UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------

                                    FORM 10-Q


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

                  For The Quarterly Period Ended June 30, 2003


              [ ] 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 Street, Ada, Oklahoma                            74821-0145
(Address of principal executive offices)                         (Zip Code)


      (Registrants' telephone number, including area code): (580) 436-1234


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

     The number of shares  outstanding  of the  registrant's  common stock as of
July 22, 2003 was 17,372,633.




                          PRE-PAID LEGAL SERVICES, INC.

                                    FORM 10-Q

                       For the Quarter Ended June 30, 2003


                                    CONTENTS



Part I.  Financial Statements

     Item 1. Financial Statements of Registrant:

          a)   Consolidated  Balance Sheets
               as of June 30, 2003  (Unaudited) and
               December 31, 2002

          b)   Consolidated  Statements  of  Income
               (Unaudited) for the three months and the
               six months ended June 30, 2003 and 2002

          c)   Consolidated Statements of Comprehensive Income
               (Unaudited) for the three months and the
               six months ended June 30, 2003 and 2002

          d)   Consolidated Statements of Cash Flows
               (Unaudited) for the six months ended
               June 30, 2003 and 2002

          e)   Notes to Consolidated Financial Statements (Unaudited)

     Item 2. Management's Discussion and Analysis of Financial Condition
                     And Results of Operations

     Item 3. Quantitative and Qualitative Disclosures About Market Risk

     Item 4. Controls and Procedures

Part II.  Other Information

     Item 1. Legal Proceedings

     Item 4. Submission Of Matters To A Vote Of Security Holders

     Item 6. Exhibits and Reports on Form 8-K


Signatures







ITEM 1.  FINANCIAL STATEMENTS OF REGISTRANT




                          PRE-PAID LEGAL SERVICES, INC.
                           CONSOLIDATED BALANCE SHEETS
                      (Amounts in 000's, except par values)


                                     ASSETS

                                                                                           June 30,       December 31,
                                                                                             2003             2002
                                                                                        --------------   -------------
Current assets:                                                                          (Unaudited)
                                                                                                   
  Cash and cash equivalents........................................................     $    14,225      $    20,858
  Available-for-sale investments, at fair value....................................           3,550            3,970
  Membership income receivable.....................................................           4,854            5,247
  Inventories......................................................................             953            1,212
  Deferred member and associate service costs......................................          13,597           13,639
  Deferred income taxes............................................................           4,515            4,603
  Other current assets.............................................................             116              275
                                                                                        --------------   -------------
      Total current assets.........................................................          41,810           49,804
                                                                                        --------------   -------------
Available-for-sale investments, at fair value......................................          10,860           11,560
Investments pledged................................................................           4,279            4,160
Property and equipment, net........................................................          37,028           25,593
Deferred member and associate service costs........................................           2,772            2,991
Other assets.......................................................................           3,395            2,728
                                                                                        --------------   -------------
        Total assets...............................................................     $   100,144      $    96,836
                                                                                        --------------   -------------



                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Membership benefits..............................................................     $     8,814      $     8,610
  Deferred revenue and fees........................................................          22,833           22,612
  Current portion of capital leases payable........................................             808               14
  Current portion of notes payable.................................................           6,707            2,412
  Accounts payable and accrued expenses............................................          14,624           13,498
                                                                                        --------------   -------------
    Total current liabilities......................................................          53,786           47,146
  Capital leases payable...........................................................           1,694              912
  Notes payable....................................................................          12,226            8,221
  Deferred revenue and fees........................................................           3,942            4,266
  Deferred income taxes ...........................................................           2,182            1,319
                                                                                        --------------   -------------
      Total liabilities............................................................          73,830           61,864
                                                                                        --------------   -------------
Stockholders' equity:
  Common stock, $.01 par value; 100,000 shares authorized; 22,225 and
    23,688 issued at June 30, 2003 and December 31, 2002, respectively.............             222              237
  Capital in excess of par value...................................................          11,915           43,219
  Retained earnings................................................................         112,331           90,254
  Accumulated other comprehensive income...........................................             874              290
  Treasury stock, at cost; 4,852 shares held at
    June 30, 2003 and December 31, 2002............................................         (99,028)         (99,028)
                                                                                        --------------   -------------
      Total stockholders' equity...................................................          26,314           34,972
                                                                                        --------------   -------------
        Total liabilities and stockholders' equity.................................     $   100,144      $    96,836
                                                                                        --------------   -------------


   The accompanying notes are an integral part of these financial statements.






                          PRE-PAID LEGAL SERVICES, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                  (Amounts in 000's, except per share amounts)
                                   (Unaudited)


                                                                     Three Months Ended        Six Months Ended
                                                                          June 30,                 June 30,
                                                                  -----------------------  ------------------------
                                                                     2003         2002         2003         2002
                                                                  ----------  -----------  -----------  -----------
Revenues:
                                                                                            
  Membership fees.................................................$  81,881   $   77,585   $  163,428   $  149,479
  Associate services..............................................    6,330        9,117       13,867       18,136
  Other...........................................................    1,431        1,242        2,667        2,360
                                                                  ----------  -----------  -----------  -----------
                                                                     89,642       87,944      179,962      169,975
                                                                  ----------  -----------  -----------  -----------
Costs and expenses:
  Membership benefits.............................................   27,590       26,004       54,315       50,316
  Commissions.....................................................   28,353       32,799       56,531       60,607
  Associate services and direct marketing.........................    7,350        7,155       14,409       14,723
  General and administrative......................................    8,928        7,538       16,921       15,340
  Other, net......................................................    2,088        1,430        4,081        2,429
                                                                  ----------  -----------  -----------  -----------
                                                                     74,309       74,926      146,257      143,415
                                                                  ----------  -----------  -----------  -----------

Income before income taxes........................................   15,333       13,018       33,705       26,560
Provision for income taxes........................................    5,290        4,491       11,628        9,163
                                                                  ----------  -----------  -----------  -----------
Net income........................................................$  10,043   $    8,527   $   22,077   $   17,397
                                                                  ----------  -----------  -----------  -----------

Basic earnings per common share...................................$     .57   $      .42    $    1.24    $     .86
                                                                  ----------  -----------  -----------  -----------

Diluted earnings per common share.................................$     .57   $      .42    $    1.24    $     .86
                                                                  ----------  -----------  -----------  -----------



   The accompanying notes are an integral part of these financial statements.





                          PRE-PAID LEGAL SERVICES, INC.
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                               (Amounts in 000's)
                                   (Unaudited)



                                                                     Three Months Ended        Six Months Ended
                                                                          June 30,                 June 30,
                                                                  -----------------------  ------------------------
                                                                     2003         2002         2003         2002
                                                                  ----------  -----------  -----------  -----------


                                                                                            
Net income.....................................................   $   10,043  $    8,527   $   22,077   $   17,397
                                                                  ----------  -----------  -----------  -----------

Other comprehensive income (loss), net of tax:
  Foreign currency translation adjustment......................           61          57          129           99
                                                                  ----------  -----------  -----------  -----------
  Unrealized gains (losses) on investments:
    Unrealized holding gains arising during period.............          345         385          455           51
    Reclassification adjustment for realized losses (gains)
      included in net income...................................           22           4            -          (29)
                                                                  ----------  -----------  -----------  -----------
                                                                         367         389          455           22
                                                                  ----------  -----------  -----------  -----------
Other comprehensive income, net of income taxes
  of $198 and $210 for the three months and $245 and $12 for the
  six months ended June 30, 2003 and 2002, respectively........          428         446          584          121
                                                                  ----------  -----------  -----------  -----------

Comprehensive income...........................................   $   10,471  $    8,973   $   22,661   $   17,518
                                                                  ----------  -----------  -----------  -----------


   The accompanying notes are an integral part of these financial statements.







                          PRE-PAID LEGAL SERVICES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (Amounts in 000's)
                                   (Unaudited)
                                                                                    Six months ended June 30,
                                                                                    -------------------------
                                                                                        2003          2002
                                                                                    ------------  -----------
Cash flows from operating activities:
                                                                                            
Net income.......................................................................   $   22,077    $   17,397
Adjustments to reconcile net income to net cash provided
  by operating activities:
  Provision for deferred income taxes............................................          706           246
  Depreciation and amortization..................................................        3,453         2,497
  Tax benefit on exercise of stock options.......................................           64           810
  Contribution of stock to ESOP..................................................          220           207
  Decrease (increase) in Membership income receivable............................          393          (135)
  Decrease (increase) decrease in inventories....................................          259          (146)
  Decrease (increase) in other current assets....................................          159          (396)
  Decrease (increase) in deferred member and associate service costs.............          261        (2,521)
  (Increase) decrease in other assets............................................         (667)          355
  Increase in accrued Membership benefits........................................          204           744
  (Decrease) increase in deferred revenue and fees...............................         (103)        3,049
  Decrease in income taxes payable...............................................            -        (1,087)
  Increase in accounts payable and accrued expenses and other....................        1,255         2,514
                                                                                    ------------  -----------
    Net cash provided by operating activities....................................       28,281        23,534
                                                                                    ------------  -----------
Cash flows from investing activities:
  Additions to property and equipment............................................      (13,513)       (4,803)
  Purchases of investments - available for sale..................................       (1,309)       (7,779)
  Maturities and sales of investments - available for sale.......................        3,010         7,046
                                                                                    ------------  -----------
        Net cash used in investing activities....................................      (11,812)       (5,536)
                                                                                    ------------  -----------
Cash flows from financing activities:
  Proceeds from exercise of common stock options.................................          580         2,964
  Decrease in capital lease obligations..........................................         (799)            -
  Proceeds from vendor rebate....................................................        1,000             -
  Proceeds from issuance of debt.................................................       10,800             -
  Repayments of debt.............................................................       (2,500)            -
  Purchases of treasury stock....................................................      (32,183)      (25,062)
                                                                                    ------------  -----------
        Net cash used in financing activities ...................................      (23,102)      (22,098)
                                                                                    ------------  -----------

Net decrease in cash and cash equivalents........................................       (6,633)       (4,100)
Cash and cash equivalents at beginning of period.................................       20,858        14,290
                                                                                    ------------  -----------
Cash and cash equivalents at end of period.......................................   $   14,225    $   10,190
                                                                                    ------------  -----------

Supplemental disclosure of cash flow information:
  Cash paid for interest.........................................................   $      233    $        -
                                                                                    ------------  -----------
  Income taxes paid..............................................................   $   10,700    $    9,580
                                                                                    ------------  -----------
  Non-cash activities - capital lease obligations incurred (net of $1 million
  rebate)........................................................................   $    1,375    $        -
                                                                                    ------------  -----------




   The accompanying notes are an integral part of these financial statements.



                          PRE-PAID LEGAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
       (Except for per share amounts, dollar amounts in tables
                  are in thousands unless otherwise indicated)
                                   (Unaudited)

Note 1 - Basis Of Presentation

     The accompanying  consolidated  financial statements and notes thereto have
been  prepared  pursuant  to the rules and  regulations  of the  Securities  and
Exchange  Commission.  Accordingly,  certain  disclosures  normally  included in
financial statements prepared in accordance with accounting principles generally
accepted  in the  United  States of  America  ("GAAP")  have been  omitted.  The
accompanying  consolidated financial statements and notes thereto should be read
in  conjunction  with the  consolidated  financial  statements and notes thereto
included in the Company's 2002 Annual Report on Form 10-K.

     The consolidated  financial  statements include the financial statements of
the Company and its wholly owned  subsidiaries,  as well as those of PPL Agency,
Inc. All significant intercompany balances and transactions have been eliminated
in consolidation.

     In  the  opinion  of  management,   the  accompanying  unaudited  financial
statements  as of June 30, 2003,  and for the three and six month  periods ended
June 30, 2003 and 2002,  reflect  adjustments  (which were normal and recurring)
which,  in the opinion of management,  are necessary for a fair statement of the
financial  position and results of operations of the interim periods  presented.
Results  for the  three  and six  month  periods  ended  June  30,  2003 are not
necessarily indicative of results expected for the full year.

     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
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

     Stock-Based Compensation
     The Company  has a  stock-based  employee  compensation  plan.  The Company
accounts  for this plan under the  recognition  and  measurement  principles  of
Accounting  Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued
to Employees, and related Interpretations.  No stock-based employee compensation
cost is reflected in net income, as all options granted under those plans had an
exercise price equal to the market value of the  underlying  common stock on the
date of grant.  The  following  table  illustrates  the effect on net income and
earnings  per  share if the  Company  had  applied  the fair  value  recognition
provisions of Financial  Accounting  Standards Board Statement ("FASB") No. 123,
Accounting for Stock-Based Compensation, to stock-based employee compensation.



                                                              Three Months Ended         Six Months Ended
                                                                   June 30,                  June 30,
                                                            ----------------------    -----------------------
                                                              2003                       2003         2002
                                                            ---------    ---------    ---------     ---------
                                                                                        
Net income, as reported................................     $ 10,043     $  8,527     $ 22,077      $ 17,397
Deduct:  Total stock-based employee compensation expense
determined under fair value based method for all awards,
net of related tax effects.............................         (211)      (1,719)        (507)         (701)
                                                            ---------    ---------    ---------     ---------
Pro forma net income...................................     $  9,832     $  6,808     $ 21,570      $ 16,696
                                                            ---------    ---------    ---------     ---------
Earnings per share:

    Basic - as reported................................     $    .57     $    .42     $   1.24      $    .86
    Basic - pro forma..................................     $    .56     $    .34     $   1.21      $    .83
    Diluted - as reported..............................     $    .57     $    .42     $   1.24      $    .86
    Diluted - pro forma................................     $    .56     $    .34     $   1.21      $    .83



Note 2 - Contingencies

     The  Company  and  various  of its  executive  officers  have been named as
defendants in a putative  securities class action originally filed in the United
States District Court for the Western District of Oklahoma in early 2001 seeking
unspecified  damages on the basis of  allegations  that the Company issued false
and  misleading  financial  information,  primarily  related  to the  method the
Company  used  to  account  for  commission   advance   receivables  from  sales
associates.  On March 5, 2002, the Court granted the Company's motion to dismiss
the  complaint,  with  prejudice,  and  entered  a  judgment  in  favor  of  the
defendants.  Plaintiffs thereafter filed a motion requesting  reconsideration of
the dismissal  which was denied.  The plaintiffs  have appealed the judgment and
the order denying  their motion to reconsider  the judgment to the Tenth Circuit
Court of Appeals,  and as of June 30, 2003, the case was in the briefing  stage.
The Company is unable to predict when a decision will be made on this appeal. In
August 2002, the lead  institutional  plaintiff  withdrew from the case, leaving
two individual  plaintiffs as lead  plaintiffs on behalf of the putative  class.
The ultimate outcome of this case is not determinable.

