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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K/A
 Amendment No. 1
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 0-20634
 SafeNet, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction of
incorporation or organization)
    
    52-1287752(IRS Employer Identification No.)4690 Millennium Drive
Belcamp, Maryland(Address of principal executive offices)
    
    21017(Zip Code)
 Registrants telephone number, including area code:
(443) 327-1200
Securities registered under Section 12 (b) of the Exchange Act:
NONE
Securities registered under Section 12 (g) of the Exchange Act:
 Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Stock, $.01 par value
    
    NASDAQ National Market
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 o þ
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  o þ o
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Explanatory Note
  PART III
 ITEM 10.
    
    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 DIRECTORS
 DirectorName
    
    Age
    
    SinceAnthony A. Caputo
    
    
    64
    
    
    
    1986Thomas A. Brooks
    
    
    69
    
    
    
    1998Andrew E. Clark
    
    
    44
    
    
    
    2001Shelley A. Harrison
    
    
    63
    
    
    
    1999Ira A. Hunt, Jr.
    
    
    81
    
    
    
    1990Arthur L. Money
    
    
    66
    
    
    
    2004Walter W. Straub
    
    
    62
    
    
    
    2004Bruce R. Thaw
    
    
    53
    
    
    
    1990
 Anthony A. Caputo,
 Thomas A. Brooks
 Andrew E. Clark
 Shelley A. Harrison,




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Ira A. Hunt, Jr.
 Arthur L. Money
 Walter W. Straub
 Bruce R. Thaw
 OFFICERS
  Name
    
    Age
    
    Office or Position HeldAnthony A. Caputo
    
    
    64
    
    
    Chairman and Chief Executive OfficerCarole D. Argo
    
    
    44
    
    
    President,Chief Operating Officer, and
interim Chief Financial OfficerSteve Lesem
    
    
    52
    
    
    Senior Vice President of Worldwide SalesChris S. Fedde
    
    
    55
    
    
    Senior Vice President and General
Manager, Enterprise Security Division
  Carole D. Argo




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Steve Lesem
 Chris S. Fedde
 IDENTIFICATION OF AUDIT COMMITTEE
  COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
  CODE OF ETHICS




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ITEM 11.
    
    EXECUTIVE COMPENSATION
 EXECUTIVE COMPENSATION
 Summary Compensation Table
  Long-TermCompensationAwardsAnnual CompensationOther Annual
    
    
    
    
    
    All OtherSalary
    
    Bonus
    
    Compensation
    
    Options
    
    CompensationName and Principal Position
    
    Year
    
    ($)
    
    ($)
    
    ($)
    
    (Shares)
    
    $Anthony A. Caputo,
    
    
    2005
    
    
    
    431,102
    
    
    
    0
    
    
    
    
    (1)
    
    
    100,000
    
    
    
    77,407
    (5)Chairman and Chief
    
    
    2004
    
    
    
    377,000
    
    
    
    565,000
    
    
    
    
    (1)
    
    
    100,000
    
    
    
    77,407
    (5)Executive Officer
    
    
    2003
    
    
    
    340,000
    
    
    
    335,000
    
    
    
    
    (1)
    
    
    100,000
    
    
    
    77,407
    (5)Carole D. Argo,
    
    
    2005
    
    
    
    315,404
    
    
    
    0
    
    
    
    
    (1)
    
    
    50,000
    
    
    
    President and
    
    
    2004
    
    
    
    271,957
    
    
    
    226,600
    
    
    
    
    (1)
    
    
    100,000
    
    
    
    Chief Operating Officer
    
    
    2003
    
    
    
    180,000
    
    
    
    175,000
    
    
    
    
    (1)
    
    
    50,000
    
    
    
    Kenneth A. Mueller
    
    
    2005
    
    
    
    300,808
    
    
    
    0
    
    
    
    
    
    
    
    50,000
    
    
    
    Senior Vice President and
    
    
    2004
    
    
    
    143,118
    
    
    
    68,750
    
    
    
    185,000
    (4)
    
    
    100,000
    
    
    
    Chief Financial Officer(2)Chris Fedde
    
    
    2005
    
    
    
