UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K/A
                                 Amendment No. 1
(Mark one)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the fiscal year ended December 31, 2002

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the transition period from _____________ to ____________

Commission File Number: 1-9293
         --------------------------------------------------------------

                          PRE-PAID LEGAL SERVICES, INC.
             (Exact name of registrant as specified in its charter)

             Oklahoma                                           73-1016728
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                           Identification No.)

          321 East Main
          Ada, Oklahoma                                          74820
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number including area code:  (580) 436-1234

Securities registered pursuant to Section 12(b) of the Exchange Act:
                                                     Name of each exchange on
   Title of each class                                    which registered
   -------------------                                    ----------------
Common Stock, $0.01 Par Value                          New York Stock Exchange

Securities registered under Section 12 (g) of the Exchange Act: None

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K ( ).

     State the aggregate market value of the voting stock held by non-affiliates
of the registrant.  The aggregate market value shall be computed by reference to
the price at which the stock was sold,  or the average  bid and asked  prices of
such stock,  as of a specified date within the past 60 days prior to the date of
the filing: As of March 7, 2003 - $203,210,000.

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act) Yes |X| No [ ]

     State the aggregate market value of the voting and non-voting common equity
held by  non-affiliates  computed by  reference to the price at which the common
equity was last sold, or the average bid and asked prices of such common equity,
as of the last business day of the registrant's  most recently  completed second
fiscal quarter:  As of June 30, 2002 - $285,577,000

     Indicate  the  number of  shares  outstanding  of each of the  registrant's
classes of common stock, as of the latest  practicable date: As of March 7, 2003
there  were  17,866,510  shares  of Common  Stock,  par  value  $.01 per  share,
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE.
     Portions of the Company's  definitive  proxy  statement for its 2003 annual
meeting  of  shareholders  are  incorporated  into Part III of this Form 10-K by
reference.

     The undersigned  registrant  hereby amends the following  items:

     Part IV, Item 15 - "Exhibits, Financial Statement Schedules, and Reports on
Form 8-K" is  amended  (i) to include as  Exhibit  99.3 the  attached  financial
information  relating to The Employee Stock Option Ownership and Thrift Plan and
Trust ("Plan"),  as required by Form 11-K, for the fiscal year of the Plan ended
December  31, 2002,  which is filed as an exhibit  pursuant to Rule 15d-21 under
the  Securities  Exchange  Act of 1934,  and (ii) to include as Exhibit 23.2 the
consent of Grant Thornton LLP, respectively relating to the use of their reports
which are included as part of Exhibit 99.3.

     The full text of Item 15 and the Exhibit  Index,  as  amended,  referred to
therein are as set forth below.

ITEM 15.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)  The following documents are filed as part of this report:

     (1)  Financial Statements:  See Index to Consolidated  Financial Statements
          and Consolidated  Financial Statement Schedule set forth on page 39 of
          this report.

     (2)  Exhibits:  For a list  of the  documents  filed  as  exhibits  to this
          report, see the Exhibit Index following the signatures to this report.

(b)  Reports on Form 8-K: None.




                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

Date: June 30, 2003         By:    /s/ Randy Harp
                                   --------------------------------------
                                   Randy Harp
                                   Chief Operating Officer







                                 CERTIFICATIONS

I, Harland C. Stonecipher, Chief Executive Officer, certify that:

(1)  I have  reviewed  this  amendment  to the  annual  report  on Form  10-K of
     Pre-Paid Legal Services, Inc.;

(2)  Based on my knowledge, this amendment to the annual report does not contain
     any untrue  statement of a material  fact or omit to state a material  fact
     necessary to make the statements made, in light of the circumstances  under
     which such  statements were made, not misleading with respect to the period
     covered by the annual report;

(3)  Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included in the annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

(4)  The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     (a)  Designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this  amendment to
          the annual report is being prepared;

     (b)  Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     (c)  Presented in this amendment to the annual report our conclusions about
          the  effectiveness of the disclosure  controls and procedures based on
          our evaluation as of the Evaluation Date;

(5)  The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     (a)  All  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     (b)  Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

(6)  The  registrant's  other  certifying  officer and I have  indicated in this
     amendment  to the  annual  report  whether  or not there  were  significant
     changes in internal  controls or in other factors that could  significantly
     affect  internal  controls  subsequent  to  the  date  of our  most  recent
     evaluation,  including any  corrective  actions with regard to  significant
     deficiencies and material weaknesses.


