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, 2006

[ ] 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.)

           One Pre-Paid Way
             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 if registrant is a well-known seasoned issuer, as defined
in Rule 405 of the Securities Act. Yes [ ] No |X|

Indicate by check mark if registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes [ ] No |X|

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 [ ].

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. Check one:

Large accelerated filer [ ]   Accelerated filer |X|     Non-accelerated file [ ]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) Yes [ ] No |X|

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, 2006 -$323,799,000

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest  practicable  date: As of February 16, 2007 there
were 13,622,131 shares of Common Stock, par value $.01 per share, outstanding.


DOCUMENTS INCORPORATED BY REFERENCE.
Portions  of our  definitive  proxy  statement  for its 2007  annual  meeting of
shareholders are incorporated into Part III of this Form 10-K by reference.


     The undersigned  registrant  hereby amends the following  items,  financial
statements,  exhibits  of other  portions  of its  Annual  Report  on Form  10-K
pursuant to Section 13 of the Securities and Exchange Act of 1934 for the fiscal
year ended  December  31,  2006,  as set forth  below and in the pages  attached
hereto.

     Part IV, Item 15 - "Exhibits, Financial Statement Schedules" is amended (i)
to include as Exhibit 99.1 the attached  financial  information  relating to The
Employee Stock Option  Ownership and Thrift Plan  ("Plan"),  as required by Form
11-K, for the fiscal year of the Plan ended December 31, 2006, 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 99.1.

     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.
------------------------------------------------------

(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 41 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.

                                   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 28, 2007                By:     /s/ Randy Harp
                                      ------------------------------------------
                                           Randy Harp
                                           Chief Operating Officer




                  



                                INDEX TO EXHIBITS


    Exhibit No.                                                  Description
    -----------                                                  -----------
      3.1           Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 of our Annual
                    Report on Form 10-K for the year ended December 31, 2004)

      3.2           Amended and Restated Bylaws of the Company (Incorporated by reference to Exhibit 3.1 of our Report on Form 10-Q
                    for the period ended June 30, 2003)

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

    *10.2           Agreements 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 our Annual
                    Report on Form 10-K for the year ended December 31, 1985)

    *10.3           Amendment 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 our Annual
                    Report on Form 10-KSB for the year ended December 31, 1992)

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

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

    *10.6           Amendment No. 2 to New Business Generation Agreement between the Company and Harland C. Stonecipher effective
                    January, 1990 (Incorporated by reference to Exhibit 10.13 of our Annual Report on Form 10-K for the year ended
                    December 31, 2002)

    *10.7           Stock Option Plan, as amended effective May 2003 (Incorporated by reference to Exhibit 10.7 of our Annual report
                    on Form 10-K for the year ended December 31, 2004)

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

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

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

    *10.11          Deferred compensation plan effective November 6, 2002 (Incorporated by reference to Exhibit 10.14 of our Annual
                    Report on Form 10-K for the year ended December 31, 2002)

     10.12          Loan agreement dated September 19, 2003 between Registrant and Bank of Oklahoma, N.A., Comerica Bank and First
                    United Bank & Trust (Incorporated by reference to Exhibit 10.1 of our Report on Form 10-Q for the period ended
                    September 30, 2003)

     10.13          Aircraft purchase agreement dated December 9, 2004 by and between S&S Aviation, LLC and the Company
                    (Incorporated by reference to Exhibit 10.13 of our Annual Report on Form 10-K for the year ended
                    December 31, 2004)

     10.14          Aircraft purchase agreement dated December 9, 2004 by and between Harland C. Stonecipher and/or Shirley A.
                    Stonecipher and Stonecipher Aviation, LLC and the Company (Incorporated by reference to Exhibit 10.14 of our
                    Annual Report on Form 10-K for the year ended December 31, 2004)

     10.15          Assignment and Assumption of Lease dated December 20, 2004 between Harland C. and Shirley Stonecipher and the
                    Company (Incorporated by reference to Exhibit 10.15 of our Annual Report on Form 10-K for the year ended
                    December 31, 2004)

    *10.16          Amended Deferred Compensation Plan effective January 1, 2005 (Incorporated by reference to Exhibit 10.16 of our
                    Annual Report on Form 10-K for the year ended December 31, 2004)

     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 99.1

     31.1           Certification of Harland C. Stonecipher, Chairman and Chief Executive Officer, pursuant to Rule 13a-14(a) under
                    the Securities Exchange Act of 1934

