EMPLOYMENT AGREEMENT



      THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made and entered into as

of May 15, 2005 (the "EFFECTIVE DATE"), by and between Smith International, Inc.

(hereafter "COMPANY") and Roger Brown (hereafter "EXECUTIVE"). The Company and

Executive may sometimes hereafter be referred to singularly as a "PARTY" or

collectively as the "PARTIES."



                              WITNESSETH:



      WHEREAS, the Company desires to continue to secure the employment services

of Executive subject to the terms and conditions hereafter set forth; and



      WHEREAS, the Executive is willing to enter into this Agreement upon the

terms and conditions hereafter set forth;



      NOW, THEREFORE, in consideration of Executive's employment with the

Company, and the premises and mutual covenants contained herein, the Parties

hereto agree as follows:



      1.    EMPLOYMENT. During the Employment Period (as defined in Section 4

hereof), the Company shall employ Executive, and Executive shall serve as, staff

Vice President for Strategic Initiatives of the Company. Executive's principal

place of employment shall be at the main offices of the Company in Houston,

Texas metropolitan area.



      2.    COMPENSATION. The Company shall pay to Executive during the

Employment Period a base salary of $150,000.00 per year, as may be adjusted (the

"BASE SALARY"). The Base Salary shall be payable in accordance with the

Company's normal payroll schedule and procedures for its executives. The Base

Salary shall be subject to at least annual review. Nothing contained herein

shall preclude the payment of any other compensation to Executive.



      3.    DUTIES AND RESPONSIBILITIES OF EXECUTIVE. During the Employment

Period, Executive shall devote his services (at least 30 hours per work week) to

the business of the Company and perform the duties and responsibilities assigned

to him by the Chief Executive Officer of the Company, to the best of his ability

and with reasonable diligence. This Section 3 shall not be construed as

preventing Executive from (a) engaging in reasonable volunteer services for

charitable, educational or civic organizations, or (b) investing his assets in

such a manner that will not require a material amount of his time or services in

the operations of the businesses in which such investments are made; provided,

however, no such other activity shall conflict with Executive's loyalties and

duties to the Company. Executive shall at all times use his best efforts to, in

good faith, comply with United States laws applicable to Executive's actions on

behalf of the Company and its Affiliates (as defined in Section 6(d)). Executive

understands and agrees that he may be required to travel from time to time for

purposes of the Company's business.



      4.    TERM OF EMPLOYMENT. Executive's initial term of employment with the

Company under this Agreement shall be for the period from the Effective Date

through May 14, 2007 (the "INITIAL TERM OF EMPLOYMENT"). Thereafter, the

Employment Period hereunder may be extended on a month-to-month basis or for

such other period as mutually agreed by the Parties. The Initial Term of

Employment, and any extension of employment hereunder, shall each be referred to

herein as a "TERM OF EMPLOYMENT." The period from the Effective Date through the

date of Executive's termination of employment for whatever reason shall be

referred to herein as the "EMPLOYMENT PERIOD."



      Executive may terminate his employment with the Company and all Affiliates

at any time by providing 30 days Notice of Termination to the CEO pursuant to

Section 7. Company may terminate the employment of Executive with the Company

and all Affiliates at any time by providing 30 days Notice of Termination to

Executive pursuant to Section 7; provided, however, no advance Notice of

Termination shall be required if Executive is being terminated for Cause (as

defined in Section 6(c)).



      5.    BENEFITS. Subject to the terms and conditions of this Agreement,

during the Employment Period, Executive shall be entitled to the following:



            (a)   REIMBURSEMENT OF BUSINESS EXPENSES. The Company shall pay or

reimburse Executive for all reasonable travel, entertainment and other business

expenses paid or incurred by Executive in the performance of his duties

hereunder. The Company shall also provide Executive with suitable office space,

including staff support, and paid parking.



<PAGE>



            (b)   OTHER EMPLOYEE BENEFITS. Executive shall be entitled to

participate in any pension, retirement, 401(k), profit-sharing, and other

employee benefits plans or programs of the Company to the same extent as

available to any other officers of the Company under the terms and conditions of

such plans or programs. Executive shall also be entitled to participate in any

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