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Exhibit 4.1    
  

        AMENDED AND RESTATED COMMUNICATION SYSTEMS, INC.

1990 EMPLOYEE STOCK PURCHASE PLAN
  

As Amended through May 16, 2002

	SECTION
 
	 	CONTENTS
	 	PAGE

	

1.	
 	

Establishment of Plan	
 	

1
	

2.	
 	

Purpose	
 	

1
	

3.	
 	

Administration	
 	

1
	

4.	
 	

Duration and Phases	
 	

1
	

5.	
 	

Eligibility	
 	

2
	

6.	
 	

Participation	
 	

2
	

7.	
 	

Payroll Deduction	
 	

2
	

8.	
 	

Stock Options	
 	

3
	

9.	
 	

Withdrawal or Termination	
 	

3
	

10.	
 	

Stock Reserved For Options	
 	

4
	

11.	
 	

Accounting & Use of Funds	
 	

4
	

12.	
 	

Adjustments	
 	

4
	

13.	
 	

Non-Transferable	
 	

5
	

14.	
 	

Designation of Beneficiaries	
 	

5
	

15.	
 	

Amendments and Termination	
 	

5
	

16.	
 	

Interest	
 	

6
	

17.	
 	

Notice	
 	

6
	

18.	
 	

Participation of Subsidiaries	
 	

6
	

19.	
 	

Definitions	
 	

6

  

 
 

AMENDED AND RESTATED COMMUNICATIONS SYSTEMS, INC.
  1990 EMPLOYEE STOCK PURCHASE PLAN    
  

        1.    Establishment of Plan. Communications Systems, Inc. (hereinafter referred to as the "Company") proposes to grant to
certain employees of the Company the opportunity to purchase common stock of the Company. Such common stock shall be purchased pursuant to the plan herein set forth which shall be known as the
"COMMUNICATIONS SYSTEMS, INC. 1990 EMPLOYEE STOCK PURCHASE PLAN" (hereinafter referred to as the "Plan"). The Company intends that the Plan shall qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1954, as amended, and shall be construed in a manner consistent with the requirements of said Section 423 and the regulations
thereunder. 

        2.    Purpose. The Plan is intended to encourage stock ownership by all employees of the Company, and as an incentive to them to
remain in employment, improve operations, increase profits, and contribute more significantly to the Company's success. 

        3.    Administration. The Plan shall be administered by a stock purchase committee (hereinafter referred to as the "Committee")
consisting of not less than three directors or employees of the Company, as designated by the Board of Directors of the Company (hereinafter referred to as the "Board of Directors"). The Board of
Directors shall fill all vacancies in the Committee and may remove any member of the Committee at any time, with or without cause. The Committee shall select its own chairman and hold its meetings at
such times and places as it may determine. All determinations of the Committee shall be made by a majority of its members. Any decision which is made in writing and signed by a majority of the members
of the Committee shall be effective as fully as though made by a majority vote at a meeting duly called and held. The determinations of the Committee shall be made in accordance with its judgment as
to the best interests of the Company, its employees and its shareholders and in accordance with the purposes of the Plan; provided, however, that the provisions of the Plan shall be construed in a
manner consistent with the requirements of Section 423 of the Internal Revenue Code, as amended. Such determinations shall be binding upon the Company and the participants in the Plan unless
otherwise determined by the Board of Directors. The Company shall pay all expenses of administering the Plan. No member of the Board of Directors or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted under it. 

        4.    Duration and Phases of the Plan. (a) The Plan will commence on July 1, 1990 and will terminate ten
(10) years thereafter, except that any phase commenced prior to such termination shall, if necessary, be allowed to continue beyond such termination until completion. Notwithstanding the
foregoing, this Plan shall be considered of no force or effect and any options granted shall be considered null and void unless the holders of a majority of all the issued and outstanding shares of
the common stock of the Company approve the Plan within twelve (12) months before or after the date of its adoption by the Board of Directors. 

