LOGO

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD JUNE 13, 2018

10, 2020

To the Stockholders of

VASCO Data Security International,
OneSpan Inc.:

The Annual Meeting of Stockholders of VASCO Data Security International,OneSpan Inc., a Delaware corporation (“Company”), will be held on Wednesday, June 13, 2018,10, 2020, commencing at 10:00 a.m., local time, at 121 West Wacker Drive, Suite 2400 Chicago, IL 60601 central time.  The Annual Meeting,  will be a virtual stockholder meeting, conducted via live audio webcast, through which you can submit questions and vote online. The Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/OSPN2020 and entering your 16-digit control number (included on the Notice Regarding the Availability of Proxy Materials mailed to you). The purpose of the Annual Meeting will be for the following purposes:following:

The Board of Directors has no knowledge at this time of any other business to be presented or transacted at the meeting.

The Board of Directors recommends that you vote FOR each proposal set forth in this Notice of Annual Meeting of Stockholders and Proxy Statement. Stockholders of record on April 16, 201813, 2020 are entitled to notice of and to vote at the meeting. Further information as to the matters to be considered and acted upon can be found in the accompanying Proxy Statement.

By Order of the Board of Directors,

Chicago, Illinois
April 24, 2020

April 27, 2018

You are cordially invited and urged to attend the Annual Meeting in person. To assure your representation at the Annual Meeting, please sign, date and return the enclosed proxy card, whethercard. For your convenience, you may attend the Annual Meeting in person or notthrough a webcast. You may attend the webcast of the meeting via the Internet at www.virtualshareholdermeeting.com/OSPN2020 when you expectenter your 16‐digit control number included with the Notice of Internet Availability or proxy card. Instructions on how to attend and participate in person.the Annual Meeting via the webcast are posted at www.virtualshareholdermeeting.com/OSPN2020. You will be able to vote your shares while attending the Annual Meeting by following the instructions on the website. You may revoke your proxy at any time before it is voted at the Annual Meeting.

LOGO

PROXY STATEMENT

FOR

ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD JUNE 13, 2018

10, 2020

This Proxy Statement is furnished by the Board of Directors of VASCO Data Security International,OneSpan Inc.  (“Company, “VASCO,“OneSpan,” “we,” “us” or “our”), in connection with the solicitation of proxies for use at the Annual Meeting of Stockholders to be held on Wednesday, June 13, 2018,10, 2020, commencing at 10:00 a.m., local time, at our principal executive offices located at 121 West Wacker Drive, Suite 2400, Chicago, IL 60601,as a virtual stockholder meeting which can be accessed by visiting www.virtualshareholdermeeting.com/OSPN2020, and at any postponement or adjournment thereof. Directions may be obtained by calling (312) 766-4001.766‑4001. Holders of record of shares of our common stock at the close of business on April 16, 2018,13,  2020, will be entitled to vote on all matters to properly come before the Annual Meeting. Each share of common stock that you own entitles you to one vote.

Important Notice Regarding the Availability of Proxy Materials for the Annual Stockholder

Meeting Toto Be Held on June 13, 2018:10, 2020:

The Company’s Proxy Statement and Annual Report on Form 10-K10‑K are available at: http://www.vasco.com/investors.

investors.onespan.com.

If you received a notice of internet availability of proxy materials (“E-ProxyE‑Proxy Notice”) by mail or electronically, you will not receive a printed copy of the Proxy Statement or Annual Report unless you specifically request one. Instead, the E-ProxyE‑Proxy Notice provides instructions on how you may access and review our proxy materials. The E-ProxyE‑Proxy Notice also instructs you on how you may submit your proxy via the Internet. If you received the E-ProxyE‑Proxy Notice and would still like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the E-ProxyE‑Proxy Notice. On or about April 30, 2018,2020, we will begin mailing printed copies of our proxy materials to certain of our stockholders and the E-ProxyE‑Proxy Notice to all other stockholders.

ANNUAL REPORT

Our Annual Report on Form 10-K10‑K to Stockholders for the fiscal year ended December 31, 2017,2019, has been included in the mailing of this Proxy Statement and our E-ProxyE‑Proxy Notice provides instructions to access our Annual Report through the internet. We recommend that you review it for financial and other information. It is not intended to be a part of the proxy soliciting material.  You can review and download a copy of VASCO’sOneSpan’s Annual Report on Form 10-K10‑K by accessing our website, www.vasco.com/investors,https://investors.onespan.com, or you can request paper copies, without charge, by writing to VASCO Data Security International,OneSpan Inc., 121 West Wacker Drive, Ste. 2050,20th Floor, Chicago, IL 60601, Attention: Secretary.

