 Annual Meeting of Stockholders, this proxy statement,
form of proxy card and the Company's 1994 Annual Report are being mailed on or
about March 1, 1995 to each stockholder of the Company at the holder's address
of record.

Under the Company's Restated Certificate of Incorporation, as long as the
number of outstanding shares of Common Stock is at least 10% of the aggregate
number of outstanding shares of Class A Common Stock, the holders of the Class A
Common Stock and holders of the Common Stock vote as separate classes in the
election of directors. Stockholders are entitled to one vote per share in the
election of directors for their class of stock.

A majority of the outstanding shares entitled to vote must be represented
in person or by proxy at the meeting in order to constitute a quorum for
purposes of holding the annual meeting. The voting by stockholders at the
meeting is conducted by the inspectors of election. Abstentions and broker
nonvotes are counted as present in determining whether the quorum requirement is
met.

Directors are elected by a plurality of the votes cast, by proxy or in
person, with the holders voting as separate classes. A plurality of votes means
that the nominees who receive the greatest number of votes cast are elected as
directors. Consequently, any shares which are not voted, whether by abstention,
broker nonvotes or otherwise, will have no effect on the election of directors.

With respect to the Company's proposal to amend the Restated Certificate of
Incorporation, the affirmative vote of the holders of a majority of the
outstanding shares of the Class A Common Stock and the Common Stock entitled to
vote at the meeting, each voting as a separate class, is needed for
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adoption of the proposed amendment. In addition, the proposal must be adopted by
the vote of the Class A Common Stock and the Common Stock voting together as a
single class in the manner described in the paragraph below.

For all other matters considered at the meeting, both classes of stock vote
together as a single class, with the Class A Common Stock entitled to one vote
per share and the Common Stock entitled to 1/10th vote per share. All such other
matters are decided by a majority of the votes cast. On such other matters, an
abstention will have the same effect as a "no" vote but, because shares held by
brokers will not be considered to vote on matters as to which the brokers
withhold authority, a broker nonvote will have no effect on the vote.

The enclosed proxy is solicited by and on behalf of the Board of Directors
of the Company. A proxy may be revoked by the person giving it at any time
before the exercise thereof by written notice of revocation or a duly executed
proxy bearing a later date to the Secretary of the Company or by attending the
meeting and voting in person. All valid proxies not revoked will be voted unless
marked to abstain. Where a choice is specified on a proxy, the shares
represented by such proxy will be voted in accordance with the specification
made. If no instruction is indicated, the shares will be voted FOR proposals (1)
through (4) set forth in the accompanying notice and AGAINST the stockholder
proposal referenced in (5).

The cost of soliciting proxies, including preparing, assembling and mailing
the notice of meeting, proxy statement, form of proxy and other soliciting
materials, as well as the cost of forwarding such material to the beneficial
owners of stock, will be paid by the Company. In addition to solicitation by
mail, directors, officers, regular employees of the Company and others may also,
but without compensation other than their regular compensation, solicit proxies
personally or by telephone or other means of electronic communication. The
Company may reimburse brokers and others holding stock in their names or in the
names of nominees for their reasonable out-of-pocket expenses in sending proxy
material to principals and beneficial owners.

PRINCIPAL STOCKHOLDERS

The following table shows persons who may be deemed to be beneficial owners
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of
more than 5% of any class of the Company's stock. Unless otherwise noted, the
table reflects beneficial ownership as of December 31, 1994.

TITLE OF NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------------- -------------------------------- -------------------- --------

Class A Smith Investment Company 5,378,168(1) 89.2%
Common Stock P.O. Box 23976
Milwaukee, WI 53223-0976
Common Stock Smith Investment Company 1,039,384(2) 7.0%(2)
P.O. Box 23976
Milwaukee, WI 53223-0976
Common Stock FMR Corp. and 2,551,610(3) 17.16%
Edward C. Johnson 3d
82 Devonshire Street
Boston, MA 02109

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TITLE OF NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------------- -------------------------------- -------------------- --------

Common Stock Mitchell Hutchins Institutional 1,261,100(4) 8.48%
Investors Inc.
1285 Avenue of the Americas
New York, NY 10019

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(1) Of the shares listed for Smith Investment Company ("SICO"), 200,000 of the
Class A Common Stock shares are held by SCAP Corporation, which is a
wholly-owned subsidiary of SICO. SICO and SCAP Corporation each have sole
voting and sole dispositive power with respect to the shares described
above.

(2) Pursuant to the Company's Restated Certificate of Incorporation dated
January 26, 1993, Class A Common Stock is convertible at any time at the
option of the holder into Common Stock on a share-for-share basis. For
purposes of computing beneficial ownership of SICO's Common Stock, assuming
that all Class A Common Stock held by SICO was converted into Common Stock,
SICO's beneficial ownership of the Common Stock is 6,417,552 shares, which
represents 31.7% of the class of Common Stock.

(3) FMR Corp. has sole voting power with respect to 462,850 shares and sole
dispositive power with respect to 2,551,610 shares and Edward C. Johnson 3d
has sole dispositive power with respect to 2,551,610 shares, including
shares beneficially owned by Fidelity Management & Research Company (FMRC)
a subsidiary of FMR Corp., and Fidelity Magellan Fund, an investment
company for which FMRC acts as investment advisor.

(4) Mitchell Hutchins Institutional Investors Inc. has shared voting and shared
dispositive power with respect to all 1,261,100 shares.

Information on beneficial ownership is based upon Schedules 13D or 13G
filed with the Securities and Exchange Commission and any additional information
which may have been provided to the Company by any beneficial owners.

On December 31, 1994, Arthur O. Smith owned beneficially 121,845 shares,
and his wife owned of record and beneficially 3,485 shares of the outstanding
capital stock of SICO; various trusts held 195,730 shares for the benefit of the
wife and issue of Arthur O. Smith. On December 31, 1994, Lloyd B. Smith owned
beneficially 7,002 shares of the outstanding capital stock of SICO; various
trusts held 306,003 shares for the benefit of the wife and issue of Lloyd B.
Smith. In addition, Messrs. Smith were trustees of various trusts for the
benefit of persons other than themselves, their wives and issue, which trusts
held on December 31, 1994 an aggregate of 522,960 shares of the outstanding
capital stock of SICO. The shares of SICO held beneficially by Messrs. Smith and
their wives, together with shares held by Messrs. Smith in trust for others
comprised 69.4% of the 1,667,635 outstanding shares of capital stock of SICO on
December 31, 1994. Messrs. Smith have shared investment and voting power on all
trusts for which they are co-trustees. On all other trusts, one or the other
shares trust powers with at least one other person. Messrs. Smith disclaim that
any of the foregoing interests in the capital stock of SICO constitute
beneficial ownership of any common stock of the Company.

