Exhibit
4.1



DESCRIPTION
OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934



Communications
Systems, Inc. (“CSI,” “we,” “our,” or “us”) has one class of securities registered
under Section 12 of the Securities Exchange Act of 1934, as amended: our common stock.



DESCRIPTION
OF CAPITAL STOCK



The
following summary of the general terms and provisions of our capital stock does not purport to be complete and is based upon and
qualified by reference to our articles of incorporation and bylaws, which are either filed as exhibits to our Annual Report on
Form 10-K or are incorporated by reference to our Annual Report on Form 10-K. We encourage you to read our articles of incorporation,
our bylaws and the applicable provisions of the Minnesota Business Corporation Act, or MBCA, for additional information.



Authorized
Shares of Capital Stock



The
aggregate number of shares of capital stock that the Company has authority to issue is as follows



3,000,000
shares of preferred stock, $1.00 par value



30,000,000
shares of common stock, par value $.05



Preferred
Stock



We
have no preferred stock outstanding.



On
December 18, 2009, the Board of Directors of the Company (the “Board”) authorized and declared a dividend distribution
of one Right for each outstanding share of the Company’s Common Stock value per share outstanding at the close of business
on January 4, 2010 (the “Record Date”), each Right representing the right to purchase one one-hundredth of a share
of Series A Junior Participating Preferred Stock of the Company having the rights, powers and preferences set forth in the form
of Amended and Restated Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock and
further authorized the issuance of one Right with respect to each share of Common Stock that would become outstanding after the
close of business on the Record Date. This Shareholder Rights Plan expired in December 2019.



Common
Stock



Holders
of the Company’s common stock are entitled to one vote for each share held of record on all matters submitted to a vote
of the shareholders and do not have cumulative voting rights. Except as otherwise provided by law, our articles of incorporation
or our bylaws, matters will generally be decided by the vote of the holders of a majority of the voting power present in person
or represented by proxy. Our bylaws provide that the authorized number of directors will be fixed by the shareholders at each
annual meeting and that either the shareholders or the board of directors may increase or decreases the number of directors. Our
board of directors is not classified.













Holders
of our common stock are entitled to receive dividends declared by our board of directors out of funds legally available for the
payment of dividends. In the event of any liquidation, dissolution or winding-up of our affairs, holders of common stock will
be entitled to share ratably in our assets that are remaining after payment or provision for payment of all of our debts and obligations.



Holders
of common stock have no preemptive, conversion or subscription rights, and there are no redemption provisions applicable to the
common stock.



All
outstanding shares of our common stock are fully paid and nonassessable.



The
transfer agent and registrar for our common stock is Equiniti Trust Company, 1110 Centre Pointe Curve, Suite 101, South St. Paul,
Minnesota 55120-4100



Our
common stock is currently listed on The NASDAQ Stock Market LLC under the trading symbol “JCS.”



Anti-Takeover
Effects of Provisions of our Articles of Incorporation, our Bylaws and Minnesota Law



Specific
provisions of Minnesota law, our articles of incorporation and our bylaws may be deemed to have an anti-takeover effect.



The
Company’s Bylaws of the Company establish an advance notice procedure with regard to (i) certain business to be brought
before an annual meeting of shareholders of the Company and (ii) the nomination by shareholders of candidates for election as
directors.



Properly
Brought Business



The
Bylaws provide that at the annual meeting only such business may be conducted as is of a nature that is appropriate for consideration
at an annual meeting and has been either specified in the notice of the meeting, otherwise properly brought before the meeting
by or at the direction of the Board of Directors, or otherwise properly brought before the meeting by a shareholder who has given
timely written notice to the Secretary of the Company of the shareholder’s intention to bring the business before the meeting.
To be timely, the notice must be given by such shareholder to the Secretary of the Company not less than 45 days or more than
75 days prior to a meeting date corresponding to the previous year’s annual meeting. Notice relating to the conduct of such
business at an annual meeting must contain certain information as described in Section 2.9 of the Company’s Bylaws, which
are available for inspection by shareholders at the Company’s principal executive offices pursuant to Section 302A.441,
subd. 4 of the Minnesota Statutes. Nothing in the Bylaws precludes discussion by any shareholder of any business properly brought
before the annual meeting in accordance with the Company’s Bylaws.





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Shareholder
Nominations



The
Bylaws provide that a notice of proposed shareholder nominations for the election of directors must be timely given in writing
to the Secretary of the Company prior to the meeting at which directors are to be elected. To be timely, the notice must be given
by the shareholder to the Secretary of the Company not less than 45 days or more than 75 days prior to a meeting date corresponding
to the previous year’s annual meeting. The notice to the Company from a shareholder who intends to nominate a person at
the meeting for election as a director must contain certain information as described in Section 3.7 of the Company’s Bylaws,
which are available for inspection by shareholders as described above. If the presiding officer of a meeting of shareholders determines
that a person was not nominated in accordance with the foregoing procedure, that person will not be eligible for election as a
director.



