Exhibit 10.3.1

FIRST AMENDMENT OF THE
COMMUNICATIONS SYSTEMS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST

          THIS AGREEMENT, amending the Communications Systems, Inc. Employee
Stock Ownership Plan and Trust, is adopted by Communications Systems, Inc., a
Minnesota corporation, (the “Employer”), and Curtis A. Sampson, William G.
Schultz and David T. McGraw (collectively, the “Trustee”).

          WITNESSETH: That

          WHEREAS, The Employer has heretofore established and maintains a stock
bonus and employee stock ownership plan (the “Plan”) that is currently embodied
in a document dated January 1, 2009; and

          WHEREAS, Pursuant to the authority reserved to the Employer under the
Plan, the Employer desires to amend the Plan as set forth herein;

          NOW, THEREFORE, The Plan is hereby amended as follows:

 

 

1.

Effective January 1, 2009, Article 9 of the Plan is amended by adding a new
Section 9.10 to read as follows:

 

 

 

          9.10      2009 Required Minimum Distributions. Notwithstanding any
other provision of this Article 9, a Participant or Beneficiary who would have
been required to receive required minimum distributions for 2009 but for the
enactment of Section 401(a)(9)(H) of the Code (“2009 RMDs”), and who would have
satisfied that requirement by receiving distributions that are (1) equal to the
2009 RMDs or (2) one or more payments in a series of substantially equal
distributions (that include the 2009 RMDs) made at least annually and expected
to last for the life (or life expectancy) of the participant, the joint lives
(or joint life expectancy) of the participant and the participant’s designated
beneficiary, or for a period of at least 10 years (“Extended 2009 RMDs”), will
not receive those distributions for 2009 unless the Participant or Beneficiary
chooses to receive such distributions. Participants and Beneficiaries described
in the preceding sentence will be given the opportunity to elect to receive the
distributions described in the preceding sentence. In addition, notwithstanding
the definition of Eligible Rollover Distribution in Section 2.1, and solely for
purposes of applying the Direct Rollover provisions of the Plan, 2009 RMDs and
Extended 2009 RMDs will be treated as Eligible Rollover Distributions in 2009.

 

 

2.

Effective January 1, 2009, Article 15 of the Plan is amended by adding a new
Section 15.4 to read as follows, effective as provided therein:

 

 

 

          15.4      HEART Act Provisions. In the case of a death occurring on or
after January 1, 2007, if a Participant dies while performing qualified military
service, the survivors of the Participant are entitled to any additional
benefits (other than benefit accruals relating to the period of qualified
military service) provided under the Plan as if the Participant had resumed and
then terminated employment on account of death. Moreover, the Plan will credit
the Participant’s qualified military service as service for vesting purposes, as
though the Participant had resumed employment under the Uniformed Services
Employment and Reemployment Rights Act immediately prior to the Participant’s
death.

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          For remuneration paid after December 31, 2008, (i) an individual
receiving a differential wage payment, as defined by Section 3401(h)(2) of the
Code, is treated as an Employee of the Employer making the payment, (ii) the
differential wage payment is treated as Compensation and Net Compensation, and
(iii) the Plan is not treated as failing to meet the requirements of any
provision described in Section 414(u)(1)(C) of the Code (or corresponding Plan
provisions) by reason of any contribution or benefit which is based on the
differential wage payment, but only if all Employees of the Employer performing
service in the uniformed services described in Section 3401(h)(2)(A) of the Code
are entitled to receive differential wage payments (as defined in Section
3401(h)(2) of the Code) on reasonably equivalent terms and, if eligible to
participate in a retirement plan maintained by the Employer, to make
contributions based on the payments on reasonably equivalent terms (taking into
account Sections 410(b)(3), (4), and (5) of the Code).

 

 

3.

Effective January 1, 2010, the first sentence of Section 18.1 of the Plan is
amended to read as follows:

 

 

 

In the event of a transfer of business assets, operations, or employees from the
Employer to a successor employer, provision may be made by which the Plan and
Trust will be continued by the successor; and, in that event, such successor
shall be substituted for the Employer under the Plan.

 

 

4.

Effective January 1, 2010, Section 18.2 of the Plan is amended by adding the
following to the end of said Section:

 

 

 

Notwithstanding the foregoing, a transfer of amounts from the Trust Fund to a
nonqualified foreign trust shall be treated as a distribution from the Trust
Fund.

 

 

5.

Save and except as herein expressly amended, the Plan shall continue in full
force and effect.

          IN WITNESS WHEREOF, Communications Systems, Inc. has caused this
Amendment to be executed by its officer, who has been duly authorized by its
Board of Directors, and Curtis A. Sampson, William G. Schultz and David T.
McGraw have executed this Amendment, effective as of the dates specified above.

 

 

 

 

 

COMMUNICATIONS SYSTEMS, INC.

 

TRUSTEES

 

 

 

 

 

 

By

William G. Schultz

 

/s/Curtis A. Sampson

 

 

 

 

 

 

 

 

 

Curtis A. Sampson

 

Its

President and CEO

 

 

 

 

 

 

/s/ William G. Schultz

 

Date

October 21, 2011

 

William G. Schultz

 

 

 

 

 

 

 

 

 

/s/ David T. McGraw

 

 

 

 

David T. McGraw

 

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