Exhibit 4(b)  


AMENDED AND RESTATED CERTIFICATE OF DESIGNATION, PREFERENCES
 AND RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK


of


Communications Systems, Inc.


Pursuant to Section 302A.401 and Section
302A.133 of the Minnesota

Business Corporation Act


          We,
Jeffrey K. Berg, President and Chief Executive Officer, and David T. McGraw,
Secretary and Treasurer, of Communications Systems, Inc., a corporation
organized and existing under the Minnesota Business Corporation Act, in
accordance with the provisions of Section 302A.401 and Section 302A.133
thereof, DO HEREBY CERTIFY: 


	
  

 	
  

 
	
 1.

 	
 That by
 resolution of the Board of Directors of the Company adopted on October 26,
 1999 and by a Certificate of Designation, Preferences and Rights of Series A
 Junior Participating Preferred Stock filed in the office of the Secretary of
 State of the State of Minnesota on November 8, 1999, the Company authorized
 the issuance of a series of one hundred fifty thousand (150,000) Series A
 Junior Participating Preferred Stock of the Company (the “Series A Junior
 Preferred Stock”) and established the powers, designations, preferences and
 rights and the qualifications, limitations or restrictions thereof. 

 
	
  

 	
  

 
	
 2.

 	
 That no
 shares of Series A Junior Participating Preferred Stock of the Company have
 been issued. 

 
	
  

 	
  

 
	
 3.

 	
 That
 pursuant to the authority conferred upon the Board of Directors of this
 Company in accordance with the Articles of Incorporation of the Company and
 Section 302A.401 and Section 302A.133 of the Minnesota Business Corporation
 Law the Board of Directors of the Company on December 18, 2009, adopted the
 following resolution amending and restating the provisions of the Series A
 Junior Preferred Stock. 

 



          RESOLVED,
that pursuant to the authority vested in the Board of Directors of this
Corporation in accordance with the provisions of its Articles of Incorporation,
the Certificate of Designation, Preferences and Rights of Series A Junior
Participating Preferred Shares of the Company is hereby amended and restated to
read in its entirety as follows: 


          Section
1.     Designation and Amount. The shares of
such series shall be designated as “Series A Junior Participating Preferred
Stock,” no par value, and the number of shares constituting such series shall
be 150,000. Such number of shares may be increased or decreased by resolution
of the Board of Directors; provided that no decrease shall reduce the number of
shares of Series A Junior Participating Preferred Stock to a number less than
that of the shares then outstanding plus the number of shares issuable upon
exercise of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Corporation. 





          Section
2.     Dividends and Distributions. 


          (A)     Subject
to the prior and superior rights of the holders of any shares of any series of
preferred stock now or hereafter ranking prior and superior to the shares of
Series A Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Participating Preferred Stock, in
preference to the holders of shares of Common Stock, $.05 par value per share
(the “Common Stock”), of the Corporation and any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the last day of March, June, September and December in each year (each such
date being referred to herein as a “Quarterly Dividend Payment Date”),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per whole share (rounded to the nearest cent),
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Junior Participating Preferred Stock. In the event the Corporation
shall at any time declare or pay any dividend on Common Stock payable in shares
of Common Stock, or effect a subdivision (by stock split or otherwise) or
combination (by reverse stock split or otherwise) or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Junior Participating Preferred
Stock were entitled immediately prior to such event shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event (and rounding the result to the
nearest whole number); and provided further that if at any time after January
4, 2010 the Corporation shall
issue any shares of its capital stock in a reclassification or change of the
outstanding shares of Common Stock (including any such reclassification or
change in connection with a merger in which the Corporation is the surviving
corporation), then in such event the amount to which holders of Series A Junior
Participating Preferred Stock are entitled shall be appropriately adjusted to
reflect such reclassification or change. 


          (B)     The
Corporation shall declare a dividend or distribution on the Series A Junior
Participating Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock). 


          (C)     The
holders of shares of Series A Junior Participating Preferred Stock shall not be
entitled to receive any dividends or other distributions except as provided herein.



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          Section
3.     Voting Rights. The holders of shares of
Series A Junior Participating Preferred Stock shall have the following voting
rights: 


          (A)     Each
share of Series A Junior Participating Preferred Stock shall entitle the holder
thereof to one hundred (100) votes, subject to adjustment in the manner set
forth in Section 2(A), on all matters on which holders of the Common Stock or
stockholders generally are entitled to vote. 


          (B)     Except
as otherwise provided herein or by applicable law, the holders of shares of
Series A Junior Participating Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation. 


          (C)     Except
as set forth herein or by applicable law, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action. 


          Section
4.     Certain Restrictions. 