     31.2           Certification of Steve Williamson, Chief Financial Officer, pursuant to Rule 13a-14(a) under the Securities
                    Exchange Act of 1934

     32.1           Certification of Harland C. Stonecipher, Chairman and Chief Executive Officer, pursuant to 18 U.S.C.
                    Section 1350

     32.2           Certification of Steve Williamson, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350

     99.1**         Financial information relating to the Pre-Paid Legal Services, Inc. Employee Stock Ownership and Thrift Plan,
                    as required by Form 11-K for the fiscal year of the plan ended December 31, 2006
--------------------
* Constitutes a management contract or compensatory plan or arrangement required
to be filed as an exhibit to this report.
** Filed herewith.  All other Exhibits have been previously filed.








                                  EXHIBIT 23.2


            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




We have  issued  our report  dated June 26,  2007,  accompanying  the  financial
statements  and  supplemental  schedules of the Pre-Paid  Legal  Services,  Inc.
Employee  Stock  Ownership and Thrift Plan for the year ended December 31, 2006,
included in this Amendment No. 1 on Form 10-K/A of Pre-Paid Legal Services, Inc.
for the year ended December 31, 2006. 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 26, 2007




                                  EXHIBIT 99.1

       Financial information relating to the Pre-Paid Legal Services, Inc.
       Employee Stock Ownership and Thrift Plan, as required by Form 11-K
             for the fiscal year of the plan ended December 31, 2005



                                 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

We have audited the accompanying statements of net assets available for benefits
of Pre-Paid Legal Services,  Inc. Employee Stock Ownership and Thrift Plan as of
December 31, 2006 and 2005, 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 as  established  by the  American  Institute of
Certified Public  Accountants.  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 consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are appropriate in the  circumstances,  but not for the purpose of expressing an
opinion on the  effectiveness  of the Plan's  internal  control  over  financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   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 as of December 31, 2006
and 2005,  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 26, 2007




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





                 STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

                                  December 31,


                                                                                             2006              2005
                                                                                       ----------------  ----------------

ASSETS
    Investments, at fair value
                                                                                                     
       Pre-Paid Legal Services, Inc. common stock                                        $  7,988,233      $  7,133,196
       Participant-directed mutual funds                                                    3,109,596         2,641,412
       Common collective trust funds                                                          485,693           441,938
       Money market funds                                                                         706             9,361
       Participant notes                                                                      169,900           116,782

    Receivables
       Employer contributions                                                                 471,497           445,055
       Dividends receivable                                                                       -              55,933

    Cash and cash equivalents                                                                  22,266               839
                                                                                          -----------       -----------
                  Total assets                                                             12,247,891        10,844,516

LIABILITIES
    Accounts payable                                                                           21,624             9,568
                                                                                          -----------       -----------

                  NET ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE                          12,226,267        10,834,948

Adjustment  from  fair  value to  contract  value for  interest  in  collective  trust
    relating to fully benefit-responsive investment contracts                                  12,784             1,127
                                                                                          -----------       -----------

                  NET ASSETS AVAILABLE FOR BENEFITS                                       $12,239,051       $10,836,075
                                                                                          -----------       -----------





        The accompanying notes are an integral part of these statements.




           STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

                             Year ended December 31,


                                                                                              2006              2005
                                                                                         --------------    --------------

Additions to net assets attributed to
                                                                                                    
    Employer contributions                                                              $     471,497     $     445,055
    Participant contributions                                                                 646,334           617,242
    Interest and dividend income                                                              167,056           220,393
    Net appreciation in fair value of investments                                             495,567           271,037
                                                                                          -----------       -----------
                  Total additions                                                           1,780,454         1,553,727

Deductions from net assets attributed to
    Benefits paid to participants                                                             376,478           254,177
    Administrative fees                                                                         1,000             1,200
                                                                                          -----------       -----------


                  NET INCREASE IN NET ASSETS                                                1,402,976         1,298,350

Net assets available for benefits at beginning of year                                     10,836,075         9,537,725
                                                                                          -----------       -----------

Net assets available for benefits at end of year                                          $12,239,051       $10,836,075
                                                                                          -----------       -----------

        The accompanying notes are an integral part of these statements.





