Exhibit 10.2
December 9, 2008
A. O. Smith Corporation
11270 West Park Place
Milwaukee, WI 53224
Attention: James F. Stern
Smith Investment Company
11270 West Park Place
Milwaukee, WI 53224
Attention: Bruce M. Smith
Ladies and Gentlemen:
Smith Investment Company, a Nevada
corporation (“ SICO ”), Smith Investment Company
LLC, a Delaware limited liability company (“ SpinCo
”), A. O. Smith Corporation, a Delaware 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 (“ SICO Common Stock ”) 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 and shares of Common Stock, par value $1.00 per share,
of the Company. Each of the parties signatory hereto are
stockholders of SICO (each, individually, a “
Stockholder ” and, collectively, the “
Stockholders ”). 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 and SICO to enter into and perform their respective
obligations under the Merger Agreement, the Company and SICO have
required that each Stockholder enter into this Support Agreement.
Each Stockholder 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:
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1. Each Stockholder represents and
warrants that the list showing ownership by each of the
Stockholders, provided to the Company and SICO (the “
List ”), sets forth as of the date hereof the number
of shares of SICO Common Stock owned beneficially or of record by
such Stockholder (the “ Covered Shares ”). Each
Stockholder represents and warrants that, as of the date hereof,
such Stockholder owns its Covered Shares free and clear of all
liens, charges, encumbrances, voting agreements and commitments of
every kind, except for such liens, charges, encumbrances, voting
agreements and commitments that would not prevent or delay the
performance by such Stockholder of its obligations under this
Support Agreement or the transactions contemplated hereby. 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 the List, each Stockholder has sole voting
power and sole dispositive power with respect to all of its Covered
Shares. Each Stockholder agrees, while this Support Agreement is in
effect, to endeavor to promptly notify the Company and SICO of the
number of any new shares of SICO Common Stock with respect to which
such Stockholder 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 such Stockholder
as of the date hereof.
2. Each Stockholder 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 such Stockholder, and, other
than Paragraph 7 as to which the Stockholders make no
representation, is enforceable against such Stockholder in
accordance with its terms, subject to the Bankruptcy and Equity
Exception.
3. Each Stockholder represents and
warrants that (A) except for filings as may be required under,
and other applicable requirements of, the Exchange Act, no filing
with, and no permit, authorization, consent or approval of, any
state, federal or foreign public body or authority is necessary for
the execution of this Support Agreement by such Stockholder and the
consummation by such Stockholder of the transactions contemplated
hereby and (B) none of the execution and delivery of this
Support Agreement by such Stockholder, the consummation by such
Stockholder of the transactions contemplated hereby or compliance
by such Stockholder with any of the provisions hereof shall
(i) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to
any third party right of termination, cancellation, material
modification or acceleration of any obligation or to a loss of a
material benefit) under any of the terms, conditions or provisions
of any contract, agreement or arrangement to which such Stockholder
is a party or by which such Stockholder may be bound in a manner
that would render such Stockholder unable to perform its covenants
and agreements set forth in this Support Agreement, including any
voting agreement, stockholders agreement, irrevocable proxy, voting
trust or organizational document, or (ii) violate any law,
order, injunction, judgment, decree or award of any court,
Governmental Authority or arbitrator applicable to such
Stockholder.
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4. Each Stockholder 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 such Stockholder from consummating a Transfer
(i) to another Stockholder, (ii) as specifically required
by a court order, which such Stockholder shall use its reasonable
best efforts to avoid, (iii) pursuant to this Support
Agreement or the Merger Agreement or the transactions and other
agreements contemplated thereby, (iv) as required by such
Stockholder’s trust documents, or (v) with the
Company’s and SICO’s prior written consent. Any action
taken in violation of the foregoing sentence shall be null and void
ab initio and each Stockholder 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.
5. Each Stockholder agrees that,
during the term of this Support Agreement, at any meeting of SICO
stockholders, however called, or any adjournment or postponement
thereof, such Stockholder 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 SICO to facilitate the Merger or any
transaction contemplated by the Merger Agreement; and
(2) against (X) any proposal that would reasonably be
expected to prevent or materially delay the consummation of the
Merger and (Y) any proposal directly resulting from or related
to a Company Intervening Event that resulted in the modification or
withdrawal of the Company Recommendation.
6. Each Stockholder further agrees
that, during the one year period following any termination of the
Merger Agreement by the Company pursuant to Section 8.1(e) of
the Merger Agreement, at any meeting of SICO stockholders, however
called, or any adjournment or postponement thereof, such
Stockholder shall be present (in person or by proxy) and vote (or
cause to be voted) all of the Covered Shares against any proposal
directly resulting from or related to the Company Intervening Event
that resulted in the modification or withdrawal of the Company
Recommendation.
7. Each Stockholder hereby
(i) waives, to the fullest extent of the law, and agrees not
to assert any dissenters’ or appraisal rights in connection
with the Merger, including pursuant to Section 92A.380 of the
Nevada Revised Statutes or otherwise, with respect to any and all
Covered Shares; and (ii) 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, SICO 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