     Beginning  in the  second  quarter  of 2001  multiple  lawsuits  were filed
against the Company,  certain  officers,  employees,  sales associates and other
defendants in various Alabama and Mississippi  state courts by current or former
members  seeking  actual and  punitive  damages for alleged  breach of contract,
fraud and various other claims in connection with the sale of memberships. As of
June  30,  2003,  the  Company  was  aware  of 28  separate  lawsuits  involving
approximately  298  plaintiffs  that have been  filed in  multiple  counties  in
Alabama.  One suit involving two plaintiffs,  which was filed as a class action,
has been  dismissed  with  prejudice  as to the class  allegations  and  without
prejudice as to the  individual  claims.  As of June 30,  2003,  the Company was
aware of 18 separate lawsuits involving approximately 432 plaintiffs in multiple
counties  in  Mississippi.  Certain of the  Mississippi  lawsuits  also name the
Company's provider attorney in Mississippi as a defendant. Proceedings in eleven
cases which name the Company's  provider attorney as a defendant had been stayed
for at least 90 days as to the provider  attorney  (and as to all  defendants in
some cases) due to the  rehabilitation  proceeding  involving  the  provider law
firm's insurer,  though  plaintiffs now contend that the stay as to the provider
attorney  should  be  concluded  due to  the  conversion  of the  rehabilitation
proceedings to liquidation proceedings. However, one case has been stayed by the
Mississippi Supreme Court pending its ruling on the Pre-Paid  defendants' appeal
of the trial court's  granting of a partial summary  judgment that the action is
not  required  to be  submitted  to  arbitration.  Motions  to stay other of the
actions on that ground are also pending. At least two complaints have been filed
on behalf of certain of the Mississippi  plaintiffs and others with the Attorney
General  of  Mississippi  in March  2002 and  December  2002.  The  Company  has
responded to the Attorney  General's  requests for  information  with respect to
both  complaints,  and as of June 30,  2003,  the  Company  was not aware of any
further actions being taken by the Attorney General. In Mississippi, the Company
has filed  lawsuits in the United  States  District  Court for the  Southern and
Northern  Districts  of  Mississippi  in  which  the  Company  seeks  to  compel
arbitration of the various  Mississippi claims under the Federal Arbitration Act
and the terms of the Company's membership agreements, and has appealed the state
court rulings in favor of certain of the plaintiffs on the arbitration  issue to
the  Mississippi  Supreme  Court.  These  cases  are all in  various  stages  of
litigation,  including trial settings  beginning in Alabama in October 2003, and
in  Mississippi  in  September  2003,  and seek  varying  amounts  of actual and
punitive damages.  While the amount of membership fees paid by the plaintiffs in
the Mississippi cases is $500,000 or less,  certain of the cases seek damages of
$90 million.  Additional  suits of a similar  nature have been  threatened.  The
ultimate outcome of any particular case is not determinable.

     On April 19, 2002, counsel in certain of the above-referenced Alabama suits
also filed a similar suit against the Company and certain of its officers in the
District  Court of Creek  County,  Oklahoma  on behalf  of Jeff and Jana  Weller
individually  and doing  business  as Hi-Tech  Auto making  similar  allegations
relating to the Company's  memberships and seeking unspecified damages on behalf
of a "nationwide"  class. The Pre-Paid  defendants'  preliminary motions in this
case were denied,  and on June 17, 2003,  the  Oklahoma  Court of Civil  Appeals
reversed the trial court's denial of the Pre-Paid  defendants'  motion to compel
arbitration, finding that the trial court erred when it denied Pre-Paid's motion
to compel arbitration  pursuant to the terms of the valid membership  contracts,
and remanded the case to the trial court for further proceedings consistent with
that opinion. The ultimate outcome of this case is not determinable.

     On June 29, 2001,  an action was filed  against the Company in the District
Court of Canadian  County,  Oklahoma.  In 2002,  the petition was amended to add
five additional named plaintiffs and to add and drop certain claims. This action
is a putative class action brought by Gina Kotwitz,  George Kotwitz, Rick Coker,
Richard  Starke,  Jeff  Turnipseed  and  Aaron  Bouren  on  behalf  of all sales
associates of the Company. The amended petition seeks injunctive and declaratory
relief,  with such other  damages as the court  deems  appropriate,  for alleged
violations of the Oklahoma  Uniform  Consumer Credit Code in connection with the
Company's  commission  advances,  and seeks  injunctive and  declaratory  relief
regarding the enforcement of certain contract  provisions with sales associates,
including a request  stated in June 2003 for the  imposition  of a  constructive
trust as to earned  commissions  applied to the reduction of debit  balances and
disgorgement of all earned renewal commissions applied to the reduction of debit
balances.  The impact of the claims  alleged under the Consumer  Credit Code and
the assertion of  entitlement  to the other relief  requested  could exceed $315
million  if  plaintiffs  are   successful   both  in  their  request  for  class
certification  and on the  merits.  Though  plaintiffs  have stated that they no
longer seek class  certification  on the Consumer Credit Code claims,  they have
also made recent  statements  inconsistent  with that  position.  The hearing on
plaintiffs'  request for class  certification  has been  continued from July 22,
2003, to February 2004. The ultimate outcome of this case is not determinable.

     On March 1, 2002, an action was filed in the United States  District  Court
for the Western District of Oklahoma by Caroline Sandler, Robert Schweikert, Sal
Corrente,  Richard Jarvis and Vincent  Jefferson against the Company and certain
executive  officers.  This action is a putative class action seeking unspecified
damages filed on behalf of all sales  associates of the Company and alleges that
the  marketing  plan  offered by the Company  constitutes  a security  under the
Securities  Act of 1933 and seeks remedies for failure to register the marketing
plan as a  security  and for  violations  of the  anti-fraud  provisions  of the
Securities  Act of 1933 and the  Securities  Exchange Act of 1934 in  connection
with representations  alleged to have been made in connection with the marketing
plan. The complaint also alleges violations of the Oklahoma  Securities Act, the
Oklahoma Business Opportunities Sales Act, breach of contract, breach of duty of
good faith and fair dealing and unjust  enrichment and violation of the Oklahoma
Consumer Protection Act and negligent  supervision.  This case is subject to the
Private  Litigation  Securities  Reform Act.  Pursuant to the Act, the Court has
approved the named plaintiffs and counsel and an amended  complaint was filed in
August 2002. The Pre-Paid  defendants filed motions to dismiss the complaint and
to strike the class action  allegations  on September 19, 2002, and discovery in
the  action was stayed  pending a ruling on the motion to  dismiss.  On July 24,
2003,  the Court  granted  in part and denied in part the  Pre-Paid  defendants'
motion to dismiss. The claims asserted under the Securities Exchange Act of 1934
and the Oklahoma Securities Act were dismissed without prejudice. The motion was
denied as to the remaining claims. On July 23, 2003, the Court denied the motion
to strike class action allegations at this time. Accordingly,  the case will now
proceed in the normal course as to the remaining  claims.  The Company is unable
to predict when a decision  will be made.  The ultimate  outcome of this case is
not determinable.

     In  December  2002,  the West  Virginia  Supreme  Court  reversed a summary
judgment which had been granted by the Circuit Court of Monangalia County,  West
Virginia  in favor of the  Company  in  connection  with the  claims of a former
member,  Georgia  Poling and her  daughters  against  the Company and a referral
lawyer with  respect to a 1995  referral.  That action was  originally  filed in
March 2000,  and alleges  breach of  contract  and fraud  against the Company in
connection  with the referral.  Plaintiffs  seek actual and punitive  damages in
unspecified  amounts.  The case has been continued from the previously scheduled
trial in August 2003 at plaintiffs'  request, and the new trial date has not yet
been set. The ultimate outcome of this case is not determinable.

     On January 30, 2003, the Company  announced that it had received a subpoena
from the office of the United States  Attorney for the Southern  District of New
York  requesting  information  relating to trading  activities  in the Company's
stock in advance of the January 2003  announcement  of recruiting and membership
production  results for the fourth  quarter of 2002.  The Company also  received
notice from the  Securities  and Exchange  Commission  that it is  conducting an
informal  inquiry  into  the  same  subject  and  requesting  that  the  Company
voluntarily  provide  certain  information.  The  Company has and  continues  to
respond  to  these  requests.  The  ultimate  outcome  of these  matters  is not
determinable.

     The Company is a defendant  in various  other  legal  proceedings  that are
routine and incidental to its business.  The Company will vigorously  defend its
interests in all  proceedings  in which it is named as a defendant.  The Company
also receives periodic complaints or requests for information from various state
and federal agencies relating to its business or the activities of its marketing
force.  The Company  promptly  responds to any such  matters  and  provides  any
information requested.

     While the ultimate outcome of these  proceedings is not  determinable,  the
Company does not currently  anticipate that these  contingencies  will result in
any material adverse effect to its financial  condition or results of operation,
unless  an  unexpected  result  occurs  in one of the  cases.  The  Company  has
established  an  accrued  liability  it  believes  will be  sufficient  to cover
estimated  damages in connection with various cases,  which at June 30, 2003 was
$3.3  million.  If an  unexpected  result  were to  occur  in one or more of the
pending cases,  the amount of damages  awarded could differ  significantly  from
management's estimates.  The Company believes it has meritorious defenses in all
pending cases and will vigorously defend against the plaintiffs' claims.

     The  Company  is  constructing  a new  corporate  office  complex  with  an
estimated  completion  during the fourth quarter of 2003 at an estimated cost of
approximately $30 million. Costs incurred through June 30, 2003 of approximately
$22.8 million,  including  approximately $355,000 of capitalized interest costs,
have been paid from  existing  resources  and a real estate line of credit.  The
Company  expects  to incur  additional  indebtedness  in order  to  finance  the
remaining  costs of its new corporate  headquarters  in order to allow cash flow
from operations to continue to be used to purchase  treasury stock.  The Company
has entered into construction  contracts in the amount of $28.2 million with the
general contractor  pertaining to the new office complex.  Total remaining costs
of construction from July 1, 2003 are estimated at approximately $7.2 million.

Note 3 - Treasury Stock Purchases

     The Company  announced on April 6, 1999, a treasury stock purchase  program
authorizing  management to acquire up to 500,000 shares of the Company's  common
stock.  The Board of Directors has  increased  such  authorization  from 500,000
shares to 8,000,000 shares during  subsequent board meetings.  At June 30, 2003,
the Company had purchased 7.0 million treasury shares under these authorizations
for a total  consideration  of $157.3  million,  an average  price of $22.47 per
share.  During the  quarter  ended June 30,  2003,  the  Company  purchased  and
formally  retired  502,916 million shares of treasury shares reducing its common
stock by $5,000  and its  capital  in excess of par by $12.3  million.  Treasury
stock  purchases  will be made at  prices  that  are  considered  attractive  by
management and at such times that management believes will not unduly impact the
Company's  liquidity.  No time limit has been set for completion of the treasury
stock purchase program. Given the current interest rate environment,  the nature
of other investments available and the Company's expected cash flows, management
believes that purchasing treasury shares enhances shareholder value. The Company
expects to continue its treasury stock program and may seek alternative  sources
of financing to continue or accelerate the program.

Note 4 - Earnings Per Share

     Basic  earnings per common share are computed by dividing net income by the
weighted  average  number  of  shares of common  stock  outstanding  during  the
respective periods.

     Diluted  earnings  per common  share are computed by dividing net income by
the  weighted  average  number  of  shares of  common  stock  and  common  stock
equivalents  outstanding  during the respective  periods.  The weighted  average
number of common  shares is  increased  by the number of shares  issuable on the
exercise  of  options  less the  number of common  shares  assumed  to have been
purchased  with the proceeds  from the  exercise of the options  pursuant to the
treasury  stock  method;  those  purchases  are assumed to have been made at the
average price of the common stock during the respective period.



                                                                            Three Months          Six Months
                                                                           Ended June 30,       Ended June 30,
                                                                        -------------------  -------------------
Basic Earnings Per Share:                                                 2003       2002      2003       2002
                                                                        --------- ---------  --------- ---------
Earnings:
                                                                                           
Net income...........................................................   $  10,043 $   8,527  $  22,077 $  17,397
                                                                        --------- ---------  --------- ---------
Shares:
Weighted average shares outstanding..................................      17,611    20,126     17,824    20,215
                                                                        --------- ---------  --------- ---------
Diluted Earnings Per Share:
Earnings:
Net income...........................................................    $ 10,043  $  8,527  $  22,077  $ 17,397
                                                                        --------- ---------  --------- ---------
Shares:
Weighted average shares outstanding..................................      17,611    20,126     17,824    20,215
Assumed exercise of options..........................................          73        99         42       118
                                                                        --------- ---------  --------- ---------
Weighted average number of shares, as adjusted.......................      17,684    20,225     17,866    20,333
                                                                        --------- ---------  --------- ---------


     Options  to  purchase   shares  of  common  stock  are  excluded  from  the
calculation  of diluted  earnings per share when their  inclusion  would have an
anti-dilutive effect on the calculation.  Options to purchase 1.0 million shares
and  951,000  shares for the three  months and 1.3  million  shares and  949,000
shares for the six months  ended June 30, 2003 and 2002,  respectively,  with an
average exercise price of $28.32, $31.63, $28.81 and $31.74, respectively,  were
excluded from the  calculation of diluted  earnings per share for the respective
periods.