    248,712
    
    
    
    0
    
    
    
    
    (1)
    
    
    25,000
    
    
    
    Senior Vice President and
    
    
    2004
    
    
    
    215,901
    
    
    
    150,000
    
    
    
    
    (1)
    
    
    25,000
    
    
    
    General Manager, Enterprise
    
    
    2003
    
    
    
    187,000
    
    
    
    120,000
    
    
    
    
    (1)
    
    
    60,000
    
    
    
    Security DivisionSteve Lesem
    
    
    2005
    
    
    
    221,539
    
    
    
    183,079
    
    
    
    
    (1)
    
    
    115,000
    
    
    
    Senior Vice President,Worldwide Sales(3)
 
 (1)
    
    Perquisites and other personal benefits to the Named Executive
Officer was less than both $50,000 and 10% of the total annual
salary and bonus reported for such Named Executive Officers, and,
therefore, information has not been included.(2)
    
    Mr. Mueller became an employee of the Company in June 2004. As
of April 6, 2006, Mr. Mueller is no longer a Named Executive
Officer.(3)
    
    Mr. Lesem became an employee of the Company in January 2005(4)
    
    Represents taxable relocation expenses.(5)
    
    Represents premiums paid under a variable life insurance policy.




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Option Grants in Fiscal Year 2005
  Individual Grants% of TotalOptionsNumber of
    
    Granted to
    
    
    
    
    
    
Potential Realizable Value at AssumedSecurities
    
    Employees
    
    Exercise
    
    
    
    
    Annual Rates of Stock PriceUnderlying
    
    in
    
    or Base
    
    
    
    
Appreciation For Option Term(4)Options
    
    Fiscal
    
    Price
    
    ExpirationName
    
    Granted (#)
    
    Year(3)
    
    ($/Sh)
    
    Date
    
    5% ($)
    
    10% ($)Anthony A. Caputo
    
    
    100,000
    (1)
    
    
    7.9
    
    
    
    29.70
    
    
    
    9/29/2015
    
    
    
    1,867,800
    
    
    
    4,733,400Carole D. Argo
    
    
    50,000
    (2)
    
    
    3.9
    
    
    
    29.70
    
    
    
    9/29/2015
    
    
    
    933,900
    
    
    
    2,366,700Kenneth A. Mueller
    
    
    50,000
    (2)
    
    
    3.9
    
    
    
    29.70
    
    
    
    9/29/2015
    
    
    
    933,900
    
    
    
    2,366,700Chris Fedde
    
    
    25,000
    (2)
    
    
    2.0
    
    
    
    29.70
    
    
    
    9/29/2015
    
    
    
    466,900
    
    
    
    1,183,300Steve Lesem
    
    
    100,000
    (2)
    
    
    7.9
    
    
    
    31.78
    
    
    
    6/01/2015
    
    
    
    1,998,600
    
    
    
    5,064,90015,000
    (2)
    
    
    1.2
    
    
    
    29.70
    
    
    
    9/29/2015
    
    
    
    280,200
    
    
    
    710,000
 
 (1)
    
    The option became immediately exercisable on the grant date.(2)
    
    The option becomes exercisable in cumulative annual installments
of 25% of the shares on each of the first, second, third and
fourth anniversaries of the grant date.(3)
    
    There were 1,269,000 options granted to employees in 2005.(4)
    
    The potential realizable value has been calculated in conformity
with Securities and Exchange Commission proxy statement
disclosure rules and is not intended to forecast possible future
appreciation of the common stock. No gain to the options is
possible without stock price appreciation, which will benefit all
shareholders. If the stock price does not increase above the
exercise price, compensation to the named executive will be zero.




