ADA, Okla., July 23 /PRNewswire-FirstCall/ -- Pre-Paid Legal Services, Inc. (NYSE: PPD), announced that on July 7, 2009, a federal court entered judgment against a former Pre-Paid Legal Services, Inc. sales associate, Benson W. Kane, in a lawsuit involving Pre-Paid Legal Services, Inc., its Founder & CEO Harland Stonecipher, and Platinum Executive Director Mark O. Smith. This announcement, along with items described below, is part of a negotiated settlement of all individuals involved.

The lawsuit, originally filed in October 2007 in the U.S. District Court for the Eastern District of Oklahoma, alleged that Ben Kane violated contractual and statutory obligations when he solicited Pre-Paid associates to join another company and used confidential information acquired from Pre-Paid for the solicitations. Kane, meanwhile, had filed a lawsuit against Mark O. and Tammy Smith claiming they failed to fulfill the terms of a purchase agreement of Kane's associate position with Pre-Paid Legal Services, Inc.

The judgment entered by the District Court found in favor of Pre-Paid and Smith, and against Kane, on all claims asserted by Pre-Paid and Smith as well as the counterclaims asserted by Kane. Specifically, the judgment and the negotiated settlement provide:

• Kane agreed that he knowingly and willfully recruited, and caused others to recruit, Pre-Paid Legal Services, Inc. sales associates to another business opportunity. He conceded this recruitment was in violation to the terms of his associate agreement with Pre-Paid Legal Services, Inc.;
• Kane conceded no further payment from Mark O. and Tammy Smith was due to him because his recruitment of Pre-Paid Legal Services, Inc. sales associates was a violation of the purchase agreement the two parties had negotiated;
• Kane agreed to a $300,000 judgment because of his knowingly and willfully violating the terms of his associate agreement which will be released by Pre-Paid and Smith subsequent to the parties' agreement in this matter;
• Kane agrees to an injunction of 3 years during which he is not to compete nor solicit - knowingly or otherwise - any associate of Pre-Paid Legal Services, Inc. into any other business opportunity or business venture.
  

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