        (b)  The
Plan shall be carried out in one or more phases, each phase being for a period of one year. No phase shall run concurrently, but a phase may commence immediately
after the termination of the preceding phase. The existence and date of commencement of a phase (the "Commencement Date") shall be determined by the Committee, provided that the commencement of the
first phase shall be within twelve (12) months before or after the date of approval of the Plan by the shareholders of the Company. In the event all of the stock reserved for grant of options
hereunder is issued pursuant to the terms hereof prior to the commencement of one or more phases scheduled by the Committee or the number of shares remaining is so small, in the opinion of the
Committee, as to render administration of any succeeding phase impracticable, such phase or phases shall be cancelled. Phases shall be numbered successively Phase 1, Phase 2, Phase 3, etc. 

1

 

        (c)  The
Board of Directors may elect to accelerate the termination date of any phase effective on the date specified by the Board of Directors in the event of (i) any
consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares would be converted into cash, securities or other property, other
than a merger of the Company in which shareholders immediately prior to the merger have the same proportionate ownership of stock in the surviving corporation immediately after the merger;
(ii) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; or (iii) any plan of
liquidation or dissolution of the Company. 

        5.    Eligibility. All Employees, as defined in Paragraph 19 hereof, who are employed by the Company at least one day
prior to the Commencement Date of a phase shall be eligible to participate in such phase. 

        6.    Participation. Participation in the Plan is voluntary. An eligible Employee may elect to participate in any phase of the
Plan, and thereby become a "Participant" in the Plan, by completing the Plan payroll deduction form provided by the Company and delivering it to the Company or its designated representative prior to
the Commencement Date of that phase. Payroll deductions for a Participant shall commence on the first payday after the Commencement Date of the phase and shall terminate on the last payday immediately
prior to or coinciding with the termination date of that phase unless sooner terminated by the Participant as provided in Paragraph 9 hereof. 

        7.    Payroll Deduction. (a) Upon enrollment, a Participant shall elect to make contributions to the Plan by payroll
deductions (in full dollar amounts and in amounts calculated to be as uniform as practicable throughout the period of the phase), in the aggregate amount not in excess of 10% of such Participant's
Base Pay for the term of the phase, as determined according to Paragraph 19 hereof. 

        The
minimum authorized payroll deduction must aggregate to not less than $10 per month. 

        (b)  In
the event that the Participant's compensation for any pay period is terminated or reduced from the compensation rate for such a period as of the Commencement Date of
the phase for any reason so that the amount actually withheld on behalf of the Participant as of the termination date of the phase is less than the amount anticipated to be withheld over the phase
year as determined on the Commencement Date of the phase, then the extent to which the Participant may exercise his option shall be based on the amount actually withheld on his behalf. In the event of
a change in the pay period of any Participant, such as from bi-weekly to monthly, an appropriate adjustment shall be made to the deduction in each new pay period so as to ensure the
deduction of the proper amount authorized by the Participant. 

        (c)  All
payroll deductions made for Participants shall be credited to their accounts under the Plan. The Participant may not make any separate cash payments into such
account. 

        (d)  Except
for his right to discontinue participation in the Plan as provided in Paragraph 9, no Participant shall be entitled to increase or decrease the amount to
be deducted in a given phase after the Commencement Date. 

        8.    Options.

        (a)  Grant of Option.

        (i)    A
Participant who is employed by the Company as of the Commencement Date of a phase shall be granted an option as of such date to purchase a number of full shares of
Company common stock to be determined by dividing the total amount to be credited to that Participant's account under Paragraph 7 hereof by the option price set forth in
Paragraph 8(a)(ii)(A) hereof, subject to the limitations of Paragraph 10 hereof. 

2

 

        (ii)  The
option price for such shares of common stock shall be the lower of: 

        A.    Eighty-five
percent (85%) of the fair market value of such shares of common stock on the Commencement Date of the phase; or 

        B.    Eighty-five
percent (85%) of the fair market value of such shares of common stock on the termination date of the phase. 

