Document:

Exhibit
10.10

INDEMNIFICATION
AGREEMENT

This
Indemnification Agreement (the “Agreement”) is made as of November 30,
2006, by and between SM&A, a Delaware corporation (the “Company”),
and Steve D. Handy (the “Indemnitee”).

RECITALS

A.            The Company and Indemnitee
recognize the increasing difficulty in obtaining liability insurance for
directors, officers and key employees, the significant increases in the cost of
such insurance and the general reductions in the coverage of such insurance.

B.            The Company and Indemnitee
further recognize the substantial increase in corporate litigation in general,
subjecting directors, officers and key employees to expensive litigation risks
at the same time as the availability and coverage of liability insurance has
been severely limited.

C.            Indemnitee does not
regard the current protection available as adequate under the present
circumstances, and Indemnitee and agents of the Company may not be willing to
continue to serve as agents of the Company without additional protection.

D.            The Company desires to
attract and retain the services of highly qualified individuals, such as
Indemnitee, and to indemnify its directors, officers and key employees so as to
provide them with the maximum protection permitted by law.

AGREEMENT

In consideration
of the mutual promises made in this Agreement, and for other good and valuable
consideration, receipt of which is hereby acknowledged, the Company and
Indemnitee hereby agree as follows:

1.             Indemnification.

(a)           Third Party
Proceedings.  The Company shall
indemnify Indemnitee if Indemnitee is or was a party or is threatened to be
made a party to any threatened, pending or completed action, suit, proceeding,
or investigation whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company) by reason of the fact
that Indemnitee is or was a director, officer, employee or agent of the
Company, or any subsidiary of the Company, by reason of any action or inaction
on the part of Indemnitee while an officer or director or by reason of the fact
that Indemnitee is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement (if such settlement is approved
in advance by the Company, which approval shall not be unreasonably withheld)
actually and reasonably incurred by Indemnitee in connection with such action,
suit or proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful.  The

 

termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, or, with respect to any criminal action or proceeding, that
Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful.

(b)           Proceedings By or in
the Right of the Company.  The
Company shall indemnify Indemnitee if Indemnitee was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
proceeding by or in the right of the Company or any subsidiary of the Company
to procure a judgment in its favor by reason of the fact that Indemnitee is or
was a director, officer, employee or agent of the Company, or any subsidiary of
the Company, by reason of any action or inaction on the part of Indemnitee
while an officer or director or by reason of the fact that Indemnitee is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees) and, to the fullest extent
permitted by law, amounts paid in settlement (if such settlement is approved in
advance by the Company, which approval shall not be unreasonably withheld), in
each case to the extent actually and reasonably incurred by Indemnitee in
connection with the defense or settlement of such action or suit if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company and its stockholders, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which Indemnitee shall have been finally adjudicated by court order or
judgment to be liable to the Company in the performance of Indemnitee’s duty to
the Company and its stockholders unless and only to the extent that the court
in which such action or proceeding is or was pending shall determine upon
application that, in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper.

(c)           Mandatory Payment of
Expenses.  To the extent that
Indemnitee has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 1(a) or Section 1(b) or the
defense of any claim, issue or matter therein, Indemnitee shall be indemnified
against expenses (including attorneys’ fees) actually and reasonably incurred
by Indemnitee in connection therewith.

(d)           Exceptions. Any
other provision herein to the contrary notwithstanding, the Company shall not
be obligated pursuant to the terms of this Agreement:

(i)            Claims Initiated by
Indemnitee.  To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the Delaware General Corporation Law, but such indemnification
or advancement of expenses

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may be provided by
the Company in specific cases if the Board of Directors finds it to be
appropriate; or

(ii)           Claims under Section
16(b).  To indemnify Indemnitee for
expenses or the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.

2.             No
Employment Rights.  Nothing contained
in this Agreement is intended to create in Indemnitee any right to continued
employment. 

3.             Expenses;
Indemnification Procedure.

(a)           Advancement of
Expenses.  The Company shall advance
all expenses incurred by Indemnitee in connection with the investigation,
defense, settlement or appeal of any civil or criminal action, suit or
proceeding referred to in Section 1(a) or Section 1(b) hereof (including
amounts actually paid in settlement of any such action, suit or proceeding).  Indemnitee hereby undertakes to repay such
amounts advanced only if, and to the extent that, it shall ultimately be
determined that Indemnitee is not entitled to be indemnified by the Company as
authorized hereby.

(b)           Notice/Cooperation
by Indemnitee.  Indemnitee shall, as
a condition precedent to his or her right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable of any
claim made against Indemnitee for which indemnification will or could be sought
under this Agreement.  Notice to the
Company shall be directed to the President or the Chief Executive Officer of
the Company and shall be given in accordance with the provisions of Section
11(d) below.  In addition, Indemnitee
shall give the Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee’s power.