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Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
  Number of
    
    
    
    
    
    Number of SecuritiesSecurities
    
    
    
    
    
    Underlying Unexercised
    
    Value of UnexercisedUnderlying
    
    
    
    
    
    Options at
    
    In-the-Money Options atOptions
    
Value
    

December
31, 2005 (#)
    

December 31, 2005 ($)(2)Name
    
    Exercised (#)(1)
    
    Realized ($)
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableAnthony A. Caputo
    
    
    50,000
    
    
    
    1,397,500
    
    
    
    541,600
    
    
    
    
    
    
    
    7,973,772
    
    
    
    Carole D. Argo
    
    
    10,000
    
    
    
    201,000
    
    
    
    186,500
    
    
    
    90,000
    
    
    
    2,255,280
    
    
    
    761,475Kenneth A. Mueller
    
    
    12,500
    
    
    
    180,250
    
    
    
    12,500
    
    
    
    125,000
    
    
    
    125,375
    
    
    
    878,250Chris Fedde
    
    
    2,000
    
    
    
    50,638
    
    
    
    81,750
    
    
    
    66,250
    
    
    
    1,289,267
    
    
    
    391,425Steve Lesem
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    115,000
    
    
    
    
    
    
    
    81,800
 
 (1)
    
    No stock appreciation rights were exercised by any Company
employee, executive officer or director in 2005, and there are no
outstanding stock appreciation rights held by any employee,
executive officer or director of the Company.(2)
    
    The value of unexercised stock options at December 31, 2005 is
based on the last reported sale price of $32.22 for the common
stock, as reported by The Nasdaq National Market on that date.




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Compensation of Directors
     Employment Contracts, Termination of Employment and Change in Control Arrangements




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2005 Compensation Committee Interlocks and Insider Participation
  ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN OTHER BENEFICIAL OWNERS
  Number of sharesName (and address of 5% owners)
    
    Beneficially owned(1)
    

Percent(1)Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401(2)
    
    
    1,940,489
    
    
    
    7.6
    %Transamerica Investment Management, LLC
1150 South Olive Street, Suite 2700
Los Angeles, CA 90015(3)
    
    
    1,279,822
    
    
    
    5.0Anthony A. Caputo(4)
    
    
    1,011,200
    
    
    
    3.9Walter W. Straub(4)
    
    
    521,445
    
    
    
    2.0Bruce R. Thaw(4)
    
    
    281,000
    
    
    
    1.1Carole D. Argo(4)
    
    
    219,525
    
    
    
    (5
    )Shelley A. Harrison(4)
    
    
    168,334
    
    
    
    (5
    )Kenneth A. Mueller(4)
    
    
    12,500
    
    
    
    (5
    )Chris S. Fedde(4)
    
    
    89,333
    
    
    
    (5
    )Ira A. Hunt, Jr.(4)
    
    
    89,000
    
    
    
    (5
    )Thomas A. Brooks(4)
    
    
    53,300
    
    
    
    (5
    )Arthur L. Money(4)
    
    
    51,220
    
    
    
    (5
    )Andrew E. Clark(4)
    
    
    50,000
    
    
    
    (5
    )Steve Lesem(4)
    
    
    25,000
    
    
    
    (5
    )All Current Executive Officers and Directors as a Group (12 persons)
    
    
    2,571,857
    
    
    
    9.5
 
 (1)
    
    The Company believes that all persons named in the table have
sole voting and investment power with respect to all shares of
common stock beneficially owned by them. A person is deemed to be
the beneficial owner of securities that can be acquired by such
person within 60 days from the date hereof upon the exercise of
warrants or options. Each beneficial owners percentage ownership
is determined by assuming that options or warrants held by such
person (but not those held by any other person) and which are
exercisable within 60 days have been exercised.(2)
    
    Based on information contained in a Schedule 13G filed with the
Securities and Exchange Commission on February 6, 2006 by
Dimensional Fund Advisors, Inc.(3)
    
    Based on information contained in a Schedule 13G filed with the
Securities and Exchange Commission on January 11, 2006 by
Transamerica Investment Management, LLC(4)
    
    Includes shares issuable pursuant to outstanding stock options
that may be exercised within 60 days from the date hereof as
follows: 491,600 shares for Mr. Caputo; 248,014 shares for Mr.
Straub; 61,000 shares for Mr. Thaw; 199,000 shares for Ms. Argo;
168,334 shares for Dr. Harrison; 12,500 shares for Mr. Mueller;
88,000 shares for Mr. Fedde; 80,000 shares for Mr. Hunt; 49,400
shares for Mr. Brooks; 51,220 shares for Mr. Money; 50,000 shares
for Mr. Clark; 25,000 shares for Mr. Lesem and 1,524,068 shares
for all executive officers and directors as a group.(5)
    
    Represents less than 1% of the outstanding shares of common stock.