Note 5 - Recent Issued Accounting Pronouncements

     In January 2003, the FASB issued  Interpretation  No. 46,  Consolidation of
Variable  Interest Entities (FIN 46). Subject to certain criteria defined in the
Interpretation,  FIN 46 will require  consolidation  by business  enterprises of
variable  interest  entities if the enterprise has a variable interest that will
absorb the majority of the entity's expected losses,  receives a majority of its
expected  returns,  or both. The provisions of FIN 46 are effective  immediately
for interests acquired in variable interest entities after January 31, 2003, and
at the beginning of the first interim or annual period  beginning after June 15,
2003, for interests  acquired in variable  interest  entities before February 1,
2003 (for the Company in the third quarter of 2003).  The Company has determined
the adoption of the provisions of FIN 46 will not have a material  effect on its
financial condition or results of operations.  Certain transitional  disclosures
required by FIN 46 in all financial  statements  initially  issued after January
31, 2003, have been included in the accompanying financial statements.

Note 6 - Notes Payable and Capital Leases

     On June 11, 2002,  the Company  entered into two line of credit  agreements
totaling $30 million with a commercial  lender  providing  for a treasury  stock
purchase  line and a real estate line for funding of the Company's new corporate
office complex.  The treasury stock line of credit provided for funding of up to
$10  million to finance  treasury  stock  purchases  through  May 31,  2003 with
scheduled monthly  repayments  beginning after the initial advance and ending no
later than May 31, 2004 with interest at the 30 day LIBOR Rate plus two percent,
adjusted  monthly.  The real estate line of up to $20 million may be funded over
the period ending  December 31, 2003 with interest at the 30 day LIBOR Rate plus
2.25%,  adjusted monthly,  and will be repayable  beginning December 31, 2003 in
monthly  principal  payments  equal  to the  principal  balance  outstanding  at
December  31,  2003  divided  by 105 plus  interest  with a balloon  payment  on
September 30, 2008.  Additionally,  interest on the  outstanding  balance of the
real estate line is payable monthly through November 30, 2003.

     As of June 30,  2003,  the  Company  had  accessed  all of the $10  million
treasury  stock  purchase  line  and made  repayments  of $4.2  million  and had
accessed  $13.1 million of the $20 million real estate line.  The interest rates
as of June 30, 2003 are 3.32% and 3.57% for the treasury stock loan and the real
estate loan, respectively. The $5.8 million used to purchase treasury stock, net
of repayments  of $4.2 million,  is scheduled to be paid off by May 31, 2004 and
therefore has been classified as short term.  Monthly principal  payments on the
treasury  stock line are $500,000.  The Company is scheduled to begin  principal
payments  on the real estate line on December  31,  2003.  As of June 30,  2003,
interest capitalized related to construction in progress was $355,000.

     These lending agreements contain the following financial covenants: (a) the
Company's  quarterly  Debt Coverage  Ratio shall not be less than 125%;  (b) the
Company shall not permit the ratio of its Total  Liabilities to its Tangible Net
Worth to exceed 3.75 to 1.00, measured at the end of each calendar quarter;  (c)
the Company's cancellation rate on contracts less than or equal to twelve months
old shall not  exceed  50% for  fiscal  year 2002 and 45% for each  fiscal  year
thereafter,  on a trailing twelve months basis, (d) the Company shall maintain a
rolling twelve month average retention rate of membership contracts in place for
greater  than  eighteen  months of not less than 70%,  calculated  on a calendar
quarter basis, and (e) the Company shall maintain tangible net worth of at least
$15 million at the end of each calendar quarter.

     A schedule of  outstanding  balances and future  maturities  as of June 30,
2003 follows:

Real estate line of credit.................    $      13,100
Stock purchase line of credit..............            5,833
                                              ----------------
Total notes payable........................           18,933
Less: Current portion of notes payable.....           (6,707)
Long term portion..........................   ----------------
                                               $      12,226
                                              ----------------



Repayment Schedule commencing
    July 2003:
Year 1.....................................    $       6,707
Year 2.....................................            1,497
Year 3.....................................            1,497
Year 4.....................................            1,497
Year 5.....................................            1,497
Thereafter.................................            6,238
Total notes payable........................   ----------------
                                               $      18,933
                                              ----------------

     During the six months  ended June 30,  2003,  the  Company  entered  into a
capital lease in the amount of $2.4 million to acquire  significant new computer
hardware to supplement its current  information  technology platform and provide
redundancy  for its critical  business  systems.  The capital lease requires the
Company to make annual  payments  of $792,000  beginning  January  2003  through
January 2005.  Pursuant to this lease,  the Company received a $1 million vendor
rebate  during  April 2003,  which was  recorded as a reduction  in property and
equipment.


ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

     Results of Operations - First six months of 2003 compared to first
     six months of 2002

     The  Company  reported  net income of $22.1  million,  or $1.24 per diluted
common share,  for the six months ended June 30, 2003, up 27% from net income of
$17.4 million,  or $.86 per diluted common share,  for the comparable  period of
the prior year.  Diluted  earnings per share  increased 44% due to increased net
income of 27% and an approximate 12% decrease in the weighted  average number of
outstanding shares.

     Membership  fees  totaled  $163.4  million  during 2003  compared to $149.5
million for 2002, an increase of 9%.  Membership  fees and their impact on total
revenues  in any  period  are  determined  directly  by  the  number  of  active
Memberships in force during any such period. The active Memberships in force are
determined  by both the number of new  Memberships  sold in any period  together
with the renewal rate of existing  Memberships.  New Membership  sales decreased
14% during the six months ended June 30, 2003 to 350,000 from 406,975 during the
comparable  period  of 2002.  At June 30,  2003,  there  were  1,405,121  active
Memberships  in force compared to 1,360,502 at June 30, 2002, an increase of 3%.
Additionally,  the average annual fee per Membership has increased from $256 for
all  Memberships in force at June 30, 2002 to $257 for all  Memberships in force
at June  30,  2003,  as a result  of a  higher  portion  of  active  Memberships
containing the additional  pre-trial  hours benefit at an additional cost to the
member,  a larger number of Legal Shield  subscribers and increased sales of the
Company's business oriented memberships.

     Associate  services revenue  decreased 24% from $18.1 million for the first
six months of 2002 to $13.9 million  during the same period of 2003 primarily as
a result of fewer new  associates  recruited.  As a result  of the  decrease  in
recruiting for the 2003 period,  the Fast Start program generated  training fees
of  approximately  $4.0 million  during the first six months of 2003 compared to
$6.0 million for the  comparable  period of 2002.  The field  training  program,
titled Fast Start to Success  ("Fast Start") is aimed at increasing the level of
new Membership sales per associate. Fast Start typically requires a training fee
of $184 per new associate,  except for special promotions the Company implements
from time to time, and upon  successful  completion of the program  provides for
the payment of certain training  bonuses.  The $4.0 million and $6.0 million for
the six month periods ending June 30, 2003 and 2002,  respectively,  in training
fees was collected from approximately 52,183 new sales associates who elected to
participate in Fast Start during the first six months of 2003 compared to 74,422
that  participated  during the comparable  period of 2002.  Total new associates
enrolled  during the first six months of 2003 were 52,502 compared to 79,455 for
the same  period of 2002,  a decrease of 34%.  Future  revenues  from  associate
services will depend primarily on the number of new associates  enrolled and the
number who choose to  participate  in the Company's  training  program,  but the
Company  expects that such revenues  will  continue to be largely  offset by the
direct and indirect cost to the Company of training  (including training bonuses
paid), providing associate services and other direct marketing expenses.

     Other revenue  increased 13%, to $2.7 million for the six months ended June
30, 2003 from $2.4 million for the comparable period of 2002 primarily due to an
increase in enrollment  fees of $365,000.  Enrollment fee revenue  increased for
the six months ended June 30, 2003 despite a lower number of  Memberships  being
written during the period compared to the 2002 period due to the amortization of
previously deferred revenue.

     Primarily as a result of the increase in Membership  fees,  total  revenues
increased  to $180.0  million for the six months ended June 30, 2003 from $170.0
million during the comparable period of 2002, an increase of 6%.

     Membership benefits totaled $54.3 million for the six months ended June 30,
2003  compared  to  $50.3  million  for  the  comparable  period  of  2002,  and
represented  33% and 34% of  Membership  fees for the  2003  and  2002  periods,
respectively. This Membership benefit ratio (Membership benefits as a percentage
of  Membership  fees) should  remain near current  levels as  substantially  all
active Memberships provide for a capitated cost in the absence of any changes in
the capitated benefit level, which has not changed significantly since 1993.

     Commissions to associates  decreased 7% to $56.5 million for the six months
ended June 30, 2003 compared to $60.6 million for the comparable period of 2002,
and represented  35% and 41% of Membership fees for such periods.  These amounts
were reduced by $110,000 and  $550,000,  respectively,  representing  Membership
lapse fees.  These fees were  determined by applying the prime  interest rate to
the unearned advance commission balance  pertaining to lapsed  Memberships.  The
Company  realizes and recognizes this fee only when the amount of the calculated
fee is collected by withholding from cash commissions due the associate, because
the Company's ability to recover fees in excess of current payments is primarily
dependent on the  associate  selling new  Memberships  which qualify for advance
commission payments. These fees were eliminated for Memberships sold after March
1, 2002.  Commissions to associates are primarily dependent on the number of new
memberships  sold during a period.  New  memberships  sold during the six months
ended June 30, 2003 totaled 350,000, a 14% decrease from the 406,975 sold during
the comparable period of 2002. Commissions to associates per new membership sold
were $162 per membership for the six months ended June 30, 2003 compared to $150
for the  comparable  period of 2002.  The average  commission per new membership
sold varies depending on the compensation structure that is in place at the time
a new  membership  is sold and the  amount of any  charge-backs  (recoupment  of
previous  commission  advances)  that  are  deducted  from  amounts  that  would
otherwise be paid to the various sales  associates  that are compensated for the
membership  sale.   Should  the  Company  add  additional   commissions  to  its
compensation  plan or  reduce  the  amount  of  chargebacks  collected  from its
associates as it has from time to time, the  commission  cost per new Membership
will increase accordingly.

     Associate services and direct marketing expenses decreased to $14.4 million
for the six months  ended June 30, 2003 from $14.7  million  for the  comparable
period of 2002. Fast Start training  bonuses  incurred were  approximately  $1.4
million during the first six months of 2003 compared to $2.6 million in the same
period of 2002.  This $1.2 million decline in bonuses and a $1.4 million decline
in associate incentive program costs more than offset a $1.4 million increase in
Fast  Start  attendance  bonuses  incurred,  implemented  January  2003,  and an
$842,000  increase in the  amortization of deferred  associate  costs.  The Fast
Start training  bonuses are affected by the number of new sales  associates that
successfully meet the qualification  criteria  established by the Company,  i.e.
more training  bonuses will be paid when a higher number of new sales associates
meet such criteria. These expenses also include the costs of providing associate
services and marketing expenses.

     General and  administrative  expenses  during the six months ended June 30,
2003  and  2002  were  $16.9  million  and  $15.3  million,   respectively,  and
represented 10% of Membership fees for each period.  Management  expects general
and administrative expenses when expressed as a percentage of Membership fees to
remain  relatively  consistent over the near term. The Company should experience
cost  efficiencies  as a result of certain  economies of scale in some areas but
expects  such cost  savings for the  remainder  of 2003 to be largely  offset by
higher levels of expenses related to legal fees,  expenses related to moving its
corporate headquarters to its new facilities and increased compliance costs as a
result of new requirements of the Sarbanes-Oxley Act of 2002.

     Other  expenses,  net,  which include  depreciation  and  amortization  and
premium taxes reduced by interest income,  was $4.1 million for the period ended
June  30,  2003  compared  to $2.4  million  for  the  2002  comparable  period.
Depreciation  increased  to $3.5  million  for the first six months of 2003 from
$2.5 million for the comparable period of 2002 due to technology  infrastructure
additions  during the last 12 months.  Premium taxes increased from $900,000 for
the six months ended June 30, 2002 to $1.3 million for the comparable  period of
2003.  The  increase in 2003 was due to a change in the tax  structure of one of
the states in which the Company pays premium taxes. Interest income decreased by
approximately  $285,000  for the first six months of 2003 to $715,000  from $1.0
million for the 2002  period due to a decrease  in balances of interest  bearing
notes.

     The Company  has  recorded a provision  for income  taxes of $11.6  million
(34.5% of pretax  income)  for the first  six  months of 2003  compared  to $9.2
million (34.5% of pretax income) for the same period of 2002.

     Results of Operations - Second Quarter of 2003 compared to the Second
     Quarter of 2002

     The results of  operations in the second  quarter of 2003,  compared to the
second quarter of 2002,  reflect increases in revenues and expenses primarily as
a result of the same factors discussed in the comparison of the first six months
of 2003 to the first six months of 2002.

     Total revenues  increased 2% or approximately $1.7 million to $89.6 million
in the second quarter of 2003 compared to $87.9 million in the second quarter of
2002, primarily as a result of increases in membership premiums.  The membership
premium  increase  of 6%  primarily  resulted  from an increase in the number of
average  active  memberships  during the second  quarter of 2003 compared to the
similar period in 2002.

     Membership  benefits  totaled  $27.6  million  in the  2003-second  quarter
compared to $26.0  million in the  2002-second  quarter  and  resulted in a loss
ratio of 34% for both periods.