Shareholder
Meetings



Under
our bylaws, regular meetings of our shareholders may be called only by our board of directors, or by written consent of all the
shareholders entitled to vote at the annual meeting. If the Board fails to designate a time for a regular meeting for any consecutive
period of 15 months, the board must cause such regular meeting to be called within 90 days of receipt of the written demand of
any shareholder owning one percent or more of all voting shares of the corporation



Under
our bylaws, special meetings of our shareholders may be called by the Chief Executive Officer, the Chief Financial Officer, any
two or more directors, or upon request by shareholders holding ten percent or more of the voting power of the shareholders.



Provisions
of Minnesota Law



The
following provisions of the MBCA may have an effect of delaying, deterring or preventing an unsolicited takeover of the Company
or make an unsolicited takeover of the Company more difficult.



MBCA
Section 302A.553 [Power to acquire shares] subd 3, [limitation on share purchases] prohibits a publicly held corporation
such as CSI from purchasing shares entitled to vote for more than market value from a person that beneficially owns more than
5% of the voting power of the corporation if the shares have been beneficially owned for less than two years unless the purchase
or agreement to purchase is approved at a meeting of shareholders by the affirmative vote of the holders of a majority of the
voting power of all shares entitled to vote or the corporation makes an offer, of at least equal value per share, to all shareholders
for all other shares of that class or series and any other class or series into which they may be converted.



MBCA
Section 302A.671 [Control share acquisitions] provides that shares of an “issuing public corporation,” such
as Electro-Sensors, Inc. acquired by an “acquiring person” in a “control share acquisition” that exceed
the threshold of voting power of any of the three ranges identified below will not have voting rights, unless the issuing public
company’s shareholders vote to accord these shares the voting rights normally associated with these shares. A “control
share acquisition” is an acquisition, directly or indirectly, by an “acquiring person” (as defined in the MBCA)
of beneficial ownership of shares of an issuing public corporation that, but for Section 302A.671, would, when added to all other
shares of the issuing public corporation beneficially owned by the acquiring person, entitle the acquiring person, immediately
after the acquisition, to exercise or direct the exercise of a new range of voting power of the issuing public corporation with
any of the following three ranges: (i) at least 20 percent but less than 33-1/3 percent; (ii) at least 33-1/3 percent but less
than or equal to 50 percent; and (iii) over 50 percent. The issuing public company also has an option to call for redemption all,
but not less than all, shares acquired in the control share acquisition that exceed the threshold of voting power of any of the
specified ranges at a price equal to the fair market value of the shares at the time the call is given if (i) the acquiring person
fails to deliver the information statement to the issuing public company by the tenth day after the control share acquisition;
or (ii) shareholders have voted not to accord voting rights to the shares acquired in the control share acquisition.





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MBCA
Section 302A.673 [Business combinations] prohibits a public Minnesota corporation, such as Electro-Sensors, Inc. from engaging
in a business combination with an interested shareholder for a period of four years after the date of the transaction in which
the person became an interested shareholder, unless either (i) the business combination or (ii) the acquisition by which the person
becomes an interested shareholder is approved in a prescribed manner before the person became an interested shareholder. The term
“business combination” includes mergers, asset sales and other transactions resulting in a financial benefit to the
interested shareholder. An “interested shareholder” is a person who is the beneficial owner, directly or indirectly,
of 10% or more of a corporation’s voting stock, or who is an affiliate or associate of the corporation, and who, at any
time within four years before the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the corporation’s
outstanding voting stock.1



If
a takeover offer is made for our stock, MBCA Section 302A.675 [Takeover offer; fair price] precludes the offeror from acquiring
additional shares of stock (including in acquisitions pursuant to mergers, consolidations or statutory share exchanges) within
two years following the completion of the takeover offer, unless shareholders selling their shares in the later acquisition are
given the opportunity to sell their shares on terms that are substantially the same as those contained in the earlier takeover
offer. A “takeover offer” is a tender offer that results in an offeror who owned ten percent or less of a class of
our shares acquiring more than ten percent of that class, or that results in the offeror increasing its beneficial ownership of
a class of our shares by more than ten percent of the class, if the offeror owned ten percent or more of the class before the
takeover offer. Section 302A.675 does not apply if a committee of our board of directors formed in accordance with Section 302A.675
approves the proposed acquisition before any shares are acquired pursuant to the earlier tender offer.










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