SMITH INTERNATIONAL, INC.



                       CODE OF BUSINESS CONDUCT AND ETHICS



                                 I. Introduction



This Code of Business Conduct and Ethics covers a wide range of business

practices and procedures. It is applicable to all employees, officers and

directors of the Company. It does not cover every issue that may arise or

provide full details of specific Company policies, but it sets out basic

principles to guide all employees of the Company. All of our employees, officers

and directors must conduct themselves accordingly and seek to avoid even the

appearance of improper behavior. The Code should also be provided to and

followed by the Company's agents and representatives, including consultants.

Those who violate the standards in this Code will be subject to disciplinary

action up, and including, termination.



                 1. Compliance with Laws, Rules and Regulations



In conducting the Company's affairs, and in their private affairs outside the

Company which in any way can affect the Company, the Company expects all

employees to exercise good judgment, the highest ethical standards and to obey

applicable law, both in letter and in spirit. All employees must respect and

obey the laws of the cities, states and countries in which we operate. Although

not all employees are expected to know the details of these laws, it is

important to know enough to determine when to seek advice from supervisors,

managers or other appropriate personnel.



                            2. Conflicts of Interest



A "conflict of interest" exists when a person's private interest interferes in

any way with the interests of the Company or interferes with a person's duty to

serve the Company to the best of the person's ability. A conflict situation can

arise when an employee, officer or director takes actions or has interests that

may make it difficult to perform his or her Company work objectively and

effectively.



It is a conflict of interest for a Company employee to work simultaneously for a

competitor, customer or supplier or to have a direct or indirect financial

interest in, or receive compensation for, any transaction between Smith and any

company with whom we do business. You are not allowed to work for a competitor

as a consultant or board member. The best policy is to avoid any direct or

indirect business connection with our customers, suppliers or competitors,

except on our behalf.



The Company's policy on conflicts and ethics is more specifically set out in the

SII Code of Ethics, which is annually distributed to employees worldwide

together with a compliance certification that is to be completed and returned to

the Company.



Conflicts of interest are prohibited as a matter of Company policy, except under

guidelines approved by the Board of Directors. Conflicts of interest may not

always be clear-cut, so if you have a question, you should consult with your

management or the Company's Legal Department. Any employee, officer or director

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