     Associate  services  revenue  decreased  31% to $6.3 million for the second
quarter of 2003 from $9.1 million  during the same period of 2002 primarily as a
result of less new  associates  enrolled  during the  second  quarter of 2003 of
22,747  compared to 45,962  enrolled  during the comparable  period of 2002. The
Fast Start program generated  training fees of approximately $1.8 million during
the second quarter of 2003 compared to $2.5 million for the comparable period of
2002.  The $1.8 million and $2.5  million for the second  quarter 2003 and 2002,
respectively, in training fees was collected from approximately 22,658 new sales
associates  who  elected to  participate  in Fast Start  during the  2003-second
quarter compared to 43,235 that  participated  during the comparable  quarter of
2002.  Total new  associates  enrolled  during the  second  quarter of 2003 were
22,747  compared to 45,962 for the same period of 2002,  a decrease of 51%.  The
number of new associates  recruited in the second quarter of 2002 represents the
highest  recruiting quarter in the Company's  history.  The Company's  quarterly
average of new associate enrollments during the last three years is 31, 749.

     Other income increased 15%, to $1.4 million for the three months ended June
30, 2003 from $1.2 million for the comparable period of 2002 primarily due to an
increase in enrollment fees of $231,000.

     Commissions  to  associates  decreased  14% to $28.4  million for the three
months ended June 30, 2003 compared to $32.8 million for the  comparable  period
of 2002, and represented 35% and 42% of Membership fees for such periods.  These
amounts  were  reduced  by  $46,000  and  $111,000,  respectively,  representing
Membership  lapse fees.  Commissions to associates per new membership  sold were
$166 per  membership  for the three months ended June 30, 2003  compared to $159
for the comparable period of 2002.

     Associate  services and direct marketing expenses increased to $7.4 million
for the three months  ended June 30, 2003 from $7.2  million for the  comparable
period of 2002. Fast Start bonuses incurred were  approximately  $666,000 during
the second  quarter of 2003 compared to $1.0 million in the same period of 2002.
This approximate $400,000 decline in bonuses and a $466,000 decline in associate
incentive  program  costs  partially  offset a $712,000  increase  in Fast Start
attendance bonuses incurred,  implemented  January 2003, and a $748,000 increase
in the  amortization of deferred  associate  costs.  These expenses also include
marketing costs, other than commissions,  that are directly  associated with new
Membership sales.

     General and administrative  expenses during the three months ended June 30,
2003 and 2002 were $8.9 million and $7.5 million,  respectively, and represented
11% and 10% of  Membership  fees,  respectively,  for  each  period.  Management
expects  general and  administrative  expenses when expressed as a percentage of
Membership fees to remain relatively  consistent over the near term. The Company
should experience cost efficiencies as a result of certain economies of scale in
some areas but expects such cost savings for the remainder of 2003 to be largely
offset by higher levels of expenses  related to legal fees,  expenses related to
moving its corporate headquarters to its new facilities and increased compliance
costs as a result of new requirements of the Sarbanes-Oxley Act of 2002.

     Other  expenses,  net,  which include  depreciation  and  amortization  and
premium taxes reduced by interest income,  were  approximately  $2.1 million and
$1.4  million  for the  three-month  periods  ended  June  30,  2003  and  2002,
respectively.  Depreciation and  amortization  increased to $1.8 million for the
three months ended June 30, 2003 from $1.3 million for the comparable  period of
2002 due to technology  infrastructure  additions  during the last 12 months and
premium  taxes  increased  $57,000 from $622,000 for the three months ended June
30, 2002 to  $679,000  for the  comparable  period of 2003 due to an increase in
membership revenues. Interest income decreased by approximately $135,000 for the
three months ended June 30, 2003 to $357,000  from  $492,000 for the 2002 period
primarily due to a decrease in balances of interest bearing notes.

     The  Company  has  recorded a provision  for income  taxes of $5.3  million
(34.5% of pretax  income) for the 2003 second  quarter  compared to $4.5 million
(34.5% of pretax income) for the same period of 2002.

     The above  factors  resulted in a 2003  second  quarter net income of $10.0
million,  or $.57 per share,  diluted,  compared  to $8.5  million,  or $.42 per
share, for the second quarter of 2002.

     Second quarter 2003  membership  fees  increased  slightly to $81.9 million
from $81.5  million  for first  quarter  of 2003.  Associate  services  revenues
declined  during the 2003 second quarter by  approximately  $1.2 million to $6.3
million from $7.5 million for the 2003 first  quarter while  associate  services
and direct  marketing  expenses  increased  by $291,000  during the same period.
Membership benefits totaled $27.6 million in the second quarter of 2003 compared
to $26.7 million for the first quarter and  represented  34% of membership  fees
for the second quarter compared to 33% for the first quarter.  Total commissions
to associates per new membership  sold during the respective  quarters were $166
per membership for the three months ended June 30, 2003 compared to $158 for the
first three  months of 2003 and  increased  primarily  due to the  reduction  of
commission   chargebacks   during  the  second  quarter  for  qualifying   sales
associates.   Primarily  due  to  increased  legal  fees  and  telecommunication
expenses,  general and  administrative  expenses  during the 2003 second quarter
increased to $8.9 million compared to $8.0 million for the first quarter of 2003
and represented 11% and 10% of membership fees, respectively, for each period.

     Liquidity and Capital Resources
     General
     Consolidated  net cash provided by operating  activities  was $28.3 million
for the first six months of 2003  compared to cash provided of $23.5 million for
the 2002  period.  The  increase of $4.7  million  resulted  primarily  from the
increase in net income of $4.7  million,  a net increase in the change in income
taxes payable of $1.1 million  partially  offset by a change in accounts payable
and accrued expenses of $1.3 million and a decrease in deferred revenue and fees
of $3.2 million.

     Consolidated  net cash used in investing  activities  was $11.8 million for
the first six months of 2003 compared to $5.5 million for the comparable  period
of 2002.  This  $6.3  million  increase  in cash  used in  investing  activities
resulted from the $8.7 million  increase in additions to property and equipment,
primarily  additional costs of the Company's new corporate office complex offset
by a $2.4 million net decrease in available-for-sale investments.

     Net cash used in financing  activities  during the first six months of 2003
was $23.1 million  compared to $22.1 million for the comparable  period of 2002,
in each case  primarily for treasury stock  purchases.  This $1.0 million change
was  primarily  comprised of the $10.8  million  increase in net  proceeds  from
issuance of debt and a $1.0 million  vendor rebate offset by the $3.3 million in
repayments on debt and capital  lease  obligations,  a $2.4 million  decrease in
proceeds from sale of common stock and a $7.1 million increase of treasury stock
purchases.

     During the six months  ended  June 30,  2003,  the  Company  purchased  and
formally  retired 1.5 million shares of treasury stock reducing its common stock
accounts  by $15,000 and  capital in excess of par  accounts  by $32.2  million.
Primarily due to the large amount of treasury  stock  purchases in the first six
months of 2003 of  approximately  $32.2 million,  the Company had a consolidated
working  capital  deficit of $12.0 million at June 30, 2003, a decrease of $14.6
million  compared to a consolidated  working  capital surplus of $2.7 million at
December 31, 2002.  Approximately $9.2 million of the working capital deficit at
June 30,  2003 is related to  deferred  revenue  and fees in excess of  deferred
member and  associate  service  costs.  These  amounts will be eliminated by the
passage of time without the  utilization  of other current assets or the Company
incurring other current liabilities.  Additionally,  at the current rate of cash
flow provided by operations ($28.3 million during the first six months of 2003),
the Company's ability to control the timing of its discretionary  treasury stock
purchases and the availability  pursuant to its real estate line of credit,  ($4
million at June 30, 2003), the Company does not expect any difficulty in meeting
its financial obligations in the short term or the long term.

     At June 30,  2003  the  Company  reported  $32.9  million  in cash and cash
equivalents and unpledged  investments compared to $36.4 million at December 31,
2002.  The Company's  investments  consist of common  stocks,  investment  grade
(rated Baa or higher)  preferred  stocks and  investment  grade bonds  primarily
issued by corporations,  the United States Treasury, federal agencies, federally
sponsored  agencies and  enterprises as well as  mortgage-backed  securities and
state and municipal tax-exempt bonds.

     The  Company  generally  advances  significant  commissions  at the  time a
Membership  is sold.  During the six months  ended June 30,  2003,  the  Company
advanced  commissions of $54.9 million on new Membership sales compared to $61.2
million for the same period of 2002. Since  approximately 95% of Membership fees
are collected on a monthly basis, a significant  cash flow deficit is created on
a per  Membership  basis at the time a  Membership  is sold.  Since there are no
further  commissions paid on a Membership during the advance period, the Company
typically  derives  significant  positive cash flow from the Membership over its
remaining life.

     The Company  expenses advance  commissions  ratably over the first month of
the related  membership.  As a result of this accounting  policy,  the Company's
commission  expenses are all recognized over the first month of a Membership and
there is no commission  expense  recognized for the same  Membership  during the
remainder  of the  advance  period.  The  Company  tracks its  unearned  advance
commission  balances  outstanding in order to ensure the advance commissions are
recovered before any renewal  commissions are paid and for internal  purposes of
analyzing  its  commission  advance  program.  While not  recorded  as an asset,
unearned  advance  commission  balances from associates as of June 30, 2003, and
related activity for the six month period then ended, were:



                                                                                 (Amounts in 000's)
                                                                                 ------------------
                                                                                 
Beginning unearned advance commission payments (1)...............................   $   227,084
Advance commission payments, net.................................................        54,905
Earned commissions applied.......................................................       (78,308)
Advance commission payment write-offs............................................        (1,472)
                                                                                    -------------
Ending unearned advance commission payments before
  estimated unrecoverable payments (1)...........................................       202,209
Estimated unrecoverable advance commission payments (1)..........................       (23,216)
Ending unearned advance commission payments, net (1).............................   -------------
                                                                                    $   178,993
                                                                                    -------------



     (1) These  amounts do not  represent  fair value,  as they do not take into
consideration timing of estimated recoveries.

     The ending unearned advance  commission  payments,  net, above includes net
unearned advance commission payments to non-vested  associates of $28.0 million.
As such, at June 30, 2003 future commission  payments and related expense should
be  reduced  as  unearned  advance  commission  payments  of  $151  million  are
recovered.  Commissions  are earned by the associate as Membership  premiums are
earned by the Company,  usually on a monthly basis.  For additional  information
concerning  these commission  advances,  see the Company's Annual report on Form
10-K  under the  heading  Commissions  to  Associates  in Item 7 -  Management's
Discussion and Analysis of Financial Condition and Results of Operations.

     The Company  believes that it has significant  ability to finance  expected
future growth in Membership  sales based on its recurring cash flow and existing
amount of cash and cash  equivalents and unpledged  investments at June 30, 2003
of $28.6 million.  The Company expects to maintain cash and investment balances,
including pledged investments,  on an on-going basis of approximately $20 to $30
million in order to meet expected  working capital needs and regulatory  capital
requirements.  Cash  balances  in  excess  of this  amount  would  be  used  for
discretionary purposes such as treasury stock purchases.

     The  Company  is  constructing  a new  corporate  office  complex  with  an
estimated  completion  during the fourth quarter of 2003 at an estimated cost of
approximately $30 million. Costs incurred through June 30, 2003 of approximately
$22.8 million,  including  approximately $355,000 of capitalized interest costs,
have been paid from existing  resources and the real estate line of credit.  The
Company  expects  to incur  additional  indebtedness  in order  to  finance  the
remaining  costs of its new corporate  headquarters  in order to allow cash flow
from operations to continue to be used to purchase  treasury stock.  The Company
has entered into construction  contracts in the amount of $28.4 million with the
general contractor  pertaining to the new office complex.  Total remaining costs
of construction from July 1, 2003 are estimated at approximately $7.2 million.

     On June 11, 2002,  the Company  entered into two line of credit  agreements
totaling $30 million with a commercial  lender  providing  for a treasury  stock
purchase  line and a real estate line for funding of the Company's new corporate
office complex.  The treasury stock line of credit provided for funding of up to
$10  million to finance  treasury  stock  purchases  through  May 31,  2003 with
scheduled monthly  repayments  beginning after the initial advance and ending no
later than May 31, 2004 with interest at the 30 day LIBOR Rate plus two percent,
adjusted  monthly.  The real estate line of up to $20 million may be funded over
the period ending  December 31, 2003 with interest at the 30 day LIBOR Rate plus
2.25%,  adjusted  monthly,  and will be  repayable  beginning  after the advance
period in monthly principal payments equal to the principal balance  outstanding
at December  31, 2003  divided by 105 plus  interest  with a balloon  payment on
September 30, 2008. These credit agreements,  as amended, contain, among others,
a financial  covenant  that the Company  shall not permit the ratio of its total
liabilities  to its tangible  net worth to exceed 3.75 to 1.00,  measured at the
end of each calendar quarter and a financial covenant  prohibiting the Company's
tangible  net worth to fall below $15 million  effective  June 30, 2003 and each
quarter thereafter.

     As of June 30,  2003,  the  Company  had  accessed  all of the $10  million
treasury  stock  purchase  line  and made  repayments  of $4.2  million  and had
accessed  $13.1 million of the $20 million real estate line.  The interest rates
as of June 30, 2003 are 3.32% and 3.57% for the treasury stock loan and the real
estate loan, respectively. The $5.8 million used to purchase treasury stock, net
of repayments of $4.2 million,  is scheduled to be paid off by May 31, 2004, and
therefore has been classified as short term.  Monthly principal  payments on the
treasury stock line are $500,000.  The Company is scheduled to begin payments on
the real estate line on December 31, 2003.

     During the six months  ended June 30,  2003,  the  Company  entered  into a
capital lease in the amount of $2.4 million to acquire  significant new computer
hardware to supplement its current  information  technology platform and provide
redundancy  for its critical  business  systems.  The capital lease requires the
Company to make annual  payments  of $792,000  beginning  January  2003  through
January 2005.  Pursuant to this lease,  the Company received a $1 million vendor
rebate  during  April 2003,  which was  recorded as a reduction  in property and
equipment.