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THE ANNUAL MEETING

Matters to be Considered

The Annual Meeting has been called to:

1.                        To elect seven directors to serve on the Board of Directors (Proposal 1);

2.                        To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018 (Proposal 2); and

3.                        To transact such other business as may properly come before the meeting.

Voting at the Annual Meeting

A majority of the votes entitled to be cast on matters to be considered at the Annual Meeting will constitute a quorum for the transaction of business. If a share is represented for any purpose at the meeting, it is deemed to be present for all other matters. Holders of record of outstanding shares of common stock at the close of business on April 16, 2018,13,  2020, are entitled to notice of and to vote at the Annual Meeting. As of April 16, 2018,13,  2020, there were 40,197,96040,313,630 shares of common stock outstanding and entitled to vote. Each share of common stock is entitled to cast one vote on any matter submitted to the stockholders for approval.

Assuming the presence of a quorum, the affirmative vote of a plurality of the votes cast and entitled to votevoting will be required for Proposal 1, and the affirmative vote of a majority of the votes cast and entitled to vote thereon will be required for Proposal 2. There is no cumulative voting in the election of directors.

Stockholders may vote in favor of or withhold authority to vote for the nominees for electionoccur as directors listed under Proposal 1. Stockholders may vote for or against, or abstain from voting on, Proposal 2. Abstentions and withheld votes will be counted by the election inspector in determining whether a quorum is present.

follows: With respect to Proposal 1, each nominee must receive a pluralitymajority of the votes cast and entitledwith respect to vote,that director’s election, and any director nominee who receives a greater number of withhold votesless than affirmative votessuch majority in an uncontested election is expected to tender to the Board his or her resignation promptly following the certification of election results pursuant to the Company’s majority vote policy, more fully described in Proposal No. 1, below. Under the majority vote policy, abstentions and broker non-votesresults. Abstentions will not have an impactno effect on the electionoutcome of directors.

the vote.

With respect to Proposal 2, Say on Pay requires the approval of a majority of the votes cast and entitled to vote thereon. Abstentions will have the same effect as voting against such proposal.

With respect to Proposal 3, Say on Pay Frequency has three options and one must receive a plurality of the votes cast and entitled to vote for such option to be deemed approved. Withheld votes will have no effect on the outcome of the vote.

With respect to Proposal 4, it requires the approval of a majority of the votes cast and entitled to vote thereon, abstentionsthereon. Abstentions will have the same effect as voting against such proposal.

proposal

Broker non-votes will also be counted by the election inspector in determining whether a quorum is present. Broker non-votes are proxies received from brokers when the broker has neither received voting instructions from the beneficial owner nor has discretionary power to vote on a particular proposal. Broker non-votes,

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instructions by the beneficial owner. With respect to Proposal 2, brokers have the discretionary authority to vote shares held in street name even if they do not receive voting instructions from the beneficial owner.

If a properly executed, unrevoked proxy does not specifically direct the voting of the shares covered by such proxy, the proxy will be voted:

Any stockholder executing a proxy has the power to revoke it at any time before it has been voted by delivering written notice to the Secretary of the Company, by executing a later-dated proxy or by voting in person at the Annual Meeting. Any written notice of revocation or subsequent proxy should be delivered prior to June 13, 201810, 2020 to:

VASCO Data Security International,OneSpan Inc.

121 West Wacker Drive, Suite 2050

20th Floor
Chicago, Illinois 60601

Attention: Secretary

Alternatively, hand delivered to the Secretary before the closing of the polls at the Annual Meeting.

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PROPOSAL 1

ELECTION OF DIRECTORS

Stockholders are being asked to elect seventen directors. All of the director nominees will be elected at the Annual Meeting. Each director will serve until the annual meeting in 2019,2021, until a qualified successor director has been elected, or until he or she resigns, dies or is removed.

The Board of Directors, upon the recommendation of the Corporate Governance and Nominating Committee, has nominated the following individuals for election as directors at the Annual Meeting: Marc  Boroditsky, Scott M. Clements, Michael P. Cullinane, John N. Fox, Jr.,  Art Gilliland,Naureen Hassan, Jean K. Holley, T. Kendall Hunt,  andMarianne Johnson, Matthew Moog and Marc Zenner, all of whom are current directors and have agreed to serve if elected.