ELECTION OF DIRECTORS

Ten directors are to be elected to serve until the next succeeding annual
meeting of stockholders and thereafter until their respective successors shall
be duly elected and qualified. Owners of Class A Common Stock are entitled to
elect 7 directors and owners of Common Stock are entitled to elect the 3
remaining directors.

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It is intended that proxies hereby solicited will be voted for the election
of the nominees named below. Proxies will not be voted for a greater number of
persons than the 10 nominees named below. All nominees have consented to being
named in the proxy statement and to serve if elected. If any nominee for
election as a director shall become unavailable to serve as a director, proxies
will be voted for such substitute nominee as may be nominated by the Board of
Directors.

The following information has been furnished to the Company by the
respective nominees for director. Each nominee has been principally engaged in
the employment indicated for the last 5 years unless otherwise stated. The Board
of Directors has designated Mr. Bruce M. Smith as a nominee for election as
director for the Class A Common Stock. All other nominees are currently serving
as directors of the Company.

NOMINEES -- CLASS A COMMON STOCK

TOM H. BARRETT -- Retired Chairman of the Board, President and Chief
Executive Officer, The Goodyear Tire & Rubber Company -- rubber products.

Mr. Barrett is 64 years of age and has been a director of the Company since
1981. He is the chairman of the Personnel and Compensation Committee of the
Board. He was with Goodyear from 1953 to 1991. He is also a director of Air
Products and Chemicals, Inc., Fieldcrest Cannon, Inc. and Rubbermaid
Incorporated, as well as a Trustee of the Mutual Life Insurance Company of New
York and a partner in American Industrial Partners, a private investment
partnership.

GLEN R. BOMBERGER -- Executive Vice President and Chief Financial Officer.

Mr. Bomberger, 57, became a director and executive vice president and chief
financial officer in 1986. He is a member of the Investment Policy Committee of
the Board. Mr. Bomberger joined the Company in 1960. He is currently a director
and vice president -- finance of SICO. He is a director of Portico Funds, Inc.

THOMAS I. DOLAN -- Retired Chairman of the Board.

Mr. Dolan, 67, retired as Chairman of the Board on March 31, 1992, a
position which he held since 1984. He is a member of the Audit Committee of the
Board. Mr. Dolan became chief executive officer of the Company in 1983 and
served in that capacity until 1989. He was elected president and a director in
1982. Mr. Dolan joined the Company in 1979. He is a trustee of Northwestern
Mutual Life Insurance Company.

ROBERT J. O'TOOLE -- Chairman of the Board, President and Chief Executive
Officer.

Mr. O'Toole, 54, became Chairman of the Board on March 31, 1992. He is a
member of the Investment Policy Committee of the Board. He was elected chief
executive officer in March 1989. He was elected president, chief operating
officer and a director in 1986. He also served as the head of the Automotive
Products Company, a division of the Company, from November 1990 until May 1992.
Mr. O'Toole joined the Company in 1963. He is a director of Firstar Bank
Milwaukee, N.A.

DONALD J. SCHUENKE -- Retired Chairman of The Northwestern Mutual Life
Insurance Company.

Mr. Schuenke, 66, was elected a director of the Company in October, 1988.
He is Chairman of the Investment Policy Committee of the Board. Mr. Schuenke has
served as the chairman (non-executive)

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of Northern Telecom Limited since January, 1994, and he also serves as the
chairman (non-executive) of Northern Telecom, Inc. He was elected chairman of
The Northwestern Mutual Life Insurance Company in January 1990 and retired from
that position on January 31, 1994. He was chief executive officer of
Northwestern Mutual from March 1983 to October 1993. Mr. Schuenke is a director
of Allen-Edmonds Shoe Corporation, Badger Meter, Inc. and Federal Home Loan
Mortgage Corporation.

ARTHUR O. SMITH -- Director, Chairman and Chief Executive Officer of Smith
Investment Company.

Mr. Smith is 64 years of age and has been a director of the Company since
1960. He is a member of the Personnel and Compensation Committee and the
Investment Policy Committee of the Board. He is chairman and chief executive
officer of SICO and the retired chairman of ASI Technologies, Inc. He was
president of SICO until July 1, 1993. Mr. Smith is the uncle of Bruce M. Smith,
nominee for director of the Class A Common Stock.

BRUCE M. SMITH -- President and Director of Smith Investment Company.

Mr. Smith, age 45, was elected president of SICO on July 1, 1993 and has
served as a director of SICO since July, 1983. Prior to that time he was
executive vice president of the Water Products Company, a division of the
Company, from January, 1991 through June, 1993 and managing director of A. O.
Smith Electric Motors (Ireland) Ltd., a subsidiary of the Company, from March,
1988 through December, 1990. Mr. Smith originally joined the Company in 1978. He
is the nephew of Arthur O. Smith, a director of the Company.

NOMINEES -- COMMON STOCK

RUSSELL G. CLEARY -- Chairman and Chief Executive Officer, Cleary
Management Corporation -- a privately held business and real estate development
corporation.

Mr. Cleary is 61 years of age and has been a director of the Company since
1984. He is a member of the Personnel and Compensation Committee of the Board.
Mr. Cleary has been chairman and chief executive officer of Cleary Management
since 1989. Formerly he was chairman, president and chief executive officer of
G. Heileman Brewing Company, Inc. and retired in December 1988. Mr. Cleary is a
director of Ecolab, Inc., Heileman Holding Company and also Chairman of the
Board of First State Bancorp, Inc.

LEANDER W. JENNINGS -- Chairman and Chief Executive Officer, Jennings &
Associates -- financial management consulting.

Mr. Jennings is 66 years of age and was elected a director of the Company
in 1987. He is the chairman of the Audit Committee of the Board. He has been
chairman and chief executive officer of Jennings & Associates since 1985. Mr.
Jennings retired as managing partner and senior operating committee member of
Peat, Marwick, Mitchell & Company in 1985. He is also a director of Fruit of the
Loom, Inc., Prime Capital Corporation, Alberto Culver Company and TEPPCO, Inc.