          (A)     Whenever
quarterly dividends or other dividends or distributions payable on the Series A
Junior Participating Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series A Junior Participating Preferred
Stock outstanding shall have been paid in full, the Corporation shall not: 


	
  

 	
  

 
	
  

 	
           (i)     declare
 or pay dividends, or make any other distributions, on any shares of stock
 ranking junior (either as to dividends or upon liquidation, dissolution or
 winding up) to the Series A Junior Participating Preferred Stock; 

 
	
  

 	
  

 
	
  

 	
           (ii)    declare
 or pay dividends, or make any other distributions, on any shares of stock
 ranking on a parity (either as to dividends or upon liquidation, dissolution
 or winding up) with the Series A Junior Participating Preferred Stock, except
 dividends paid ratably on the Series A Junior Participating Preferred Stock
 and all such parity stock on which dividends are payable or in arrears in
 proportion to the total amounts to which the holders of all such shares are
 then entitled; 

 
	
  

 	
  

 
	
  

 	
           (iii)   redeem
 or purchase or otherwise acquire for consideration shares of any stock
 ranking junior (either as to dividends or upon liquidation, dissolution or
 winding up) to the Series A Junior Participating Preferred Stock, provided
 that the Corporation may at any time redeem, purchase or otherwise acquire
 shares of any such junior stock in exchange for shares of any stock of the
 Corporation ranking junior (either as to dividends or upon dissolution,
 liquidation or winding up) to the Series A Junior Participating Preferred Stock;
 or 

 
	
  

 	
  

 
	
  

 	
           (iv)    redeem
 or purchase or otherwise acquire for consideration any shares of Series A
 Junior Participating Preferred Stock, or any shares of stock ranking on a
 parity with the Series A Junior Participating Preferred Stock, except in
 accordance with a purchase offer made in writing or by publication (as
 determined by the Board of Directors) to all holders of such shares upon such
 terms as the Board of Directors, after consideration of the respective annual
 dividend rates and other relative rights and preferences of the respective
 series and classes, shall determine in good faith will result in fair and
 equitable treatment among the respective series or classes. 

 


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          (B)     The
Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation
unless the Corporation could, under paragraph (A) of this Section 4, purchase
or otherwise acquire such shares at such time and in such manner. 


          Section
5.     Reacquired Shares. Any shares of Series
A Junior Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and canceled promptly
after the acquisition thereof. All such shares shall, upon their cancellation,
become authorized but unissued shares of preferred stock and may be reissued as
part of a new series of preferred stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein or as otherwise required by law. 


          Section
6.     Liquidation, Dissolution or Winding Up. 


          (A)     Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the “Liquidation Preference”). Following the payment of the full
amount of the Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Common Stock shall have received
an amount per share (the “Common Adjustment”) equal to the quotient obtained by
dividing (i) the Liquidation Preference by (ii) 100 (as appropriately adjusted
as set forth in subparagraph C below to reflect such events as stock splits,
stock dividends and recapitalization with respect to the Common Stock) (such
number in clause (ii) being herein referred to as the “Adjustment Number”).
Following the payment of the full amount of the Liquidation Preference and the
Common Adjustment in respect of all outstanding shares of Series A Junior
Preferred Stock and Common Stock, respectively, holders of Series A Junior
Participating Preferred Stock and holders of shares of Common Stock shall
proportionately share in the remaining assets in the ratio of the Adjustment
Number (per share of Preferred Stock) to 1 (per share of Common Stock). 


          (B)     In
the event there are not sufficient assets available to permit payment in full
of the Liquidation Preference and the liquidation preferences of all other
series of preferred stock, if any, which rank on a parity with the Series A
Junior Participating Preferred Stock, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion to their
respective liquidation preferences. In the event there are not sufficient
assets available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock. 


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          (C)     In
the event the Corporation shall at any time (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number in effect immediately
prior to such event shall be adjusted by multiplying such Adjustment Number by
a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to such
event. 


          Section
7.     Consolidation, Merger etc. In case the
Corporation shall enter into any consolidation, merger combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case the shares of Series A Junior Participating Preferred Stock shall at
the same time be similarly exchanged or changed in an amount per share (subject
to the provision for adjustment hereinafter set forth) equal to 100 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A Junior
Participating Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event. 


          Section
8.     No Redemption. The shares of Series A
Junior Participating Preferred Stock shall not be redeemable. 


          Section
9.     Ranking. The Series A Junior
Participating Preferred Stock shall rank junior to all other series of the
Corporation’s preferred stock which may hereafter be authorized as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise. 


          Section
10.   Amendment. The Articles of
Incorporation of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of two-thirds (2/3) or more of the
outstanding shares of Series A Junior Participating Preferred Stock, voting
separately as a class. 


          Section
11.   Fractional Shares. Series A Junior
Participating Preferred Stock may be issued in fractions of a share which shall
entitle the holder, in proportion to such holder’s fractional shares, to
exercise voting rights, receive dividends, participate in liquidating
distributions and to have the benefit of all other rights of holders of Series
A Junior Participating Preferred Stock. 


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          IN
WITNESS WHEREOF, we have executed and subscribed this Certificate and do affirm
the foregoing as true under the penalties of perjury this 28th day
of December, 2009. 


	
  

 	
  

 	
  

 
	
 Attest:

 	
  

 	
  

 
	
   

 	
  

 	
  

 
	
 /s/ David T. McGraw



 	
  

 	
 /s/ Jeffrey K. Berg



 
	
 David T. McGraw

 	
  

 	
 Jeffrey K. Berg

 
	
 Secretary
 and Treasurer



 	
  

 	
 President
 and Chief Executive Officer



 


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