While the Board of Directors does not contemplate that any nominee for election as a director will not be able to serve, if unforeseen circumstances (for example, death or disability) make it necessary for the Board of Directors to substitute another person for any of the nominees, the persons listed in the enclosed proxy will vote your proxy, if properly executed and returned and unrevoked, for such other person or persons, or the Board may, in its discretion, reduce the number of directors to be elected. The affirmative vote of a pluralitymajority of the votes cast and entitled to vote at the Annual Meeting is required for the election of directors but under the majority voting policy in the VASCO Corporate Governance Guidelines,and any director nominee who receives a greater number of withhold votesless than affirmative votessuch majority in an uncontested election is expected to tender to the Board his or her resignation promptly following the certification of election results. Under the plurality voting standard and our majority voting policy, abstentionsAbstentions and broker non-votes will not have an impact on the election of directors.

The Board of Directors recommends that the stockholders vote “FOR” each of the nominees listed herein.

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PROPOSAL 2

ADVISORY VOTE ON EXECUTIVE COMPENSATION

Stockholders are being asked to approve an advisory resolution on the Company’s compensation of its named executive officers as reported in this Proxy Statement. We urge stockholders to read the “Compensation Discussion and Analysis” section of this Proxy Statement, which appears after the Compensation Committee report and that describes in detail how our executive compensation policies and procedures operate, how they are designed to achieve our compensation objectives and what compensation decisions our Compensation Committee made with respect to our named executive officers. We believe that our compensation programs are aligned with our strategic objectives and address evolving concerns in the very competitive technology industry. Most importantly, we believe that our executive compensation programs appropriately link pay to performance and are well aligned with the long-term interests of our stockholders.

In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and related rules promulgated by the Securities and Exchange Commission (the “SEC”) and as a matter of good corporate governance, we are asking stockholders to approve the following advisory resolution at the 2020 Annual Meeting of Stockholders:

RESOLVED, that the stockholders approve the compensation of the named executive officers of OneSpan Inc. as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission (which includes the Compensation Discussion and Analysis, the compensation tables and related narrative discussion).

This advisory resolution, commonly referred to as a “say-on-pay” resolution, is non-binding on the Board of Directors. Although non-binding, the Board and the Compensation Committee will review and carefully consider the voting results when evaluating our executive compensation programs.

The Board of Directors recommends that the stockholders vote “FOR” the approval of the Advisory Resolution on Executive Compensation.

PROPOSAL 3

FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION

Stockholders are being asked to recommend, in a non-binding vote, whether the advisory stockholder vote on the compensation of our named executive officers should occur every one, two or three years. While this vote is non-binding, we value the opinions of our stockholders and will consider the outcome of the vote when considering the frequency of future advisory stockholder votes on executive compensation.

We believe a three-year frequency for the advisory stockholder vote on executive compensation is most consistent with the objectives of our executive compensation programs.

Stockholders will be able to specify one of four choices for this proposal on their proxy: three years, two years, one year or abstain. This is an advisory vote and the Board of Directors and the Compensation Committee will review the results of the vote and consider those results in making a determination on the frequency of future advisory votes.

The Board of Directors recommends that the stockholders vote “THREE YEARS” with respect to how frequently an advisory vote on the compensation of our named executive officers should occur.

PROPOSAL 4

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Directors has appointed KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2018.

2020.

If our stockholders fail to ratify the appointment, the Audit Committee will reconsider this appointment. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and its stockholders.

KPMG LLP served as independent registered public accounting firm for the fiscal year ended December 31, 2017,2019 and has acted as independent registered public accounting firm for the Company and its predecessor, VASCO Corp., since 1996. Representatives of KPMG LLP are expected to be present at the Annual Meeting, and such representatives will have an opportunity to make a statement, if they desire to do so, and are expected to be available to respond to appropriate questions.

The Board of Directors recommends that the stockholders vote “FOR” the appointment of KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2018.2020.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS, DIRECTORS AND MANAGEMENT

Except as otherwise indicated below, the table below sets forth certain information with respect to the beneficial ownership of our common stock as of March 31, 2018,2020, for (i) each of our directors, (ii) each of our named executive officers, (iii) all directors and executive officers as a group, and (iv) each person or entity known by VASCOOneSpan to beneficially own more than 5% of the outstanding shares of common stock. The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them unless otherwise indicated. For purposes of the table, a person or group of persons is deemed to have beneficial ownership of any shares as of a given date that such person has the right to acquire within 60 days after such date.