DR. AGNAR PYTTE -- President, Case Western Reserve University.

Dr. Pytte, 62, was elected a director of the Company in February 1991. He
is a member of the Audit Committee of the Board. He became the president of Case
Western Reserve University in July 1987. Prior to July 1987, Dr. Pytte was the
provost at Dartmouth College where he held other academic positions since 1958.
Dr. Pytte is also a director of The Goodyear Tire & Rubber Company.

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BOARD COMMITTEES

The Board of Directors of the Company serves as a committee of the whole
for designating nominees for election as director. The Board of Directors will
consider written recommendations directed to the Chairman from stockholders
concerning nominees for Director. The Board of Directors has 3 standing
committees, the Personnel and Compensation Committee, the Investment Policy
Committee and the Audit Committee. In 1994 the Personnel and Compensation
Committee held 4 meetings, the Investment Policy Committee held 4 meetings and
the Audit Committee met 4 times. The Personnel and Compensation Committee is
responsible for establishing and administering the Company's compensation and
benefit plans for officers, executives and management employees, including the
determination of eligibility for participation in such plans. It determines the
compensation to be paid to officers and certain other selected executives. The
Investment Policy Committee is responsible for investment policy and certain
other matters for all Company retirement funds and other employee benefit funds.
The Audit Committee recommends the firm which will act as independent auditors
for the Company and has the responsibility to review audit procedures and the
internal controls of the Company.

DIRECTOR COMPENSATION

Directors received $20,000 annually, plus expenses and $1,000 for
attendance at each Board meeting. Each Audit and Personnel and Compensation
Committee member receives $2,000 and the chairman of each receives $3,000
annually; Committee members are also entitled to $1,000 per meeting, plus
expenses. Each Investment Policy Committee member receives $2,000 and the
chairman receives $3,000 annually; Committee members are also entitled to $2,000
per meeting, plus expenses. Directors who are employees of the Company are not
compensated for service as directors or committee members or for attendance at
board or committee meetings. During 1994, a total of 6 regular meetings of the
Board of Directors was held; all directors attended at least 75% of the number
of board meetings and committee meetings, in the aggregate, on which the
director served as a member, with the exception of Mr. Dolan who attended 70% of
such meetings.

Certain directors have elected to defer payment of their fees under the
Corporate Directors' Deferred Compensation Plan (the "Directors' Plan"). The
Directors' Plan allows directors to defer all or a portion (not less than 50%)
of their fees until any date but not later than the year in which age 71 is
attained. Payments can be made in a lump sum or in not more than 10 annual
installments. Deferred fees earn interest based on an established prime rate.

The A. O. Smith Non-Employee Directors' Retirement Plan provides an annual
benefit for outside directors after 5 years of service and attainment of age 70.
The annual benefit amount, payable in quarterly installments, is the annual
retainer in effect at the time of retirement. Benefit payments continue for a
period equal to the number of years of service as a director, but not to exceed
10 years; all payments cease upon death of the director.

Under an agreement with the Company, Mr. Dolan is entitled to $81,250 of
term insurance in addition to the life insurance provided by the Company for its
retired salaried employees.

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SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT

The following table shows, as of December 31, 1994, the Class A Common
Stock and Common Stock of the Company as well as the Class A Common Stock and
Common Stock options exercisable on or before March 1, 1995, and the common
stock of SICO beneficially owned by each Director, each Nominee for Director,
each named Executive Officer in the Summary Compensation Table and by all
Directors and Executive Officers as a group.

COMPANY COMMON STOCK

PERCENT OF
TYPE OF AMOUNT AND NATURE OF SHARES
NAME STOCK BENEFICIAL OWNERSHIP(1) OUTSTANDING
- ---------------------------------------- ------------ ----------------------- -----------

Tom H. Barrett Common Stock 1,000 shares *
Glen R. Bomberger Common Stock 144,540 shares(2) *
Russell G. Cleary Common Stock 32,332 shares(4) *
Thomas I. Dolan Common Stock 18,118 shares *
Leander W. Jennings Common Stock 1,000 shares *
Samuel Licavoli Common Stock 18,500 shares(2) *
Robert J. O'Toole Common Stock 428,728 shares(2) 2.88%
Dr. Agnar Pytte Common Stock 2,000 shares *
W. David Romoser Common Stock 27,055 shares(2) *
Donald J. Schuenke Common Stock 2,000 shares *
Arthur O. Smith(5) -- -- --
Bruce M. Smith(5) -- -- --
Michael W. Watt Common Stock 9,300 shares(2) *
All 22 Directors, Nominees and Executive Common Stock 891,471 shares(2) 5.99%
Officers as a Group

*Represents less than one percent.

SICO COMPANY STOCK

TYPE OF AMOUNT AND NATURE OF PERCENT
NAME CLASS BENEFICIAL OWNERSHIP(1) OF CLASS
- ---------------------------------------- ------------ ----------------------- -----------

Arthur O. Smith Common Stock 121,845 shares(3) 7.31%
Bruce M. Smith Common Stock 20,137 shares(3) 1.20%
All 22 Directors, Nominees and Common Stock 141,982 shares 8.51%
Officers as a Group

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(1) Except as otherwise noted, all securities are held with sole voting and
sole dispositive power.

(2) Includes 396,600, 128,100, 13,500, 9,300, 9,300 and 720,600 shares of
Common Stock subject to options exercisable on or before March 1, 1995,
respectively for Messrs. O'Toole, Bomberger, Licavoli, Watt and Romoser and
for all Directors and Executive Officers as a group. Please refer to the
Option Grants and Option Exercise Tables for additional stock option
information.

(3) See also "Principal Stockholders." As of December 31, 1994, Mr. Bruce M.
Smith beneficially owned 17,337 shares of the outstanding capital stock of
SICO, which shares are held in a grantor trust which can be amended or
revoked by him at any time (but for which he does not have voting or
dispositive power), and his wife beneficially owned 2,800 shares of SICO as
sole custodian for the benefit of the issue of Mr. Smith. He disclaims that
any of the foregoing interests in the capital stock of SICO constitute
beneficial ownership of any common stock of the Company.

