<SEC-DOCUMENT>0001193125-14-373290.txt : 20141118
<SEC-HEADER>0001193125-14-373290.hdr.sgml : 20141118
<ACCEPTANCE-DATETIME>20141016085253
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-14-373290
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20141016

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:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">October&nbsp;15, 2014 </P> <P STYLE="margin-top:6pt; 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">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">Attention:</TD>
<TD ALIGN="left" VALIGN="top">&nbsp;Jan Woo </TD></TR></TABLE> <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman">Jeff Kauten </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top"><B>Re:</B></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <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 September&nbsp;26, 2014 letter (the &#147;Letter&#148;) in response to our initial response letter dated September&nbsp;4, 2014 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:18pt; 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:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Item&nbsp;1&#151;Business </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Customers and Markets, page 15 </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>1. We note your
response to prior comment 1 but it appears that a material description of the global supply agreement, including the term and termination provisions governing the framework for business between VASCO and HSBC and HSBC Members, would be appropriate.
In this regard, we note that HSBC can terminate the agreement at any time without cause with 90 days&#146; notice and without payment of any termination charges. Given that HSBC, your largest customer, accounted for approximately 18%, 10% and 17% of
your total revenue in 2013, 2012 and 2011, respectively, this provision of the agreement appears to pose a significant risk to the company that should be disclosed in your filing. Please advise. </I></P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Please see the first Risk Factor on page 17 of the 2013 Form 10-K which we believe addresses the
risk relating to HSBC as follows: </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B></B><B>&#147; A significant portion of our sales are to a limited number of
customers. The loss of substantial sales to anyone of them could have an adverse effect on revenues and profits.</B><B></B> </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">We derive a
substantial portion of our revenue from a limited number of customers, most of which are European or Asian headquartered banks. The loss of substantial sales to any one of them could adversely affect our operations and results. In fiscal 2013, 2012
and 2011, our top 10 largest customers contributed 40%, 37% and 47%, respectively, of total worldwide revenue. HSBC, our largest customer, contributed approximately 18%, 10% and 17%, respectively, of total worldwide revenue. &#147; </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">In response to the Letter we will add the following language to such Risk factor in our Form 10-K filing for the year ending December&nbsp;31,
2014: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman">&#147;HSBC has no long term contractual commitment to purchase products or services from us. HSBC and its affiliates
only make purchase commitments pursuant to individual purchase orders placed with us from time to time, which are subject to our acceptance. The general commercial framework that applies to such purchases by HSBC may be terminated by HSBC at any
time, without cause, on 90 days&#146; notice to us and without payment of any termination charge by HSBC.&#148; </P> <P STYLE="margin-top:12pt; 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>
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<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>
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<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>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Sincerely,</P></TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em; 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 (Principal Financial Officer and Principal Accounting Officer)</TD></TR>
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