EXHIBIT 99.1
STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS AS AMENDED THROUGH MARCH 30, 2007
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 Nonemployee Directors (the Plan) are to attract and retain the services of experienced and knowledgeable nonemployee Directors of Communications Systems, Inc. (the Corporation) and to provide an incentive for such Directors to increase their proprietary interest in the Corporations 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, 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.
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 3,000 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.
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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.
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.
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