(4) Mr. Cleary has shared voting and shared dispositive power with respect to
his shares of Common Stock, including 10,046 shares of Common Stock which
are held in a charitable foundation as to which Mr. Cleary disclaims any
beneficial ownership.

(5) Excludes shares beneficially owned by SICO.

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EXECUTIVE COMPENSATION

The SUMMARY COMPENSATION TABLE reflects all compensation awarded to, earned
by or paid to each of the Company's five most highly compensated Executive
Officers, including the chief executive officer, during fiscal year 1994, as
well as all compensation awarded, earned or paid in the two previous fiscal
years.

- --------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------

LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION
- --------------------------------------------------------------------------------- AWARDS
OTHER ------------
ANNUAL OPTIONS ALL OTHER
NAME AND COMPENSATION GRANTED COMPENSATION
PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($) ($)(2) (#)(3) ($)(4)
- -------------------------------- ---- ------------- --------- ------------ ------------ ------------

Robert J. O'Toole 1994 514,992 760,000 33,764 57,800 113,762
Chairman, President and 1993 465,000 600,000 27,042 52,800 98,102
Chief Executive Officer 1992 440,827 250,000 18,165 55,400 17,985
Glen R. Bomberger 1994 292,008 295,000 25,702 17,800 53,599
Executive Vice President and 1993 282,000 265,000 22,899 16,300 47,626
Chief Financial Officer 1992 270,000 150,000 15,863 19,400 11,016
Samuel Licavoli 1994 235,000 215,000 20,930 14,700 27,340
President of A. O. Smith 1993 218,335 190,000 13,167 13,500 17,360
Automotive Products Company, 1992 132,071 175,000 72,955 31,000 45,849
a division of the Company
Michael W. Watt 1994 200,000 165,000 12,143 10,200 85,234
President of A. O. Smith 1993 N/A N/A N/A N/A N/A
Water Products Company, 1992 N/A N/A N/A N/A N/A
a division of the Company
W. David Romoser 1994 191,667 150,000 14,460 10,200 22,206
Vice President, Secretary and 1993 N/A N/A N/A N/A N/A
General Counsel 1992 N/A N/A N/A N/A N/A

- --------------------------------------------------------------------------------

(1) Includes amounts earned during 1994 even if deferred.

(2) Includes amounts of tax reimbursements for the following: Company car,
country club, financial counseling and executive term life insurance
premiums and reimbursement of executive payments for term life insurance
premiums.

(3) See footnote (1) in Option Grants Table.

(4) All Other Compensation includes the amounts of: (a) Company contributions
under the Profit Sharing Retirement Plan (a 401(k) plan) and contributions
under the Supplemental Benefit Plan for the 401(k) plan and (b) the value
of the non-term portion of the premiums paid by the Company (arrived at by
treating the payment as an interest-free loan to the earliest possible date
the payment can be refunded and calculating its present value) for the
benefit of the named Executive Officers pursuant to the Executive Life
Insurance Plan, a split-dollar insurance plan. (Note: the amounts in the
Summary Compensation Table were adjusted to include amounts for (b) during
prior year). The amounts paid in 1994 are as follows: Mr. O'Toole -- (a)
$41,405 and (b) $72,357 ; Mr. Bomberger -- (a) $23,477 and (b) $30,122 ;
Mr. Licavoli -- (a) $18,894 and (b) $8,446 ; Mr. Watt -- (a) $16,080 and
(b) $8,740 ; and Mr. Romoser -- (a) $15,410 and (b) $6,796. Also included
is an amount of $60,414 paid to Mr. Watt in connection with the
commencement of his employment with the Company and reimbursement of
moving, traveling and temporary housing expenses.

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STOCK OPTION GRANTS

The table below reflects the stock option grants made under the 1990
Long-Term Executive Incentive Compensation Plan to the five named Executive
Officers during 1994.

- ----------------------------------------------------------------------------------------------------------------
OPTION GRANTS TABLE
- ----------------------------------------------------------------------------------------------------------------
Option Grants in 1994
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(2)
- --------------------------------------------------------------------------- ---------------------------------
% OF
TOTAL
OPTIONS
OPTIONS GRANTED EXERCISE
GRANTED(1) TO ALL PRICE EXPIRATION 0% 5% 10%
NAME (#) EMPLOYEES ($/SH) DATE ($) ($) ($)
---- ---------- --------- -------- ---------- --- ------------ ------------

Robert J. O'Toole
Chairman, President and
Chief Executive Officer 57,800 32.58% $25.81 10/11/04 $0 $ 939,845 $ 2,371,990
Glen R. Bomberger 17,800 10.03% 25.81 10/11/04 0 289,433 730,475
Samuel Licavoli 14,700 8.29% 25.81 10/11/04 0 239,026 603,257
Michael W. Watt 10,200 5.75% 25.81 10/11/04 0 165,855 418,587
W. David Romoser 10,200 5.75% 25.81 10/11/04 0 165,855 418,587
------- ----- -- ------------ ------------
Totals 110,700 62.40% N/A N/A $0 $ 1,800,014 $ 4,542,896
======= ===== == ============ ============
All Stockholders (20,905,621
shares of Class A Common
Stock and Common Stock) N/A N/A N/A N/A 0 $339,931,669 $857,922,784
Named Executive Officers' %
of Total Stockholders
Equity N/A .53% N/A N/A 0 .53% .53%

- --------------------------------------------------------------------------------

(1) All options were granted under the 1990 Long-Term Executive Incentive
Compensation Plan. The options were granted on 10/11/94 as options to
acquire Common Stock and are first exercisable on 10/10/95. An additional
option to acquire Common Stock was granted on 12/13/94 and is first
exercisable on 12/12/95. All options were granted at market value on the
date of grant and have a 10 year term.

(2) The dollar values in these columns represent ASSUMED RATES of appreciation
only, over the 10-year option term, at the 5% and 10% rates of appreciation
set by the Securities and Exchange Commission rules as well as a 0%
increase in value. These amounts are not intended to predict or represent
possible future appreciation of the Company's Common Stock value. Actual
gains, if any, on stock option exercises and Common Stock holdings depend
on future performance of the Company's Common Stock and overall stock
market conditions.

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12

OPTION EXERCISES AND YEAR-END VALUES

The table includes information related to options exercised by the five
named Executive Officers during fiscal year 1994 and the number and value of
options held at the end of the fiscal year.