Date: June 30, 2003                /s/ Harland C. Stonecipher
                                   ---------------------------------------------
                                   Harland C. Stonecipher
                                   Chairman,   Chief  Executive  Officer  and
                                    President






                            CERTIFICATIONS, continued

I, Steve Williamson, Chief Financial Officer, certify that:

(1)  I have  reviewed  this  amendment  to the  annual  report  on Form  10-K of
     Pre-Paid Legal Services, Inc.;

(2)  Based on my knowledge, this amendment to the annual report does not contain
     any untrue  statement of a material  fact or omit to state a material  fact
     necessary to make the statements made, in light of the circumstances  under
     which such  statements were made, not misleading with respect to the period
     covered by the annual report;

(3)  Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included in the annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

(4)  The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     (a)  Designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this  amendment to
          the annual report is being prepared;

     (b)  Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     (c)  Presented in this amendment to the annual report our conclusions about
          the  effectiveness of the disclosure  controls and procedures based on
          our evaluation as of the Evaluation Date;

(5)  The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     (a)  All  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     (b)  Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

(6)  The  registrant's  other  certifying  officer and I have  indicated in this
     amendment  to the  annual  report  whether  or not there  were  significant
     changes in internal  controls or in other factors that could  significantly
     affect  internal  controls  subsequent  to  the  date  of our  most  recent
     evaluation,  including any  corrective  actions with regard to  significant
     deficiencies and material weaknesses.

Date: June 30, 2003                /s/ Steve Williamson
                                   ---------------------------------------------
                                   Steve Williamson
                                   Chief Financial Officer






                                INDEX TO EXHIBITS


Exhibit No.                       Description
-----------                       -----------

3.1  Amended and  Restated  Certificate  of  Incorporation  of the  Company,  as
     amended  (Incorporated  by reference to Exhibit 4.1 of the Company's Report
     on Form 8-K dated January 10, 1997)

3.2  Amended and Restated  Bylaws of the Company  (Incorporated  by reference to
     Exhibit  3.1 of the  Company's  Report  on Form 10-Q for the  period  ended
     September 30, 1996)

*10.1Employment  Agreement  effective  January 1, 1993  between  the Company and
     Harland C.  Stonecipher  (Incorporated  by reference to Exhibit 10.1 of the
     Company's  Annual  Report on Form  10-KSB for the year ended  December  31,
     1992)

*10.2Agreements between Shirley Stonecipher, New York Life Insurance Company and
     the Company regarding life insurance policy covering Harland C. Stonecipher
     (Incorporated  by reference to Exhibit 10.21 of the Company's Annual Report
     on Form 10-K for the year ended December 31, 1985)

*10.3Amendment dated January 1, 1993 to Split Dollar  Agreement  between Shirley
     Stonecipher  and the  Company  regarding  life  insurance  policy  covering
     Harland C.  Stonecipher  (Incorporated  by reference to Exhibit 10.3 of the
     Company's  Annual  Report on Form  10-KSB for the year ended  December  31,
     1992)

*10.4Form of New Business  Generation  Agreement Between the Company and Harland
     C. Stonecipher (Incorporated by reference to Exhibit 10.22 of the Company's
     Annual Report on Form 10-K for the year ended December 31, 1986)

*10.5Amendment  to New  Business  Generation  Agreement  between the Company and
     Harland C. Stonecipher  effective January,  1990 (Incorporated by reference
     to Exhibit 10.12 of the Company's Annual Report on Form 10-KSB for the year
     ended December 31, 1992)

*10.6Amendment  No.  1 to Stock  Option  Plan,  as  amended  effective  May 2000
     (Incorporated  by reference to Exhibit 10.6 of the Company's  Annual Report
     on Form 10-K for the year ended December 31, 2000)

