EXHIBIT 10.7
COLEMAN CABLE, INC.
LONG-TERM INCENTIVE PLAN
SECTION 1
GENERAL
     1.1. Purpose. The Coleman Cable, Inc. Long-Term Incentive Plan (the “Plan”)
has been established by Coleman Cable, Inc. (the “Company”) to (i) attract and
retain persons eligible to participate in the Plan; (ii) motivate Participants,
by means of appropriate incentives, to achieve long-range goals; (iii) provide
incentive compensation opportunities that are competitive with those of other
similar companies; and (iv) further identify Participants’ interests with those
of the Company’s other shareholders through compensation that is based on the
Company’s common stock; and thereby promote the long-term financial interest of
the Company and the Subsidiaries, including the growth in value of the Company’s
equity and enhancement of long-term shareholder return.
     1.2. Participation. Subject to the terms and conditions of the Plan, the
Committee shall determine and designate, from time to time, from among the
Eligible Employees, those persons who will be granted one or more Awards under
the Plan, and thereby become “Participants” in the Plan.
     1.3. Operation, Administration, and Definitions. The operation and
administration of the Plan, including the Awards made under the Plan, shall be
subject to the provisions of Section 3 (relating to operation and
administration). Capitalized terms in the Plan shall be defined as set forth in
the Plan (including the definition provisions of Section 7).
SECTION 2
OPTIONS
     2.1. Definitions. The grant of an “Option” entitles the Participant to
purchase shares of Stock at an Exercise Price established by the Committee. Any
Option granted under this Section 2 may be either an incentive stock option (an
“ISO”) or a non-qualified option (an “NQO”), as determined in the discretion of
the Committee. An “ISO” is an Option that is intended to satisfy the
requirements applicable to an “incentive stock option” described in section
422(b) of the Code. An “NQO” is an Option that is not intended to be an
“incentive stock option” as that term is described in section 422(b) of the
Code.
     2.2. Exercise Price. The “Exercise Price” of each Option granted under this
Section 2 shall be established by the Committee or shall be determined by a
method established by the Committee at the time the Option is granted. The
Exercise Price shall not be less than 100% of the Fair Market Value of a share
of Stock on the date of grant (or, if greater, the par value of a share of
Stock).
     2.3. Exercise. An Option shall be exercisable in accordance with such terms
and conditions and during such periods as may be established by the Committee.
In no event, however, shall an Option expire later than ten years after the date
of its grant.

 

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     2.4. Payment of Option Exercise Price. The payment of the Exercise Price of
an Option granted under this Section 2 shall be subject to the following:

(a)   Subject to the following provisions of this subsection 2.4, the full
Exercise Price for shares of Stock purchased upon the exercise of any Option
shall be paid at the time of such exercise (except that, in the case of an
exercise arrangement approved by the Committee and described in paragraph
2.4(c), payment may be made as soon as practicable after the exercise).

(b)   Subject to applicable law, the Exercise Price shall be payable in cash, by
promissory note, or by tendering, by either actual delivery of shares or by
attestation, shares of Stock acceptable to the Committee (including shares
otherwise distributable pursuant to the exercise of the Option), and valued at
Fair Market Value as of the day of exercise, or in any combination thereof, as
determined by the Committee; provided that, except as otherwise provided by the
Committee, payments made with shares of Stock in accordance with this paragraph
(b) shall be limited to shares held by the Participant for not less than six
months prior to the payment date.

(c)   Subject to applicable law, the Committee may permit a Participant to elect
to pay the Exercise Price upon the exercise of an Option by irrevocably
authorizing a third party to sell shares of Stock (or a sufficient portion of
the shares) acquired upon exercise of the Option and remit to the Company a
sufficient portion of the sale proceeds to pay the entire Exercise Price and any
tax withholding resulting from such exercise.

