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EXHIBIT 10.14
 SMITH INTERNATIONAL, INC.
EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN
 (As Amended and Restated Effective January 1, 2008)
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TABLE OF CONTENTS
 PageARTICLE I DEFINITIONS
    
    84ARTICLE II ADMINISTRATION
    
    86ARTICLE III ELIGIBILITY
    
    87ARTICLE IV ESTABLISHMENT OF INCENTIVE COMPENSATION TARGETS
    
    874.1 Incentive Compensation Award Target
    
    874.2 Reduction of Incentive Compensation
    
    87ARTICLE V DETERMINATION OF GOALS FOR INCENTIVE COMPENSATION
    
    875.1 Establishment of Performance Goals
    
    875.2 Determination.
    
    875.3 Committee Discretion.
    
    87ARTICLE VI PAYMENT OF INCENTIVE COMPENSATION
    
    886.1 Form and Time of Payment
    
    886.2 Forfeiture Upon Termination Prior to Date of Payment
    
    886.3 Pro Rata Payment for Involuntary Termination without Cause, Death, Disability, or Retirement
    
    88ARTICLE VII PERFORMANCE CRITERIA
    
    88ARTICLE VIII MISCELLANEOUS PROVISIONS
    
    898.1 Non-Assignability
    
    898.2 No Right to Continue in Employment
    
    898.3 Indemnification of Committee Members
    
    898.4 No Plan Funding
    
    898.5 Governing Law
    
    908.6 Binding Effect
    
    908.7 Construction of Plan
    
    908.8 Integrated Plan
    
    908.9 Compliance with Code Section 409A
    
    90ARTICLE IX AMENDMENT OR DISCONTINUANCE
    
    90ARTICLE X EFFECT OF THE PLAN
    
    90ARTICLE XI TERM
    
    90
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SMITH INTERNATIONAL, INC.
EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN
 (As Amended and Restated Effective January 1, 2008)
 Purpose
 Plan Company Code
 Effective Date
 ARTICLE I  DEFINITIONS
  Base Salary
 Beneficiary
 Board
 Business Unit
 Business Unit Performance Goal
 Cause
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Code
 Committee
 Company
 Company Performance Goal
 Disability
 Employee
 Employer
 Employment
 Exchange Act
 Executive
 Incentive Compensation
 Participant Article III
 Performance Criteria Article VII
 Performance Goal
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Performance Period
 Plan
 Retirement ,
 Subsidiary
 ARTICLE II  ADMINISTRATION
 Article II
  (a)
    
    designate the Executives who are eligible to participate in the Plan as
Participants;(b)
    
    maintain records of all Plan transactions and other data in the manner
necessary for proper administration of the Plan;(c)
    
    adopt rules of procedure and regulations necessary for the proper and efficient
administration of the Plan, provided the rules and regulations are not inconsistent
with the terms of the Plan as set out herein;(d)
    
    enforce the terms of the Plan and the rules and regulations it adopts;(e)
    
    review claims and render decisions on claims for benefits under the Plan;(f)
    
    furnish the Company or the Participants, upon request, with information that
the Company or the Participants may require for tax or other purposes;(g)
    
    employ agents, attorneys, accountants or other persons (who also may be
employed by or represent the Company) for such purposes as the Committee deems
necessary or desirable in connection with its duties hereunder; and(h)
    
    perform any other acts necessary or appropriate for the proper management and
administration of the Plan.
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ARTICLE III  ELIGIBILITY
  ARTICLE IV  ESTABLISHMENT OF INCENTIVE COMPENSATION TARGETS
 Incentive Compensation Award Target Section 4.2
 Reduction of Incentive Compensation
 Article IV Section 6.1 Article II
 ARTICLE V  DETERMINATION OF GOALS FOR INCENTIVE COMPENSATION
 Establishment of Performance Goals Section 4.2
 Determination
 Committee Discretion
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ARTICLE VI  PAYMENT OF INCENTIVE COMPENSATION
 Form and Time of Payment Sections 6.2 and 6.3 1 2
 Forfeiture Upon Termination Prior to End of Performance Period Section 6.1
 Pro Rata Payment for Involuntary Termination without Cause, Death, Disability, or
Retirement Section 6.1
 ARTICLE VII  PERFORMANCE CRITERIA
  (a)
    
    profits (including, but not limited to, profit growth, net operating profit or
economic profit);(b)
    
    profit-related return ratios;(c)
    
    return measures (including, but not limited to, return on assets, capital,
equity, investment or sales);(d)
    
    cash flow (including, but not limited to, operating cash flow, free cash flow
or cash flow return on capital or investments);(e)
    
    earnings (including, but not limited to, total shareholder return, earnings per
share or earnings before or after taxes);(f)
    
    net sales growth;(g)
    
    net earnings or income (before or after taxes, interest, depreciation and/or
amortization);(h)
    
    gross, operating or net profit margins;(i)
    
    productivity ratios;(j)
    
    share price (including, but not limited to, growth measures and total
shareholder return);(k)
    
    turnover of assets, capital, or inventory;
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(l)
    
    expense targets;(m)
    
    margins;(n)
    
    measures of health, safety or environment;(o)
    
    operating efficiency;(p)
    
    customer service or satisfaction;(q)
    
    market share;(r)
    
    credit quality; and(s)
    
    working capital targets.
   ARTICLE VIII  MISCELLANEOUS PROVISIONS
 Non-Assignability
 No Right to Continue in Employment
 Indemnification of Committee Members
 No Plan Funding
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Governing Law
 Binding Effect
 Construction of Plan
 Integrated Plan
 Compliance with Code Section 409A
 ARTICLE IX  AMENDMENT OR DISCONTINUANCE
 Articles IV and
V
 ARTICLE X  EFFECT OF THE PLAN
  ARTICLE XI  TERM
  [Signature page follows]
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ATTEST:
    
    
    
    SMITH INTERNATIONAL, INC.By:
    
    /s/ PAMELA L. KUNKEMOELLER
    
    
    
    By:
    
    /s/ MALCOLM W. ANDERSONName:
    
    Pamela L. Kunkemoeller
    
    
    
    Name:
    
    Malcolm W. AndersonTitle:
    
    Senior Corporate Counsel and Assistant Secretary
    
    
    
    Title:
    
    Senior Vice President, Human ResourcesDate:
    
    October 23, 2007
    
    
    
    Date:
    
    October 23, 2007
 91