Annual report pursuant to Section 13 and 15(d)

Common Stock

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Common Stock
 12 Months Ended
Dec. 31, 2012
Common Stock [Abstract]  
Common Stock

NOTE 10 – COMMON STOCK

 

PURCHASES OF COMMUNICATIONS SYSTEMS, INC. COMMON STOCK

 

In October 2008, the Company’s Board of Directors authorized the repurchase of shares of the Company’s stock pursuant to Exchange Act Rule 10b-18 on the open market, in block trades or in private transactions. In 2012, the Company purchased and retired 70,028 shares at a cost of $758,000.  At December 31, 2012,  411,910 additional shares could be repurchased under outstanding Board authorizations.

 

SHAREHOLDER RIGHTS PLAN

 

On December 23, 2009 the Board of Directors adopted a shareholders’ rights plan.  Under this plan, the Board of Directors declared a distribution of one right per share of common stock.  Each right entitles the holder to purchase 1/100th of a share of a new series of Junior Participating Preferred Stock of the Company at an initial exercise price of $41.  The rights expire on December 23, 2019.  The rights will become exercisable only following the acquisition by a person or group, without the prior consent of the Board of Directors, of 16.5% or more of the Company’s voting stock, or following the announcement of a tender offer or exchange offer to acquire an interest of 16.5% or more.  If the rights become exercisable, each rightholder will be entitled to purchase, at the exercise price, common stock with a market value equal to twice the exercise price.  Should the Company be acquired, each right would entitle the holder to purchase, at the exercise price, common stock of the acquiring company with a market value equal to twice the exercise price.  Any rights owned by the acquiring person or group would become void.