- --------------------------------------------------------------------------------
OPTION EXERCISES AND YEAR-END VALUE TABLE
- --------------------------------------------------------------------------------

Aggregated Option Exercises in Fiscal Year 1994, and December 31, 1994 Option
Values

NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1994 (#) DECEMBER 31, 1994 ($)(1)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- --------------- ------------ ----------- ------------- ----------- -------------

Robert J. O'Toole
Chairman, President
and Chief Executive
Officer 48,000 $1,413,611 396,600 57,800 $ 5,401,264 $ 0
Glen R. Bomberger 27,000 $ 768,196 128,100 17,800 $ 1,783,413 $ 0
Samuel Licavoli 0 $ 0 13,500 14,700 $ 0 $ 0
Michael W. Watt 0 $ 0 9,300 10,200 $ 0 $ 0
W. David Romoser 10,600 $ 163,643 9,300 10,200 $ 0 $ 0

- --------------------------------------------------------------------------------

(1) Based on the difference between the option exercise price and the closing
price on the New York Stock Exchange of $24.50 for the Common Stock on
December 31, 1994.

- --------------------------------------------------------------------------------
PENSION PLAN TABLE(1)
- --------------------------------------------------------------------------------

YEARS OF SERVICE(3)
---------------------------------------------------------
REMUNERATION(2) 10 20 25 30 35
- --------------- ------- ------- ------- -------- --------

$150,000 $21,008 $42,016 $52,520 $ 63,024 $ 73,528
175,000** 23,693 47,488 59,385 71,282 83,179
200,000** 26,899 54,255 67,933 81,610 95,288
225,000** 30,104 61,021 76,480 91,939 107,397
250,000** 33,178 67,512 84,678 101,845 118,800*
275,000** 34,913 71,173 89,303 107,433 118,800*
300,000
and Above** 35,217 71,816 90,115 108,414 118,800*

- --------------------------------------------------------------------------------

* Maximum annual benefit payment in 1994 is $118,800.

** Maximum allowable salary that can be used in benefit calculation for 1994 is
$150,000.

(1) The Pension Plan Table shows estimated annual benefits payable to an
executive officer upon retirement under the A. O. Smith Retirement Plan,
assuming retirement at December 31, 1994, at age 65 and based upon the
final compensation and years of service set forth in the Table and based on
compensation increases of 4% each year. Benefit amounts were computed on a
straight-life annuity basis and are not subject to any deduction for Social
Security amounts.

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13

(2) The compensation covered by the Plan is based on the average of the highest
5 years of annual compensation out of the last 10 years prior to retirement.
The amount included in the calculation of compensation, as reflected in the
Summary Compensation Table, is Salary. Compensation covered by the Plan does
not include Bonus, Other Annual Compensation, Long Term Compensation or All
Other Compensation amounts.

(3) Messrs. O'Toole, Bomberger, Licavoli, Watt and Romoser had 31, 34, 2, 1 and
2 years of service, respectively, at year-end.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In connection with the Company's Executive Life Insurance Plan, some of the
life insurance policies were purchased from Northwestern Mutual Life Insurance
Company. Mr. Schuenke, a director of the Company, was the chairman of
Northwestern Mutual until January 31, 1994. The total amount paid by the Company
in 1994 with respect to the policies was $465,370.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The directors who served as members of the Personnel and Compensation
Committee during fiscal year 1994 are: Tom H. Barrett, Russell G. Cleary and
Arthur O. Smith.

Mr. Arthur O. Smith is an executive officer and a director of SICO. During
1994, the Company provided SICO consulting services, office space, directors',
officers' and group insurance coverage and other miscellaneous services. The
Company was reimbursed by SICO in the amount of $119,080 for the Company's costs
relating to such services. Mr. Arthur O. Smith is a director of the Company and
served on the Personnel and Compensation Committee of the Company in 1994. Mr.
Glen R. Bomberger, an executive officer and a director of the Company, is also a
director and vice president -- finance of SICO and served as a member of the
compensation committee of SICO. Mr. Bruce M. Smith, an executive officer and
director of SICO, is a nominee for election as a director of the Company.

BOARD PERSONNEL AND COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION

The Personnel and Compensation Committee (the "Committee") of the Board of
Directors is responsible for establishing an executive compensation program and
for administering the executive compensation policies and plans of the Company.
The Committee also determines the amount of compensation which the Company's
chief executive officer and other executive officers receive annually.

The Committee consists of three members, each of whom is an outside
director of the Company. This report was prepared by the Committee to provide
the Company's stockholders with a summary of its executive compensation policies
and practices.

The Committee has two primary objectives relating to the Company's
executive compensation program. The first is to recruit and retain high quality
executive leadership which is committed to achieving the current and long term
successful and profitable operations of the Company's businesses. The other is
to maintain an incentive compensation program which links executive pay to the
Company's return on investment.

In order to achieve these objectives, the Committee provides an executive
compensation program competitive with other comparably sized manufacturing
companies. The Committee believes that return

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on investment provides the best measure of performance because it closely
correlates the benefits to the stockholders with the financial incentives for
the executives. The Committee has established ranges for financial incentives
based upon return on investment, with smaller incentive payments for a modest
return on investment and larger incentive payments for greater returns.

The Company's executive compensation program consists of three components:
base salary, short term incentive (bonus) compensation and long term incentive
(stock options) compensation. In determining the executive compensation
practices, the Committee compares the Company's executive compensation program
with other companies' compensation programs for executives with similar
management responsibilities. The companies surveyed include manufacturing
businesses of similar size and the companies reflected in the Dow Auto Index,
one of the comparables used in the Company's Performance Graph. The Committee
annually reviews executive compensation data bases and also from time to time
uses independent compensation consultants for purposes of evaluating and
reviewing the Company's executive compensation program.

The Committee has designated certain executives, including the chief
executive officer ("CEO"), for compensation under the executive compensation
program in accordance with the performance criteria and standards described
below.

BASE SALARY

The Committee establishes competitive salary ranges for the executive
officers, generally above the median level of the salary ranges in the survey
referred to above. In addition, the Committee reviews each executive's
performance and accomplishments during the prior year as well as experience and
service with the Company in determining the annual base salary level for the
executive within the applicable salary range. In 1994, this methodology was
followed in establishing base salaries for the executive officers.