*10.7Letter  Agreements dated July 8, 1993 and March 7, 1994 between the Company
     and Wilburn L. Smith  (Incorporated  by reference  to Exhibit  10.17 of the
     Company's Form 10-KSB filed for the year ending December 31, 1993)

10.8 Demand Note of Randy Harp dated  December  22, 2000 in favor of the Company
     (Incorporated  by reference to Exhibit 10.17 of the Company's Annual Report
     on Form 10-K for the year ended December 31, 2000)

10.9 Loan agreement  dated June 11, 2002 between Bank of Oklahoma,  N.A. and the
     Company  (Incorporated  by  reference  to  Exhibit  10.1  of the  Company's
     Quarterly Report on Form 10-Q for the six-months ended June 30, 2002)

10.10Security  agreement dated June 11, 2002 between Bank of Oklahoma,  N.A. and
     the Company  (Incorporated  by reference  to Exhibit 10.2 of the  Company's
     Quarterly Report on Form 10-Q for the six months ended June 30, 2002)

10.11Form of Mortgage dated July 23, 2002 between Bank of Oklahoma, N.A. and the
     Company  (Incorporated  by  reference  to  Exhibit  10.3  of the  Company's
     Quarterly Report on Form 10-Q for the six months ended June 30, 2002)

10.12 Demand Note of Randy Harp dated April 14, 2002 in favor of the Company

10.13Amendment No. 2 to New Business  Generation  Agreement  between the Company
     and Harland C. Stonecipher effective January, 1990

*10.14 Deferred compensation plan effective November 6, 2002

21.1 List of Subsidiaries of the Company

23.1 Consent of Grant Thornton LLP

23.2 Consent of Grant Thornton LLP relating to report  concerning plan financial
     information included as part of Exhibit 99.3

99.1 Certification  of Chief  Executive  Officer  pursuant to Section 906 of the
     Sarbanes-Oxley Act of 2002

99.2 Certification  of Chief  Financial  Officer  pursuant to Section 906 of the
     Sarbanes-Oxley Act of 2002

99.3 Financial  information  relating  to  the  Pre-Paid  Legal  Services,  Inc.
     Employee  Stock  Ownership  and Thrift Plan and Trust,  as required by Form
     11-K for the fiscal year of the plan ended December 31, 2002

--------------------
* Constitutes a management contract or compensatory plan or arrangement required
to be filed as an exhibit to this report.







                  Exhibit 23.2 - Consent of Grant Thornton LLP



CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------




We have  issued  our report  dated June 27,  2003,  accompanying  the  financial
statements and schedules of the Pre-Paid  Legal  Services,  Inc.  Employee Stock
Ownership  and  Thrift  Plan and Trust for the year  ended  December  31,  2002,
included in this Amendment No. 1 on Form 10-K/A of Pre-Paid Legal Services, Inc.
for the year ended December 31, 2002. We hereby consent to the  incorporation by
reference  of said  report  in the  Registration  Statement  of  Pre-Paid  Legal
Services, Inc. on Form S-8 (File No. 33-82144, effective July 28, 1994).







GRANT THORNTON LLP


Oklahoma City, Oklahoma
June 27, 2003





                                  Exhibit 99.1

                                  CERTIFICATION


     Pursuant to 18 U.S.C.  ss. 1350, the undersigned  officer of Pre-Paid Legal
Services, Inc. (the "Company"), hereby certifies that the Company's amendment to
the  Annual  Report  on Form  10-K for the year  ended  December  31,  2002 (the
"Report")  fully complies with the  requirements  of Section 13(a) or 15(d),  as
applicable,  of the  Securities  Exchange  Act of 1934 and that the  information
contained in the Report fairly presents, in all material respects, the financial
condition  and  results of  operations  of the  Pre-Paid  Legal  Services,  Inc.
Employee Stock Ownership and Thrift Plan and Trust.

Date: June 30, 2003                /s/ Harland C. Stonecipher
                                   ---------------------------------------------
                                   Harland C. Stonecipher
                                   Chairman,   Chief  Executive  Officer  and
                                   President

     The  foregoing  certification  is being  furnished  solely  pursuant  to 18
U.S.C.ss.1350.