     2.5. No Repricing. Except for either adjustments pursuant to paragraph
3.2(e) (relating to the adjustment of shares), or reductions of the Exercise
Price approved by the Company’s stockholders, the Exercise Price for any
outstanding Option may not be decreased after the date of grant nor may an
outstanding Option granted under the Plan be surrendered to the Company as
consideration for the grant of a replacement Option with a lower exercise price.
SECTION 3
OPERATION AND ADMINISTRATION
     3.1. Effective Date. Subject to the approval of the shareholders of the
Company, the Plan shall be effective as of October 5, 2006 (the “Effective
Date”); provided, however, that Awards may be granted contingent on approval of
the Plan by the shareholders of the Company. In the event of Plan termination,
the terms of the Plan shall remain in effect as long as any Awards under it are
outstanding; provided, however, that no Awards may be granted under the Plan
after the ten-year anniversary of the Effective Date.
     3.2. Shares and Other Amounts Subject to Plan. The shares of Stock for
which Awards may be granted under the Plan shall be subject to the following:

(a)   The shares of Stock with respect to which Awards may be made under the
Plan shall be shares currently authorized but unissued or, to the extent
permitted by applicable law, currently held or acquired by the Company as
treasury shares, including shares purchased in the open market or in private
transactions.

 

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(b)   Subject to the following provisions of this subsection 3.2, the maximum
number of shares of Stock that may be delivered to Participants and their
beneficiaries under the Plan shall be equal to 1,650,000 shares of Stock.

(c)   Only shares of Stock, if any, actually delivered to the Participant or
beneficiary on an unrestricted basis with respect to an Award shall be treated
as delivered for purposes of the determination under paragraph (b) above,
regardless of whether the Award is denominated in Stock or cash. Consistent with
the foregoing:

  (i)   To the extent any shares of Stock covered by an Award are not delivered
to a Participant or beneficiary because the Award is forfeited or canceled, or
the shares of Stock are not delivered on an unrestricted basis (including,
without limitation, by reason of the Award being settled in cash or used to
satisfy the applicable tax withholding obligation), such shares shall not be
deemed to have been delivered for purposes of the determination under paragraph
(b) above.     (ii)   If the exercise price of any Option granted under the Plan
or any Prior Plan, or the tax withholding obligation with respect to any Award
granted under the Plan or any Prior Plan, is satisfied by tendering shares of
Stock to the Company (by either actual delivery or by attestation), only the
number of shares of Stock issued net of the shares of Stock tendered shall be
deemed delivered for purposes of determining the number of shares of Stock
available for delivery under the Plan.

(d)   Subject to paragraph 3.2(e), the following additional maximums are imposed
under the Plan.

  (i)   The maximum number of shares of Stock that may be delivered to
Participants and their beneficiaries with respect to ISOs granted under the Plan
shall be 1,650,000 shares.     (ii)   The maximum number of shares that may be
covered by Awards granted to any one Participant during any one calendar-year
period pursuant to Section 2 (relating to Options) shall be 500,000 shares.

(e)   In the event of a corporate transaction involving the Company (including,
without limitation, any stock dividend, stock split, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, sale of assets or subsidiaries, combination or exchange of shares),
the Committee shall adjust Awards to preserve the benefits or potential benefits
of the Awards. Action by the Committee may include: (i) adjustment of the number
and kind of shares which may be delivered under the Plan; (ii) adjustment of the
number and kind of shares subject to outstanding Awards; (iii) adjustment of the
Exercise Price of outstanding Options; and (iv) any other adjustments that the
Committee determines to be equitable (which may include, without limitation,
(I) replacement of Awards with other Awards which the Committee determines have
comparable value and which are based on stock of a company resulting from the
transaction, and (II) cancellation of the Award in return for cash payment of
the current value of the Award, determined as though the Award is fully vested
at the time of

 

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    payment, provided that the amount of such payment may be the excess of value
of the Stock subject to the Option at the time of the transaction over the
exercise price).

     3.3. General Restrictions. Delivery of shares of Stock or other amounts
under the Plan shall be subject to the following:

(a)   Notwithstanding any other provision of the Plan, the Company shall have no
obligation to deliver any shares of Stock or make any other distribution of
benefits under the Plan unless such delivery or distribution complies with all
applicable laws (including, without limitation, the requirements of the
Securities Act of 1933), and the applicable requirements of any securities
exchange or similar entity.

