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.

 












	
  

 	
  

 
	
  

 	
           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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