##### 









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K/A


Amendment No. 1


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31, 2004                                                 
|          
|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                                                                            |  | 52-1287752                       
|(State or other jurisdiction of
    incorporation or organization)                  |  | (IRS Employer Identification No.)
|                                                                                   
|4690 Millennium Drive
    Belcamp, Maryland(Address of principal executive offices) |  | 21017(Zip Code)                  

Registrants telephone number, including area code:


(410) 931-7500


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 Registered
|                             |  |                                          
|Common Stock, $.01 par value |  | NASDAQ National Market                   

þ o


o


þ o














---



##### 



EXPLANATORY NOTE






| |   |                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------
| |  | Item 9A is amended to include Managements Annual
    Report on Internal Controls Over Financial Reporting.           
|
| |  | Item 9A is amended to include the related Attestation
    Report of the Independent Registered Public Accounting Firm.
|
| |  | Part III (Items 10, 11, 12, 13 and 14) is
    amended to include the required information.                            







|         |                        
|-------- | -----------------------
|ITEM 9A. | CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures




Managements Report on Internal Control over Financial
Reporting






1



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##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM 


INTERNAL CONTROL OVER FINANCIAL REPORTING




















| |                      
| | ---------------------
| | /s/ Ernst & Young LLP





2



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##### 



PART III




|         |                                                   
|-------- | --------------------------------------------------
|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS


|                    |  |     |    |          |       |  |      | 
|------------------- |  | --- | -- | -------- | ----- |  | ---- | 
|                    |  |     |    | Director |      
|Name                |  | Age |    |          | Since | 
|                    |  |     |    |          |       | 
|Anthony A. Caputo   |  |     | 63 |          |       |  | 1986 | 
|Thomas A. Brooks    |  |     | 68 |          |       |  | 1998 | 
|Andrew E. Clark     |  |     | 43 |          |       |  | 2001 | 
|Shelley A. Harrison |  |     | 62 |          |       |  | 1999 | 
|Ira A. Hunt, Jr.    |  |     | 80 |          |       |  | 1990 | 
|Arthur L. Money     |  |     | 65 |          |       |  | 2004 | 
|Walter W. Straub    |  |     | 61 |          |       |  | 2004 | 
|Bruce R. Thaw       |  |     | 52 |          |       |  | 1990 | 

Anthony A. Caputo,


Thomas A. Brooks


Andrew E. Clark


Shelley A. Harrison,


3



---



##### 





Ira A. Hunt, Jr.


Arthur L. Money


Walter W. Straub


Bruce R. Thaw


OFFICERS




4



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##### 





|                   |  |     |    |  |                         |                                                                            
|------------------ |  | --- | -- |  | ----------------------- | ---------------------------------------------------------------------------
|Name               |  | Age |    |  | Office or Position Held
|                   |  |     |    |  |                        
|Anthony A. Caputo  |  |     | 63 |  |                         | Chairman and Chief Executive Officer                                       
|Carole D. Argo     |  |     | 44 |  |                         | President and Chief Operating Officer                                      
|Kenneth A. Mueller |  |     | 52 |  |                         | Chief Financial Officer, Senior Vice President and Treasurer               
|Steve Lesem        |  |     | 51 |  |                         | Senior Vice President of Worldwide Sales                                   
|Chris S. Fedde     |  |     | 54 |  |                         | Senior Vice President and General Manager, Enterprise Security
    Division



Carole D. Argo


Kenneth A. Mueller


Steve Lesem


Chris S. Fedde


5



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##### 





IDENTIFICATION OF AUDIT COMMITTEE




COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT




CODE OF ETHICS






|         |                       
|-------- | ----------------------
|ITEM 11. | EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION




6



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##### 





Summary Compensation Table


|                              |  |      |      |                     |     |              |              |     |           |              |              |  |         |          |         |     |   |  |         |  |  |  |        |    
|----------------------------- |  | ---- | ---- | ------------------- | --- | ------------ | ------------ | --- | --------- | ------------ | ------------ |  | ------- | -------- | ------- | --- | - |  | ------- |  |  |  | ------ | ---
|                              |  |      |      |                     |     | Long-Term    |              |     |          
|                              |  |      |      | Annual Compensation |     |              | Compensation |     |           |             
|                              |  |      |      |                     |     |              | Awards       |     |           |             
|                              |  |      |      |                     |     |              |              |     | All Other |             
|                              |  |      |      |                     |     | Other Annual |              |     |           |              | Compensation | 
|                              |  |      |      | Salary              |     |              | Bonus        |     |           | Compensation |              |  | Options |          |         |     |  
|Name and Principal Position   |  | Year |      |                     | ($) |              |              | ($) |           |              | ($)          |  |         | (Shares) |         |     | $ | 
|                              |  |      |      |                     |     |              |              |     |           |              |              |  |         |          |         |     |   | 
|Anthony A. Caputo,            |  |      | 2004 |                     |     |              | 377,000      |     |           |              | 565,500      |  |         |          |        | (1) |   |  | 100,000 |  |  |  | 77,407 | (5)
|Chairman and Chief            |  |      | 2003 |                     |     |              | 340,000      |     |           |              | 335,000      |  |         |          |        | (1) |   |  | 100,000 |  |  |  | 77,407 | (5)
|Executive Officer             |  |      | 2002 |                     |     |              | 329,000      |     |           |              | 330,000      |  |         |          |        | (1) |   |  | 100,000 |  |  |  | 77,407 | (5)
|Carole D. Argo,               |  |      | 2004 |                     |     |              | 271,957      |     |           |              | 226,600      |  |         |          |        | (1) |   |  | 100,000 |  |  |  |        |    
|President and                 |  |      | 2003 |                     |     |              | 180,000      |     |           |              | 175,000      |  |         |          |        |     |   |  | 50,000  |  |  |  |        |    
|Chief Operating Officer       |  |      | 2002 |                     |     |              | 153,000      |     |           |              | 175,000      |  |         |          |        | (1) |   |  | 0       |  |  |  |        |    
|Kenneth A. Mueller            |  |      | 2004 |                     |     |              | 143,118      |     |           |              | 68,750       |  |         |          | 185,000 | (4) |   |  | 100,000 |  |  |  |        |    
|Senior Vice President and     |  |      |      |                     |     |              |              |     |           |              |              |  |         |          |         |     |   |  |         |  |  |  |        |    
|Chief Financial Officer(2)    |  |      |      |                     |     |              |              |     |           |              |              |  |         |          |         |     |   |  |         |  |  |  |        |    
|Chris Fedde                   |  |      | 2004 |                     |     |              | 215,901      |     |           |              | 150,000      |  |         |          |        | (1) |   |  | 25,000  |  |  |  |        |    
|Senior Vice President and     |  |      | 2003 |                     |     |              | 187,000      |     |           |              | 120,000      |  |         |          |        | (1) |   |  | 60,000  |  |  |  |        |    
|General Manager, Enterprise   |  |      | 2002 |                     |     |              | 130,000      |     |           |              | 100,000      |  |         |          |        | (1) |   |  | 15,000  |  |  |  |        |    
|Security Division             |  |      |      |                     |     |              |              |     |           |              |              |  |         |          |         |     |   |  |         |  |  |  |        |    
|David Potts                   |  |      | 2004 |                     |     |              | 215,009      |     |           |              |             |  |         |          |        | (1) |   |  | 10,000  |  |  |  |        |    
|Senior Vice President and     |  |      | 2003 |                     |     |              | 143,000      |     |           |              | 65,000       |  |         |          | 109,000 | (4) |   |  |         |  |  |  |        |    
|General Manager,              |  |      |      |                     |     |              |              |     |           |              |              |  |         |          |         |     |   |  |         |  |  |  |        |    
|Embedded Security Division(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.                                                                                                                                                                                              
|   
|(3) | Mr. Potts became an employee of the Company in April 2003.
    Mr. Potts is no longer a Named Executive Officer, as of
    March 2005.                                                                                                                   
|   
|(4) | Represents taxable relocation expenses.                                                                                                                                                                                                                  
|   
|(5) | Represents premiums paid under a variable life insurance policy.                                                                                                                                                                                         