     Actions that May Impact Retention in the Future
     The potential  impact on the Company's future  profitability  and cash flow
due to future changes in Membership retention can be significant. For additional
information concerning Membership retention,  see the Company's Annual report on
Form  10-K  under  the  heading  Measures  of  Member  Retention  in  Item  7  -
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations.  While blended retention rates have not changed  significantly  over
the past five years,  the Company  continues  to take actions that it expects to
favorably  impact  retention  rates in the future.  Since December 31, 2002, the
Company has implemented several new initiatives aimed at improving the retention
rate of both  new and  existing  Memberships.  Such  initiatives  include  newly
designed  marketing  tools  and  Fast  Start  training  materials  as  well as a
completely  redesigned  membership  contract kit. The Company believes that such
efforts may increase the  utilization  by members and  therefore  lead to higher
retention rates.

     Parent Company Funding and Dividends
     Although the Company is the  operating  entity in many  jurisdictions,  the
Company's  subsidiaries  serve as  operating  companies  in various  states that
regulate  Memberships as insurance or specialized  legal expense  products.  The
most significant of these wholly owned  subsidiaries  are PPLCI and PPLSIF.  The
ability  of PPLCI and  PPLSIF to  provide  funds to the  Company is subject to a
number of  restrictions  under various  insurance laws in the  jurisdictions  in
which PPLCI and PPLSIF conduct business,  including limitations on the amount of
dividends  and  management  fees that may be paid and  requirements  to maintain
specified levels of capital and reserves.  In addition PPLCI will be required to
maintain its stockholders'  equity at levels sufficient to satisfy various state
or  provincial  regulatory  requirements,  the  most  restrictive  of  which  is
currently $3.0 million.  Additional capital requirements of PPLCI or PPLSIF will
be  funded  by the  Company  in the form of  capital  contributions  or  surplus
debentures. At June 30, 2003, PPLSIF did not have funds available for payment of
substantial dividends without the prior approval of the insurance  commissioner.
PPLCI had  approximately  $3.5 million in surplus funds available for payment of
an ordinary dividend during December 2003.

     Forward-Looking Statements
     All statements in this report concerning Pre-Paid Legal Services, Inc. (the
"Company") other than purely historical  information,  including but not limited
to,   statements   relating  to  the  Company's  future  plans  and  objectives,
discussions  with the  staff of the SEC,  expected  operating  results,  and the
assumptions  on which such  forward-looking  statements  are  based,  constitute
"Forward-Looking Statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are based
on the Company's  historical operating trends and financial condition as of June
30, 2003 and other information  currently  available to management.  The Company
cautions that the  Forward-Looking  Statements  are subject to all the risks and
uncertainties  incident  to its  business,  including  but not  limited to risks
described below.  Moreover, the Company may make acquisitions or dispositions of
assets or  businesses,  enter  into new  marketing  arrangements  or enter  into
financing  transactions.  None of these can be  predicted  with  certainty  and,
accordingly,  are not taken  into  consideration  in any of the  Forward-Looking
Statements  made herein.  For all of the foregoing  reasons,  actual results may
vary  materially  from the  Forward-Looking  Statements.  The Company assumes no
obligation  to  update  the  Forward-Looking  Statements  to  reflect  events or
circumstances occurring after the date of the statement.

     Risk Factors
     There  are a  number  of risk  factors  that  could  affect  our  financial
condition or results of operations. See Note 2 - Contingencies and Part II, Item
1 - Legal  Proceedings.  Please  refer to page 37 and 38 of the  Company's  2002
Annual Report on Form 10-K for a description of other risk factors.



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The  Company's  consolidated  balance  sheets  include a certain  amount of
assets and liabilities  whose fair values are subject to market risk. Due to the
Company's significant  investment in fixed-maturity  investments,  interest rate
risk  represents  the  largest  market  risk  factor   affecting  the  Company's
consolidated financial position.  Increases and decreases in prevailing interest
rates  generally  translate into decreases and increases in fair values of those
instruments.  Additionally,  fair values of interest rate sensitive  instruments
may be  affected by the  creditworthiness  of the  issuer,  prepayment  options,
relative  values of  alternative  investments,  liquidity of the  instrument and
other general market conditions.

     As of June 30, 2003, substantially all of the Company's investments were in
investment   grade   (rated   Baa   or   higher)   fixed-maturity   investments,
interest-bearing   money  market  accounts  and  a   collateralized   repurchase
agreement.  The  Company  does not hold any  investments  classified  as trading
account assets or derivative financial instruments.

     The table below summarizes the estimated effects of hypothetical  increases
and  decreases  in interest  rates on the  Company's  fixed-maturity  investment
portfolio. It is assumed that the changes occur immediately and uniformly,  with
no effect  given to any steps  that  management  might take to  counteract  that
change. The hypothetical  changes in market interest rates reflect what could be
deemed best and worst case  scenarios.  The fair values  shown in the  following
table are based on  contractual  maturities.  Significant  variations  in market
interest  rates  could  produce  changes  in the  timing  of  repayments  due to
prepayment  options  available.  The  fair  value of such  instruments  could be
affected and, therefore, actual results might differ from those reflected in the
following table (dollars in 000's):





                                                                         Hypothetical change in   Estimated fair value
                                                                             interest rate         after hypothetical
                                                             Fair Value    (bp=basis points)     change in interest rate
                                                             ----------- ----------------------  ------------------------
                                                                                             
Fixed-maturity investments at June 30, 2003 (1)............. $   16,056     100 bp increase           $  14,682
                                                                            200 bp increase              13,693
                                                                             50 bp decrease              16,404
                                                                            100 bp decrease              16,814

Fixed-maturity investments at December 31, 2002 (1)......... $   16,111     100 bp increase           $  14,740
                                                                            200 bp increase              13,806
                                                                             50 bp decrease              16,310
                                                                            100 bp decrease              16,794


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

(1)  Excluding short-term investments with a fair value of $2.4 and $2.7 million
     at June 30, 2003 and December 31, 2002, respectively.

     The table above illustrates,  for example,  that an instantaneous 200 basis
     point  increase in market  interest rates at June 30, 2003 would reduce the
     estimated  fair  value  of  the  Company's  fixed-maturity  investments  by
     approximately  $2.4  million  at  that  date.  At  December  31,  2002,  an
     instantaneous  200 basis point increase in market interest rates would have
     reduced  the  estimated   fair  value  of  the   Company's   fixed-maturity
     investments  by  approximately  $2.3 million at that date.  The  definitive
     extent of the interest rate risk is not  quantifiable or predictable due to
     the variability of future interest rates,  but the Company does not believe
     such risk is material.

     The  Company  primarily  manages  its  exposure  to  interest  rate risk by
purchasing  investments that can be readily  liquidated should the interest rate
environment begin to significantly change.


ITEM 4. CONTROLS AND PROCEDURES

(a)  Evaluation of disclosure  controls and procedures.  The Company's Principal
     Executive  Officer  and  Principal  Financial  Officer  have  reviewed  and
     evaluated  the  effectiveness  of the  Company's  disclosure  controls  and
     procedures (as defined in Exchange Act Rule 240.13a-14(c)) as of the end of
     the period covered by this report. Based on that evaluation,  the Principal
     Executive  Officer and the Principal  Financial Officer have concluded that
     the Company's current  disclosure  controls and procedures are effective to
     ensure  that  information  required to be  disclosed  by the Company in the
     reports  that it files or  submits  under  the  Exchange  Act is  recorded,
     processed,  summarized and reported,  within the time periods  specified in
     the Securities and Exchange Commission's rules and forms.

(b)  Changes  in  internal  controls  over  financial  reporting.  There were no
     changes in the Company's  internal  control over  financial  reporting that
     occurred  during the  period  covered by this  report  that has  materially
     affected,  or is  reasonably  likely to  materially  affect,  the Company's
     internal control over financial reporting.






                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

     See Note 2 of the Notes to Consolidated  Financial  Statements  included in
Part I, Item 1 of this report for information with respect to legal proceedings.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     The 2003  Annual  Meeting  of  Shareholders  of the  Company  (the  "Annual
Meeting") was held on May 29, 2003.  The following  matters were  submitted to a
vote of the Company's shareholders at the Annual Meeting.

Election of Two Directors.
         The results of the election for two directors were as follows:
                                                                 Abstentions and
                                          Votes For               Votes Withheld
                                          ----------             ---------------
John W. Hail                              14,541,121                 235,451
Steven R. Hague                           14,559,431                 217,141


     The Board of  Directors  of the Company now  consists of six members and is
divided into three classes  equal in size,  with the term of office of one class
expiring  each year.  The new terms of  service  of Messrs.  Hail and Hague will
expire in 2006.  The terms of the other four  directors  of the  Company did not
expire at the Annual Meeting.  The names of such other directors and the year of
expiration of their  respective  terms are as follows:  Harland C. Stonecipher -
2005; Martin H. Belsky - 2005; Peter K. Grunebaum - 2004 and Randy Harp - 2004.

Approval Of Amendment to Stock Option Plan
     The results of the amendment of the Company's Stock Option Plan to increase
the maximum  number of shares of Common Stock in respect of which options may be
granted under the Stock Option Plan from  2,000,000  shares to 3,000,000  shares
and to extend the  termination  date of the Stock Option Plan from  December 12,
2005 to December 12, 2012 were as follows:

                                       Votes For                      8,048,346
                                       Votes Against                  1,471,810
                                       Votes Abstain                     31,831
                                       Delivered non-votes            5,224,585

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits:

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

     3.1  Amended and Restated Bylaws of the Company as adopted May 29, 2003

     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, filed under Exhibit 31 of Item 601 of Regulation S-K

     31.2 Certification of Steve Williamson,  Chief Financial Officer,  Pursuant
          to Rule  13a-14(a)  under the Securities  Exchange Act of 1934,  filed
          under Exhibit 31 of Item 601 of Regulation S-K.

     32.1 Certification of Harland C. Stonecipher,  Chairman and Chief Executive
          Officer, Pursuant to 18 U.S.C. Section 1350, filed under Exhibit 32 of
          Item 601 of Regulation S-K.

     32.2 Certification of Steve Williamson,  Chief Financial Officer,  Pursuant
          to 18 U.S.C.  Section  1350,  filed  under  Exhibit  32 of Item 601 of
          Regulation S-K.

(b) Reports on Form 8-K:

     The  Company  filed Form 8-K dated April 2, 2003  providing  under Item 7 -
     Financial  Statements and Exhibits the Company's  press release dated April
     2, 2003, announcing its membership and recruiting information for the three
     months ended March 31, 2003.

     The Company  filed Form 8-K dated April 28, 2003  providing  under Item 7 -
     Financial  Statements and Exhibits the Company's  press release dated April
     28,  2003,  announcing  its earnings  and  operating  results for the three
     months ended March 31, 2003.


                                   SIGNATURES

Pursuant to the requirements of the Securities and 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: July 28, 2003                /s/ Harland C. Stonecipher
                                   ------------------------------------------
                                   Harland C. Stonecipher
                                   Chairman and Chief Executive Officer
                                   (Principal Executive Officer)

Date: July 28, 2003                /s/ Randy Harp
                                   ------------------------------------------
                                   Randy Harp
                                   Chief Operating Officer
                                   (Duly Authorized Officer)

Date: July 28, 2003                /s/ Steve Williamson
                                   ------------------------------------------
                                   Steve Williamson
                                   Chief Financial Officer
                                   (Principal Financial and
                                   Accounting Officer)









                                   Exhibit 3.1

                           AMENDED AND RESTATED BYLAWS

                                       OF

                          PRE-PAID LEGAL SERVICES, INC.

                            (As Adopted May 29, 2003)

                                TABLE OF CONTENTS
                                       TO
                           AMENDED AND RESTATED BYLAWS
                                       OF
                          PRE-PAID LEGAL SERVICES, INC.
                            (an Oklahoma Corporation)



ARTICLE I - SHAREHOLDERS
   Section 1.01.    Annual Meeting
   Section 1.02.    Special Meetings
   Section 1.03.    Notice of Meetings
   Section 1.04.    Quorum
   Section 1.05.    Organization
   Section 1.06.    Conduct of Business
   Section 1.07.    Proxies and Voting
   Section 1.08.    Stock List
   Section 1.09.    Inspectors of Elections
   Section 1.10.    Voting Procedures
   Section 1.11.    Notice of Shareholder Nomination and Shareholder Business

ARTICLE II - BOARD OF DIRECTORS
   Section 2.01.    Number and Term of Office
   Section 2.02.    Vacancies
   Section 2.03.    Regular Meetings
   Section 2.04.    Special Meetings
   Section 2.05.    Quorum
   Section 2.06.    Participation in Meetings by Conference Telephone
   Section 2.07.    Written Consents
   Section 2.08.    Conduct of Business
   Section 2.09.    Powers
   Section 2.10.    Compensation of Directors

ARTICLE III - COMMITTEES
   Section 3.01.    Executive Committee
   Section 3.02.    Other Committees of the Board of Directors
   Section 3.03.    Limitations on Power and Authority of Committees
   Section 3.04.    Conduct of Business

ARTICLE IV - OFFICERS
   Section 4.01.    Generally
   Section 4.02.    Chairman of the Board
   Section 4.03.    Vice Chairman of the Board
   Section 4.04.    Chief Executive Officer
   Section 4.05.    President
   Section 4.06.    Vice Presidents
   Section 4.07.    Secretary
   Section 4.08.    Treasurer
   Section 4.09.    Delegation of Authority
   Section 4.10.    Removal
   Section 4.11.    Action with Respect to Securities of Other Corporations

ARTICLE V - STOCK
   Section 5.01.    Certificates of Stock
   Section 5.02.    Transfers of Stock
   Section 5.03.    Record Date
   Section 5.04.    Lost, Stolen or Destroyed Certificates
   Section 5.05.    Regulations

ARTICLE VI - NOTICES
   Section 6.01.    Notices
   Section 6.02.    Waivers

ARTICLE VII - MISCELLANEOUS
   Section 7.01.    Facsimile Signatures
   Section 7.02.    Corporate Seal
   Section 7.03.    Reliance upon Books, Reports and Records
   Section 7.04.    Fiscal Year
   Section 7.05.    Time Periods

ARTICLE VIII - INDEMNIFICATION

ARTICLE IX - AMENDMENTS

ARTICLE X - ELECTRONIC TRANSMISSION




                           AMENDED AND RESTATED BYLAWS
                                       OF
                          PRE-PAID LEGAL SERVICES, INC.
                            (As Adopted May 29, 2003)


                            ARTICLE I - SHAREHOLDERS

Section 1.01.   Annual Meeting

     An annual  meeting of the  shareholders,  for the  election of directors to
succeed those whose terms expire and for the  transaction of such other business
as may properly  come before the meeting,  shall be held at such place,  on such
date, and at such time as the Board of Directors shall each year fix, which date
shall  be  within  thirteen  months  subsequent  to the  later  of the  date  of
incorporation  or the last  annual  meeting  of the  shareholders.  The board of
directors may, in its sole  discretion,  determine that the meeting shall not be
held at any place, but may be held solely by means of remote communication.