(c)           Procedure.  Any indemnification and advances provided for
in Section 1 and this Section 3 shall be made no later than thirty (30)
days after receipt of the written request of Indemnitee.  If a claim under this Agreement, under any
statute, or under any provision of the Company’s Certificate of Incorporation
or Bylaws providing for indemnification, is not paid in full by the Company
within thirty (30) days after a written request for payment thereof has first
been received by the Company, Indemnitee may, but need not, at any time
thereafter bring an action against the Company to recover the unpaid amount of
the claim and, subject to Section 10 of this Agreement, Indemnitee shall also
be entitled to be paid for the expenses (including attorneys’ fees) of bringing
such action.  It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in connection with any action, suit or proceeding in advance of its
final disposition) that Indemnitee has not met the standards of conduct which
make it permissible under applicable law for the Company to indemnify
Indemnitee for the amount claimed, but the burden of proving such defense shall
be on the Company and Indemnitee shall be entitled to receive interim payments
of expenses pursuant to Section 3(a) unless and until such defense may be
finally adjudicated by court order or judgment from which no further right of
appeal exists.  It is the parties’
intention that if the Company contests Indemnitee’s right to

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indemnification, the
question of Indemnitee’s right to indemnification shall be for the court to
decide, and neither the failure of the Company (including its Board of
Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its stockholders) to have made a determination that
indemnification of Indemnitee is proper in the circumstances because Indemnitee
has met the applicable standard of conduct required by applicable law, nor an
actual determination by the Company (including its Board of Directors, any
committee or subgroup of the Board of Directors, independent legal counsel, or
its stockholders) that Indemnitee has not met such applicable standard of
conduct, shall create a presumption that Indemnitee has or has not met the
applicable standard of conduct.

(d)           Notice to Insurers.  If, at the time of the receipt of a notice of
a claim pursuant to Section 3(b) hereof, the Company has director and officer
liability insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies.  The Company shall thereafter take all necessary
or desirable action to cause such insurers to pay, on behalf of the Indemnitee,
all amounts payable as a result of such proceeding in accordance with the terms
of such policies.

(e)           Selection of Counsel.  In the event the Company shall be obligated
under Section 3(a) hereof to pay the expenses of any proceeding against
Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, upon the
delivery to Indemnitee of written notice of its election so to do.  After delivery of such notice, approval of
such counsel by Indemnitee and the retention of such counsel by the Company,
the Company will not be liable to Indemnitee under this Agreement for any fees
of counsel subsequently incurred by Indemnitee with respect to the same
proceeding, provided that (i) Indemnitee shall have the right to employ counsel
in any such proceeding at Indemnitee’s expense; and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense
or (C) the Company shall not, in fact, have employed counsel to assume the
defense of such proceeding, then the fees and expenses of Indemnitee’s counsel
shall be at the expense of the Company.

4.             Additional
Indemnification Rights; Nonexclusivity.

(a)           Scope.  Notwithstanding any other provision of this
Agreement, the Company hereby agrees to indemnify the Indemnitee to the fullest
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by the other provisions of this Agreement, the Company’s
Certificate of Incorporation, the Company’s Bylaws or by statute.  In the event of any change, after the date of
this Agreement, in any applicable law, statute, or rule which expands the right
of a Delaware corporation to indemnify a member of its board of directors or an
officer, such changes shall be deemed to be within the purview of Indemnitee’s
rights and the Company’s obligations under this Agreement.  In the event of any change in any applicable
law, statute or rule which narrows the right of a Delaware corporation to
indemnify a member of its board of directors or an officer, such changes, to
the extent not otherwise required by such law, statute or rule to be

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applied to this Agreement
shall have no effect on this Agreement or the parties’ rights and obligations
hereunder.

(b)           Nonexclusivity.  The indemnification provided by this Agreement
shall not be deemed exclusive of any rights to which Indemnitee may be entitled
under the Company’s Certificate of Incorporation, its Bylaws, any agreement,
any vote of stockholders or disinterested members of the Company’s Board of
Directors, the General Corporation Law of the State of Delaware, or otherwise,
both as to action in Indemnitee’s official capacity and as to action in another
capacity while holding such office.  The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnified capacity even
though he or she may have ceased to serve in any such capacity at the time of
any action, suit or other covered proceeding.

5.             Partial
Indemnification.  If Indemnitee is
entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of the expenses, judgments, fines or penalties
actually or reasonably incurred in the investigation, defense, appeal or
settlement of any civil or criminal action, suit or proceeding, but not,
however, for the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such expenses, judgments, fines or penalties to
which Indemnitee is entitled. 

6.             Mutual
Acknowledgment.  Both the Company and
Indemnitee acknowledge that in certain instances, Federal law or public policy
may override applicable state law and prohibit the Company from indemnifying
its directors and officers under this Agreement or otherwise.  For example, the Company and Indemnitee
acknowledge that the Securities and Exchange Commission (the “SEC”) has taken
the position that indemnification is not permissible for liabilities arising
under certain federal securities laws, and federal legislation prohibits indemnification
for certain ERISA violations.

