<SEC-DOCUMENT>0001193125-14-331890.txt : 20141118
<SEC-HEADER>0001193125-14-331890.hdr.sgml : 20141118
<ACCEPTANCE-DATETIME>20140904150201
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-14-331890
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20140904

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			VASCO DATA SECURITY INTERNATIONAL INC
		CENTRAL INDEX KEY:			0001044777
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
		IRS NUMBER:				364169320
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		1901 SOUTH MYERS ROAD
		STREET 2:		SUITE 210
		CITY:			OAKBROOK TERRACE
		STATE:			IL
		ZIP:			60181
		BUSINESS PHONE:		6309328844

	MAIL ADDRESS:	
		STREET 1:		1919 S HIGHLAND AVE
		STREET 2:		STE 118 C
		CITY:			LOMBARD
		STATE:			IL
		ZIP:			60148
</SEC-HEADER>
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<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>VASCO Data Security International, Inc. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>1901 S. Meyers Road, Ste. 210 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Oakbrook Terrace, IL 60181 </B></P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">September&nbsp;4, 2014 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F. Street, NE </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Attention: Jan Woo </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jeff Kauten </P>
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<TD VALIGN="top"><B>&nbsp;&nbsp;&nbsp;&nbsp;Re:</B></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Vasco Data Security International, Inc.</B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Form 10-K for Fiscal Year Ended December&nbsp;31, 2013</B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Filed March&nbsp;12, 2014</B></P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman"><B>File No.
000-24389</B></P></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Ms.&nbsp;Woo: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Set forth below are the responses of VASCO Data Security International, Inc. (referred to herein using the words &#147;VASCO&#148;,
&#147;Company&#148;, &#147;we&#148;, &#147;our&#148; and &#147;us&#148;) to your letter of comment dated August&nbsp;25, 2014 (the &#147;Letter&#148;) relating to the above-referenced Form 10-K (sometimes referred to herein as the &#147;2013 Form
10-K). The comments from the Letter are repeated below. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Form 10-K for Fiscal Year Ended December&nbsp;31, 2013 </U></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Item&nbsp;1&#151;Business </U></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Customers and Markets,
page 15 </U></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>1. We note that HSBC, your largest customer, accounted for approximately 18%, 10% and 17% of your total revenue in 2013, 2012 and 2011,
respectively. Please tell us what consideration you have given to describing the material terms of any agreements with HSBC, including the term of your contract, any minimum commitments, termination provisions, and the rights and obligations of the
parties. Tell us also what consideration you have given to filing any agreements as exhibits pursuant to Item&nbsp;601(b) (10)&nbsp;of Regulation S-K. </I></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">While sales to HSBC on a worldwide basis has represented a significant percentage of our revenue over the 3-year period of 2011, 2012 and
2013, we do not believe that descriptions of the material terms of agreements with HSBC, or the filing of such agreements as exhibits is appropriate or necessary for the following reasons: </P>

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<TD WIDTH="4%" VALIGN="top" ALIGN="left">a)</TD>
<TD ALIGN="left" VALIGN="top">HSBC is a global bank and financial institution which does business throughout the world through its local branches and affiliates (&#147;HSBC Members&#148;), and although part of the HSBC organization, each HSBC Member
contracts separately with VASCO. </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">b)</TD>
<TD ALIGN="left" VALIGN="top">VASCO sales to HSBC and the HSBC Members are subject to a global supply agreement (&#147;GSA&#148;). The GSA establishes the framework for business between VASCO and HSBC and the HSBC Members, but it does not obligate
HSBC or HSBC members to purchase any products or services from VASCO, establish any other purchase commitments or requirements from HSBC or HSBC Members, or obligate VASCO to sell any products or services to HSBC or HSBC Members. </TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">c)</TD>
<TD ALIGN="left" VALIGN="top">HSBC can terminate the GSA at any time without cause with 90 days&#146; notice and without payment of any termination charges. </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">d)</TD>
<TD ALIGN="left" VALIGN="top">The GSA is subject to confidentiality provisions. </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">e)</TD>
<TD ALIGN="left" VALIGN="top">With the GSA in place, VASCO is allowed to market its products to HSBC Members. Each sale to an HSBC Member is negotiated on a standalone basis with that HSBC Member, with the final agreement with that HSBC Member
referencing certain terms that are included in the GSA. Purchases made by HSBC Members are effected through purchase orders submitted by the HSBC Member which generally are not long-term purchase commitments. All purchase orders submitted by HSBC
and HSBC Members are subject to approval and acceptance by VASCO. </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">f)</TD>
<TD ALIGN="left" VALIGN="top">The data disclosed in the 10-K reflect the aggregate revenues sold to all HSBC Members for the periods noted. Over the three-period, we sold products to more than 40 different HSBC Members. </TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">g)</TD>
<TD ALIGN="left" VALIGN="top">We do not believe that filing the GSA or any of agreements with individual HSBC Members as exhibits pursuant to Item&nbsp;601(b)(10) of Regulation S-K was appropriate because: </TD></TR></TABLE>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left">a.</TD>
<TD ALIGN="left" VALIGN="top">Each of the agreements was made in the ordinary course of business, and </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="5%" VALIGN="top" ALIGN="left">b.</TD>
<TD ALIGN="left" VALIGN="top">Our business is not substantially dependent on any purchase commitment from any HSBC Member. </TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We acknowledge
that: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
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<TD ALIGN="left" VALIGN="top">the company is responsible for the adequacy and accuracy of the disclosure in the filing; </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and </TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. </TD></TR></TABLE>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">If you have any questions regarding the Company&#146;s responses or this letter, please contact
Matthew S. Brown or the undersigned. </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top">Matthew S. Brown</TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top">Clifford K. Bown</TD></TR>
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<TD VALIGN="top">Katten Muchin Rosenman LLP</TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top">VASCO Data Security International, Inc.</TD></TR>
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<TD VALIGN="top">525 West Monroe Street</TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top">1901 South Meyers Road, Ste. 210</TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Chicago, Illinois 60661-3693</TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top">Oakbrook Terrace, IL 60181</TD></TR>
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<TD VALIGN="top">Phone: 312 902-5207</TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top">Phone U.S.: 630 932-8844 x3304</TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Fax: 312 902-1061</TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top">Fax U.S.: 630 932-8852</TD></TR>
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<TD VALIGN="top">Email: matthew.brown@kattenlaw.com</TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top">Email: <U>cbo@vasco.com</U></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Sincerely, </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Clifford K. Bown</P></TD></TR>
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<TD VALIGN="top">Clifford K. Bown</TD></TR>
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<TD VALIGN="top">Executive Vice President and Chief Financial Officer</TD></TR>
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