        (iii)  The
fair market value of shares of common stock of the Company shall be determined by the Committee for each valuation date in a manner acceptable under
Section 423, Internal Revenue Code of 1954. 

        (iv)  Anything
herein to the contrary notwithstanding, no Employee shall be granted an option hereunder: 

        A.    Which
permits his rights to purchase stock under all employee stock purchase plans of the Company, its subsidiaries or its parent, if any, to accrue at a rate which
exceeds Twenty-Five Thousand Dollars ($25,000) of the fair market value of such stock (determined at the time such option is granted) for each calendar year in which such option is
outstanding at any time; 

        B.    If
immediately after the grant such Employee would own and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company, its parent, if any, or of any subsidiary of the Company. For purposes of determining stock ownership under this Paragraph, the rules of
Section 425(d) of the Internal Revenue Code, as amended, shall apply; or 

        C.    Which
can be exercised after the expiration of 27 months from the date the option is granted. 

        (b)  Exercise of Option.

        (i)    Unless
a Participant gives written notice to the Company pursuant to Paragraph 8(b)(ii) or Paragraph 9 prior to the termination date of a phase, his
option for the purchase of shares will be exercised automatically for him as of such termination date for the purchase of the number of full shares of Company common stock which the accumulated
payroll deductions in his account at that time will purchase at the applicable option price, subject to the limitations set forth in Paragraph 10 hereof. 

        (ii)  A
Participant may, by written notice to the Company at any time during the thirty (30) day period immediately preceding the termination date of a phase, elect,
effective as of the termination date of that phase, to exercise his option for a specified number of full shares less than the maximum number which may be purchased under his option. 

        (iii)  As
promptly as practicable after the termination date of any phase, the Company will deliver to each Participant herein the common stock purchased upon the exercise of
his option, together with a cash payment equal to the balance, if any, of his account which was not used for the purchase of common stock with interest accrued thereon. 

        9.    Withdrawal or Termination of Participation. (a) A Participant may, at any time prior to the termination date of a
phase, withdraw all payroll deductions then credited to his account by giving written notice to the Company. Promptly upon receipt of such notice of withdrawal, all payroll deductions credited to the
Participant's account will be paid to him with interest accrued thereon and no further payroll deductions will be made during that phase. In such event, the option granted the Participant under that
phase of the Plan shall lapse immediately. Partial withdrawals of payroll deductions hereunder may not be made. 

3

 

        (b)  In
the event of the death of a Participant, the person or persons specified in Paragraph 14 may give notice to the Company within sixty (60) days of the
death of the Participant electing to purchase the number of full shares which the accumulated payroll deductions in the account of such deceased Participant will purchase at the option price specified
in Paragraph 8(a)(ii) and have the balance in the account distributed in cash with interest accrued thereon. If no such notice is received by the Company within said sixty
(60) days, the accumulated payroll deductions will be distributed in full in cash with interest accrued thereon. 

        (c)  Upon
termination of Participant's employment for any reason other than death of the Participant, the payroll deductions credited to his account, plus interest, shall be
returned to him. 

        10.  Stock Reserved for Options. (a) Four Hundred Thousand (400,000)(1) shares of the Company's $.05 par value common
stock are reserved for issuance upon the exercise of options to be granted under the Plan. Shares subject to the unexercised portion of any lapsed or expired option may again be subject to option
under the Plan. 

	(1)
	100,000
shares (as adjusted for a stock split in 1993) were registered on Form S-8 (File No. 33-39862) on April 11, 1991. 100,000 shares were registered on From S-8 (File No.
33-99564) on November 20, 1995. 200,000 shares are being registered herewith. 