7.             Officer
and Director Liability Insurance. 
The Board shall, from time to time, make the good faith determination
whether or not it is practicable for the Company to obtain and maintain a
policy or policies of insurance with reputable insurance companies providing
the officers and directors of the Company with coverage for losses from
wrongful acts, or to ensure the Company’s performance of its indemnification
obligations under this Agreement.  Among
other considerations, the Board will weigh the costs of obtaining such
insurance coverage against the protection afforded by such coverage.  In all policies of director and officer
liability insurance, Indemnitee shall be named as an insured in such a manner
as to provide Indemnitee the same rights and benefits as are accorded to the
most favorably insured of the Company’s directors, if Indemnitee is a director;
or of the Company’s officers, if Indemnitee is not a director of the Company
but is an officer; or of the Company’s key employees, if Indemnitee is not an
officer or director but is a key employee. 
Notwithstanding the foregoing, the Company shall have no obligation to
obtain or maintain such insurance if the Board determines in good faith that
such insurance is not reasonably available, if the premium costs for such
insurance are disproportionate to the amount of coverage provided, if the
coverage provided by such insurance is limited by exclusions so as to provide
an insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a parent or subsidiary of the Company.

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8.             Severability.  Nothing in this Agreement is intended to
require or shall be construed as requiring the Company to do or fail to do any
act in violation of applicable law.  The Company’s
inability, pursuant to court order, to perform its obligations under this
Agreement shall not constitute a breach of this Agreement.  The provisions of this Agreement shall be
severable as provided in this Section 8. 
If this Agreement or any portion hereof shall be invalidated on any
ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any
applicable portion of this Agreement that shall not have been invalidated, and
the balance of this Agreement not so invalidated shall be enforceable in
accordance with its terms.

9.             Construction
of Certain Phrases.

(a)           For purposes of this
Agreement, references to the “Company” shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent
of a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that if Indemnitee is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, Indemnitee shall stand in the same position under
the provisions of this Agreement with respect to the resulting or surviving
corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.

(b)           For purposes of this
Agreement, references to “other enterprises” shall include employee benefit
plans; references to “fines” shall include any excise taxes assessed on
Indemnitee with respect to an employee benefit plan; and references to “serving
at the request of the Company” shall include any service as a director,
officer, employee or agent of the Company which imposes duties on, or involves
services by, such director, officer, employee or agent with respect to an
employee benefit plan, its participants, or beneficiaries; and if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan,
Indemnitee shall be deemed to have acted in a manner “not opposed to the best
interests of the Company” as referred to in this Agreement.

10.           Attorneys’
Fees.  In the event that any action
is instituted by Indemnitee under this Agreement to enforce or interpret any of
the terms hereof, Indemnitee shall be entitled to be paid all court costs and
expenses, including reasonable attorneys’ fees, incurred by Indemnitee with
respect to such action, unless as a part of such action, the court of competent
jurisdiction determines that each of the material assertions made by Indemnitee
as a basis for such action were not made in good faith or were frivolous.  In the event of an action instituted by or in
the name of the Company under this Agreement or to enforce or interpret any of
the terms of this Agreement, Indemnitee shall be entitled to be paid all court
costs and expenses, including attorneys’ fees, incurred by Indemnitee in
defense of such action (including with respect to Indemnitee’s counterclaims
and cross-claims made in such action), unless as a part of such action the
court determines that each of Indemnitee’s material defenses to such action
were made in bad faith or were frivolous.

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11.           Miscellaneous.

(a)           Governing Law.  This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of law.

(b)           Entire Agreement;
Enforcement of Rights.  This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter herein and merges all prior discussions between
them.  No modification of or amendment to
this Agreement, nor any waiver of any rights under this Agreement, shall be
effective unless in writing signed by the parties to this Agreement.  The failure by either party to enforce any
rights under this Agreement shall not be construed as a waiver of any rights of
such party.

(c)           Construction.  This Agreement is the result of negotiations
between and has been reviewed by each of the parties hereto and their
respective counsel, if any; accordingly, this Agreement shall be deemed to be
the product of all of the parties hereto, and no ambiguity shall be construed
in favor of or against any one of the parties hereto.

(d)           Notices.  Any notice, demand or request required or
permitted to be given under this Agreement shall be in writing and shall be
deemed sufficient when delivered personally or sent by fax or 48 hours after
being sent by nationally-recognized courier or deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such party’s address or fax number as set forth below or as
subsequently modified by written notice.

(e)           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

(f)            Successors and
Assigns.  This Agreement shall be
binding upon the Company and its successors and assigns, and inure to the
benefit of Indemnitee and Indemnitee’s heirs, legal representatives and
assigns.

(g)           Subrogation.  In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Company to effectively bring suit to enforce such rights.

[Remainder of page intentionally left blank]

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The parties hereto
have executed this Agreement as of the day and year set forth on the first page
of this Agreement.

 

	
  SM&A, a Delaware
  corporation

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Cathy L.
  McCarthy

  	
   

  
	
   

  	
   Name: Cathy
  L. McCarthy

  	
   

  
	
   

  	
   Title: President
  & Chief Operating Officer

  
	
   

  
	
  Address:

  
	
  4695 MacArthur
  Court, 8th Floor

  
	
  Newport Beach,
  CA 92660

  
	
   

  
	
   

  
	
  AGREED TO AND
  ACCEPTED:

  
	
   

  
	
   

  
	
  /s/ Steve D.
  Handy

  	
   

  
	
  Steve D. Handy

  	
   

  
	
   

  
	
  Address:

  
	
  4695 MacArthur
  Court, 8th Floor

  
	
  Newport Beach,
  CA 92660

  

Signature Page to Indemnification
AgreementEXHIBIT
10.1

AMENDED AND RESTATED SEVERANCE AGREEMENT

This Amended and Restated Severance Agreement (the “Agreement”) is
entered into by and between Cherokee International Corporation (the “Company”),
a Delaware corporation, and Jeffrey M. Frank (the “Executive”).

