NOTE 5 ? Commitments and Contingencies The Company was sued by a former employee on June 23, 2008, alleging breach of a consulting agreement and an employment agreement entered into in May and June 2007, respectively. In addition, the plaintiff seeks to recover certain of his personal property, which was used or stored in the Company's offices, and alleges the Company invaded his privacy by looking at his personal computer (which was used in the Company's business) in the Company's offices. A jury trial was held for the lawsuit in July 2012. At the conclusion of the trial, the plaintiff was awarded $ 200,000 under his invasion of privacy and fraudulent misrepresentation claim, $ 5,000 on the trespass claim, $ 841,000 on the breach of consulting agreement claim and $ 200,000 against the Company's CEO on a claim of civil theft, which by law results in an award of $ 600,000 for the plaintiff. The Company's board of directors approved the indemnification of the Company's CEO for the $ 600,000 . The Company filed a post-trial motion for Judgment Notwithstanding Verdict, New Trial and Remittitur, requesting that the judge set aside or reduce the amounts of the jury verdict. Based upon the verdicts, the Company recorded a litigation accrual of $ 1,646,000 as of June 30, 2012. In November 2012, the insurance carrier paid the plaintiff $ 200,000 in settlement of the invasion of privacy and fraudulent misrepresentation awards. As a result, the Company reduced the amounts accrued for these awards resulting in other income of $ 200,000 for the period ended December 31, 2012. In January 2013, the court ruled on the Company's post-trial motions in this litigation dismissing the $ 200,000 civil theft verdict (which was subject to triple damages) against the CEO and reducing the $ 841,000 breach of the consulting agreement award to $ 500,000 . The Company then filed a motion seeking a new trial on damages. The Company received a favorable ruling on this motion and received a new trial on the damages. As a result of the reduction