                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005


NOTE A - DESCRIPTION OF PLAN

     The Pre-Paid Legal Services,  Inc. Employee Stock Ownership and Thrift Plan
     (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
     three employees appointed by the Company.  The Committee also served as the
     Plan's  Trustee and  Invest-ment  Manager  until  November 1, 2004 when the
     Company  amended and  restated the Plan to provide for  appointment  by the
     Committee of outside  entities to assume the duties of both the  Investment
     Manager and Trustee.  The 401(k) Company was appointed  Investment Manager.
     Effective November 1, 2004, the Employer and Nationwide Trust Company,  FSB
     ("Nationwide")  entered into a Trust Agreement  whereby  Nationwide  became
     Plan Trustee.

     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 Trustee may acquire,  hold and dispose of
     all cash and  investments,  including  common  and  preferred  stock of the
     Company in  accordance  with the  Committee's  written  investment  policy.
     Participants  may direct the investment of 25% of their  Elective  Deferral
     accounts  to any one or  more of the  investment  funds  designated  by the
     Committee as permissible under the written investment policy.  Participants
     who have  attained  the age of 55 have the  right  to make an  election  to
     direct the investment of up to 100% of their deferred  compensation account
     and the vested portion of their Company Contribution Account in one or more
     of those permissible funds.

     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
     the first day of the month  following  the date the employee  completes one
     year of  service  (1,000  hours)  within 12  consecutive  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.

     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:


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

             0-3                                               50%
             4-5                                               75%
             6 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  ($15,000 and
     $14,000 in 2006 and 2005, 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.  Effective  January 1, 2007,  the Plan was
     amended  to  allow  the  participants  to  direct  the  Trustee  as to  the
     investment  of their  contributions  including  the portion,  if any, to be
     invested in 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.

     Upon  termination  of a  participant's  employment  with the  Company,  the
     nonvested portion of the Company contribution is forfeited. Forfeitures are
     used  to  reduce  future  Company  contributions.  At  December  31,  2006,
     forfeited nonvested accounts totaled approximately $7,000.

     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's
     interest in the collective trust is valued based on information reported by
     the  investment  advisor  using the  audited  financial  statements  of the
     collective  trust at year-end.  Dividends  are recorded on the  ex-dividend
     date.

     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

    Participant notes are approved by the Committee and cannot be made for an
    amount less than $1,040 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 Loan Policy. 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 the  market  price of Company  common  stock on the New York
     Stock Exchange for the day when the company match is contributed.

     6. Expenses

     The Company elected to pay substantially  all of the Plan's  administration
     expenses  in 2006 and  2005  although  it is not  obligated  to do so.  Any
     expenses  not paid by the  Company  are to be paid by the Plan and  totaled
     $1,000 for 2006 and $1,200 for 2005.

     7. Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
     principles  generally  accepted  in the United  States of America  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.

     As described in Financial  Accounting  Standards Board Staff Position,  FSP
     AAG INV-1 and SOP 94-4-1, Reporting on Fully Benefit-Responsive  Investment
     Contracts  Held by  Certain  Investments  Companies  Subject  to the  AICPA
     Investment  Company Guide and  Defined-Contribution  Health and Welfare and
     Pension   Plans   (the   "FSP"),    investment    contracts   held   by   a
     defined-contribution  plan  are  required  to be  reported  at fair  value.
     However,  contract value is the relevant measure attribute for that portion
     of the net assets  available  for benefits of a  defined-contribution  plan
     attributable to a fully-benefit  responsive  investment  contracts  because
     contract  value is the amount  participants  would  receive if they were to
     initiate  permitted  transactions  under the  terms of the  Plan.  The Plan
     invests in investment  contracts through a collective trust. As required by
     the FSP, the Statement of Net Assets  Available  for Benefits  presents the
     fair  value  of the  investment  in the  collective  trust  as  well as the
     adjustment  of the  investment in the  collective  trust from fair value to
     contract  value  relating to the  investment  contracts.  The  Statement of
     Changes in Net Assets  Available  for  Benefits  is  prepared on a contract
     value basis.