(b)   To the extent that the Plan provides for issuance of stock certificates to
reflect the issuance of shares of Stock, the issuance may be effected on a
non-certificated basis, to the extent not prohibited by applicable law or the
applicable rules of any stock exchange.

     3.4. Tax Withholding. All distributions under the Plan are subject to
withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other benefits under the Plan on satisfaction of the
applicable withholding obligations. Except as otherwise provided by the
Committee, such withholding obligations may be satisfied (i) through cash
payment by the Participant; (ii) through the surrender of shares of Stock which
the Participant already owns; or (iii) through the surrender of shares of Stock
to which the Participant is otherwise entitled under the Plan, provided,
however, that such shares under this clause (iii) may be used to satisfy not
more than the Company’s minimum statutory withholding obligation (based on
minimum statutory withholding rates for Federal and state tax purposes,
including payroll taxes, that are applicable to such supplemental taxable
income).
     3.5. Grant and Use of Awards. In the discretion of the Committee, a
Participant may be granted any Award permitted under the provisions of the Plan,
and more than one Award may be granted to a Participant. Subject to subsection
2.5 (relating to repricing), Awards may be granted as alternatives to or
replacement of awards granted or outstanding under the Plan, or any other plan
or arrangement of the Company or a Subsidiary (including a plan or arrangement
of a business or entity, all or a portion of which is acquired by the Company or
a Subsidiary). Subject to the overall limitation on the number of shares of
Stock that may be delivered under the Plan, the Committee may use available
shares of Stock as the form of payment for compensation, grants or rights earned
or due under any other compensation plans or arrangements of the Company or a
Subsidiary, including the plans and arrangements of the Company or a Subsidiary
assumed in business combinations. Notwithstanding the provisions of subsection
2.2, Options granted under the Plan in replacement for awards under plans and
arrangements of the Company, Subsidiaries, or other companies that are assumed
in business combinations may provide for exercise prices that are less than the
Fair Market Value of the Stock at the time of the replacement grants, if the
Committee determines that such exercise price is appropriate to preserve the
economic benefit of the award.
     3.6. Dividends and Dividend Equivalents. An Award may provide the
Participant with the right to receive dividend or dividend equivalent payments
with respect to Stock subject to the Award (both before and after the Stock
subject to the Award is earned, vested, or acquired),

 

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which payments may be either made currently or credited to an account for the
Participant, and may be settled in cash or Stock, as determined by the
Committee. Any such settlements, and any such crediting of dividends or dividend
equivalents or reinvestment in shares of Stock, may be subject to such
conditions, restrictions and contingencies as the Committee shall establish,
including the reinvestment of such credited amounts in Stock equivalents.
     3.7. Settlement of Awards. The obligation to make payments and
distributions with respect to Awards may be satisfied through cash payments, the
delivery of shares of Stock, the granting of replacement Awards, or combination
thereof as the Committee shall determine. Satisfaction of any such obligations
under an Award, which is sometimes referred to as “settlement” of the Award, may
be subject to such conditions, restrictions and contingencies as the Committee
shall determine. The Committee may permit or require the deferral of any Award
payment or distribution, subject to such rules and procedures as it may
establish, which may include provisions for the payment or crediting of interest
or dividend equivalents, and may include converting such credits into deferred
Stock equivalents. Each Subsidiary shall be liable for payment of cash due under
the Plan with respect to any Participant to the extent that such benefits are
attributable to the services rendered for that Subsidiary by the Participant.
Any disputes relating to liability of a Subsidiary for cash payments shall be
resolved by the Committee.
     3.8. Transferability. Except as otherwise provided by the Committee, Awards
under the Plan are not transferable except as designated by the Participant by
will or by the laws of descent and distribution.
     3.9. Form and Time of Elections. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Committee shall require.
     3.10. Agreement With Company. An Award under the Plan shall be subject to
such terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. The terms and conditions of any Award
to any Participant shall be reflected in such form of written (including
electronic) document as is determined by the Committee. A copy of such document
shall be provided to the Participant, and the Committee may, but need not
require that the Participant sign a copy of such document. Such document is
referred to in the Plan as an “Award Agreement” regardless of whether any
Participant signature is required.
     3.11. Action by Company or Subsidiary. Any action required or permitted to
be taken by the Company or any Subsidiary shall be by resolution of its board of
directors, or by action of one or more members of the board (including a
committee of the board) who are duly authorized to act for the board, or (except
to the extent prohibited by applicable law or applicable rules of any stock
exchange) by a duly authorized officer of such company.

