UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 11, 2006
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Pre-Paid Legal Services, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Oklahoma
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(State or Other Jurisdiction of Incorporation)
001-09293 73-1016728
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(Commission File Number) (IRS Employer Identification No.)
One Pre-Paid Way
Ada, OK 74820
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(Address of Principal Executive Offices) (Zip Code)
(580) 436-1234
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On September 11, 2006, Pre-Paid Legal Services, Inc. (the "Company") issued
a press release announcing the settlement of existing litigation. A copy of the
release is included as an exhibit to this report.
Item 9.01 Financial Statements and Exhibits
The following exhibits are included with this report:
Exhibit No. Description
99.1 Company Press Release dated September 11, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Pre-Paid Legal Services, Inc.
By: /s/ Randy Harp
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Randy Harp, Chief Operating Officer
Date: September 11, 2006
For Release 8:30 a.m. Eastern Company Steve Williamson
Monday, September 11, 2006 Contact: (580) 436-1234
PRE-PAID LEGAL SERVICES, INC. ANNOUNCES
LITIGATION DEVELOPMENT
ADA, OK - September 11, 2006 - Pre-Paid Legal Services, Inc. (NYSE: PPD)
today announced that we reached a settlement agreement with counsel for the more
than 400 plaintiffs in numerous pending cases in Mississippi. Upon closing of
the settlement for an amount significantly less than our accrued reserves of
$2.5 million, all pending litigation against us will be resolved including the
Barbara Booth v. Pre-Paid Legal Services, Inc. case in which a verdict had been
decided in favor of the plaintiff for punitive damages in the aggregate amount
of $9.9 million against us and our chief executive officer. Consummation of the
settlement and dismissal of the lawsuits is subject to approval of the
individual plaintiffs.
"This resolution eliminates the distraction and costs of litigation and
allows us to focus on our core business;" said Harland C. Stonecipher, Chief
Executive Officer.
About Us
We develop, underwrite and market legal service plans across North America. The
plans provide for legal service benefits, including unlimited attorney
consultation as well as letter writing, document preparation and review, will
preparation, traffic violation defense, automobile-related criminal charges
defense and a general trial defense. We also market an identity theft protection
plan. More information can be located at our homepage on the worldwide web at
http://www.prepaidlegal.com/.
Forward-Looking Statements
Statements in this press release, other than purely historical information,
regarding our future plans and objectives and expected operating results,
dividends and share repurchases and statements of the assumptions underlying
such statements, constitute forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934. The forward-looking
statements contained herein are based on certain assumptions that may not be
correct. They are subject to risks and uncertainties incident to our business
that could cause actual results to differ materially from those described in the
forward-looking statements. These risks and uncertainties are described in the
reports and statements filed by us with the Securities and Exchange Commission,
including (among others) those listed in our Form 10-K, Form 10-Q and Form 8-K,
and include the risks that our membership persistency or renewal rates may
decline, that we may not be able to continue to grow our memberships and
earnings, that we are dependent on the continued active participation of our
principal executive officer, that pending or future litigation may have a
material adverse effect on us if resolved unfavorably to us, that we could be
adversely affected by regulatory developments, that competition could adversely
affect us, that we are substantially dependent on our marketing force, that our
stock price may be affected by short sellers, that we have been unable to
increase our employee group membership sales and that our active premium in
force is not indicative of future revenue as a result of changes in active
memberships from cancellations and additional membership sales. Please refer to
pages 14 and 15 of our 2005 Form 10-K and pages 7 through 9 of our June 30, 2006
Form 10-Q for a more complete description of these risks. We undertake no duty
to update any of the forward-looking statements in this release.
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