Section 1.02.   Special Meetings

     Special  meetings  of  the  shareholders,   for  any  purpose  or  purposes
prescribed in the notice of the meeting, may be called by the Board of Directors
or by the Chairman of the Board or the President and shall be held on such date,
and at such time as they or he shall fix.

Section 1.03.   Notice of Meetings

     Written notice of the place,  if any,  date, and time of all meetings,  and
the  means  of  remote  communications,   if  any,  by  which  shareholders  and
proxyholders may be deemed to be present in person and vote at the meetings,  of
the shareholders shall be given, not less than ten (10) nor more than sixty (60)
days  before the date on which the  meeting is to be held,  to each  shareholder
entitled  to vote at such  meeting,  except  as  otherwise  provided  herein  or
required by law (meaning, here and hereinafter, as required from time to time by
the Oklahoma General  Corporation Act or the Certificate of Incorporation).  The
term "Certificate of Incorporation" as used herein shall mean the Certificate of
Incorporation of the corporation as may be amended from time to time.  Notice of
a special meeting of the  shareholders  shall also state the purpose or purposes
for which the meeting is called.

     When a meeting is adjourned to another place, if any, date or time, written
notice need not be given of the adjourned  meeting if the place,  if any,  date,
and time  thereof  and the  means of  remote  communications,  if any,  by which
shareholders  and proxyholders may be deemed to be present in person and vote at
the adjourned  meeting are announced at the meeting at which the  adjournment is
taken; provided, however, that if the date of any adjourned meeting is more than
thirty (30) days after the date for which the meeting was originally noticed, or
if a new record date is fixed for the adjourned  meeting,  written notice of the
place,  if any,  date,  and  time of the  adjourned  meeting  shall  be given in
conformity  herewith.  At any adjourned meeting,  any business may be transacted
which might have been transacted at the original meeting.

     If a meeting  is to be held  solely by  remote  communication,  notice of a
meeting  shall also  provide  the  information  required  to gain  access to the
shareholder list by reasonably accessible electronic network; provided, however,
that such list shall only be available to shareholders of the corporation.

     Notice  may be  given  effectively  to  shareholders  if given by a form of
electronic  transmission  consented to by the  shareholder to whom the notice is
given.  The consent shall be revocable by the  shareholder  by written notice to
the corporation.  Such consent shall be deemed revoked if (a) the corporation is
unable to deliver by electronic  transmission  two consecutive  notices given by
the  corporation in accordance with the consent;  and (b) the inability  becomes
known to the secretary or an assistant  secretary of the  corporation  or to the
transfer agent, or other person responsible for the giving of notice;  provided,
however,  the inadvertent  failure to treat the inability as a revocation  shall
not invalidate any meeting or other action.  Notice shall be deemed  effectively
given if by (i) facsimile telecommunication,  when directed to a number at which
the  shareholder has consented to receive  notice;  (ii)  electronic  mail, when
directed to an electronic mail address at which the shareholder has consented to
receive notice;  (iii) a posting on an electronic network together with separate
notice to the shareholder of the specific posting, upon the later of the posting
and the  giving  of  separate  notice;  and (iv) any  other  form of  electronic
transmission,   when  directed  to  the   shareholder  in  accordance  with  the
shareholder's  consent.  An affidavit of the secretary or an assistant secretary
or of the transfer agent or other agent of the  corporation  that the notice has
been given by a form of electronic  transmission shall, in the absence of fraud,
be prima facie evidence of the facts stated therein.

Section 1.04.   Quorum

     At any meeting of the shareholders,  the holders of one-third of all of the
shares  of the  stock  entitled  to  vote at the  meeting,  present  in  person,
represented  by proxy or by means of remote  communication,  shall  constitute a
quorum for all  purposes,  unless or except to the extent that the presence of a
larger number may be required by law or by the Certificate of Incorporation.

     If a quorum shall fail to attend any  meeting,  the chairman of the meeting
or the holders of a majority of the shares of the stock entitled to vote who are
present,   in  person,   represented   by  proxy  or  by  means  of   electronic
communication, may adjourn the meeting to another date, or time.

Section 1.05.   Organization

     Such  person  as the  Board of  Directors  may have  designated  or, in the
absence of such a person,  the highest ranking officer of the corporation who is
present shall call to order any meeting of the  shareholders and act as chairman
of the  meeting.  In  the  absence  of the  Secretary  of the  corporation,  the
secretary of the meeting shall be such person as the chairman appoints.

Section 1.06.   Conduct of Business

     The chairman of any meeting of  shareholders  shall  determine the order of
business and the  procedure at the meeting,  including  such  regulation  of the
manner of voting and the conduct of discussion as seem to him in order.

Section 1.07.   Proxies and Voting

     At any meeting of the shareholders,  every shareholder entitled to vote may
vote in person or by proxy  authorized in such manner as specifically  permitted
by the Oklahoma  General  Corporation  Act or as the  corporation  may otherwise
permit.  Proof of such authority shall be filed in accordance with the procedure
established  for the  meeting.  If  authorized  by the Board of  Directors,  the
requirement  of a written  ballot shall be  satisfied  by a ballot  submitted by
electronic  transmission;  provided that the electronic transmission must either
set forth or be submitted with  information from which it can be determined that
the electronic  transmission  was authorized by the  shareholder or proxyholder.
The  validity  and  authenticity  of  any  proxy  shall  be  determined  by  the
corporation.

     Each  shareholder  shall have one vote for every share of stock entitled to
vote which is registered in his name on the record date for the meeting,  except
as  otherwise  provided  herein  or  required  by law or by the  Certificate  of
Incorporation.

     All voting, except where otherwise required by law or by the Certificate of
Incorporation,  may be by a voice  vote;  provided,  however,  that upon  demand
therefor by a shareholder  entitled to vote or his proxy,  a stock vote shall be
taken. Every stock vote shall be taken by ballots, each of which shall state the
name of the  shareholder  or proxy voting and such other  information  as may be
required under the procedure  established  for the meeting.  Every vote taken by
ballots shall be counted by an inspector or inspectors appointed by the chairman
of the meeting.

     All elections  shall be  determined  by a plurality of the votes cast,  and
except as otherwise required by law or by the Certificate of Incorporation,  all
other matters shall be determined by a majority of the votes cast.

     Notwithstanding the provisions of this Section 1.07, any action,  except as
set forth below, required or which may be taken at any annual or special meeting
of the  shareholders  may be taken without a meeting,  without prior notice or a
vote, if a consent or consents in writing or by electronic transmission, setting
forth the action so taken,  shall be signed by the holders of outstanding  stock
having not less than the  minimum  number of votes that  would be  necessary  to
authorize or take such action at a meeting at which all shares  entitled to vote
thereon  were present and voted and shall be  delivered  to the  corporation  by
delivery  to its  registered  office  in this  state,  its  principal  place  of
business,  or an officer or agent of the corporation  having custody of the book
in which proceedings of meetings of shareholders are recorded.  Delivery made to
a corporation's  registered  office shall be by hand, by certified or registered
mail, return receipt requested, or electronic transmission. Such written consent
or  consents  shall  be  filed  with  the  minutes  of  the  proceedings  of the
shareholders,  provided  the  filings  shall be in paper form if the minutes are
maintained  in paper form and shall be in  electronic  form if the  minutes  are
maintained in electronic  form.  Prompt notice of the taking of corporate action
without a meeting by less than unanimous written consent shall be given to those
shareholders who have not consented in writing.

     Shareholders  may,  unless  the  certificate  of  incorporation   otherwise
provides,  act by written consent to elect directors;  provided however, that if
the consent is less than unanimous, the action by written consent may be in lieu
of holding an annual meeting only if all the  directorships  to which  directors
could be elected at an annual  meeting held at the effective  time of the action
are vacant and are filled by the action.

     Every written consent shall bear the date of signature of each  shareholder
who signs the  consent and no written  consent  shall be  effective  to take the
corporate  action  referred  to therein  unless,  within  sixty (60) days of the
earliest dated consent  delivered in the manner  required by this section to the
corporation,  written consents signed by a sufficient  number of holders to take
action are delivered to the corporation by delivery to its registered  office in
this  state,  its  principal  place of  business,  or an officer or agent of the
corporation  having  custody of the book in which  proceedings  of  meetings  of
shareholders are recorded.  Delivery made to a corporation's  registered  office
shall be by hand, by certified or registered mail, return receipt requested,  or
by electronic transmission.

     An  electronic  transmission  consenting  to  an  action  to be  taken  and
transmitted  by a  shareholder  or  proxyholder,  shall be deemed to be written,
signed  and  dated  for the  purposes  herein,  provided  that  such  electronic
transmission  sets  forth  or is  delivered  with  information  from  which  the
corporation can determine (a) that the shareholder or proxyholder was authorized
to act for the  shareholder  or  proxyholder  and (b)  the  date on  which  such
shareholder or proxyholder transmitted such electronic transmission. The date on
which such electronic transmission is transmitted shall be deemed to be the date
on which such consent was signed. An electronic  transmission shall be deemed to
be  delivered   when   reproduced  in  paper  form  and  delivered  to  (i)  the
corporation's  registered office,  (ii) its principal place of business or (iii)
an  officer  or agent of the  corporation  having  custody  of the book in which
proceedings  of  meetings  of  shareholders  are  recorded,  or as  provided  by
resolution of the board of directors of the corporation.

Section 1.08.   Stock List

     The officer  who has charge of the stock  ledger of the  corporation  shall
prepare a  complete  list of  shareholders  entitled  to vote at any  meeting of
shareholders, arranged in alphabetical order for each class of stock and showing
the address of each such shareholder and the number of shares  registered in the
name of each  shareholder.  The  corporation  shall not be  required  to include
electronic  mail  addresses  or  other  electronic  contact   information  of  a
shareholder  on the list.  Such  list  shall be open to the  examination  of any
shareholder,  for any purpose  germane to the meeting,  for a period of at least
ten (10) days prior to the meeting,  (i) on a reasonably  accessible  electronic
network,  or (ii)  during  ordinary  business  hours at the  principal  place of
business of the corporation.

     If the meeting is to be held at a place,  the stock list shall also be kept
at the place of the meeting  during the whole time  thereof and shall be open to
examination  by any  shareholder  who is  present.  If the meeting is to be held
solely by means of remote  communication,  the list shall be open to examination
of any  shareholder  during  the  whole  time  of the  meeting  on a  reasonably
accessible electronic network. The stock ledger shall be the only evidence as to
the identity of the shareholders  entitled to examine the stock list and to vote
in person or by proxy at the meeting.

Section 1.09.   Inspectors of Elections

     The corporation may, but shall not be required to in advance of any meeting
of shareholders, appoint one or more persons to act as inspector of elections at
the meeting and make a written report thereof. The corporation may designate one
or more persons as an alternate  inspector to replace any inspector who fails to
act. If no inspector  or alternate is able to act at a meeting of  shareholders,
the person presiding at the meeting may appoint one or more inspectors to act at
the meeting. Each inspector, before entering upon the discharge of the duties of
inspector,  shall  take and sign an oath  faithfully  to  execute  the duties of
inspector with strict  impartiality and according to the best of the inspector's
ability.

     The inspector or inspectors,  if appointed,  shall (i) ascertain the number
of shares  outstanding  and the voting power of each;  (ii) determine the shares
represented at the meeting and the validity of proxies and ballots;  (iii) count
all votes and  ballots;  (iv)  determine  and retain for a  reasonable  period a
record of the  disposition of any challenges  made to any  determination  by the
inspectors;  and  (v)  certify  their  determination  of the  number  of  shares
represented  at the  meeting  and  their  count of all votes  and  ballots.  The
inspectors  may  appoint  or retain  other  persons  or  entities  to assist the
inspectors  in the  performance  of the  duties of such  inspectors.  The person
presiding at the meeting of shareholders shall announce the date and time of the
opening and the closing of the polls for each matter upon which the shareholders
will vote at a meeting.

     No ballot,  proxy or vote,  nor any revocation  thereof or change  thereto,
shall be accepted by the  inspectors  after the closing of the polls  unless the
district court upon application by a shareholder shall determine otherwise.

Section 1.10.   Voting Procedures

     In  determining  the  validity  and  counting of proxies and  ballots,  the
inspectors  shall be limited to an  examination  of the proxies,  any  envelopes
submitted  with  those   proxies,   any   information   provided  by  electronic
transmission or remote communication,  ballots and the regular books and records
of the  corporation,  except that the  inspectors  may consider  other  reliable
information for the limited purpose of reconciling proxies and ballots submitted
by or on behalf of banks,  brokers,  their  nominees  or similar  persons  which
represent  more  votes than the  holder of a proxy is  authorized  by the record
owner  to cast or more  votes  that the  shareholder  holds  of  record.  If the
inspectors consider other reliable information for the limited purpose permitted
by the Oklahoma General  Corporation Act or these bylaws,  the inspectors at the
time they may their certification as required by these Bylaws, shall specify the
precise  information  considered  by them,  including the person or persons from
whom they obtained the information, when the information was obtained, the means
by which the information  was obtained and the basis for the inspectors'  belief
that the information is accurate and reliable.