        (b)  If
the total number of shares of Company common stock for which options are to be granted for a given phase as specified in Paragraph 8 exceeds the number of
shares then remaining available under the Plan (after deduction of all shares for which options have been exercised or are then outstanding) and if the Committee does not elect to cancel such phase
pursuant to Paragraph 4, the Committee shall make a pro rata allocation of the shares remaining available in as uniform and equitable a manner as it shall consider practicable. In such event,
the options to be granted and the payroll deductions to be made pursuant to the Plan which would otherwise be effected may, in the discretion of the Committee, be reduced accordingly. The Committee
shall give written notice of such reduction to each Participant affected. 

        (c)  The
Participant (or a joint tenant named pursuant to Paragraph 10(d) hereof) shall have no rights as a shareholder with respect to any shares subject to the
Participant's option until the date of the issuance of a stock certificate evidencing such shares. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property), distributions or other rights for which the record date is prior to the date such stock certificate is actually issued, except as otherwise provided in Paragraph 12 hereof. 

        (d)  The
shares of Company common stock to be delivered to a Participant pursuant to the exercise of an option under the Plan will be registered in the name of the
Participant or, if the Participant so directs by written notice to the Committee prior to the termination date of that phase of the Plan, in the names of the Participant and one other person the
Participant may designate as his joint tenant with rights of survivorship, to the extent permitted by law. 

        11.  Accounting and Use of Funds. Payroll deductions for each Participant shall be credited to an account established for him
under the Plan. A Participant may not make any separate cash payments into such account. Such account shall be solely for bookkeeping purposes and no separate fund or trust shall be established
hereunder and the Company shall not be obligated to segregate such funds. All funds from payroll deductions received or held by the Company under the Plan may be used, without limitation, for any
corporate purpose by the Company. 

        12.  Adjustment Provision. (a) Subject to any required action by the shareholders of the Company, the number of shares
covered by each outstanding option, and the price per share thereof in each such option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of the Company
common stock resulting from a subdivision or consolidation of shares or the payment of 

4

 

a share dividend (but only on the shares) or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company. 

        (b)  In
the event of a change in the shares of the Company as presently constituted, which is limited to a change of all its authorized shares with par value into the same
number of shares with a different par value or without par value, the shares resulting from any such change shall be deemed to be the shares within the meaning of this Plan. 

        13.  Non-Transferability of Options. (a) Options granted under any phase of the Plan shall not be
transferable except under the laws of descent and distribution and shall be exercisable only by the Participant during his lifetime and after his death only by his beneficiary of the representative of
his estate as provided in Paragraph 9(b) hereof. 

        (b)  Neither
payroll deductions credited to a Participant's account, nor any rights with regard to the exercise of an option or to receive common stock under any phase of the
Plan may be assigned, transferred, pledged or otherwise disposed of in any way by the Participant. Any such attempted assignment, transfer, pledge or other disposition shall be null and void and
without effect, except that the Company may, at its option, treat such act as an election to withdraw funds in accordance with Paragraph 9. 

        14.  Designation of Beneficiary. A Participant may file a written designation of a beneficiary who is to receive any
cash to the Participant's credit plus interest thereon under any phase of the Plan in the event of such Participant's death prior to exercise of his option pursuant to Paragraph 9(b) hereof, or
to exercise his option and become entitled to any stock and/or cash upon such exercise in the event of the Participant's death prior to exercise of the option pursuant to Paragraph 9(b) hereof.
The beneficiary designation may be changed by the Participant at any time by written notice to the Company. 

        Upon
the death of a Participant and upon receipt by the Company of proof deemed and adequate by it of the identity and existence at the Participant's death of a beneficiary validly
designated under the Plan, the Company shall in the event of the Participant's death under the circumstances described in Paragraph 9(b) hereof, allow such beneficiary to exercise the
Participant's option pursuant to Paragraph 9(b) if such beneficiary is living on the termination date of the phase and deliver to such beneficiary the appropriate stock and/or cash after
exercise of the option. In the event there is no validly designated beneficiary under the Plan who is living at the time of the Participant's death under the circumstances described in
Paragraph 9(b) or in the event the option lapses, the Company shall deliver the cash credited to the account of the Participant with interest to the executor or administrator of the estate of
the Participant, or if no such executor or administrator has been appointed to the knowledge of the Company, it may, in its discretion, deliver such cash to the spouse or to any one or more dependents
or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. The Company will not be responsible for or be
required to give effect to the disposition of any cash or stock or the exercise of any option in accordance with any will or other testamentary disposition made by such Participant or in accordance
with the provision of any law concerning intestacy, or otherwise. No designated beneficiary shall, prior to the death of a Participant by whom he has been designated, acquire any interest in any stock
or in any option or in the cash credited to the Participant under any phase of the Plan. 