R E C I T A L S

WHEREAS, the Executive and the Company have previously entered into
that certain severance agreement dated March 31, 2005 (the “Old Severance
Agreement”); and

WHEREAS, the Executive and the Company desire to amend and restate in its
entirety the Old Severance Agreement to include severance benefits payable to
the Executive in the event his employment is terminated in connection with a
Change in Control.

NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements and covenants herein contained, the Company and the Executive
agree as follows:

1.                                       At
Will Employment.  The Executive’s
employment with the Company is currently on an at-will basis, meaning that
either the Executive or the Company may terminate the employment relationship
at any time for any reason or for no reason, and without further obligation or
liability, except as set forth in this Agreement.

2.                                       Term
of Agreement. This Agreement shall remain in effect for so long as the
Executive is employed as the President and Chief Executive Officer of the
Company; provided, however, that if a Change in Control shall have occurred
while the Executive is still employed, the Agreement shall expire no earlier
than twenty-four (24) months beyond the month in which such Change in Control
occurred (the “Term”).

3.                                       Severance
Payment. Provided that the Executive is not entitled to any benefits set
forth in Section 4 below and subject to the Executive’s having executed and, if
applicable, not revoked, a release of claims reasonably satisfactory to the
Company (the “Release of Claims”), in the event the Executive’s employment is
terminated by the Company other than for Cause, the Executive shall be entitled
to the following (collectively, the “Severance Benefits”):  (i) a cash payment, in lieu of any other
severance payment pursuant to any other plan or agreement of the Company or any
subsidiary thereof to which the Executive is otherwise entitled, of an amount
equal to his then annual base salary as in effect immediately prior to the date
of termination (the “Severance Payment”); (ii) the bonus that would have been
due the Executive for the year in which the 

 

                                                Executive’s
termination of employment occurs, calculated as if the Company achieved
financial performance for that year equal to that set forth in the then most
recent budget for that year approved by the Board of Directors of the Company,
prorated for the number of months worked in the fiscal year the termination
occurred (the “Bonus Payment”); (iii) continued medical, hospitalization, life
and other insurance benefits being provided to the Executive and the Executive’s
family at the date of termination, for a period of twelve (12) months after the
date of termination; provided, however, that the Company shall have no
obligation to continue to provide the Executive with such insurance benefits
for any periods after the date the Executive obtains comparable benefits (with
no significant pre existing condition exclusions) as a result of the Executive’s
employment in a new position; and (iv) to the extent permitted under Section
409A of the Code, a lump sum settlement of all deferred compensation
arrangements.  Subject to Section 7, the
Severance Payment and the Bonus Payment shall be payable in a lump sum within 10 business days
following the effective date of the Release of Claims.

The Executive shall not
be entitled to the Severance Benefits if (i) the Executive’s employment is
terminated by the Company for Cause or as a result of the Executive’s death or
Disability or (ii) the Executive terminates his employment with the Company for
any reason.

4.                                       Change
in Control Benefit.  Subject to
Section 7 and the Executive’s having executed and, if applicable, not revoked,
a Release of Claims, in the event the Executive’s employment is terminated (a)
by the Company other than for Cause or (b) by the Executive for Good Reason, in
either case within two years following a Change in Control, the Executive shall
be entitled to the following (collectively, the “Change in Control Benefits”):
(i) an amount equal to two times his then annual base salary as in effect
immediately prior to the date of termination, of which 50% shall be payable in
a cash lump sum payment within 10 business days following the effective date of
the Release of Claims, and the remaining 50% shall be payable in a cash lump
sum payment on the six-month anniversary of the Executive’s termination of
employment; (iii) Bonus Payment, payable in a cash lump sum within 10 business
days following the effective date of the Release of Claims; (iv) immediate
vesting of all outstanding stock options; (v) to the extent permitted by
Section 409A of the Code, a lump sum settlement of all deferred compensation
arrangements; (vi) continued medical, hospitalization, life and other insurance
benefits being provided to the Executive and the Executive’s family at the date
of termination, for a period of twenty-four (24) months after the date of
termination; provided, however, that the Company shall have no obligation to
continue to provide the Executive with such insurance benefits for any periods
after the date the Executive obtains comparable benefits (with no significant
pre existing condition exclusions) as a result of the Executive’s employment in
a new position; (vii) a cash payment equal to the amount forfeited by the
Executive under the Company’s 401(k) Plan or equivalent plans in effect for the
Executive; (viii) the right to utilize the services of a nationally recognized
executive placement service of the Executive’s choosing at the Company’s
expense in an 

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                                                amount
not to exceed  $50,000 in the aggregate
for the Executive at the Executive’s request, which request may be made at any
time within twenty-four (24) months following the date of termination; and (ix)
other or additional benefits then due or earned in accordance with applicable
plans and programs of the Company.

For purposes of this Agreement, the Executive’s employment shall be
deemed to have been terminated following a Change in Control by the Company
without Cause or by the Executive with Good Reason if the Executive’s
employment is terminated by the Company without Cause (within the meaning of
section 14(a)) within six months prior to a Change in Control and such
termination was in connection with the Change in Control.