 

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     3.12. Gender and Number. Where the context admits, words in any gender
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.
     3.13. Limitation of Implied Rights.

(a)   Neither a Participant nor any other person shall, by reason of
participation in the Plan, acquire any right in or title to any assets, funds or
property of the Company or any Subsidiary whatsoever, including, without
limitation, any specific funds, assets, or other property which the Company or
any Subsidiary, in its sole discretion, may set aside in anticipation of a
liability under the Plan. A Participant shall have only a contractual right to
the Stock or amounts, if any, payable under the Plan, unsecured by any assets of
the Company or any Subsidiary, and nothing contained in the Plan shall
constitute a guarantee that the assets of the Company or any Subsidiary shall be
sufficient to pay any benefits to any person.

(b)   The Plan does not constitute a contract of employment, and selection as a
Participant will not give any participating employee the right to be retained in
the employ of the Company or any Subsidiary, nor any right or claim to any
benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan. Except as otherwise provided in the Plan, no Award
under the Plan shall confer upon the holder thereof any rights as a shareholder
of the Company prior to the date on which the individual fulfills all conditions
for receipt of such rights.

     3.14. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
SECTION 4
CHANGE IN CONTROL
     Subject to the provisions of paragraph 3.2(e) (relating to the adjustment
of shares), the occurrence of a Change in Control shall have the effect, if any,
with respect to any Award as set forth in the Award Agreement or, to the extent
not prohibited by the Plan or the Award Agreement, as provided by the Committee.
SECTION 5
COMMITTEE
     5.1. Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in a committee (the “Committee”) in
accordance with this Section 5. The Committee shall be selected by the Board,
and shall consist solely of two or more members of the Board who are not
employees of the Company or any Subsidiary. If the Committee does not exist, or
for any other reason determined by the Board, and to the extent not prohibited
by applicable law or the applicable rules of any stock exchange, the Board may
take any action under the Plan that would otherwise be the responsibility of the
Committee.

 

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     5.2. Powers of Committee. The Committee’s administration of the Plan shall
be subject to the following:

(a)   Subject to the provisions of the Plan, the Committee will have the
authority and discretion to select from among the Eligible Employees those
persons who shall receive Awards, to determine the time or times of receipt, to
determine the types of Awards and the number of shares covered by the Awards, to
establish the terms, conditions, performance criteria, restrictions, and other
provisions of such Awards, and (subject to the restrictions imposed by
Section 6) to amend, cancel, or suspend Awards.

(b)   To the extent that the Committee determines that the restrictions imposed
by the Plan preclude the achievement of the material purposes of the Awards in
jurisdictions outside the United States, the Committee will have the authority
and discretion to modify those restrictions as the Committee determines to be
necessary or appropriate to conform to applicable requirements or practices of
jurisdictions outside of the United States.

(c)   The Committee will have the authority and discretion to interpret the
Plan, to establish, amend, and rescind any rules and regulations relating to the
Plan, to determine the terms and provisions of any Award Agreement made pursuant
to the Plan, and to make all other determinations that may be necessary or
advisable for the administration of the Plan.

(d)   Any interpretation of the Plan by the Committee and any decision made by
it under the Plan is final and binding on all persons.

(e)   In controlling and managing the operation and administration of the Plan,
the Committee shall take action in a manner that conforms to the articles and
by-laws of the Company, and applicable state corporate law.

(f)   The Committee shall take such actions as it determines to be necessary or
appropriate with respect to this Plan, and the Awards granted under the Plan, to
avoid acceleration of income recognition or imposition of penalties under Code
section 409A.