                                  Exhibit 99.2

                                  CERTIFICATION

Pursuant to 18 U.S.C.  ss. 1350, the undersigned  officer of Pre-Paid Legal
Services, Inc. (the "Company"), hereby certifies that the Company's amendment to
the  Annual  Report  on Form  10-K for the year  ended  December  31,  2002 (the
"Report")  fully complies with the  requirements  of Section 13(a) or 15(d),  as
applicable,  of the  Securities  Exchange  Act of 1934 and that the  information
contained in the Report fairly presents, in all material respects, the financial
condition  and  results of  operations  of the  Pre-Paid  Legal  Services,  Inc.
Employee Stock Ownership and Thrift Plan and Trust.

Date: June 30, 2003                /s/ Steve Williamson
                                   ---------------------------------------------
                                   Steve Williamson
                                   Chief Financial Officer

     The  foregoing  certification  is being  furnished  solely  pursuant  to 18
U.S.C.ss.1350.





Exhibit 99.3 - Financial  Statements and Report of independent  certified public
accounts for the Pre-Paid Legal  Services,  Inc.  Employee  Stock  Ownership and
Thrift Plan Trust for the fiscal year of the plan ended December 31, 2002












  Financial statements and report of independent certified public accountants
Pre-Paid Legal Services, Inc. Employee Stock Ownership and Thrift Plan and Trust
                           December 31, 2002 and 2001



                                 C O N T E N T S




REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

FINANCIAL STATEMENTS

    STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

    STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

    NOTES TO FINANCIAL STATEMENTS

SUPPLEMENTAL SCHEDULES

    SCHEDULE H, LINE 4i--ASSETS HELD FOR INVESTMENT PURPOSES

    SCHEDULE H, LINE 4j--REPORTABLE TRANSACTIONS





               Report of Independent Certified Public Accountants


Trustee and Participants
Pre-Paid Legal Services, Inc. Employee Stock Ownership and Thrift Plan and Trust

We have audited the accompanying statements of net assets available for benefits
of Pre-Paid Legal  Services,  Inc.  Employee Stock Ownership and Thrift Plan and
Trust as of December 31, 2002 and 2001, and the related statements of changes in
net assets  available  for  benefits for the years then ended.  These  financial
statements are the responsibility of the Plan's  management.  Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the net assets available for benefits of Pre-Paid Legal
Services, Inc. Employee Stock Ownership and Thrift Plan and Trust as of December
31, 2002 and 2001, and the changes in net assets  available for benefits for the
years then ended in conformity with accounting  principles generally accepted in
the United States of America.

Our audits  were  performed  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for  investment  purposes and  reportable  transactions  are  presented  for the
purpose  of  additional  analysis  and are  not a  required  part  of the  basic
financial statements but are supplemental information required by the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement  Income Security Act of 1974.  These  supplemental  schedules are the
responsibility of the Plan's management.  Such supplemental  schedules have been
subjected  to the  auditing  procedures  applied  in  the  audits  of the  basic
financial  statements  and, in our  opinion,  are fairly  stated in all material
respects in relation to the basic financial statements taken as a whole.






GRANT THORNTON LLP

Oklahoma City, Oklahoma
June 27, 2003






             Pre-Paid Legal Services, Inc. Employee Stock Ownership
                            and Thrift Plan and Trust



                 STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

                                  December 31,



                                                                                               2002              2001
                                                                                          ------------      ------------
ASSETS
                                                                                                      
    Cash and cash equivalents                                                             $   377,905       $   296,455

    Investments, at fair value
       Pre-Paid Legal Services, Inc. common stock                                           5,177,696         4,108,747
       Participant-directed mutual funds                                                      872,183           842,959
       Participant notes                                                                       48,119            50,502

    Receivables
       Employer contributions                                                                 220,853           210,671
       Participants' elective deferrals                                                         7,788             8,831
                                                                                          ------------      ------------
                  NET ASSETS AVAILABLE FOR BENEFITS                                        $6,704,544        $5,518,165
                                                                                          ------------      ------------




        The accompanying notes are an integral part of these statements.





           STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

                             Year ended December 31,



                                                                                               2002              2001
                                                                                          ------------      ------------
Additions
                                                                                                      
    Employer contributions (Pre-Paid Legal Services, Inc. common stock)                   $   220,853       $   210,671
    Participant contributions                                                                 420,912           375,299
    Interest and dividend income                                                               19,369            36,537
    Net appreciation in fair value of investments                                             821,148               -
                                                                                          ------------      ------------
                  Total additions                                                           1,482,282           622,507

Deductions
    Benefits paid to participants                                                             295,903           155,530
    Net depreciation in fair value of investments                                                 -             635,938
                                                                                          ------------      ------------
                  Total deductions                                                            295,903           791,468
                                                                                          ------------      ------------

                  NET INCREASE (DECREASE) IN NET ASSETS                                     1,186,379          (168,961)

Net assets available for benefits at beginning of year                                      5,518,165         5,687,126
                                                                                          ------------      ------------

Net assets available for benefits at end of year                                           $6,704,544        $5,518,165
                                                                                          ------------      ------------



        The accompanying notes are an integral part of these statements.



                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2002 and 2001


NOTE A - DESCRIPTION OF PLAN

The Pre-Paid Legal Services,  Inc.  Employee Stock Ownership and Thrift Plan and
Trust (the  "Plan")  was  established  on January 1, 1988 for the benefit of the
employees of Pre-Paid Legal Services, Inc. and its subsidiaries (the "Company").
The Plan is  administered  by a  committee  (the  "Committee")of  two  employees
appointed by the Company.  The Committee  also serves as the Plan's  Trustee and
Investment Manager.

The following  brief  description  of the provisions of the Plan is provided for
general  information  purposes  only.  Participants  should  refer  to the  Plan
agreement for more complete information.

Under the terms of the Plan, the Committee may acquire,  hold and dispose of all
cash and  investments,  including  common and  preferred  stock of the  Company,
through a trust  fund.  Participants  who have  attained  the age of 55 have the
right to make an election to direct the Committee as to the  investment of their
accounts.  Such participants may elect to diversify up to 100% of their deferred
compensation  account  and the  vested  portion  of their  Company  Contribution
Account  in one or more  "no  load"  mutual  funds of any  regulated  investment
company as defined by section 851 of the Internal Revenue Code.

Each  participant  or  beneficiary  shall have the sole right to vote  shares of
Company common stock allocated to such participant's  account. The right to vote
such shares shall be exercised  by directing  the  Committee as to the manner in
which the shares shall be voted.

The Plan is a  defined  contribution  plan  covering  certain  employees  of the
Company  and  employees  of  affiliated  companies  which  are  included  in the
Company's  consolidated  tax  return.  The Plan  year end is  December  31.  All
employees at least 21 years of age are eligible to enroll in the Plan on January
1 or July 1 following the date the employee completes one year of service (1,000
hours) within 12 consecu-tive months of his/her employment date.

The Company may make discretionary contributions to the Plan for each Plan year.
The  contributions  may vary from  year to year and are  determined  by  written
action of the Board of Directors of the Company.  Contributions may be made only
out of the Company's  consolidated  net profits  before federal and state income
taxes from the current or a preceding  year. The Company's  contribution  may be
paid to the Trustee either in cash,  qualified  employer  securities or in other
property.  In 2002 and 2001,  all Company  contributions  were made in qualified
employer securities.