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The following table sets forth shares of our common stock that were authorized to be issued as of December 31, 2019, under the OneSpan Inc. 2019 Omnibus Incentive Plan  (“2019 Omnibus Incentive Plan”).

Equity Compensation Plan Information

DIRECTORS AND EXECUTIVE OFFICERS

The Board has been active in executive and board refreshment for many years. Between 2015 and 2017, the Board oversaw the retirement of and succession for the three top executives at the Company. Mr. Hunt transitioned from CEO to Executive Chairman and now is our Founder and a director. During this transition, the Board created the position of Lead Independent Director which Mr. Fox filled. Mr. Fox later became our independent Board Chairman.

The Board’s refreshment activities also went beyond its leadership structure. During 2018 and 2019, the Board actively assessed itself against the Company’s current and expected future needs. The Board sought the advice of outside experts and large stockholders. This resulted in the addition of two new directors in 2019 that augmented the Board’s skills and experience primarily in the areas of SaaS software, recurring revenue business models, capital allocation, mergers and acquisitions, and financing. The refreshment activities continued into 2020 and the Board appointed two additional directors in March 2020. These latest directors added skills and experience in the financial services industry, financial technology platforms, innovation, and R&D, among others. They also increased our gender diversity bringing the total number of women on our Board from one to three. The Board is committed to continuing this process as it balances the knowledge and experience of our longer tenured directors, the onboarding of new directors, the evolving needs of the Company and the input of our stockholders.

Director Tenure

Gender Diversity

Sample of skills and experience represented among the ten Director Nominees

The names of and certain information regarding our current directors who are nominated for election and our executive officers appear below.

MARC D. BORODITSKY—Mr. Boroditsky has been a director since June 2019. He is a member of the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee. He has been the Senior Vice President of Sales at Twilio Inc. (NYSE: TWLO) since May 2017 and before that its VP and General Manager of Authentication Solutions from February 2015. Prior to Twilio, Mr. Boroditsky was President and COO of Authy, a software authentication company, from September 2014 until it was acquired by Twilio in February 2015. Prior to Authy,  Mr. Boroditsky was VP of Identity and Access Management at Oracle. Mr. Boroditsky has more than 30 years of experience with technology companies. He has founded and financed four software companies in electronic medical records, authentication and identity management. He successfully sold Authy to Twilio and Passlogix to Oracle. Mr. Boroditsky received a bachelor’s degree from the University of California, San Diego.  Mr. Boroditsky is 57 years old.

Mr. Boroditsky has an extensive security software, sales, finance, product management and operations background, having served in executive roles at numerous technology companies, both private and publicly traded. He provides the Board with unique insights into the Company’s growth strategies, software solutions including SaaS,  software company operations and our target markets.

MICHAEL P. CULLINANE—Mr. Cullinane has been a director since April 1998. He is the Chairman of our Audit Committee and a member of our Compensation Committee and our Corporate Governance and Nominating Committee. From May 2008 through September 2013, Mr. Cullinane served as Executive Vice President and CFO of SilkRoad Technology, a software company in the human capital management space. Mr. Cullinane served as the Executive Vice President and CFO of Lakeview Technology Inc. from January 2005 to July 2007. Mr. Cullinane served as the Executive Vice President, CFO and director of Divine, Inc. from July 1999 to May 2003. He served as Executive Vice President, CFO and director of PLATINUM Technology International, Inc. from 1988 to June 1999. Mr. Cullinane received a B.B.A. from the University of Notre Dame, South Bend, Indiana. Mr. Cullinane is 70 years old.

Mr. Cullinane has an extensive finance, accounting and technology background, having served as CFO of four technology companies, two of which were publicly traded. He provides the Board with unique insights into the Company’s growth strategies, global financial and accounting matters, and operations.

