The following constitutes Amendment No. 10 ("
Amendment
") to the joint filing on Schedule 13D by Thomas W. Smith, Scott J. Vassalluzzo, Steven M. Fischer, Idoya Partners and Prescott Associates originally filed with the Securities Exchange Commission on March 20, 2002, as amended by Amendment No. 1 filed on November 12, 2002, Amendment No. 2 filed on October 21, 2004, Amendment No. 3 filed on February 3, 2005, Amendment No. 4 filed on July 11, 2008, Amendment No. 5 filed on December 12, 2008, Amendment No. 6 filed on March 3, 2010, Amendment No. 7 filed on June 25, 2010, Amendment No. 8 filed on November 1, 2010 and Amendment No. 9 filed on January 19, 2011 (as amended, the “
Amended Schedule 13D
").
Item 4 of the Amended Schedule 13D is hereby amended and restated in its entirety as follows:
As described more fully in Item 5 below, Messrs. Smith, Vassalluzzo and Fischer beneficially own 1,794,415, 1,620,515 and 1,544,415 shares of Common Stock, respectively, in their capacity as investment managers for Idoya Partners, Prescott Associates and other managed accounts (the "
Managed Accounts
"). The Managed Accounts consist of investment accounts for: (i) three private investment limited partnerships (including Idoya Partners and Prescott Associates) for which Messrs. Smith, Vassalluzzo and Fischer are each a general partner, (ii) an employee profit-sharing plan of a corporation wholly-owned by Mr. Smith and for which Messrs. Smith and Vassalluzzo are each a trustee,
(iii)
certain family members of Mr. Vassalluzzo and certain individual accounts managed by Mr. Smith and (iv) a private charitable foundation established by Mr. Smith and for which Mr. Smith acts as trustee. In addition, Messrs. Smith and Vassalluzzo own 655,900 and 9,000 shares of Common Stock, respectively, for their own accounts (collectively, the "
Personal Shares
"). The 1,805,515 shares of Common Stock owned by the Managed Accounts (the "
Managed Account Shares
") were acquired by the Reporting Persons on behalf of the Managed Accounts for the purpose of achieving the investment goals of the Managed Accounts. Messrs. Smith and Vassalluzzo acquired the Personal Shares for investment purposes.
As previously reported, on January 18, 2011, Mr. Smith, Mr. Vassalluzzo, Idoya Partners and Prescott Associates entered into an Exclusivity Agreement (the “
Exclusivity Agreement
”) with Cerberus Capital Management, L.P. (“
CCM
”) relating to a potential acquisition (a “
Transaction
”) of Pre-Paid Legal Services, Inc. (the “
Company
”) by one or more affiliates of CCM. Pursuant to the terms of the Exclusivity Agreement, Mr. Smith, Mr. Vassalluzzo, Idoya Partners and Prescott Associates agreed not to directly or indirectly (i) knowingly solicit or seek offers, inquiries or proposals for, or encourage, or induce any offer, inquiry or proposal to enter into, any transaction with any party other than CCM and its affiliates relating to a business combination or merger involving the Company, the issuance or sale of a substantial portion of the Company’s equity, a sale of all or substantially all of the Company’s assets, a sale of a material portion of the Company’s securities owned by the Reporting Persons, or a change in control of the Company or its business; (ii) conduct any discussion or negotiations with, or provide any confidential information about the Company to, any third party in connection with any such alternative transactions; or (iii) take, directly or indirectly, any actions with the purpose or effect of avoiding or circumventing any of the foregoing, in each case until the occurrence of one or more of the events specified in the Exclusivity Agreement.
On February 27, 2011, CCM terminated the Exclusivity Agreement. A copy of the Exclusivity Agreement is attached hereto as
Exhibit 2
and is incorporated herein by reference.