SHORT TERM INCENTIVE COMPENSATION

Short term incentive compensation is provided under the Executive Incentive
Compensation Plan ("EICP"). The EICP, consistent with the Company's philosophy
of linking compensation to the Company's return on investment, provides an
opportunity for executives to earn a cash bonus, the amount of which is based
upon the Company's and/or the operating unit's return on investment. Each year
the Committee sets minimum and maximum financial objectives for each of the
business units and the corporation. Achievement of these financial objectives by
the business or corporate units determines the amount of the Incentive
Compensation Fund available for the award of individual executive bonuses.

Incentive compensation, while predicated on the executive's unit meeting
its financial objective, is also based upon achievement of strategic objectives
established each year for the executive. In determining the amount of incentive
compensation award to be paid to an individual executive, the Committee
considers the executive's scope of responsibility, contributions to profit
improvement and attainment of the individual's strategic objectives.
Approximately half of the incentive compensation award distributed to the
individual executive is based on the return on investment of the executive's
business unit and is formula-based between maximum and minimum target
achievement. The other half of the award is based upon accomplishment of the
executive's strategic objectives, such as development of personnel, planning,
maintenance of product leadership, continuous improvement programs and product
and process research and development.

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15

The maximum amount of incentive compensation payable to an executive during
any year is 200% of base salary. In order to be eligible for incentive
compensation, executives are required to enter into annual contracts (standard
incentive plan contracts required for all plan participants) which obligate them
to remain in the employment of the Company for the year.

During 1994, the Company had a record return on investment and most of the
operating units achieved satisfactory levels of return on investment.
Accordingly, the Committee made incentive compensation awards to the
participating executives based on the factors described above.

LONG TERM INCENTIVE COMPENSATION

The Committee utilizes the shareholder approved 1990 Long Term Executive
Incentive Compensation Plan ("LTEICP") as another key component in carrying out
the Company's philosophy of linking the executive compensation program to the
stockholders' interests. The LTEICP consists of stock options which are granted
annually to the executives at the current market price of the stock on the date
of the grant. The size of the option grant to the executive is established at a
level commensurate with the median level of grants for the executive's position
as reported in the aforementioned survey data and studies by independent
compensation consultants. Pursuant to the LTEICP, executives enter into standard
plan contracts each year which reflect the specific terms of the stock option
grants and terms of forfeiture should the executive leave the employment of the
Company.

CEO COMPENSATION

The Committee, in establishing the 1994 compensation program for the Chief
Executive Officer, Robert J. O'Toole, employed the methodology, surveys and
study conducted by an independent consulting firm previously described in this
report. In setting Mr. O'Toole's base salary for 1994, the Committee reviewed
his accomplishments during the prior year, experience, service with the Company
and determined to position it above the median level of salaries of chief
executive officers of similar sized manufacturing companies. Mr. O'Toole's bonus
compensation for 1994 was directly related to the Company's record return on
investment earned by the Company and reflected Committee set minimum and maximum
objectives. The maximum amount of bonus compensation payable to Mr. O'Toole is
200% of base salary. The Committee made stock option grants to Mr. O'Toole under
the LTEICP consistent with the methodology utilized in making grants to the
other participating executives.

CONCLUDING REMARKS

The Committee reviewed executive compensation during 1994 and concluded
that the stockholders' interests were well served by the executive compensation
program. The Committee will continue to monitor and evaluate its executive
compensation program and make any adjustments determined to be appropriate. The
Internal Revenue Service has to date only issued partial regulations
implementing the new deduction limitations for executive compensation. The
Committee intends, subject to the limited guidance of the regulations, to
preserve the deductibility of executive compensation.

PERSONNEL & COMPENSATION COMMITTEE

Tom H. Barrett, Chairman
Russell G. Cleary, Member
Arthur O. Smith, Member

13
16

PERFORMANCE GRAPH

The graph below shows a five year comparison of the cumulative shareholder
return on the Company's common stock with the cumulative total return of
companies on the S&P 500 Composite Index and the Dow Automotive Index (without
tire and rubber), both of which are published indexes.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
FROM DECEMBER 31, 1989 TO DECEMBER 31, 1994
(ASSUMES $100 INVESTED WITH REINVESTMENT OF DIVIDENDS)

MEASUREMENT PERIOD DOW AUTO W/O
(FISCAL YEAR COVERED) A. O. SMITH S&P 500 TIRE & RUBBER

12/31/89 100.00 100.00 100.00
12/31/90 124.64 96.80 87.88
12/31/91 152.65 126.42 107.92
12/31/92 333.89 136.16 138.44
12/31/93 643.03 149.91 181.18
12/30/94 448.44 151.89 159.07

COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and Executive Officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the New York and American Stock Exchanges. Executive Officers, Directors and
greater than ten percent shareholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) Forms 3, 4 and 5 which they file.

Based solely on its review of the copies of such forms received by the
Company and written representations from certain reporting persons during fiscal
year 1994, the Company believes that all filing requirements applicable to its
Executive Officers, Directors and greater than ten percent beneficial owners
were met.

14
17

BOARD OF DIRECTORS PROPOSAL TO AMEND RESTATED
CERTIFICATE OF INCORPORATION TO INCREASE
AUTHORIZED CLASS A COMMON STOCK AND COMMON STOCK

The Board of Directors has proposed an amendment to Article 4 of the
Company's Restated Certificate of Incorporation to increase the number of
authorized shares of Class A Common Stock from 7,000,000 to 14,000,000 shares
and authorized shares of Common Stock from 24,000,000 to 60,000,000 shares. As
of December 31, 1994, 6,035,541 shares of Class A Common Stock were issued (of
which 6,032,081 were outstanding and 3,460 shares were held in the Company's
treasury), leaving a balance of 964,459 unissued shares of Class A Common Stock.
As of December 31, 1994, 15,664,109 shares of Common Stock were issued (of which
14,873,540 were outstanding and 790,569 shares were held in the treasury) and
1,623,200 shares are reserved for issuance upon the exercise or grant of stock
options under the Company's stock option plan, and 6,035,541 shares are reserved
for issuance upon conversion of the Class A Common Stock into Common Stock,
leaving a balance of 677,150 unissued shares of Common Stock. No shares of
Preferred Stock are currently issued and outstanding.