The Discretionary Matching Company Contribution is an amount determined,  in the
sole  discretion  of the  Company  and  added  to  amounts  forfeited  by  other
participants,  to match the  following  percentages  of  participants'  deferred
compensation  contributions  (up to a  maximum  of 6%) for the  Plan  year.  The
Discretionary Matching Company Contribution is allocated at the end of each Plan
year to each participant's  Company  Contribution Account based on the following
percentages:




NOTE A - DESCRIPTION OF PLAN - CONTINUED

                    Years of service
                     on first day of                       Matching
                        Plan year                        percentages
                    -----------------                    -----------

                          0 - 5                               50%
                          6 - 10                              75%
                         11 or more                          100%

A participant may elect to defer a portion of his  compensation in the form of a
contribution to his deferred  compensation account under the Plan.  Participants
contribute  to the Plan on a pre-tax  basis  only.  Subject  to the  limitations
contained  in the Plan,  a  participant  may elect to defer any  portion  of his
compensation. However, a participant may never defer more than the lesser of the
Internal  Revenue  Service  limitation  ($11,000  and  $10,500 in 2002 and 2001,
respectively) in any Plan year or a percentage of compensation  greater than the
maximum percentage of compensation determined annually by the Committee.

Separate  accounts are  maintained  for each  participant  in the Plan.  When an
election  is made by the  participant  to  defer  part of his  compensation,  an
Employee  Deferred  Compensation  Account is established.  Each participant will
also have a Company  Contribution  Account consisting of discretionary  matching
contributions made by the Company and a proportionate share of forfeitures.

All  amounts  in the  participant's  accounts  are  placed  in a trust  fund and
invested by the  Trustee.  The Trustee  must invest the trust fund solely in the
interest  of  and  for  the  exclusive  purpose  of  providing  benefits  to the
participants   and  their   beneficiaries   while  minimizing  the  expenses  of
administering  the Plan. Under the terms of the Plan, all Company  contributions
and up to 75% of the participant's contributions may be invested in common stock
of the  Company or in  preferred  stock  convertible  into  common  stock of the
Company at a conversion  price which, as of the date of acquisition by the Plan,
is reasonable. Such securities are termed qualified employer securities.

A  participant  will be  entitled  to the full  amount  credited  to his Company
Contribution  Account at the normal retirement date or upon permanent disability
or death.  If a participant  terminates  employment  for any reason after he has
completed at least one year of service, he will be entitled to receive a portion
or all of his account,  depending on his years of service. The percentage of the
Company  Contribution  Account  to  which  a  participant  is  entitled  and the
percentage  forfeited if a participant leaves the Company for reasons other than
retirement,  permanent  disability  or death prior to becoming  fully  vested is
computed according to the following formula:

                                     Vested               Forfeited
      Years of service             percentage             percentage
      -----------------            ----------             ----------

      Less than 1                       0%                     100%
      1 but less than 2                 20%                     80%
      2 but less than 3                 40%                     60%
      3 but less than 4                 60%                     40%
      4 but less than 5                 80%                     20%
      5 or more                        100%                     0%

A participant will always be fully vested in his Employee Deferred  Compensation
Account, regardless of his years of service.

The  Company may amend the Plan at any time to conform to the  Internal  Revenue
Code, Treasury Regulations and Rulings thereunder.  The Company has the right to
terminate the Plan at any time upon prior written  notice to the Trustee and may
direct the Trustee to liquidate  the shares of  participants  in the trust fund.
Upon termination or permanent  suspension of contributions,  the accounts of all
participants   affected  thereby  shall  become   nonforfeitable  and  shall  be
distributed.

NOTE B - SUMMARY OF ACCOUNTING POLICIES

The following is a summary of the Plan's significant accounting policies.

1. Basis of Accounting

The Plan's financial  statements are prepared on the accrual basis of accounting
in conformity with accounting principles generally accepted in the United States
of America.

2. Cash and Cash Equivalents

Cash and cash  equivalents  consist  of the  Plan's  linked  cash and money fund
accounts at a national  brokerage firm which may not be federally  insured.  The
Plan has not  experienced  any losses in such  accounts  and  believes it is not
exposed to any significant credit risks on cash and cash equivalents. Money fund
amounts have a unit value of $1 and balances are  immediately  accessible by the
Plan.

3. Investments

Investments  are  presented at fair value as measured by market prices in active
markets,  including national  securities  exchanges.  The cost of Company common
stock sold is determined on the basis of average cost.  Actual cost is used as a
basis for sales of all other investments.  Investment  transactions are recorded
on a trade-date  basis.  The Plan  presents in the  statements of changes in net
assets available for benefits,  the net appreciation  (depreciation) in the fair
value of its investments, which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.