     5.3. Delegation by Committee. Except to the extent prohibited by applicable
law or the applicable rules of a stock exchange, the Committee may allocate all
or any portion of its responsibilities and powers to any one or more of its
members and may delegate all or any part of its responsibilities and powers to
any person or persons selected by it. Any such allocation or delegation may be
revoked by the Committee at any time.
     5.4. Information to be Furnished to Committee. The Company and Subsidiaries
shall furnish the Committee with such data and information as it determines may
be required for it to discharge its duties. The records of the Company and
Subsidiaries as to an employee’s or Participant’s employment, termination of
employment, leave of absence, reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect. Participants and other persons
entitled to benefits under the Plan must furnish the Committee such evidence,
data or information as the Committee considers desirable to carry out the terms
of the Plan.

 

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SECTION 6
AMENDMENT AND TERMINATION
     The Board may, at any time, amend or terminate the Plan, and the Board or
the Committee may amend any Award Agreement, provided that no amendment or
termination may, in the absence of written consent to the change by the affected
Participant (or, if the Participant is not then living, the affected
beneficiary), adversely affect the rights of any Participant or beneficiary
under any Award granted under the Plan prior to the date such amendment is
adopted by the Board (or the Committee, if applicable); and further provided
that adjustments pursuant to paragraph 3.2(e) shall not be subject to the
foregoing limitations of this Section 6; and further provided that the
provisions of subsection 2.5 (relating to repricing) cannot be amended unless
the amendment is approved by the Company’s stockholders.
SECTION 7
DEFINED TERMS
     In addition to the other definitions contained herein, the following
definitions shall apply:

(a)   Award. The term “Award” means any award or benefit granted under the Plan,
including, without limitation, the grant of Options.

(b) Board. The term “Board” means the Board of Directors of the Company.

(a)   Change in Control. “Change in Control” shall have the meaning given in a
Participant’s individual Award Agreement.

(c)   Code. The term “Code” means the Internal Revenue Code of 1986, as amended.
A reference to any provision of the Code shall include reference to any
successor provision of the Code.

(d)   Eligible Employee. The term “Eligible Employee” means any employee of the
Company or a Subsidiary. An Award may be granted to an employee, in connection
with hiring, retention or otherwise, prior to the date the employee first
performs services for the Company or the Subsidiaries, provided that such Awards
shall not become vested prior to the date the employee first performs such
services.

(e)   Fair Market Value. Except as otherwise provided by the Committee, for
purposes of determining the “Fair Market Value” of a share of Stock as of any
date, the following rules shall apply:

  (i)   If the principal market for the Stock is a national securities exchange
or the Nasdaq stock market, then the “Fair Market Value” as of that date shall
be the mean between the lowest and highest reported sale prices of the Stock on
that date on the principal exchange or market on which the Stock is then listed
or admitted to trading.     (ii)   If sale prices are not available or if the
principal market for the Stock is not a national securities exchange and the
Stock is not quoted on the Nasdaq stock

 

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      market, then the “Fair Market Value” as of that date shall be the mean
between the highest bid and lowest asked prices for the Stock on such day as
reported on the Nasdaq OTC Bulletin Board Service or by the National Quotation
Bureau, Incorporated or a comparable service.     (iii)   If the day is not a
business day, and as a result, paragraphs (i) and (ii) above are inapplicable,
the Fair Market Value of the Stock shall be determined as of the next earlier
business day. If paragraphs (i) and (ii) above are otherwise inapplicable, then
the Fair Market Value of the Stock shall be determined in good faith by the
Committee.

(f)   Stock. The term “Stock” means shares of common stock of the Company.

(g)   Subsidiaries. For purposes of the Plan, the term “Subsidiary” means any
corporation, partnership, joint venture or other entity during any period in
which at least a fifty percent voting or profits interest is owned, directly or
indirectly, by the Company (or by any entity that is a successor to the
Company), and any other business venture designated by the Committee in which
the Company (or any entity that is a successor to the Company) has a significant
interest, as determined in the discretion of the Committee.

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