Due to the limited number of shares of Class A Common Stock and Common
Stock available for issuance, the Board of Directors has declared it advisable
that the Restated Certificate of Incorporation be amended, subject to approval
by the stockholders, to increase the aggregate number of shares which the
Company has the authority to issue from 34,000,000 to 77,000,000 shares
(14,000,000 shares of Class A Common Stock, 60,000,000 shares of Common Stock,
and 3,000,000 shares of Preferred Stock). The Board recommends that the
stockholders approve the amendment of the first paragraph of Article 4 of the
Company's Restated Certificate of Incorporation so that, as amended, it shall
read as follows:

"The aggregate number of shares which the corporation has the
authority to issue shall be seventy-seven million (77,000,000) shares,
consisting of:

(a) fourteen million (14,000,000) shares designated as "Class A
Common Stock," with a par value of Five Dollars ($5) per share;

(b) sixty million (60,000,000) shares designated as "Common Stock,"
with a par value of One Dollar ($1) per share; and

The additional shares of Class A Common Stock and Common Stock for which
authorization is sought would be part of existing classes and, if and when
issued, would have the same rights and privileges as the outstanding shares of
Class A Common Stock and Common Stock, respectively, would have. Holders of
Class A Common Stock and Common Stock would not have the preemptive right to
subscribe for and purchase any part of any new or additional issue of stock or
securities convertible into stock.

Upon adoption of the proposed amendment, under the Delaware General
Corporation Law the Board of Directors would be authorized to issue additional
shares of Class A Common Stock, Common Stock and Preferred Stock at such time or
times, to such persons and for such consideration as it may determine without
stockholder approval. The Board would have the authority, as it has now, to fix
the number of shares in each series of Preferred Stock, the designations
thereof, and the terms of each series including the dividend rights, redemption
and retirement provisions, liquidation preferences and other

15
18

rights and restrictions. In order to minimize dilution of the voting control
exercised by SICO, and to further increase the liquidity of the Common Stock,
the Company currently believes that it is more likely to issue additional Common
Stock and Preferred Stock than Class A Common Stock in the future. The increase
in the number of authorized shares of Class A Common Stock and Common Stock
would enable the Company, as the need may arise, to take timely advantage of
market conditions and the availability of favorable opportunities without the
delay and expense of holding a meeting of stockholders.

The purpose of increasing the number of authorized shares of Common Stock
is to make additional stock available for issuance for such corporate purposes
as the Board of Directors may determine in its discretion, including, without
limitation, future public offerings, acquisitions, investment opportunities,
incentive compensation, stock splits, stock dividends or other distributions,
warrants or rights and other corporate purposes. The purpose of increasing the
number of authorized shares of Class A Common Stock is to provide sufficient
stock for future stock splits and stock dividends. The Company does not have any
present plans or intentions to issue shares of Common Stock or Class A Common
Stock. The Company may, however, issue additional shares of Common Stock in the
future if favorable opportunities arise and if market conditions and the
economic position of the Company are appropriate for such an issuance.

The issuance of any additional shares of Class A Common Stock, Common Stock
or Preferred Stock may, depending on the circumstances in which such shares are
issued, have the effect of diluting the equity of existing holders and the
earnings per share of existing shares of common stock. The Board of Directors
does not plan to seek stockholder approval prior to any issuance of additional
shares unless required by law or the rules of the New York Stock Exchange,
American Stock Exchange or any other stock exchange on which stock of the
Company may be listed.

If the proposed amendment is adopted by the stockholders of the Company, it
will become effective upon filing and recording a Certificate of Amendment of
the Restated Certificate of Incorporation as required by the General Corporation
Law of Delaware.

The Board of Directors recommends a vote FOR the proposal to amend the
Restated Certificate of Incorporation, as set forth above, and your proxy will
be so voted unless you specify otherwise.

APPOINTMENT OF INDEPENDENT AUDITORS

The Board of Directors of the Company has appointed Ernst & Young LLP,
Certified Public Accountants, as the Company's independent auditors for 1995.
The action of the Board of Directors was taken upon the recommendation of its
Audit Committee.

Although not required to be submitted to a vote of the stockholders, the
Board of Directors believes it appropriate to obtain stockholder ratification of
the Board's action in appointing Ernst & Young LLP as the Company's independent
auditors. Should such appointment not be ratified, the Board of Directors will
reconsider the matter. A representative of Ernst & Young LLP is expected to be
present at the annual meeting of stockholders and available to respond to
appropriate questions and he will have the opportunity to make a statement if he
desires to do so.

16
19

STOCKHOLDER PROPOSALS

The Company has received a proposal from one stockholder who has informed
the Company of his intention to present the proposed resolution at the annual
stockholders meeting. Mr. John J. Gilbert, 1165 Park Avenue, New York, New York
10128-1210, has submitted a proposed resolution on rotating the location of the
annual shareholder meeting. Mr. Gilbert is the owner of 100 shares of Common
Stock and 200 shares of Class A Common Stock of the Company, and he serves as
co-trustee with respect to 200 shares of Class A Common Stock of the Company.

The proposed resolution and the statement in support thereof is presented
below as received from the stockholder. The Board of Directors has recommended a
vote against the stockholder proposal for the reasons discussed in the Company's
response.

STOCKHOLDER PROPOSAL
TO ROTATE THE LOCATION
OF THE ANNUAL MEETING OF STOCKHOLDERS

RESOLVED, that the stockholders of A. O. Smith Corporation, assembled in
annual meeting in person and by proxy, hereby request that the Board of
Directors take the necessary steps to rotate the location of the annual meeting
between Milwaukee, New York City and other areas where there are large
concentrations of stockholders.

REASONS

In 1989, * owners of 138,610 shares voted in favor of this similar
proposal. The vote against included * unmarked proxies. (*Management was
requested to insert the correct figures, but does not have available information
on the total number of owners or unmarked proxies.)

We believe management has the duty to attract as many stockholders and
directors to their annual meeting as possible and that such rotation would
accomplish better attendance.

In the past, very few stockholders and directors attended our annual
meeting.

With the large number of employee stockholders, rotation of the annual
meeting would be beneficial, in our opinion.

Many companies hold their stockholder meetings at their plants and have
open houses for tours. The families enjoy doing this.

General Motors, one of our good customers, is a perfect example of doing
this the right way.

If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain.