        15.  Amendment and Termination. The Plan may be terminated at any time by the Board of Directors provided that, except as
permitted in Paragraph 4(c) with respect to an acceleration of the termination date of any phase, no such termination will take effect with respect to any options then outstanding. Also, the
Board may, from time to time, amend the Plan as it may deem proper and in the best interests of the Company or as may be necessary to comply with Section 423 of the Internal Revenue Code of
1986, as amended, or other applicable laws or regulations; provided, however, that no such amendment shall, without prior approval of the shareholders of the Company (1) increase the 

5

 

number of shares for which options may be granted under the Plan (except as provided in Paragraph 12 herein), (2) permit aggregate payroll deductions in excess of ten percent (10%) of a
Participant's compensation as of the Commencement Date of a phase, or (3) impair any outstanding option. 

        16.  Interest. In any situation where the Plan provides for the payment of interest on a Participant's payroll deductions,
such interest shall be determined by averaging the month-end balances in the Participant's account for the period of his participation and computing interest thereon at the rate of five
percent (5%) per annum. 

        17.  Notices. All notices or other communications in connection with the Plan or any phase thereof shall be in the form
specified by the Committee and shall be deemed to have been duly given when received by the Participant or his designated personal representative or beneficiary or by the Company or its designated
representative, as the case may be. 

        18.  Participation of Subsidiaries. The Board of Directors may, by written resolution, authorize the employees of any of its
subsidiaries to participate hereunder. Effective as of the date of coverage of any such subsidiary, any references herein to the "Company" shall be interpreted as referring to such subsidiary as well
as to Communications Systems, Inc. 

        In
the event that any subsidiary which is covered under the Plan ceases to be a subsidiary of Communications Systems, Inc., the employees of such subsidiary shall be considered to
have terminated their employment for purposes of Paragraph 9 hereof as of the date such subsidiary ceases to be such a subsidiary. 

        19.  Definitions. (a) "Subsidiary" shall include any corporation defined as a subsidiary of the Company in
Section 425(f) of the Internal Revenue Code of 1954, as amended. 

        (b)  "Employee"
shall mean any employee, including an officer, of the Company who as of the first day of the month immediately preceding the Commencement Date of a phase is
customarily employed by the Company for more than fifteen (15) hours per week. 

        (c)  "Base
Pay" is the regular pay for employment for each employee as annualized for a twelve (12) month period, exclusive of overtime, commissions, bonuses,
disability payments, shift differentials, incentives and other similar payments, determined as of the Commencement Date of each phase. 

        Adopted
by Board of Directors: February 15, 1990 

6

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Exhibit 4.1

AMENDED AND RESTATED COMMUNICATIONS SYSTEMS, INC. 1990 EMPLOYEE STOCK PURCHASE PLANQuickLinks
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Exhibit 4.1    
  

 
 

AMENDED AND RESTATED COMMUNICATION SYSTEMS, INC.
  1990 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
  
    As Amended through May 16, 2002    
  

	SECTION
 
	 	CONTENTS
	 	PAGE

	1.	 	Purpose	 	1
	

2.	
 	

Shares Subject to Plan	
 	

1
	

3.	
 	

Administration	
 	

1
	

4.	
 	

Participation	
 	

1
	

5.	
 	

Option Terms	
 	

1
	

6.	
 	