Section 1.11.   Notice of Shareholder Nomination and Shareholder Business

     At a meeting of the shareholders,  only such business shall be conducted as
shall  have been  properly  brought  before  the  meeting.  Nominations  for the
election  of  directors  may  be  made  by  the  Board  of  Directors  or by any
shareholder entitled to vote for the election of directors.  Other matters to be
properly  brought  before the meeting  must be: (a)  specified  in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Directors, including matters covered by Rule 14a-8 under the Securities Exchange
Act of 1934,  as in effect from time to time;  (b)  otherwise  properly  brought
before the  meeting by or at the  direction  of the Board of  Directors;  or (c)
otherwise  properly  brought  before the meeting by a  shareholder,  as provided
below.

     A notice of the intent of a  shareholder  to make a nomination  or to bring
any other matter before the meeting shall be made in writing and received by the
Secretary of the corporation not more than 150 days and not less than 90 days in
advance  of the  annual  meeting  or,  in the  event  of a  special  meeting  of
shareholders,  such notice shall be received by the Secretary of the corporation
not later than the close of the  fifteenth day following the day on which notice
of the meeting is first mailed to shareholders.

     Every such notice by a shareholder shall set forth:

          (a)  the  name  and  residence  address  of  the  shareholder  of  the
          corporation  who  intends to make a  nomination  or bring up any other
          matter;

          (b) a  representation  that the shareholder is a registered  holder of
          the  corporation's  voting stock and intends to appear in person or by
          proxy at the  meeting  to make the  nomination  or bring up the matter
          specified in the notice;

          (c) with  respect  to  notice of an  intent  to make a  nomination,  a
          description  of  all   arrangements   or   understandings   among  the
          shareholder  and each nominee and any other person or persons  (naming
          such  person  or  persons)   pursuant  to  which  the   nomination  or
          nominations are to made by the shareholder;

          (d) with  respect  to notice of an intent to make a  nomination,  such
          other information  regarding each nominee proposed by such shareholder
          as would have been required to be included in a proxy  statement filed
          pursuant to the proxy rules of the Securities and Exchange  Commission
          had each  nominee  been  nominated  by the Board of  Directors  of the
          corporation; and

          (e) with respect to notice of an intent to bring up any other  matter,
          a  description  of  the  matter,  and  any  material  interest  of the
          shareholder in the matter.

     Notice of intent to make a nomination  shall be  accompanied by the written
consent of each nominee to serve as director of the corporation, if so elected.

     At the meeting of  shareholders,  the Chairman of the meeting shall declare
out of order and  disregard  any  nomination  or other  matter not  presented in
accordance with this section.


                         ARTICLE II - BOARD OF DIRECTORS

Section 2.01.   Number and Term of Office

     The number of directors who shall  constitute the whole board shall consist
of not less than three nor more than  twenty-four  members with the exact number
to be fixed from time to time by the Board of Directors.  The directors shall be
divided into three classes,  designated Class A, Class B, and Class C, as nearly
equal in number as  possible.  The  number of  directors  equal to the number of
class whose term  expires at the time of such  meeting  shall be elected to hold
office until the third succeeding annual meeting of shareholders.  Each director
shall hold office  until his  successor is elected and  qualified,  or until his
earlier resignation or removal.

     Whenever the  authorized  number of directors is increased  between  annual
meetings of the shareholders,  the affirmative vote of 80% of the directors then
in office,  although  less than a quorum,  shall be  required  to elect such new
directors for the balance of a term and until their  successors  are elected and
qualified.  Any decrease in the authorized  number of directors shall not become
effective  until  the  expiration  of the term of the  directors  then in office
unless,  at the time of such  decrease,  there shall be  vacancies  on the board
which are being eliminated by the decrease.

Section 2.02.   Vacancies

     If  the  office  of  any  director  becomes  vacant  by  reason  of  death,
resignation,  disqualification,  removal or other  cause,  such  vacancy  may be
filled only by the affirmative vote of 80% of the directors remaining in office,
although less than a quorum, and each director so chosen shall hold office for a
term expiring at the annual meeting of  shareholders  at which term of the class
to which such  director  has been  elected  expires and until his  successor  is
elected and qualified.

Section 2.03.   Regular Meetings

     Regular  meetings of the Board of Directors  shall be held at such place or
places,  on such  date or dates,  and at such  time or times as shall  have been
established  by the Board of Directors and  publicized  among all  directors.  A
notice of each regular meeting shall not be required.

Section 2.04.   Special Meetings

     Special  meetings of the Board of Directors may be called by any two of the
directors then in office or by the chief executive  officer and shall be held at
such place,  on such date,  and at such time as they or he shall fix.  Notice of
the  place,  date,  and time of each such  special  meeting  shall be given each
director by whom it is not waived in one or more of the following  ways:  (i) by
mailing written notice not less than three (3) days before the meeting,  or (ii)
by personally  delivering  the same not less than eighteen (18) hours before the
meeting; or (iii) by telegraphing,  transmitting by facsimile or telephoning the
same or by electronic  transmission in a manner reasonably designed to reach the
director not less than eighteen (18) hours before the meeting.  Unless otherwise
indicated in the notice  thereof,  any and all business may be  transacted  at a
special meeting.

Section 2.05.   Quorum

     At any meeting of the Board of Directors,  one-third of the total number of
the whole board, but not less than two directors,  shall constitute a quorum for
all purposes, unless or except in the event that a board of one is authorized in
which case one director  shall  constitute  a quorum.  If a quorum shall fail to
attend any meeting,  a majority of the directors present may adjourn the meeting
to another place, date, or time, without further notice or waiver thereof.

Section 2.06.   Participation in Meetings by Conference Telephone

     Members  of the  Board  of  Directors,  or of any  committee  thereof,  may
participate  in a meeting  of such  board or  committee  by means of  conference
telephone   or  other   communications   equipment   that  enables  all  persons
participating  in the  meeting  to hear each  other.  Such  participation  shall
constitute presence in person at such meeting.

Section 2.07.   Written Consents

     Action  may be taken by the Board of  Directors  without  a meeting  if all
members thereof consent  thereto in writing or by electronic  transmission,  and
the writing or writings or electronic  transmission or  transmissions  are filed
with the minutes of proceedings  of the Board of Directors.  The filing shall be
in paper  form if the  minutes  are  maintained  in paper  form and  shall be in
electronic form if the minutes are maintained in electronic form.

Section 2.08.   Conduct of Business

     At any meeting of the Board of Directors at which a quorum of the directors
is present,  business  shall be transacted in such order and manner as the board
may from time to time determine, and all matters shall be determined by the vote
of a majority of the directors  present,  except as otherwise provided herein or
required by law or by the Certificate of Incorporation.

Section 2.09.   Powers

     The Board of Directors may,  except as otherwise  required by law or by the
Certificate of Incorporation,  exercise all such powers and do all such acts and
things  as may be  exercised  or done  by the  corporation,  including,  without
limiting the generality of the foregoing, the unqualified power:

          (1) To declare dividends from time to time in accordance with law;

          (2)  To  purchase  or  otherwise  acquire  any  property,   rights  or
          privileges on such terms as it shall determine;

          (3) To authorize the creation, making and issuance, in such form as it
          may determine,  of written  obligations  of every kind,  negotiable or
          non-negotiable,  secured or unsecured,  and to do all things necessary
          in connection therewith;

          (4) To remove any officer of the  corporation  with or without  cause,
          and from time to time to devolve  the powers and duties of any officer
          upon any other person for the time being;

          (5) To  confer  upon  any  officer  of the  corporation  the  power to
          appoint, remove and suspend subordinate officers and agents;

          (6) To adopt from time to time such  stock,  option,  stock  purchase,
          bonus or other compensation  plans for directors,  officers and agents
          of the corporation and its subsidiaries as it may determine;

          (7) To adopt from time to time such insurance,  retirement,  and other
          benefit plans for  directors,  officers and agents of the  corporation
          and its subsidiaries as it may determine; and,

          (8) To adopt  from time to time  regulations,  not  inconsistent  with
          these bylaws,  for the  management of the  corporation's  business and
          affairs.

Section 2.10.   Compensation of Directors

     Directors,  as such,  may receive,  pursuant to  resolution of the Board of
Directors,  fixed fees and other  compensation  for their services as directors,
including,  without  limitation,  their services as members of committees of the
directors.


                            ARTICLE III - COMMITTEES

Section 3.01.   Executive Committee

     The Board of Directors may designate an Executive Committee to serve at the
pleasure of the board and shall elect a director  or  directors  to serve as the
member or members of the Executive Committee,  designating, if it desires, other
directors  as  alternative  members who may  replace any absent or  disqualified
member at any  meeting of the  Executive  Committee.  The  Executive  Committee,
except to the extent as it may be restricted  from time to time by the vote of a
majority  of the total  number of  directors,  may  exercise  all the powers and
authority  of the Board of  Directors  in the  management  of the  business  and
affairs of the corporation,  and may authorize the seal of the corporation to be
affixed to all papers which may require it subject to the  limitations set forth
on Section  3.03.  Unless  expressly  restricted  by  resolution of the Board of
Directors, the Executive Committee shall have the power and authority to declare
a dividend,  to authorize  the issuance of stock and to adopt a  certificate  of
ownership and merger.  In the absence or  disqualification  of any member of the
Executive  Committee,  and any  alternate  member in his  place,  the  member or
members of the Executive  Committee  present at the meeting and not disqualified
from voting,  whether or not he or they  constitute  a quorum,  may by unanimous
vote appoint  another  member of the Board of Directors to act at the meeting in
the place of the absent or disqualified member.

Section 3.02.   Other Committees of the Board of Directors

     The Board of Directors may from time to time designate other  committees of
the board, with such lawfully delegable powers and duties as it thereby confers,
to serve at the pleasure of the board and shall, for those  committees,  elect a
director  or  directors  to serve as the member or members,  designating,  if it
desires,  other  directors as alternative  members who may replace any absent or
disqualified member at any meeting of the committee. Any committee so designated
may exercise the power and authority of the Board of Directors to the extent the
resolution  designating the committee or a supplemental  resolution of the Board
of Directors  shall so provide  subject to the  limitation  set forth in Section
3.03. In the absence or  disqualification of any member of any committee and any
alternate member in his place, the member or members of the committee present at
the  meeting  and  not  disqualified  from  voting,  whether  or not he or  they
constitute a quorum,  may by unanimous vote appoint  another member of the Board
of  Directors  to act at the meeting in the place of the absent or  disqualified
member.

Section 3.03.   Limitations on Power and Authority of Committees

     No committee of the Board of Directors shall have any power or authority in
reference  to amending  the  certificate  of  incorporation  of the  corporation
(except that the Executive Committee, to the extent authorized in the resolution
or  resolutions  providing  for the  issuance of shares of stock  adopted by the
Board of  Directors,  may fix the  designations  and any of the  preferences  or
rights of such  shares  relating  to  dividends,  redemption,  dissolution,  any
distribution  of  assets  of the  corporation  or the  conversion  into,  or the
exchange of such  shares for,  shares of any other class or classes or any other
series of the same or any other class or classes of stock of the  corporation or
fix the number of the shares in any series of stock or authorize the increase or
decrease  of the  shares of any  series),  adopting  an  agreement  of merger or
consolidation,  recommending to the  shareholders the sale, lease or exchange of
all  or  substantially  all of  the  property  and  assets  of the  corporation,
recommending  to  the  shareholders  a  dissolution  of  the  corporation  or  a
revocation of a dissolution, or amending the bylaws of the corporation.

Section 3.04.   Conduct of Business

     Each  committee  may  determine  the  procedural   rules  for  meeting  and
conducting  its  business  and  shall  act in  accordance  therewith,  except as
otherwise  provided herein or required by law. Adequate  provision shall be made
for notice to members of all meetings;  one-third  (1/3) of the total  committee
members shall  constitute a quorum unless the committee  shall consist of one or
two  members,  in which  event one member  shall  constitute  a quorum;  and all
matters shall be determined by a majority vote of the members  present.  Minutes
of each  committee  meeting  shall be prepared,  approved by the chairman of the
meeting and filed with the Secretary of the corporation.  Action may be taken by
any  committee  without a meeting  if all  members  thereof  consent  thereto in
writing,  and the  writing  or  writings  are  filed  with  the  minutes  of the
proceedings of such committee.


                              ARTICLE IV - OFFICERS

Section 4.01.   Generally

     The officers of the corporation shall consist of a Chief Executive Officer,
a President and a Secretary and such other senior or subordinate officers as may
from time to time be elected by the Board of  Directors.  The Board of Directors
may also elect from its number a Chairman and Vice  Chairman of the Board of the
corporation.  Officers  shall be elected by the Board of Directors,  which shall
consider  that  subject  at its first  meeting  after  every  annual  meeting of
shareholders.  Each officer shall hold his office until his successor is elected
and qualified or until his earlier resignation or removal. Any number of offices
may be held by the same person.

Section 4.02.   Chairman of the Board

     The  Chairman  of the Board,  if any,  shall,  if  present,  preside at all
meetings of the Board of  Directors  and  exercise and perform such other powers
and  duties  as may be  from  time  to  time  assigned  to him by the  Board  of
Directors.  He shall be the  senior  officer  of the  corporation  and  shall be
responsible for overall planning and policy.

Section 4.03.   Vice Chairman of the Board

     The Vice  Chairman of the Board shall  perform  such duties as the Board of
Directors shall  prescribe.  In the absence or disability of the Chairman of the
Board, the Vice Chairman shall perform the duties and exercise the powers of the
Chairman of the Board.