4. Participant Notes

Effective July 1, 2001, the Plan began to permit participant notes.  Participant
notes are approved by the  Committee  and cannot be made for an amount less than
$1,000 or exceed  the lesser of  $50,000  reduced  by the excess of the  highest
outstanding balance of loans during the one-year period ending on the day before
the loan is made or one-half of the participant's  vested balance. The notes are
secured by the participants'  vested interest in the Plan, bear interest and are
repayable  based upon rates and terms set forth in the Plan.  Participant  notes
are valued at cost which approximates fair value.

5. Noncash Contributions

Contributions  of Company  common stock are recorded at fair value as determined
by using the average  closing price of Company common stock as quoted on the New
York  Stock  Exchange  for each day when the stock is traded  during  the 20-day
period immediately preceding the date of contribution.

6. Expenses

The Company elected to pay all of the Plan's administration expenses in 2002 and
2001 although it is not obligated to do so. Any expenses not paid by the Company
would be paid by the Plan.

7. Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported  amounts of net assets available for benefits and disclosure
of contingent assets and liabilities at the date of the financial statements and
the reported  amounts of changes in net assets available for benefits during the
reporting period.  Actual results could differ from those estimates.  Investment
securities,  in general,  are exposed to various  risks,  such as interest rate,
credit and overall market  volatility.  Due to the level of risk associated with
certain  investment  securities,  it is reasonably  possible that changes in the
values  of  investment  securities  will  occur in the near  term and that  such
changes could  materially  affect the amounts  reported in the statements of net
assets available for benefits.

NOTE C - INVESTMENTS

At  December  31,  2002 and 2001,  the Plan held  197,622  and  187,614  shares,
respectively,  of the  Company's  common  stock  with a cost of  $1,940,190  and
$1,544,034,  respectively.  Other than the  Company's  common  stock (which is a
nonparticipant-directed  investment),  investments of the Plan which represented
5% or more of the Plan's net assets  available for benefits at December 31, 2002
and  2001  were  participant-directed  investments  of  $450,634  and  $372,802,
respectively,  held in the Federated  Investors  Automated Cash Management Trust
SS. In addition, the Plan's nonparticipant-directed Merrill Lynch CMA Government
Securities Fund balance of $377,905 and $296,455  represented 5.64% and 5.37% of
net assets available for benefits at December 31, 2002 and 2001, respectively.

The following  table  presents the net  appreciation  (depreciation)  (including
gains and  losses on  investments  bought and sold,  as well as held  during the
year) by type of investment for the years ended December 31:





                                                                                              2002             2001
                                                                                           ----------         -----------
                                                                                                        
      Mutual funds                                                                         $ (53,554)         $  (24,436)
      Corporate common stock - Pre-Paid Legal Services, Inc.                                 874,702            (611,502)
                                                                                           ----------         -----------
                                                                                           $ 821,148          $ (635,938)
                                                                                           ----------         -----------


NOTE D - NONPARTICIPANT-DIRECTED INVESTMENTS

Information  regarding  the  Plan's  nonparticipant-directed  investment  in the
Company's  common  stock at  December  31,  2002 and 2001 is  included in Note C
above.  Significant  components  of  the  changes  in  net  assets  relating  to
nonparticipant-directed  investments  (including activity in the Plan's cash and
cash equivalents) is as follows for the years ended December 31:




                                                                                              2002              2001
                                                                                           ----------         ----------

                                                                                                        
       Net investment gain (loss)                                                          $   879,933        $(601,372)
       Contributions
           Employer                                                                            220,853          210,671
           Employee                                                                            420,912          375,299
       Benefits paid to participants                                                          (294,850)         (60,074)
       Transfers from (to) participant-directed investments, net                                 4,826          (48,919)
                                                                                           ------------       ----------
                                                                                            $1,231,674        $(124,395)
                                                                                           ------------      -----------