JOHN N. FOX, JR.—Mr. Fox has been a director since April 2005. He is Chairman of the Board, Chairman of our Compensation Committee and is a member of our Audit Committee and our Corporate Governance and Nominating Committee. From 1998 to 2003, Mr. Fox served as a Vice Chairman of Deloitte & Touche and the Global Director,

Strategic Clients for Deloitte Consulting. He held various other positions with Deloitte Consulting from 1968 to 2003 and served on the board of Deloitte Touche Tohmatsu from 1998 to 2003. Since 2007, Mr. Fox has been a director of Cognizant Technology Solutions Corporation and has served on its Compensation Committee and the Nominating and Governance Committee. Mr. Fox received his B.A. degree from Wabash College and his MBA from the University of Michigan. Mr. Fox is 77 years old.

Mr. Fox has extensive global business experience having served as vice chairman and global director of an internationally prominent consulting firm. He has over 34 years of experience advising clients on large scale, complex transactions, including strategic initiatives, new business models, reengineered business processes, merger integration and organizational change. He provides our Board with the perspective of an executive with direct project management, staffing, compensation, change management and organizational process experience. In addition, Mr. Fox brings outside public company board experience to our Board.

NAUREEN HASSAN—Ms. Hassan has been a director since March 2020. She is a member of the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee. Ms. Hassan served as the Chief Digital Officer for Morgan Stanley Wealth Management (MSWM), a $17 billion revenue division of Morgan Stanley, and a member of the MSWM Operating Committee, from 2016 to 2020.  Previously, Ms. Hassan was the executive vice president leading Investor Services strategy, segments and platforms at the Charles Schwab Corporation and a member of the firm’s twenty-member Executive Committee from 2003 to 2016.  Ms. Hassan has been recognized within the financial services industry for her leadership in the digital space including by Investment News as an “Icons and Innovators” for 2018, ThinkAdvisor as a leading “Women in WealthTech”, Investment Advisor magazine on their IA25 list.  Ms. Hassan was previously on the board of the Charles Schwab Bank and the Women’s Initiative for Self-Employment. Ms. Hassan holds a BA from Princeton University (magna cum laude), and a Master of Business Administration from the Stanford University Graduate School of Business.  Ms. Hassan is 49 years old.

Ms. Hassan has decades of global business experience, particularly in the financial services industry which is the Company’s largest target market. Ms. Hassan has held the corporate roles that are often the decision maker or executive sponsor in our selling efforts to financial institutions. In addition, Ms. Hassan provides our Board with technology platform expertise, executive leadership focus and complex corporate operations background.

JEAN K. HOLLEY—Ms. Holley has been a director since August 2006. She is Chair of the Corporate Governance and Nominating Committee and a member of the Audit Committee and Compensation Committee. Ms. Holley served as Group Senior Vice President and Chief Information Officer for Brambles Limited, the global leader in supply chain and logistic solutions, from September 2011 until her retirement in July 2017. From April 2004 until August 2011, Ms. Holley served as the Executive Vice President and Chief Information Officer for Tellabs, Inc., a company that designs, develops, deploys and supports telecommunications networking products around the world. Ms. Holley previously served as the Vice President and Chief Information Officer for USG Corporation from 1999 to 2003. Prior to that, she served as Senior IT Director for Waste Management, Inc. Since August 2017, Ms. Holley has been a director of Herc Holdings Inc. and is a member of its Audit and Financing Committees. Ms. Holley holds a B.S. in Computer Science/Electrical Engineering from Missouri University Science & Technology, and a M.S. in Computer Science/Engineering from Illinois Institute of Technology in Chicago. Ms. Holley is 61 years old.

Ms. Holley has an extensive background in information technology (IT) and engineering, global operations and manufacturing, corporate strategy and product development, having served as an executive and the chief information officer of two public companies and two large private companies. She brings to the Board the perspective of a technology executive with many years of experience in operations, communications strategy planning, talent management, product development, IT capabilities and data security.

T. KENDALL “KEN” HUNT—Mr. Hunt is our Founder and former CEO and Chairman.  Mr. Hunt served as Chairman of the Board from 1997 until 2018. He was our Chief Executive Officer from 1997 through 1999 and again from 2002 to 2017. He holds an MBA from Pepperdine University, Malibu, California, and a B.B.A. from the University of Miami, Florida. Mr. Hunt is 76 years old.

Mr. Hunt is our largest single stockholder. He has extensive experience in international business, data security, sales, customer relationships and the acquisition and development of businesses in the United States and Europe. His continued leadership as a Director of OneSpan brings to us intimate knowledge of our operations, corporate strategy, customer base and the perspective of a large stockholder.