Section 4.04.   Chief Executive Officer

     The Chief  Executive  Officer  shall,  subject to the  provisions  of these
bylaws and to the direction of the Board of Directors,  have the  responsibility
and the  general  management  and  control of the  affairs  and  business of the
corporation  and shall perform all duties and have all powers which are commonly
incident to the office of chief  executive or which are  delegated to him by the
Board  of  Directors.  He shall  have  power  to sign  all  stock  certificates,
contracts and other  instruments of the  corporation  which are  authorized.  He
shall have general  supervision  and direction or all of the other  officers and
agents of the corporation.

Section 4.05.   President

     The President shall have such duties as are assigned to him by the Board of
Directors or the Chief  Executive  Officer.  In the absence or disability of the
Chief Executive Officer, the President shall perform the duties and exercise the
powers of the Chief Executive Officer.

Section 4.06.   Vice Presidents

     Each Vice President  shall perform such duties as the Board of Directors or
Chief  Executive  Officer shall  prescribe.  In the absence or disability of the
President,  the Vice President with the highest ranking shall perform the duties
and exercise the powers of the President.

Section 4.07.   Secretary

     The  Secretary  shall  issue all  authorized  notices  for,  and shall keep
minutes of, all  meetings of the  shareholders  and the Board of  Directors.  He
shall have charge of the corporate records.

Section 4.08.   Treasurer

     The Treasurer,  if any, shall have the custody of all monies and securities
of the corporation  and shall keep regular books of account.  He shall make such
disbursements  of the funds of the  corporation  as are proper and shall  render
from  time to time an  account  of all such  transactions  and of the  financial
condition of the corporation.

Section 4.09.   Delegation of Authority

     The Board of Directors  may from time to time delegate the powers or duties
of any officer to any other  officers or agents,  notwithstanding  any provision
hereof.

Section 4.10.   Removal

     Any officer of the  corporation may be removed at any time, with or without
cause, by the Board of Directors.

Section 4.11.   Action with Respect to Securities of Other Corporations

     Unless  otherwise  directed by the Board of Directors,  the Chief Executive
Officer or the President shall have power to vote and otherwise act on behalf of
the  corporation,  in person or by proxy,  at any meeting of  shareholders of or
with respect to any action of  shareholders  of any other  corporation  in which
this  corporation  may hold  securities  and  otherwise  to exercise any and all
rights and powers which this  corporation may possess by reason of its ownership
of securities in such other corporation.


                                ARTICLE V - STOCK

Section 5.01.   Certificates of Stock

     Each  shareholder  shall be entitled to a certificate  signed by, or in the
name of, the  corporation by the Chairman or the Vice Chairman of the Board,  or
the  President  or a  Vice  President,  and  by the  Secretary  or an  Assistant
Secretary,   or  the  Treasurer  or  an  Assistant  Treasurer,   certifying  and
representing  the number of shares owned by him. Any of or all the signatures on
the  certificate  may be  facsimile.  The  board of  directors  may  provide  by
resolution  or  resolutions  that some or all of any or all classes or series of
the corporation's stock may be uncertificated shares.

Section 5.02.   Transfers of Stock

     Transfers  of stock  shall be made  only  upon  the  transfer  books of the
corporation  kept  at  an  office  of  the  corporation  or by  transfer  agents
designated to transfer  shares of the stock of the  corporation.  Except where a
certificate  is issued in  accordance  with  Section  5.04 of these  bylaws,  an
outstanding  certificate  for the number of shares involved shall be surrendered
for cancellation before a new certificate is issued therefor.

Section 5.03.   Record Date

     The Board of Directors may fix a record date for  determining  shareholders
entitled to notice of or to vote at a meeting of shareholders, which record date
shall not precede the date upon which the  resolution  fixing the record date is
adopted by the Board of Directors,  and which record date shall not be more than
sixty (60) nor less than ten (10) days  before the date of such  meeting.  If no
record date is fixed by the Board of Directors,  the record date for determining
shareholders entitled to notice of or to vote at a meeting of shareholders shall
be at the close of business on the day next preceding the day on which notice is
given,  or, if  notice  is  waived,  at the  close of  business  on the day next
preceding the day on which the meeting is held. A determination  of shareholders
of record  entitled to notice of or to vote at a meeting of  shareholders  shall
apply to any adjournment of the meeting;  provided,  however,  that the Board of
Directors may fix a new record date for the adjourned meeting.

     In order that the  corporation may determine the  shareholders  entitled to
consent to corporate action in writing without a meeting, the Board of Directors
may fix a record  date,  which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board of Directors,  and
which  date  shall not be more than ten (10) days  after the date upon which the
resolution  fixing the record date is adopted by the Board of  Directors.  If no
record  date has been  fixed by the  Board of  Directors,  the  record  date for
determining  shareholders  entitled  to consent to  corporate  action in writing
without a meeting, when no prior action by the Board of Directors is required by
the Oklahoma General  Corporation Act, shall be the first date on which a signed
written  consent  setting  forth the  action  taken or  proposed  to be taken is
delivered to the corporation by delivery to its registered office in this state,
its  principal  place of  business,  or an officer  or agent of the  corporation
having custody of the book in which  proceedings of meetings of shareholders are
recorded. Delivery made to a corporation's registered office shall be by hand or
by certified or registered mail, return receipt requested. If no record date has
been fixed by the Board of Directors  and prior action by the Board of Directors
is  required  by the  Oklahoma  General  Corporation  Act,  the record  date for
determining  shareholders  entitled  to consent to  corporate  action in writing
without a  meeting  shall be at the  close of  business  on the day on which the
Board of Directors adopts the resolution taking such prior action.

     In order that the  corporation may determine the  shareholders  entitled to
receive payment of any dividend or other distribution or allotment of any rights
or the  shareholders  entitled to exercise  any rights in respect of any change,
conversion or exchange of stock,  or for the purpose of any other lawful action,
the Board of  Directors  may fix a record  date,  which  record  date  shall not
precede  the date upon which the  resolution  fixing the record date is adopted,
and which  record  date  shall be not more than  sixty  (60) days  prior to such
action. If no record date is fixed, the record date for determining shareholders
for any such  purpose  shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.

Section 5.04.   Lost, Stolen or Destroyed Certificates

     In the event of the loss, theft or destruction of any certificate of stock,
another may be issued in its place pursuant to such  regulations as the Board of
Directors may establish  concerning proof of such loss, theft or destruction and
concerning the giving of a satisfactory bond or bonds of indemnity.

Section 5.05.   Regulations

     The issue,  transfer,  conversion and registration of certificates of stock
shall be  governed  by such  other  regulations  as the Board of  Directors  may
establish.

                              ARTICLE VI - NOTICES

Section 6.01.   Notices

     Except as otherwise  permitted  herein,  whenever  notice is required to be
given to any shareholder,  director,  officer,  or agent, such requirement shall
not be construed to mean personal  notice.  Such notice may in every instance be
effectively  given by depositing a writing in a post office or letter box, first
class postage  prepaid,  by  dispatching a prepaid  telegram,  addressed to such
shareholder,  director,  officer,  or  agent at his or her  address  as the same
appears on the books of the corporation or by electronic transmission.  The time
when such notice is deposited or  dispatched  shall be the time of the giving of
the notice.

Section 6.02.   Waivers

     A written waiver of any notice, signed by a shareholder, director, officer,
or agent,  whether  before or after the time of the event for which notice is to
be given,  shall be deemed equivalent to the notice required to be given to such
shareholder,  director,  officer, or agent. Neither the business nor the purpose
of any meeting need be specified in such a waiver.


                           ARTICLE VII - MISCELLANEOUS

Section 7.01.   Facsimile Signatures

     In addition to the provisions for the use of facsimile signatures elsewhere
specifically authorized in these bylaws,  facsimile signatures of any officer or
officers of the  corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.

Section 7.02.   Corporate Seal

     The Board of Directors may provide a suitable seal,  containing the name of
the  corporation  and the word  "Oklahoma",  which  seal  shall be placed in the
custody of the Secretary. If and when so directed by the Board of Directors or a
committee thereof,  duplicates of the seal may be kept and used by the Treasurer
or by an Assistant Secretary or Assistant Treasurer.

Section 7.03.   Reliance upon Books, Reports and Records

     A member of the Board of Directors or a member of any committee  designated
by the Board of  Directors,  in the  performance  of his duties,  shall be fully
protected in relying in good faith upon the records of the  corporation and upon
such information,  opinions,  reports or statements presented to the corporation
by any of the corporation's officers or employees, or committees of the Board of
Directors,  or by any other person as to matters the member reasonably  believes
are within such officer's, employee's,  committee's or other person's competence
and  who  have  been  selected  with  reasonable  care  by or on  behalf  of the
corporation.

Section 7.04.   Fiscal Year

     The  fiscal  year of the  corporation  shall be as  fixed  by the  Board of
Directors.

Section 7.05.   Time Periods

     In applying any provision of these bylaws which require that an act be done
or not done a specified  number of days prior to an event or that an act be done
during a period of a specified  number of days prior to an event,  calendar days
shall be used,  the day of the doing of the act shall be excluded and the day of
the event shall be included.

                         ARTICLE VIII - INDEMNIFICATION

     (1) The Corporation shall indemnify,  and may advance  litigation  expenses
to, its officers and directors to the fullest  extent  permitted by the Oklahoma
General Corporation Act, as the same exists or may hereafter be amended, and all
other laws of the State of Oklahoma.

     (2) The Corporation may indemnify,  and may advance litigation expenses to,
employees and agents of the  Corporation,  and persons serving at the request of
the  Corporation  as  directors,   officers,  employees  or  agents  of  another
corporation,  partnership,  joint venture,  trust or enterprise,  to the fullest
extent permitted by the Oklahoma General  Corporation Act, as the same exists or
may hereafter be amended, and all other laws of the State of Oklahoma.

     (3) No  amendment  to or repeal of this Article VIII shall apply to or have
any effect on the right of a person  entitled to  indemnification  hereunder  to
receive such  indemnification  or on the ability of the  Corporation  to provide
indemnification to any person to which  indemnification  is permitted  hereunder
for or with respect to any acts or omissions of any such person  occurring prior
to the time of such amendment or repeal.

     (4) By action of the Board of  Directors,  notwithstanding  any interest of
the  directors  in  the  action,  the  Corporation  may  purchase  and  maintain
insurance,  in such  amounts as the Board of  Directors  deems  appropriate,  on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation,  or is or was  serving  at the  request  of  the  Corporation  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other enterprise,  against any liability asserted against him
and incurred by him in any such capacity,  or arising out of his status as such,
whether  or not the  Corporation  would have the power or would be  required  to
indemnify him against such  liability  under the provisions of this Article VIII
or of the Oklahoma General Corporation Act.

     (5) Any right to indemnification  conferred in this Article VIII shall be a
contract  right and shall not be  exclusive  of any other right which any person
may  have  or  hereafter   acquire  under  the   Corporation's   Certificate  of
Incorporation,   bylaws,  or  any  statute,  bylaw,  agreement,   resolution  of
shareholders or directors or otherwise.


                             ARTICLE IX - AMENDMENTS

      These bylaws may be amended or repealed by the Board of Directors at any
meeting.


                       ARTICLE X - ELECTRONIC TRANSMISSION

     As used herein,  electronic  transmission  means any form of communication,
not directly involving the physical transmission of paper, that creates a record
that may be retained,  retrieved,  and reviewed by a recipient thereof, and that
may be  directly  reproduced  in  paper  form by  such a  recipient  through  an
automated process.

                            CERTIFICATE OF SECRETARY


     I, the undersigned, do hereby certify:

     1. That I am the duly  elected  and  acting  Secretary  of  Pre-Paid  Legal
Services, Inc., an Oklahoma corporation;

     2. That the foregoing bylaws  comprising  sixteen (16) pages constitute the
bylaws of said  corporation  as duly adopted by resolution of Board of Directors
effective May 29, 2003.

     IN WITNESS  WHEREOF,  I have  hereunto  subscribed my name this 29th day of
May, 2003.



                                   /s/ Kathryn Walden
                                   -----------------------------------------
                                   Kathryn Walden, Secretary






                                  Exhibit 31.1

                                  CERTIFICATION

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

(1)  I have  reviewed  this  quarterly  report  on Form 10-Q of  Pre-Paid  Legal
     Services, Inc.;

(2)  Based on my knowledge,  this  quarterly  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
     this quarterly report;

(3)  Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  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
     quarterly 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-159e) and 15d-15(e)) for the registrant and have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  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 quarterly report is being prepared;

     (b)  Omitted pursuant to Exchange Act Release 34-47986

     (c)  Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     (d)  Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

(5)  The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, 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 and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     (b)  Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date: July 28, 2003                /s/ Harland C. Stonecipher
                                   -------------------------------------------
                                   Harland C. Stonecipher
                                   Chairman and Chief Executive Officer





                                  Exhibit 31.2

                                  CERTIFICATION

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

(1)  I have  reviewed  this  quarterly  report  on Form 10-Q of  Pre-Paid  Legal
     Services, Inc.;

(2)  Based on my knowledge,  this  quarterly  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
     this quarterly report;

(3)  Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  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
     quarterly 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  quarterly
          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 quarterly report (the "Evaluation Date"); and

     (c)  Presented  in  this  quarterly   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
     quarterly 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: July 28, 2003                /s/ Steve Williamson
                                   -------------------------------------------
                                   Steve Williamson
                                   Chief Financial Officer






                                  Exhibit 32.1

                Certification Pursuant to 18 U.S.C. Section 1350


     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  Quarterly
Report on Form 10-Q for the  quarter  ended June 30, 2003 (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 Company.

Date: July 28, 2003                /s/ Harland C. Stonecipher
                                   -------------------------------------------
                                   Harland C. Stonecipher
                                   Chairman and Chief Executive Officer





                                  Exhibit 32.2

                Certification Pursuant to 18 U.S.C. Section 1350


     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  Quarterly
Report on Form 10-Q for the  quarter  ended June 30, 2003 (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 Company.

Date: July 28, 2003                /s/ Steve Williamson
                                   -------------------------------------------
                                   Steve Williamson
                                   Chief Financial Officer