NOTE E - TAX STATUS

A  favorable  determination  letter  dated June 24, 2002 was  received  from the
Internal  Revenue  Service  indicating that the Plan, as amended through July 1,
2001,  qualifies under section 401(a) of the Internal Revenue Code and is exempt
from federal  income taxes under section  501(a) of the Code.  The Plan has been
further amended since receiving the determination  letter.  However, the Company
and the  Committee  believe that the Plan is currently  designed and operated in
compliance  with the  applicable  requirements  of the  Internal  Revenue  Code.
Therefore,  the Company and the Committee  believe that the Plan continues to be
qualified  and no  provision  for income  taxes has been  included in the Plan's
financial statements.

NOTE F - DISTRIBUTIONS

Former  participants  may request  distribution of their accounts in the form of
Company common stock or cash. The ability of the Plan to make  distributions  in
cash  depends,  in part, on the cash  available  within the Plan to purchase the
former  participants'  vested  shares  of the  Company's  common  stock.  Former
participants  who have  elected  to  diversify  all or a portion  of their  Plan
accounts  into  qualified  "no load"  mutual  fund  investments  will  receive a
distribution  of  mutual  fund  shares  or  cash.  Distribu-tions  made  in 2002
consisted of 10,209  shares of the  Company's  common stock and cash of $54,313.
Distributions  made in 2001  consisted of 1,089 shares of the  Company's  common
stock and cash of $134,717.

Former  participants  who  terminated  employment  during  2002  and had not yet
received  distribution  of their  account  at  December  31,  2002 will  receive
distribution  in 2003. The balance due former  participants at December 31, 2002
included 88 shares of the Company's  common stock and cash of $640.  The balance
due  former  participants  at  December  31,  2001  included  270  shares of the
Company's common stock and cash of $2,000.


                             SUPPLEMENTAL SCHEDULES




            SCHEDULE H, LINE 4i--ASSETS HELD FOR INVESTMENT PURPOSES

                                December 31, 2002

---------------------------------------------------------------------------------------------------------------------------
  (a) (b) (c) (d) (e)

          Identity of issuer, borrower, lessor
                                                                                                              Current
    or similar party; description of investment                        Units                  Cost             value

Corporate common stock
                                                                                                    
    *Pre-Paid Legal Services, Inc.                              197,622 shares             $1,940,190        $5,177,696

Short-term funds
    Federated Investors
       Automated Cash Management Trust SS                        450,634 units                450,634           450,634
    Merrill Lynch - Money Funds
       CMA Government Securities Fund                            377,905 units                377,905           377,905
    American Funds
       U.S. Treasury Money Fund of America                       230,266 units                230,266           230,266
    Morgan Stanley Dean Witter
       Limited Duration US Treasury Ex B                         12,483 units                 123,761           124,582
       Liquid Asset Fund                                            1 unit                          1                 1
    Vanguard Group
       Health Care Fund                                            662 units                   66,427            63,628
       500 Index Fund                                              38 units                     4,785             3,072
                                                                                           -----------       -----------
                                                                                            1,253,779         1,250,088

Participant notes, interest from 6.75% to 7%,
    maturing at various dates through 2016                                                     48,119            48,119
                                                                                           -----------       -----------
                                                                                           $3,242,088        $6,475,903
                                                                                           -----------       -----------







*  Party-in-interest






                                  SCHEDULE H, LINE 4j--REPORTABLE TRANSACTIONS

                                           Year ended December 31, 2002


------------------------------------------------------------------------------------------------------------------------------------
              (a)                   (b)                    (c)     (d)     (e)       (f)         (g)           (h)            (i)


                                                                                                   
                                                                                   Expense                 Current value
                                                        Purchase  Selling Lease  incurred with  Cost of    of asset on     Net gain
Identity of party involved  Description of asset         price    price  rental  transaction    asset    transaction date    (loss)
--------------------------  -------------------------  --------   -----  ------  -------------  -------- ----------------  --------
*Pre-Paid Legal Services,   Common stock, 8 purchases  $513,447   $   -  $    -     $    -      $513,447      $513,447       $    -
          Inc.






* Party in interest