Capital Adjustments	
 	

2
	

7.	
 	

Expenses of The Plan	
 	

3
	

8.	
 	

Approval Of Stockholders	
 	

3
	

9.	
 	

Amendments and Termination	
 	

3
	

10.	
 	

Effective Date	
 	

3

 
 
 

AMENDED AND RESTATED COMMUNICATIONS SYSTEMS, INC.
  
    1990 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS    
  

ARTICLE I

PURPOSE  

        The purposes of the 1990 Communications Systems, Inc. Stock Option Plan for Non-Employee Directors (the "Plan") are to attract and retain the
services of experienced and knowledgeable non-employee Directors of Communications Systems, Inc. (the "Corporation") and to provide an incentive for such Directors to increase their
proprietary interest in the Corporation's long-term success and progress. 

ARTICLE II

SHARES SUBJECT TO THE PLAN  

        The total number of shares of Common Stock, par value $.05 (the "Shares"), of the Corporation for which options may be granted under the Plan is 300,000(1)
subject to adjustment in accordance with Article VI hereof. Such Shares shall be authorized and unissued shares and shall include shares representing the unexercised portion of any option
granted under the Plan which expires or terminates without being exercised in full. 

	(1)
	200,000
shares (as adjusted for a stock split in 1993) were registered on Form S-8 (File No. 33-39864) on April 11, 1991. 100,000 shares
are being registered herewith. 

1

 
ARTICLE III

ADMINISTRATION OF THE PLAN  

        The Plan shall be administered by the Board of Directors of the Corporation (the "Board"), or, in the event the Board shall appoint and/or authorize a
Compensation Committee to administer this Plan, by such committee. Subject to the terms of the Plan, the Board shall have the power to construe the provisions of the Plan, to determine all questions
arising thereunder and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable. 

ARTICLE IV

PARTICIPATION IN THE PLAN  

        Each Director of the Corporation who is not otherwise an employee of the Corporation or any subsidiary ("Director") shall receive annually an option to acquire
1,000 Shares under the Plan subject to adjustment in accordance with Article VI hereof, concurrent with the annual meeting of the stockholders of the corporation (whether or not such Director
is up for election), commencing with the 1990 election. 

ARTICLE V

OPTION TERMS  

        Each option granted to a Director under the Plan and the issuance of Shares thereunder shall be subject to the following terms. 

        1.    Option Agreement.    Each option granted under the Plan shall be evidenced by an option agreement (the
"Agreement") duly executed on behalf of the Corporation and by the Director to whom such options is granted. Each Agreement shall comply with and be subject tot he terms and conditions of the Plan and
shall conclusively evidence by the optionee's signature thereon that it is the intent of the optionee to serve as a director of the Corporation for the remainder of the calendar year in which the
option was granted. Any Agreement may contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Board. No option shall be granted within the
meaning of the Plan and no purported grant of any option shall be effective until such an option agreement shall have been duly executed on behalf of the Corporation and the Director to whom the
option is to be granted. 

        2.    Option Exercise Price.    The option exercise price for an option granted under the Plan shall be the fair
market value of the Shares covered by the option at the time the option is granted. For purposes of the Plan, "fair market value" may mean the closing price or the mean between the high and low sale
prices quoted on the day of grant on the National Association of Securities Dealers Automatic Quotation System, whichever is less. 

        3.    Time and Manner of Exercise of Option.    Options are exercisable immediately after their grant and may be
exercised in full at one time or in part from time to time. Any option may be exercised by giving written notice, signed by the person exercising the option, to the corporation stating the number of
Shares with respect to which the option is being exercised, accompanied by payment in full for such Shares, which payment may be in whole or in part in Shares of the Common Stock of the Corporation
already owned by the person or persons exercising the option, valued at fair market value at the time of such exercise. 