The Executive shall not be entitled to the Change in Control Benefits
if (i) the Executive’s employment is terminated by the Company for Cause or as
a result of the Executive’s death or Disability or (ii) the Executive
terminates his employment with the Company without Good Reason.

5.                                       Payment
of Tax or Reduction in Compensation to Avoid Excise Tax.

(a)                                  In
the event the Executive would become entitled to any amounts payable in
connection with a Change in Control (whether or not such amounts are payable
pursuant to this Agreement) (the “Parachute Payments”), if any of such
Parachute Payments would otherwise be subject to the excise tax on excess
golden parachute payments imposed by Section 4999 of the Code (or any similar
federal, state or local tax that may hereafter be imposed) (the “Excise Tax”),
as determined in accordance with this Section 5(c), the Executive shall be
entitled to receive an additional payment from the Company (the “Additional
Payment”), sufficient to pay the Excise Tax (but not any
of the income tax or employment tax imposed upon the Additional Payment).  The Executive may, in his sole discretion,
and by written notice to the Company, elect not to receive the Additional
Payment for the Excise Tax but rather give effect to the following provisions
of section 5(b).

(b)                                 If
a reduction in the aggregate amount of Parachute Payments the Executive
otherwise would be entitled to receive by an amount not exceeding 20% of such
Parachute Payments would result in the Executive receiving a greater “Net After
Tax Amount,” as such term is defined below, then such Parachute Payments shall
be reduced by the amount, not exceeding 20% of such Payments, as will provide
to the Executive the greatest Net After Tax Amount, such reduction to be made
from such payments under this Agreement or such other of the Parachute Payments
not yet paid to the Executive as the Executive shall specify. For this purpose,
the term “Net After Tax Amount” shall mean the net amount of the Parachute
Payments after deducting any federal, state and local income tax and Excise Tax
which would be applicable to such Parachute 

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                                                Payments.  In the event that the Excise Tax is
subsequently determined to differ from the amount taken into account hereunder
at the time of termination of employment, adjustments shall be made in
accordance with this Section 5(b) in light of the revised determination.

(c)                                  For
purposes of determining whether any of the Parachute Payments would be subject
to the Excise Tax and the amount of such Excise Tax:

(i)                                     Parachute
Payments, including any payments or benefits other than those under this
Section 5 received or to be received by the Executive in connection with the
Executive’s termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any
person whose actions result in a Change in Control or any person affiliated
with the Company or such person) (which, together with the Parachute Payments,
constitute the “Total Payments”), shall be treated as “parachute payments”
within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute
payments” within the meaning of Section 280G(b)(1) of the Code shall be treated
as subject to the Excise Tax, unless in the opinion of a nationally recognized
public accounting firm mutually acceptable to the Executive and the Company
such other payments or benefits (in whole or in part) do not constitute
parachute payments, or such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code in excess of the base amount within
the meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to
the Excise Tax;

(ii)                                  the
amount of the Total Payments which shall be deemed to be treated as subject to
the Excise Tax shall be equal to the lesser of (x) the total amount of the
Total Payments and (y) the amount of excess parachute payments within the
meaning of Section 280G(b)(1) of the Code (after applying Section 5(c)(i)
hereof); and

(iii)                               the
value of any non cash benefits or any deferred payments or benefit shall be
determined by a nationally recognized public accounting firm mutually
acceptable to the Executive and the Company in accordance with the principles
of Sections 280G(d)(3) and (4) of the Code.

(d)                                 All
determinations under this Section 5 shall be made at the expense of the Company
by a nationally recognized public accounting firm mutually agreeable to the
Executive and the Company, and such determination shall be binding upon the
Executive and the Company.

 4
  
 

 

 

6.                                       Confidentiality and Related Covenants

(a)                                  Confidentiality.  The Executive shall not, at any time
hereafter, disclose to any person, firm or corporation or otherwise use any
confidential or proprietary information (“Confidential Information”) relating
to the Company, its constituent partners, their respective parents,
subsidiaries, and affiliates, including Confidential Information relating to
its customers, suppliers, market arrangements or methods of operations,
employees, trade practices, trade secrets, know how, and other matters that are
not publicly known outside the Company, 
except to the extent necessary to conduct the business of the Company,
or to comply with law or the valid order of a governmental agency or court of
competent jurisdiction. Without limiting the generality of the foregoing, the
parties hereto acknowledge and agree that all information not otherwise
generally known to the public relating to each of (i) this Agreement, or (ii)
the Company, any constituent partner of the Company or any of their respective
parents, subsidiaries or affiliates, is Confidential Information and is not to
be disclosed to any persons or entities or otherwise used, except to the extent
necessary to conduct the business of the Company or to comply with law or the
valid order of a governmental agency or court of competent jurisdiction.

(b)                                 Rights
to Innovations.  Any invention,
improvement, design, development or discovery conceived, developed, invented or
made by the Executive, alone or with others, during his employment hereunder
and applicable to the business of the Company, its parents, subsidiaries or
affiliates shall become the sole and exclusive property of the Company. The
Executive shall (i) disclose the same completely and promptly to the Company,
(ii) execute all documents requested by the Company in order to vest in the
Company the entire right, title and interest, in and to the same, (iii) execute
all documents required by the Company for the filing, and prosecuting of such
applications for patents, copyrights and/or trademarks, which the Company, in
its sole discretion, may desire to prosecute, and (iv) provide to the Company
all assistance it may reasonably require including, without limitation, the
giving of testimony in any suit, action or proceeding, in order to obtain,
maintain and protect the Company’s rights therein and thereto.