Option Grants in Fiscal Year 2004


|                   |  |                   |         |     |                                       |  |      |          |  |                             |                                 |  |  |        |           |  |         |  |           |  |  |  |           | 
|------------------ |  | ----------------- | ------- | --- | ------------------------------------- |  | ---- | -------- |  | --------------------------- | ------------------------------- |  |  | ------ | --------- |  | ------- |  | --------- |  |  |  | --------- | 
|                   |  | Individual Grants |         |     |                                      
|                   |  |                   |         |     | Potential Realizable Value at Assumed | 
|                   |  | Number of         |         |     | % of Total                            |  |      |          |  | Annual Rates of Stock Price |                                
|                   |  | Securities        |         |     | Options                               |  |      | Exercise |  |                             | Appreciation For Option Term(4) | 
|                   |  | Underlying        |         |     | Granted to                            |  |      | or Base  |  |                             |                                 | 
|                   |  | Options           |         |     | Employees in                          |  |      | Price    |  |                             | Expiration                      |  |  |       
|Name               |  | Granted (#)       |         |     | Fiscal Year(3)                        |  |      | ($/Sh)   |  |                             | Date                            |  |  | 5% ($) |           |  | 10% ($) | 
|                   |  |                   |         |     |                                       |  |      |          |  |                             |                                 |  |  |        |           |  |         | 
|Anthony A. Caputo  |  |                   | 100,000 | (1) |                                       |  | 10.6 |          |  |                             | 21.70                           |  |  |        | 5/19/2014 |  |         |  | 1,365,000 |  |  |  | 3,458,000 | 
|Carole D. Argo     |  |                   | 100,000 | (2) |                                       |  | 10.6 |          |  |                             | 21.70                           |  |  |        | 5/19/2014 |  |         |  | 1,364,701 |  |  |  | 3,458,000 | 
|Kenneth A. Mueller |  |                   | 100,000 | (2) |                                       |  | 10.6 |          |  |                             | 22.19                           |  |  |        | 7/28/2014 |  |         |  | 1,396,000 |  |  |  | 3,537,000 | 
|Chris Fedde        |  |                   | 25,000  | (2) |                                       |  | 2.6  |          |  |                             | 21.70                           |  |  |        | 5/19/2014 |  |         |  | 341,250   |  |  |  | 864,500   | 
|David Potts        |  |                   | 10,000  | (2) |                                       |  | 1.1  |          |  |                             | 21.70                           |  |  |        | 5/19/2014 |  |         |  | 136,500   |  |  |  | 345,800   | 

7



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##### 








|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 946,000 options granted to employees in 2004.                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(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.



Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values


|                   |  |              |        |  |              |                      |                        |             |  |                          |               |  |  |             |         |  |               |  |            |  |  |  |           | 
|------------------ |  | ------------ | ------ |  | ------------ | -------------------- | ---------------------- | ----------- |  | ------------------------ | ------------- |  |  | ----------- | ------- |  | ------------- |  | ---------- |  |  |  | --------- | 
|                   |  |              |        |  |              | Number of Securities |                        |             | 
|                   |  | Number of    |        |  |              |                      | Underlying Unexercised |             |  | Value of Unexercised     |              
|                   |  | Securities   |        |  |              |                      | Options at             |             |  | In-the-Money Options at  |              
|                   |  | Underlying   |        |  |              |                      | December 31, 2004(2)   |             |  | December 31, 2004 ($)(2) |              
|                   |  | Options      |        |  | Value        |                      |                        |             |  |                          |               | 
|Name               |  | Exercised(1) |        |  | Realized ($) |                      |                        | Exercisable |  |                          | Unexercisable |  |  | Exercisable |         |  | Unexercisable | 
|                   |  |              |        |  |              |                      |                        |             |  |                          |               |  |  |             |         |  |               | 
|Anthony A. Caputo  |  |              | 0      |  |              |                      | 0                      |             |  |                          | 460,349       |  |  |             | 31,251  |  |               |  | 14,037,218 |  |  |  | 948,586   | 
|Carole D. Argo     |  |              | 38,500 |  |              |                      | 694,105                |             |  |                          | 87,749        |  |  |             | 98,751  |  |               |  | 3,008,032  |  |  |  | 1,748,068 | 
|Kenneth A. Mueller |  |              | 0      |  |              |                      | 0                      |             |  |                          | 0             |  |  |             | 100,000 |  |               |  | 0          |  |  |  | 1,455,000 | 
|Chris Fedde        |  |              | 0      |  |              |                      | 0                      |             |  |                          | 41,250        |  |  |             | 83,750  |  |               |  | 910,890    |  |  |  | 1,319,180 | 
|David Potts        |  |              | 12,500 |  |              |                      | 196,625                |             |  |                          | 0             |  |  |             | 100,000 |  |               |  | 0          |  |  |  | 970,000   | 






|    |                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | No stock appreciation rights were exercised by any Company
    employee, executive officer or director in 2004, 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, 2004
    is based on the last reported sale price of $36.74 for the
    common stock, as reported by The Nasdaq National Market on that
    date.                                          

Compensation of Directors










8



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##### 



Employment Contracts, Termination of Employment and Change in
Control Arrangements














9



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##### 















10



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##### 





2004 Compensation Committee Interlocks and Insider
Participation




Report of Compensation Committee on Executive Compensation






| |                  
| | -----------------
| | Base Compensation





| |        
| | -------
| | Bonuses





| |                    
| | -------------------
| | Stock Option Grants



11



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##### 







| |                                                     
| | ----------------------------------------------------
| | Compensation for the Chief Executive Officer in 2004





12



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##### 



STOCK PERFORMANCE CHART









|                                                   |  |      |          |  |      |  |          |      |  |  |         |  |  |      |          |  |      |  |          |  |  |  |          | 
|-------------------------------------------------- |  | ---- | -------- |  | ---- |  | -------- | ---- |  |  | ------- |  |  | ---- | -------- |  | ---- |  | -------- |  |  |  | -------- | 
|                                                   | 
|                                                   |  | 1999 |          |  | 2000 |  |          | 2001 |  |  | 2002    |  |  | 2003 |          |  | 2004 | 
|                                                   | 
|Nasdaq Computer and Data Processing Services Index |  |      | 100.0000 |  |      |  | 55.6881  |      |  |  | 42.1639 |  |  |      | 26.7739  |  |      |  | 40.2039  |  |  |  | 41.5107  | 
|Total Return Index for Nasdaq Stock Market (U.S.)  |  |      | 100.0000 |  |      |  | 60.7110  |      |  |  | 47.9295 |  |  |      | 32.8191  |  |      |  | 49.2312  |  |  |  | 53.4597  | 
|The Company                                        |  |      | 100.0000 |  |      |  | 229.2683 |      |  |  | 92.3902 |  |  |      | 123.6586 |  |      |  | 149.6098 |  |  |  | 179.2195 | 