THE BOARD OF DIRECTORS AND MANAGEMENT DO NOT AGREE WITH THE ABOVE PROPOSAL AND
RECOMMEND A VOTE AGAINST IT FOR THE FOLLOWING REASONS:

It has been a long-standing tradition of A. O. Smith Corporation to hold
its stockholders meetings in the state of its incorporation. Under the Company's
By-Laws and in accordance with statutory provisions of Delaware, the state of
its incorporation, the Board of Directors is authorized to determine the date,
time and location of the annual meeting of stockholders. In our opinion,
selection of the

17
20

location of the annual stockholders meeting should remain in the discretion of
the Board, and the adoption of a formal program requiring the rotation of the
meeting location would be unduly restrictive on the Board.

We also believe that an annual meeting is not the best forum for
communicating with our shareholders. Our focus has been to communicate with
shareholders through the Company's quarterly and annual reports and other
periodic releases, including meetings with analysts. We make an effort to
provide timely information to all shareholders, rather than providing
information at the annual meeting which only some of the shareholders are able
to attend.

For all these reasons, the Board of Directors and Management recommend a
vote AGAINST this stockholder proposal.

OTHER BUSINESS

Management is not aware of any matters other than those stated above which
may be presented for action at the meeting, but should any matter requiring a
vote of the stockholders arise, it is intended that proxies solicited will be
voted in respect thereof in accordance with the discretion of the person or
persons voting the proxies.

DATE FOR STOCKHOLDER PROPOSALS

Proposals of stockholders intended to be presented at the 1996 annual
meeting of stockholders must be received by the Company no later than November
1, 1995, to be included in the materials for the 1996 meeting.

March 1, 1995

EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE
ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE
MEETING YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.

18
21

[LOGO]
22

A. O. SMITH CORPORATION
P.O. Box 23973
Milwaukee, WI 53223-0973

PROXY - CLASS A COMMON STOCK
THIS PROXY IS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints ROBERT J. O'TOOLE, GLEN R. BOMBERGER and W.
DAVID ROMOSER, or any one of them, with full power of substitution, as proxy or
proxies of the undersigned to attend the annual meeting of stockholders of A. O.
Smith Corporation to be held on April 5, 1995, at 9:00 a.m. Eastern Time, at the
Hotel du Pont, 11th and Market Streets, Wilmington, Delaware, or at any
adjournment thereof, and there to vote all shares of Class A Common Stock which
the undersigned would be entitled to vote if personally present as specified
upon the following matters and in their discretion upon such other matters as
may properly come before the meeting.

1. ELECTION OF FOR all nominees listed below / / WITHHOLD AUTHORITY / /
DIRECTORS (except as marked to the contrary to vote for All Nominees
below) listed below

TOM H. BARRETT, GLEN R. BOMBERGER, THOMAS I. DOLAN, ROBERT J. O'TOOLE, DONALD J.
SCHUENKE, ARTHUR O. SMITH AND BRUCE M. SMITH

(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)

_______________________________________________________________________________

2. PROPOSAL TO APPROVE AMENDMENT OF THE RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF THE CLASS A COMMON STOCK TO
14,000,000 SHARES AND THE COMMON STOCK TO 60,000,000 SHARES:
FOR / / AGAINST / / ABSTAIN / /

3. PROPOSAL TO APPROVE THE RATIFICATION OF ERNST & YOUNG LLP AS THE INDEPENDENT
AUDITORS OF THE CORPORATION:
FOR / / AGAINST / / ABSTAIN / /

4. STOCKHOLDER PROPOSAL TO ROTATE THE LOCATION OF THE ANNUAL MEETING OF
STOCKHOLDERS:
FOR / / AGAINST / / ABSTAIN / /

(continued, and to be signed and dated, on the other side)
23
PROXY NO. NO. OF SHARES

The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
and accompanying Proxy Statement, ratifies all that said proxies or their
substitutes may lawfully do by virtue hereof, and revokes all former proxies.

Please sign exactly as your name appears below, date and return this proxy.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3 AND AGAINST PROPOSAL 4.

Date _________________________, 1995

Signature
--------------------------------------------

Signature
--------------------------------------------
When signing as attorney, executor, administrator,
trustee or guardian, please add your full title as
such. If shares are held by two or more persons,
all holders must sign the proxy.

If you also hold Common Stock, please fill out the green Common Stock
proxy.

No postage is required if this proxy is returned in the enclosed envelope and
mailed in the United States.

24
A. O. SMITH CORPORATION
P.O. Box 23973
Milwaukee, WI 53223-0973

PROXY - COMMON STOCK
THIS PROXY IS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints ROBERT J. O'TOOLE, GLEN R. BOMBERGER and W.
DAVID ROMOSER, or any one of them, with full power of substitution, as proxy or
proxies of the undersigned to attend the annual meeting of stockholders of A. O.
Smith Corporation to be held on April 5, 1995, at 9:00 a.m. Eastern Time, at the
Hotel du Pont, 11th and Market Streets, Wilmington, Delaware, or at any
adjournment thereof, and there to vote all shares of Common Stock which the
undersigned would be entitled to vote if personally present as specified upon
the following matters and in their discretion upon such other matters as may
properly come before the meeting.

1. ELECTION OF FOR all nominees listed below / / WITHHOLD AUTHORITY / /
DIRECTORS (except as marked to the contrary to vote for All Nominees
below) listed below

RUSSELL G. CLEARY, LEANDER W. JENNINGS AND DR. AGNAR PYTTE

(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)

_______________________________________________________________________________

3. PROPOSAL TO APPROVE THE RATIFICATION OF ERNST & YOUNG LLP AS THE
INDEPENDENT AUDITORS OF THE CORPORATION:
FOR / / AGAINST / / ABSTAIN / /

4. STOCKHOLDER PROPOSAL TO ROTATE THE LOCATION OF THE ANNUAL MEETING OF
STOCKHOLDERS:
FOR / / AGAINST / / ABSTAIN / /

(continued, and to be signed and dated, on the other side)
25
PROXY NO. NO. OF SHARES

Please sign exactly as your name appears below, date and return this proxy.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3 AND AGAINST PROPOSAL 4.

Date __________________________, 1995

Signature
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If you also hold Class A Common Stock, please fill out the white Class A
Common Stock proxy.

No postage is required if this proxy is returned in the enclosed envelope and
mailed in the United States.