(c)                                  Non
Solicitation.  The Executive, except
within the course of the good faith performance of his duties hereunder, shall
not at any time while he is in the employ of the Company, any constituent
partner of the Company or any of their respective parents, subsidiaries, or
affiliates, and for 12 months following the termination of his employment for any
reason (the “Restricted Period”), solicit, recruit, request, cause, induce or
encourage any individual who is then employed by the Company, any constituent
partner of the Company or any of their respective parents, subsidiaries or
affiliates to leave the employment of or terminate the relationship with the
Company, its constituent partners, their respective parents, subsidiaries, and
affiliates, for any reason and/or otherwise encourage to perform work 

 5
  
 

 

                                                (as
an employee, independent contractor or otherwise) for any entity or person
(including the Executive) that directly or indirectly competes with the Company
at any time during the Restricted Period and/or whose business is or includes
the design, manufacture and marketing of power supplies for the datacom,
telecom, medical, process-control and other related industries (or any portion
thereof).

(d)                                 Enforcement.  The Executive acknowledges that as a
high-level executive of the Company, the Executive provides services of a
special and unique character that are of a peculiar value to the Company, the
loss of which may not be reasonably or adequately compensated for by damages in
an action at law, and any breach or threatened breach by the Executive of any
provision of this Section 6 shall cause the Company irreparable harm which
cannot be remedied solely by damages. 
Specifically, the Executive acknowledges that (a) the provisions of this
Section 6 are reasonable and necessary to protect the legitimate interests of
the Company and/or any of its related entities, and (b) any violation of this
Section 6 will result in irreparable injury to the Company and/or any of its
related entities, the exact amount of which will be difficult to ascertain, and
that the remedies at law for any such violation would not be reasonable or
adequate compensation to the Company and/or any of its related entities for
such a violation.  Accordingly, the
Executive agrees that in the event of a breach or threatened breach by the
Executive of any of the provisions of this Section 6, the Company shall be
entitled to injunctive relief restraining the Executive and any business, firm,
partnership, individual, corporation or entity participating in such breach or
threatened breach.  Nothing herein shall
be construed as prohibiting the Company from pursuing any other remedies
available at law or in equity for such breach or threatened breach, including
the recovery of damages and the immediate termination of the Company’s duties
under this Agreement.

(e)                                  Modification
of Restrictions. It is hereby further agreed that if any court of competent
jurisdiction shall determine that the restrictions imposed in this Section 6
are unreasonable (including, but not limited to, time and scope of coverage of
this Section 6), the parties hereto hereby agree to any restrictions that such
court would find to be reasonable under the circumstances.

7.                                       Withholding;
Section 409A.  The Company shall make such deductions and
withhold such amounts from each payment made to the Executive hereunder as may
be required from time to time by law, governmental regulation or order.  If required by Section 409A of the
Code, all or part of any payment made to the Executive hereunder may be delayed
for a period of six months.

8.                                       Attorneys’
Fees and Costs.  The Company shall
pay to any law firm chosen by the Executive, all reasonable fees and costs
incurred by the Executive, in an amount
not to exceed $30,000 in the aggregate in enforcing the terms of this Agreement

 6
  
 

 

                                                or
in the resolution of any dispute with respect to the benefits payable under
Section 4 of this Agreement.  Said fees
shall be paid, as incurred, directly to the law firm chosen by the Executive as
invoiced by the law firm.

9.                                       No
Mitigation.  The Executive shall not
be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise.

10.                                 Successors.  Any successor to the Company (whether direct
or indirect, by purchase, merger, consolidation or otherwise) or to all or
substantially all of the business and/or assets of the Company shall assume all
obligations of the Company under this Agreement and all rights of the Company
under this Agreement shall inure to such successor, in the same manner and to
the same extent that the Company would be required to perform and be entitled
to the benefits of this Agreement if no such succession had taken place.

11.                                 Notices.  All notices and other communications under
this Agreement shall be in writing and delivered to the addresses set forth
below and shall be effective when delivered, if hand delivered; three (3) days
after mailing by first class mail, certified or registered with return receipt
requested; and 24 hours after transmission of a fax :

	
  If to the Company:

  	
   

  	
  Cherokee International Corporation

  
	
   

  	
   

  	
  2841 Dow Avenue

  
	
   

  	
   

  	
  Tustin, CA 92780

  
	
   

  	
   

  	
  Attention: Chairman of the Board

  
	
   

  	
   

  	
   

  
	
  If to the Executive:

  	
   

  	
  Jeffrey M. Frank

  
	
   

  	
   

  	
  15 Calle de Princesa

  
	
   

  	
   

  	
  Coto de Caza, CA 92679

  

 

Either party may change such party’s address for
notices by notice duly given pursuant hereto.

