A. O. SMITH CORPORATION
NOMINATING AND GOVERNANCE COMMITTEE CHARTER
The purpose of the Nominating and Governance Committee (the “Committee”) is to provide assistance to the Board of Directors (“Board”) in identifying qualified individuals to become Board members, in providing direction as to the independence of directors, in determining the composition of the Board and its committees, in monitoring a process to assess Board effectiveness, in developing and implementing the Corporate Governance Guidelines and advising the Board on corporate governance matters.
Composition of the Committee
The Committee will be annually appointed by the Board and will consist of at least 2 directors all of whom in the judgment of the Board of Directors will be independent, unless and to the extent the Board elects to exempt one or more Directors under the “Controlled Company” exemption as it deems appropriate. Any such exemption will be disclosed in the proxy. The Chairperson of the Committee shall be designated by the Board. The Board may at any time remove one or more directors as members of the Committee.
Authority and Responsibilities
In furtherance of its purpose, the Committee will have the following authority and responsibility:
1. Establish the general criteria to be considered when selecting candidates for the Board, which are attached as Appendix A, and to periodically review and amend the criteria as the Committee deems appropriate.
2. Coordinate the search for individuals qualified to become members of the Board. As part of this process, the Committee will review the qualifications of candidates for Board membership, including any candidates nominated by shareholders. The Committee will make recommendations as to nominees for approval by the Board and by the shareholders at the Company’s annual meeting of shareholders, or by the Board in the interval between annual shareholder meetings.
3. Recommend to the Board the standards for determining director independence, consistent with the New York Stock Exchange rules and other legal or regulatory corporate governance requirements. Further, the Committee will review both these requirements and the individual circumstances of Board members on a periodic basis, no less frequently than annually, and make recommendations to the Board as it may deem appropriate concerning the on-going independence of Board members.
4. Review the Board’s committee structure, functions and composition, and make such recommendations to the Board as the Committee deems appropriate. Specifically, on an annual basis the Committee will review and recommend committee slates; on an on-going basis the Committee will recommend appointments to fill vacancies, and the removal of members, as necessary. Further, the Committee will confirm that each committee of the Board has a charter in effect and that each charter is reviewed at least annually by its committee.
5. Make recommendations to the Board regarding the Board’s composition, size and the structure of its Board meetings, as appropriate from time to time.
6. Develop and recommend to the Board for its approval a set of Corporate Governance Guidelines. The Committee will periodically review and, as appropriate, recommend changes to the Guidelines for Board approval.
7. Evaluate the Company’s compliance with the corporate governance requirements. The Committee will recommend to the Board such additional corporate governance actions as the Committee may deem appropriate from time to time.
8. Develop and recommend to the Board for its approval an annual self-evaluation process regarding the performance the Board and each of its committees. The Committee will oversee the annual self-evaluations.
The Committee will have the authority to delegate any of its responsibilities to subcommittees as the Committee may deem appropriate in its sole discretion.
Further, the Committee will have the authority to retain a search firm to assist in the identification of director candidates, as the Committee may deem appropriate in its sole discretion. The Committee will have the sole authority to approve related fees and retention terms.
The Committee will report its actions and its recommendations to the Board after each Committee meeting and will conduct and present to the Board an annual performance evaluation of the Committee. The Committee will review at least annually the adequacy of this Charter and recommend any proposed changes to the Board for approval.