        4.    Term of Options.    Each option shall expire not more than ten (10) years from the date of the granting
thereof, but shall be subject to earlier termination as follows: 

        (a)  In
the event of the death of an optionee during the period in which he or she is a Director of the Corporation or within the period during which the option continues to
be exercisable under Section 4(b) hereof, the option granted to such optionee may be exercised within 

2

 

one (1) year after the date of death of such optionee or prior to the date on which the option expires by its terms, whichever is earlier, by the estate of such optionee, or by any person or
persons whom the optionee shall have designated in writing on forms prescribed by and filed with the Corporation or, if no such designation has been made by the person or persons to whom the
optionee's rights have passed, by will or the law of descent and distribution. 

        (b)  In
the event that an optionee ceases to be a Director of the Corporation, the option granted to such optionee may be exercised by him or her within one (1) year
after the date such optionee ceases to be a Director of the Corporation or prior to the date on which the option expires by its terms, whichever is earlier. 

        5.    Transferability.    The right of any optionee to exercise an option granted to him or her under the Plan shall
not be assignable or transferable by such optionee otherwise than by will or the laws of descent and distribution, and any such option shall be exercisable during the lifetime of such optionee only by
such optionee. 

        6.    Participant's or Successor's Rights as Stockholder.    Neither the recipient of an option under the Plan nor his
or her successor(s) in interest shall have any rights as a stockholder of the Corporation with respect to any Shares subject to an option granted to such person until such person becomes a holder of
record of such Shares. 

        7.    Regulatory Approval and Compliance.    The Corporation shall not be required to issue any certificate or
certificates for Shares of its stock upon the exercise of an option granted under the Plan or record as a holder of record of such Shares the name of the individual exercising an option under the
Plan, without obtaining to the complete satisfaction of the Board the approval of all regulatory bodies deemed necessary by the Board, and without complying, to the Board's complete satisfaction, with
all rules and regulations, under federal, state or local law deemed applicable by the Board. 

ARTICLE VI

CAPITAL ADJUSTMENTS  

        The aggregate number of Shares with respect to which options may be granted under the Plan, as provided in Article II, the number of Shares for which
options are to be granted annually under Article IV, the number of Shares subject to each outstanding option and the price per share specified in such options, all may be adjusted, as the Board
shall determine at its sole discretion or as may be required, for any increase or decrease in the number of issued shares of Common Stock of the Corporation resulting from a subdivision or
consolidation of Shares or any other similar capital adjustment, the payment of a stock dividend, or other increase or decrease in such Shares effected without receipt of consideration by, or a
merger, or consolidation of, the Corporation, or the distribution of shares of another corporation as a stock dividend, or the sale of all or substantially all of the assets of, or the liquidation of,
the Corporation. 

ARTICLE VII

EXPENSES OF THE PLAN  

        All costs and expenses of the adoption and administration of the Plan shall be borne by the Corporation, and none of such expenses shall be charged to any
optionee. 

ARTICLE VIII

APPROVAL OF STOCKHOLDERS  

        The Plan shall be subject to approval by the vote of stockholders holding at least a majority of the voting stock of the Corporation, voting in person or by proxy
at a duly held stockholders' meeting. 

3

 

ARTICLE IX

TERMINATION AND AMENDMENT OF THE PLAN  

        The Board may amend, terminate or suspend the Plan at any time, in its sole and absolute discretion; provided, however, that without the approval of stockholders
no amendment shall (1) increase the number of Shares subject to the Plan; (2) reduce the option price below 100% of the market value of the Shares, subject to adjustment under
Article VI, the number of Shares for which options may be granted to each Director in a calendar year; or (4) change the timing with respect to which such options are granted. 

ARTICLE X

EFFECTIVE DATE  

        The effective date of the Plan shall be the date on which the Plan is approved by its stockholders. 

4

QuickLinks

Exhibit 4.1

AMENDED AND RESTATED COMMUNICATION SYSTEMS, INC. 1990 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS As Amended through May 16, 2002

AMENDED AND RESTATED COMMUNICATIONS SYSTEMS, INC. 1990 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS

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