NOTE C - INVESTMENTS

     The following presents  investments that represent 5% or more of the Plan's
net assets:



                                                                                              2006              2005
                                                                                         --------------    --------------

       Non-participant directed investments
                                                     
           Common stock - Pre-Paid Legal Services, Inc. (204,146
               and 186,684 shares, respectively)                                           $7,988,233        $7,133,196
       Participant directed investments
           Washington Mutual Investors Fund/R4 (23,673 and 21,333 units, respectively)        823,105           656,435
           Growth Fund of America/R4 (19,015 and 17,655 units, respectively)                  621,037           541,644






NOTE C - INVESTMENTS - CONTINUED

     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:



                                                                                               2006             2005
                                                                                           ------------     ------------

                                                                                                         
       Corporate common stock - Pre-Paid Legal Services, Inc.                                 $283,977         $152,055
       Mutual funds                                                                            211,590          118,982
                                                                                              --------         --------

                                                                                              $495,567         $271,037
                                                                                              --------         --------



NOTE D - NONPARTICIPANT-DIRECTED INVESTMENTS

     Information regarding the Plan's nonparticipant-directed  investment in the
     Company's  common stock at December 31, 2006 and 2005 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:



                                                                                              2006              2005
                                                                                          ------------     --------------

                                                                                                        
       Net investment gain and interest income                                              $ 303,301         $ 171,003
       Contributions
           Employer                                                                           445,055           341,550
           Employee                                                                           492,191           445,464
       Benefits paid to participants                                                         (377,478)         (254,177)
       Transfers from participant-directed investments, net                                    19,323             8,442
                                                                                            ---------         ---------

                                                                                            $ 882,392         $ 712,282
                                                                                            ---------         ---------



NOTE E - TAX STATUS

     A favorable  determination letter dated November 16, 2005 was received from
     the Internal  Revenue Service  indicating that the Plan, as amended through
     November 1, 2004,  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.  Former  participants  who have elected to
     diversify  all or a  portion  of  their  Plan  accounts  into  mutual  fund
     investments  will  receive a  distribution  of mutual  fund shares or cash.
     Distributions  made in 2006  consisted of cash of  $376,478.  Distributions
     made in 2005 consisted of cash of $254,177.

     Former  participants who terminated  employment during 2006 and had not yet
     received  distribution  of their  account at December 31, 2006 will receive
     distribution  in 2007. The balance due former  participants at December 31,
     2006 included cash of $8,065.


                             SUPPLEMENTAL SCHEDULES






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

          SCHEDULE H, LINE 4i--SCHEDULE OF ASSETS (HELD AT END OF YEAR)


                                December 31, 2006

-----------------------------------------------------------------------------------------------------------------------------------

(a)              (b)                                                        (c)                              (d)           (e)
    Identity of issuer, borrower,                  Description of investment including maturity date,
    lessor or similar party                        rate of interest, collateral, par or maturity value       Cost     Current Value
    -----------------------                        ----------------------------------------------------      ----     -------------

                                                                                                              
    *Pre-paid Legal Services, Inc. Common Stock    Common Stock, 204,146.000 shares/units                 $3,801,207   $  7,988,233

     Federated Capital Reserve                     Money Market Funds, 705.660 shares/units                   **                706

     SEI Stable Asset                              Common Collective Trust Fund, 498,477.430 shares/units     **            485,693

     American Balanced Fund/R4                     Mutual Funds, 11,772.412 shares/units                      **            223,675
     Bond Fund of America/R4                       Mutual Funds, 42,104.057 shares/units                      **            560,826
     EuroPacific Growth Fund/R4                    Mutual Funds 11,303.371 shares/units                       **            519,729
     Growth Fund of America/R4                     Mutual Funds 19,015.224 shares/units                       **            621,037
     Vanguard Small Cap Growth Index Fund          Mutual Funds 5,332.986 shares/units                        **             97,807
     Vanguard Small Cap Value Index/Inv            Mutual Funds 15,449.630 shares/units                       **            263,417
     Washington Mutual Investors Fund/R4           Mutual Funds 23,672.846 shares/units                       **            823,105

    *Participant Loans                             Participant loans, maturity dates various thru 06/2018;
                                                   interest rates vary between 6.75% and 10.25%                             169,900
                                                                                                                        -----------


                                                           Total Investments                                            $11,754,128
                                                                                                                        -----------

    *Party-in-interest
    **Cost not required for participant-directed
      investments










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

                  SCHEDULE H, LINE 4j--REPORTABLE TRANSACTIONS


                          Year ended December 31, 2006

-----------------------------------------------------------------------------------------------------------------------------------



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

                                                                                     Expense             Current value
                                                          Purchase Selling  Lease  incured with Cost of   of assent on     Net gain
Identity of party involved     Description of asset         price   price   rental transaction   asset    transaction date  (loss)
------------------------------ -------------------------- -------- -------  ------ ------------ -------  ----------------- --------

                                                                                                   
*Pre-Paid Legal Services, Inc. Common stock, 57 purchases $750,170 $     -  $    - $          - $750,170      $750,170     $      -






* Party in interest