12.                                 Arbitration.  The Company and the Executive agree that any
dispute arising as to the parties’ rights and obligations hereunder shall, at
the election and upon written demand of either party, be submitted to
arbitration before a single neutral arbitrator in Orange County, California and
shall be administered by the Judicial Arbitration Mediation Service (“JAMS”)
pursuant to its Employment Arbitration Rules and Procedures and subject to JAMS
Policy on Employment Arbitration Minimum Standards or Procedural Fairness (“Rules”),
which Rules shall be modified by the arbitrator to the extent necessary to
comply with applicable law.  The
arbitrator shall not have authority to add to, modify, change or disregard any
lawful terms of this Agreement or to issue an award that is contrary to
applicable law.  The decision of the
arbitrator shall be final and binding and enforceable in any court of competent
jurisdiction.  The parties further agree,
notwithstanding the foregoing, that (i) except as provided in this Section 12,
the Federal 

 7
  
 

 

                                                Arbitration
Act shall govern the interpretation and enforcement of this Agreement, (ii) the
procedural protections and requirements of the California Arbitration Act,
Section 1280 et seq. of the California Code of
Civil Procedure, will apply to any arbitration proceedings hereunder; (iii) the
Company shall pay any costs and expenses that the Executive would not otherwise
have incurred if the dispute had been adjudicated in a court of law, rather
than through arbitration, provided, however, that if either party prevails on a
statutory claim that affords the prevailing party an award of attorney’s fees,
the arbitrator may award reasonable attorney’s fees to the prevailing party,
consistent with applicable law; and (iv) any hearing must be transcribed by a
court reporter and any decision of the arbitrator must be set forth in writing,
consistent with the applicable state or federal law and supported by essential
findings of fact and conclusion of law. 
The provisions of this Section 12 shall survive the termination or
revocation of this Agreement.  The
parties acknowledge and agree that any claims by the Executive for Worker’s
Compensation or unemployment compensation benefits are not covered by this
Agreement.

13.                                 Miscellaneous.

(a)                                  Modification
and Waiver.  Except as otherwise
specifically provided in this Agreement, no provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by both the Company and the Executive.  No waiver at any time by either party to this
Agreement of any breach by the other party hereto of, or failure to comply
with, any provision hereof shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or similar time.

(b)                                 Entire
Agreement.  No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly
set forth in this Agreement.  This
Agreement supersedes any and all prior agreements between the parties and/or
any of their affiliates with respect to the subject matter hereof.

(c)                                  Governing
Law.  This Agreement and the legal
relations thus created between the parties hereto shall be governed by and
construed under and in accordance with the internal laws of the State of
California.

(d)                                 Severability.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

(e)                                  Termination
of Old Severance Agreement.  The Old
Severance Agreement is hereby amended, restated and superseded in its entirety
as of the date hereof.

 8
  
 

 

 

14.                                 Definitions.

(a)                                  “Cause”
shall mean (1) the willful and continued failure by the Executive to perform
his duties with the Company or follow reasonable and lawful directives of the
Board (including any material breach of the Company’s or any subsidiary’s Code
of Conduct or other corporate policies), (2) the Executive’s conviction
of, or entry of a plea of guilty or nolo contendere to, a felony or other crime
involving moral turpitude, (3) the commission by the Executive of any act of
theft, embezzlement or fraud in connection with his employment with the
Company, (4) any material breach by the Executive of any employment or other
agreement between the Executive and the Company or any subsidiary of the
Company, (5) any conflict of interest between the Executive and the Company or
any subsidiary of the Company that, in the Board’s determination,
inappropriately affects the Executive’s ability to carry on the Executive’s
normal duties as an employee of the Company or any subsidiary of the Company or
(6) the Executive’s appropriation (or attempted appropriation) of a
material business opportunity of the Company, including attempting to secure or
securing from anyone other than the Company any personal profit without the
Company’s consent in connection with any transaction entered into on behalf of
the Company; provided, however, that, on and after the occurrence of a Change
in Control, Cause shall be deemed not to exist until the Executive has first
been (1) supplied with notice from the Company setting forth the Board’s
finding of Cause, (2) provided with the opportunity to appear before the Board
to dispute the Board’s findings of Cause or present evidence that the facts
giving rise to the finding of Cause have been cured and (3) following a final
finding of Cause by the Board, provided with the opportunity to cure the facts
giving rise to such finding within ten (10) days of delivery of the written
notice of the Board’s final findings to the Executive by the Company.

For purposes of this definition of Cause, an act or failure
to act on the Executive’s part shall be considered “willful” if it was done or
omitted to be done by the Executive not in good faith, and shall not include
any act or failure to act resulting from any incapacity of the Executive.