13



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##### 





|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|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 shares      |           |  |        
|Name (and address of 5% owners)                                          |  | Beneficially owned(1) |           |  | Percent | 
|                                                                         |  |                       |           |  |         | 
|FMR Corp.                                                                |  |                       | 1,399,251 |  |         |  | 5.7  |  
|82 Devonshire Street                                                     |  |                       |           |  |         |  |      |  
|Boston, MA 02109(2)                                                      |  |                       |           |  |         |  |      |  
|Anthony A. Caputo(3)                                                     |  |                       | 1,048,700 |  |         |  | 4.3  |  
|Walter W. Straub(3)                                                      |  |                       | 554,453   |  |         |  | 2.3  |  
|Bruce R. Thaw(3)                                                         |  |                       | 306,667   |  |         |  | 1.2  |  
|Shelley A. Harrison(3)                                                   |  |                       | 163,334   |  |         |  | (4   | )
|Carole D. Argo(3)                                                        |  |                       | 123,274   |  |         |  | (4   | )
|Ira A. Hunt, Jr.(3)                                                      |  |                       | 88,667    |  |         |  | (4   | )
|Chris S. Fedde(3)                                                        |  |                       | 73,833    |  |         |  | (4   | )
|Thomas A. Brooks(3)                                                      |  |                       | 49,967    |  |         |  | (4   | )
|Andrew E. Clark(3)                                                       |  |                       | 40,000    |  |         |  | (4   | )
|David Potts(3)                                                           |  |                       | 40,000    |  |         |  | (4   | )
|Arthur L. Money(3)                                                       |  |                       | 31,220    |  |         |  | (4   | )
|Kenneth A. Mueller                                                       |  |                       | 0         |  |         |  | 0    |  
|All Current Executive Officers and Directors as a
    Group (12 persons) |  |                       | 2,532,615 |  |         |  | 10.3 |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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/ A filed
    with the Securities and Exchange Commission on February 14,
    2005 by FMR Corp.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(3) | 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;
    250,452 shares for Mr. Straub; 86,667 shares for
    Mr. Thaw; 163,334 shares for Dr. Harrison;
    112,749 shares for Ms. Argo; 81,667 shares for
    Mr. Hunt; 72,500 shares for Mr. Fedde;
    46,667 shares for Mr. Brooks; 30,000 shares for
    Mr. Clark; 40,000 shares for Mr. Potts;
    31,220 shares for Mr. Money; and 1,419,356 shares
    for all executive officers and directors as a group.                      
|   
|(4) | Represents less than 1% of the outstanding shares of common
    stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



14



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##### 



EQUITY COMPENSATION PLAN INFORMATION




|                                                       |  |                         |           |  |                      |                         |       |                         |  |  |         | 
|------------------------------------------------------ |  | ----------------------- | --------- |  | -------------------- | ----------------------- | ----- | ----------------------- |  |  | ------- | 
|                                                       |  | (a)                     |           |  | (b)                  |                         |       | (c)                     | 
|                                                       |  |                         |           |  |                      |                         |       |                         | 
|                                                       |  |                         |           |  |                      | Number of securities    |      
|                                                       |  |                         |           |  |                      | remaining available for |      
|                                                       |  |                         |           |  |                      | future issuance under   |      
|                                                       |  | Number of securities to |           |  | Weighted-average     |                         |       | equity compensation     | 
|                                                       |  | be issued upon exercise |           |  | exercise price of    |                         |       | plans (excluding        | 
|                                                       |  | of outstanding options, |           |  | outstanding options, |                         |       | securities reflected in | 
|Plan category                                          |  | warrants and rights     |           |  | warrants and rights  |                         |       | column (a))             | 
|                                                       |  |                         |           |  |                      |                         |       |                         | 
|Equity compensation plans approved by stockholders     |  |                         | 2,441,127 |  |                      | $                       | 19.40 |                         |  |  | 327,706 | 
|Equity compensation plans not approved by stockholders |  |                         | 284,008   |  |                      | $                       | 20.02 |                         |  |  | 44,305  | 
|Total                                                  |  |                         | 2,725,135 |  |                      | $                       | 19.46 |                         |  |  | 372,011 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Also, there are outstanding options for 1,411,406 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 $21.45.
    There are outstanding options for 29,452 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 $38.01.





|         |                                               
|-------- | ----------------------------------------------
|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS






|         |                                       
|-------- | --------------------------------------
|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES

Independent Auditor Fee Information




| |           
| | ----------
| | Audit Fees



15



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##### 





| |                   
| | ------------------
| | Audit-Related Fees





| |         
| | --------
| | Tax Fees



|                                                                                                                                         |  |      |         |  |      |   |         | 
|---------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- |  | ---- | - | ------- | 
|                                                                                                                                         |  | 2004 |         |  | 2003 |  
|                                                                                                                                         |  |      |         |  |      |  
|Major Components of tax fees:                                                                                                            |  |      |         |  |      |   |         | 
|U.S. federal, state and local tax compliance                                                                                             |  | $    | 57,000  |  |      | $ | 30,000  | 
|Domestic and foreign tax planning, compliance, and advice                                                                                |  |      | 124,000 |  |      |   | 85,000  | 
|Tax and human resource due diligence services pertaining to
    potential business acquisitions, including advice on tax
    structuring |  |      | 192,000 |  |      |   | 219,000 | 
|Expatriate tax assistance and compliance                                                                                                 |  |      |        |  |      |   | 8,000   | 
|                                                                                                                                         |  |      |         |  |      |  
|                                                                                                                                         |  | $    | 373,000 |  |      | $ | 342,000 | 
|                                                                                                                                         |  |      |         |  |      |  



| |               
| | --------------
| | All Other Fees



POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT SERVICES AND
PERMISSIBLE NON-AUDIT SERVICES OF INDEPENDENT AUDITORS










16



---



##### 



PART IV




|         |                                                                    
|-------- | -------------------------------------------------------------------
|ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
    FORM 8-K

| |    |    |  |                                                                                                     
| | -- | -- |  | ----------------------------------------------------------------------------------------------------
| | 23 | .1 |  | Consent of Ernst & Young LLP, independent registered
    public accounting firm                     
| | 31 | .1 |  | Certification pursuant to Rule 13a  14(a) under
    the Securities Exchange Act of 1934, as amended
| | 31 | .2 |  | Certification pursuant to Rule 13a  14(a) under
    the Securities Exchange Act of 1934, as amended

17



---



##### 



SIGNATURES






| |              
| | -------------
| | SAFENET, INC.



| |     |                      
| | --- | ---------------------
| | By: | /s/ Anthony A. Caputo

| |                  
| | -----------------
| |                  
| | Anthony A. Caputo





|                                               |  |                                                                                                    |  |                |  | 
|---------------------------------------------- |  | -------------------------------------------------------------------------------------------------- |  | -------------- |  | 
|Signature                                      |  | Title                                                                                              |  | Date          
|                                               |  |                                                                                                    |  |               
|                                              
|/s/ Anthony A. CaputoAnthony
    A. Caputo     |  | Chairman and Chief Executive Officer                                                               |  | April 27, 2005
|                                              
|/s/ Kenneth A. MuellerKenneth
    A. Mueller   |  | Senior Vice President and Chief Financial Officer (Principal
    Financial and Accounting Officer) |  | April 27, 2005
|                                              
|/s/ Thomas A. BrooksThomas
    A. Brooks       |  | Director                                                                                           |  | April 27, 2005
|                                              
|/s/ Shelley A. HarrisonShelley
    A. Harrison |  | Director                                                                                           |  | April 27, 2005
|                                              
|/s/ Ira A.
    Hunt, Jr.Ira
    A. Hunt, Jr.   |  | Director                                                                                           |  | April 27, 2005
|                                              
|/s/ Bruce R. ThawBruce
    R. Thaw             |  | Director                                                                                           |  | April 27, 2005
|                                              
|/s/ Andrew E. ClarkAndrew
    E. Clark         |  | Director                                                                                           |  | April 27, 2005
|                                              
|/s/ Walter W. StraubWalter
    W. Straub       |  | Director                                                                                           |  | April 27, 2005
|                                              
|/s/ Arthur L. MoneyArthur
    L. Money         |  | Director                                                                                           |  | April 27, 2005

18