COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2012

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Commitments

Total operating lease rentals, for various office space and equipment, charged to expense were $25.8 million, $27.4 million and $27.5 million for the years ended December 31, 2012, 2011 and 2010, respectively. Future minimum rental payments required under noncancelable operating leases as of December 31, 2012 are as follows:

Year Ended December 31,
2013		2014		2015		2016		2017		Thereafter		Total
(in thousands of U.S. dollars)
$	18,934	$	15,968	$	12,084	$	9,216	$	7,139	$	21,418	$	84,759

Future minimum contractual commitments pursuant to various agreements are $27.5 million, $22.2 million, $17.4 million and $4.0 million for the years ending December 31, 2013, 2014, 2015 and 2016, respectively.

Future commitments pursuant to current and former senior executive employment agreements, which include non-compete clauses, and excluding any discretionary bonuses, are as follows:

	Year Ended December 31,
(in thousands of U.S. dollars)	2013		2014		2015		2016		2017		Thereafter		Total
Base Salary	$	2,482	$	2,253	$	1,061	$	788	$	515	$	515	$	7,614
Maximum Cash Bonus	1,452		950		—		—		—		—		2,402
Total	$	3,934	$	3,203	$	1,061	$	788	$	515	$	515	$	10,016

Our obligation to pay the maximum cash bonus is based on Valassis and certain of the current senior executives attaining earnings, sales, cost and/or individual performance targets. In addition, we have commitments to certain former and current senior executives under a supplemental executive retirement plan (“SERP”). The present value of expected payments under the SERP was $11.6 million and $12.4 million at December 31, 2012 and 2011, respectively, and benefits are payable over the ten years following the cessation of employment by the executive. In addition, the employment agreement of a former executive provides for supplemental benefits for a period of ten years similar to those provided under the SERP plan. The present value of expected payments under this employment agreement was $1.2 million and $1.4 million at December 31, 2012 and 2011, respectively.

Contingencies

The application and interpretation of applicable state sales tax laws to certain of our products is uncertain. Accordingly, we may be exposed to additional sales tax liability to the extent various state jurisdictions determine that certain of our products are subject to such jurisdictions’ sales tax. As of December 31, 2012, we have recorded a liability of $7.6 million, reflecting our best estimate of our contingent sales tax liability.

In addition to the above matter, we are involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material effect on our financial position, results of operations or liquidity.