(b)                                 “Change
in Control” shall mean the occurrence of any of the following events:

(i)                                     securities
of the Company representing more than fifty point one percent (50.1%) of the
combined voting power of the then outstanding voting securities of the Company
are acquired by any person or group of persons acting in concert (within the
meaning of Section 14(d) of the Securities Exchange Act of 1934) other than (x)
the Company, a direct or indirect subsidiary or parent of the Company, or an
employee benefit plan or trust established by 

 9
  
 

 

                                                the
Company, or (y) Oaktree, GSC or any of their respective affiliates; or

(ii)                                  a
merger or consolidation is consummated in which the Company is a constituent
corporation and which results in less than 50 percent of the outstanding voting
securities of the surviving or resulting entity being owned by the then
existing stockholders of the Company (in the aggregate);

(iii)                               a
sale is consummated by the Company of substantially all of the Company’s assets
to a person or entity which is not (x) a direct or indirect subsidiary or
parent of the Company, or an employee benefit plan or trust established by the
Company, or (y) Oaktree, GSC or any of their respective affiliates; or

(iv)                              during
any period of two consecutive years, individuals who, at the beginning of such
period, constituted the Board (plus each additional director who was approved
by the vote of at least two-thirds of the directors then still in office
who were directors at the beginning of such two-year period or whose
appointment, election or nomination for election was previously so approved or
recommended) cease, for any reason, to constitute at least a majority thereof.

Notwithstanding the foregoing, a “Change in Control”
shall not be deemed to have occurred by virtue of the consummation of any
transaction or series of integrated transactions immediately following which
the holders of the common stock of the Company immediately prior to such
transaction or series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially all of the
assets of the Company immediately following such transaction or series of
transactions.

(c)                                  “Code”
shall mean the Internal Revenue Code of 1986, as amended.

(d)                                 “Company”
shall mean Cherokee International Corporation or any successor thereto.

(e)                                  “Disability”
shall mean a physical or mental illness which, in the judgment of the Company
after consultation with the licensed physician attending Executive, impairs
Executive’s ability to substantially perform his duties as an employee and as a
result of which the Executive shall have been unable to perform his duties for
the Company on a full-time basis for a period of 180 consecutive days.

(f)                                    “Good
Reason” shall mean the occurrence of one or more of the following events
without Executive’s prior written consent (except as a result of a prior
termination):

 10
  
 

 

 

(i)                                     any
material change in the Executive’s status, title, authorities or
responsibilities (including reporting responsibilities) which represents a
demotion from Executive’s status, title, position or responsibilities
(including reporting responsibilities) immediately prior to the Change in
Control; the assignment to the Executive of any duties or work responsibilities
which are materially inconsistent with Executive’s status, title, position or
work responsibilities immediately prior to the Change in Control, or which are
materially inconsistent with the status, title, position or work
responsibilities of a similarly situated senior officer; or any removal of the
Executive from, or failure to appoint, elect, reappoint or reelect the
Executive to, any of such positions, except in the event of Executive’s death
or Disability and other than any such change primarily attributable to the fact
the Company may no longer be a public company;

(ii)                                  any
decrease in Executive’s annual Base Salary or target annual incentive award
opportunity except for across-the-board salary reductions similarly affecting
all senior officers of the Company;

(iii)                               the
reassignment of the Executive to a location more than twenty-five (25) miles
from Executive’s then current work location;

(iv)                              the
failure by the Company to continue in effect any incentive, bonus or other
compensation plan in which the Executive participates, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to the failure to continue such plan, or the failure by the
Company to continue Executive’s participation therein, or any action by the
Company which would directly or indirectly materially reduce his participation
therein or reward opportunities thereunder; provided, however, that the
Executive continues to meet substantially all eligibility requirements thereof;

(v)                                 the
failure by the Company to continue in effect any employee benefit plan
(including any medical, hospitalization, life insurance, disability or other
group benefit plan in which the Executive participates), or any material fringe
benefit or perquisite enjoyed by the Executive unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to the failure to continue such plan, or the failure by the Company to
continue Executive’s participation therein, or any action by the Company which
would directly or indirectly materially reduce Executive’s participation
therein or reward opportunities thereunder, or the failure by the Company to
provide the Executive with the benefits to which the Executive is entitled as
an employee 

 11
  
 

 

                                                of
the Company; provided, however, that the Executive continues to meet
substantially all eligibility requirements thereof,

(vi)                              any
purported termination of Executive’s employment for Cause which is not
effective; or

(vii)                           the
failure of the Company to obtain a satisfactory agreement from any successor or
assignee of the Company to fully assume and agree to perform this Agreement;

provided, however, that Good Reason shall be deemed not to exist until
the Company has first been (1) supplied with notice from the Executive setting
forth the Executive’s assertion of Good Reason and (2) provided with the
opportunity to cure the facts giving rise to such assertion within ten (10)
days of delivery of the written notice by the Executive to the Company.

(g)                                 “GSC”
shall mean, collectively, GSC Recovery II, L.P., GSC Recovery IIA, L.P., GSC
Partners CDO Funds, Limited and GSC Partners CDO Fund II, Limited.

(h)                                 “Oaktree”
shall mean, collectively, OCM Principal Opportunities Fund, L.P., OCM/GFI Power
Opportunities Fund, L.P. and GFI Two LLC.

IN WITNESS WHEREOF, the
Company has caused this Agreement to be executed by its duly authorized
officer, and the Executive has executed this Agreement, as of the date set
forth below.

	
  EXECUTIVE

  	
   

  	
  CHEROKEE INTERNATIONAL CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ JEFFREY M. FRANK

  	
   

  	
  /s/ LINSTER W.
  FOX

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date: December
  5, 2006

  	
   

  	
  By:

  	
   

  	
  Linster W. Fox

  
	
   

  	
   

  	
  Its:

  	
   

  	
  Executive Vice President/ Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  	
  December 5, 2006

  

 

 12

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