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EQUITY COMPENSATION PLAN INFORMATION
  Weighted-
    
    Number of securitiesNumber of
    
    average
    
    remaining availablesecurities to
    
    exercise price
    
    forbe issued upon
    
    of
    
    future issuance underexercise
    
    outstanding
    
    equity compensationof outstanding
    
    options,
    
    plans (excludingoptions,
    
    warrants and
    
    securities reflected inPlan category
    
    warrants and rights
    
    rights
    
    column (a))(a)
    
    (b)
    
    (c)Equity
compensation plans
approved by
stockholders
    
    
    2,761,113
    
    
    $
    24.47
    
    
    
    1,587,965Equity compensation
plans not approved
by stockholders
    
    
    210,360
    
    
    $
    18.69
    
    
    
    53,305Total
    
    
    2,971,473
    
    
    $
    24.06
    
    
    
    1,641,267
 
 (1)
    
    Also, there are outstanding options for 1,194,818 shares of common stock of
the Company issued in connection with the acquisition of Rainbow
Technologies, Inc. in March 2004. The weighted average exercise
price of these options is $21.95. There are outstanding options
for 27,083 shares of common stock of the Company issued in connection
with the acquisition of Datakey, Inc. in December 2004. The
weighted average exercise price of these options is $37.91. There
are outstanding options for 22,582 shares of common stock of the Company
issued in connection with the acquisition of MediaSentry, Inc. in
June 2005. The weighted average exercise price of these options
is $21.64.  ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS




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ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
 Audit Fees
  Audit-Related Fees
  Tax Fees
  2005
    
    2004U.S. federal, state and local tax compliance
    
    $
    117,000
    
    
    $
    57,000Domestic and foreign tax planning, compliance, and advice
    
    
    115,000
    
    
    
    124,000Tax and human resource due diligence services pertaining
to potential business combinations
    
    
    5,000
    
    
    
    192,000$
    237,000
    
    
    $
    373,000
 All Other Fees
  Policy on Audit Committee Pre-Approval of Audit Services and Permissible Non-Audit Services of
Independent Auditors




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PART IV
 ITEM 15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 21.0
    
    
    Subsidiaries of Registrant31.1
    
    
    Certification pursuant to Rule 13a  14(a) under the Securities Exchange Act of 1934, as amended31.2
    
    
    Certification pursuant to Rule 13a  14(a) under the Securities Exchange Act of 1934, as amended32.1
    
    
    Certification pursuant to Section 135032.2
    
    
    Certification pursuant to Section 1350




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SIGNATURES
  SAFENET, INC.By:
    /s/ Anthony A. CaputoAnthony A. CaputoDate: April 11, 2006  Signature
    
    Title
    
    Date/s/ Anthony A. Caputo
    
    Chairman and Chief Executive Officer
    
    April 11, 2006Anthony A. Caputo/s/ Carole D. Argo
    
    President, Chief Operating Officer
and interim Chief Financial OfficerCarole D. Argo
    
    (Principal Financial and Accounting
Officer)
    
    April 11, 2006/s/ Thomas A. Brooks
    
    Director
    
    April 11, 2006Thomas A. Brooks/s/ Shelley A. Harrison
    
    Director
    
    April 11, 2006Shelley A. Harrison/s/ Ira A. Hunt, Jr.
    
    Director
    
    April 11, 2006Ira A. Hunt, Jr./s/ Bruce R. Thaw
    
    Director
    
    April 11, 2006Bruce R. Thaw/s/ Andrew E. Clark
    
    Director
    
    April 11, 2006Andrew E. Clark/s/ Walter W. Straub
    
    Director
    
    April 11, 2006Walter W. Straub/s/ Arthur L. Money
    
    Director
    
    April 11, 2006Arthur L. Money