MARIANNE JOHNSON—Ms. Johnson has been a director since March 2020. She is a member of the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee. She is the chief product officer at Cox Automotive since 2018, where she leads the company’s product, engineering and data teams, as well as the product innovation discipline. Before joining Cox Automotive, Johnson was at First Data where she was head of product innovation and technology for the network and security solutions line of business and senior vice president of enterprise commercialization from 2015 to 2018. She has been named one of the top Women Worth Watching® by Profiles in Diversity Journal ® and Woman of the Year by The Technology Association of Georgia. Ms. Johnson is  55 years old.

Ms. Johnson has decades of experience in the financial technology field which is the primary way our products and solutions are used. She also brings to the Board experience in product management, R&D, data analytics, innovation and executive management.

MATTHEW MOOG—Mr. Moog has been a director since December 2012. He is a member of the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee.  Mr. Moog served as the CEO of PowerReviews, Inc., a leading consumer ratings and reviews service from 2014 through 2020. In this role, Mr. Moog is responsible for leading the company to create innovative products and services that help consumers make smart decisions and help businesses gain valuable feedback. In addition, Mr. Moog is Founder of Built In, a network of regional online communities that connect, educate, and promote digital entrepreneurs and innovators. Mr. Moog is also the founder of the FireStarter Fund, an early stage investment fund focused on digital technology companies, and chaired the project to launch 1871, a 50,000 square foot co-working center for technology startups in Chicago. Previously, Mr. Moog served as President & CEO of Q Interactive and CEO of CoolSavings, Inc., the predecessor to Q Interactive. Mr. Moog holds a BA in Political Science from George Washington University. Mr. Moog is 49 years old.

Mr. Moog brings to the Board the perspective of a technology company founder and executive with many years of experience in sales, business development, product development, cloud computing, capital allocation and executive management.

MARC ZENNER—Mr. Zenner has been a director since June 2019. He is a member of the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee. He retired from investment banking in September 2017 after having spent 10 years at J.P. Morgan and 6 years at Citigroup. At J.P. Morgan,  Mr. Zenner was a Managing Director and Global Co-Head of Corporate Finance Advisory. At Citigroup, he was a Managing Director and Global Head of the Financial Strategy Group. In addition to investment banking, Mr. Zenner also had a distinguished career as a professor where he taught undergraduate, MBA and Ph.D. students in finance at the University of North Carolina Chapel Hill, Kenan-Flagler Business School. Mr. Zenner received numerous awards for his teaching and is the author of a wealth of academic and business articles. Mr. Zenner is originally from Belgium where he received an undergraduate degree in business engineering from the Katholieke Universiteit in Leuven. He then received an MBA from City University in London, U.K., and a  Ph.D. in Financial Economics from Purdue University in W. Lafayette, Indiana where he was a Fulbright Scholar. Mr. Zenner previously served on the board of directors of Sentinel Energy Services (NASDAQ: STNL)  where he was the Chairman of the Audit Committee and a member of the Nominating and Corporate Governance Committee. Mr. Zenner currently serves on the board of directors of Innerworkings, Inc. since 2019 where he is a member of the Audit Committee.  Mr. Zenner is 57 years old.

Mr. Zenner has extensive finance, investment banking, capital markets, M&A and capital allocation experience, having served in senior roles at major international investment banks and as a Professor of Finance. He provides the Board with deep insights into the Company’s  capital structure, capital allocation strategies, and M&A program.

Executive Officers

SCOTT M. CLEMENTS—Mr. Clements has served as OneSpan’s President and Chief Executive Officer since July 2017. From November 2016 to July 2017, he served as the Company’s President and Chief Operating Officer, and prior to that, Mr. Clements served as the Company’s Chief Strategy Officer since he joined the Company in December 2015. Before joining OneSpan, Mr. Clements spent eleven years at Tyco International where he most recently served as Corporate Senior Vice President, Business Development focused on technology acquisitions. Prior to that, Mr. Clements served as President of Tyco Retail Solutions and also as Tyco’s Chief Technology Officer. Before joining Tyco, Mr. Clements spent a decade at Honeywell International in domestic and international financial and operational leadership roles. Mr. Clements received a bachelor’s degree in chemical engineering and advanced process control from The Ohio State University and an MBA in finance and corporate strategy from the University of Michigan in Ann Arbor. Mr. Clements is 57 years old.

Mr. Clements has extensive experience in leadership roles in the technology industry with a strong focus on developing and deploying successful business strategies that integrate customer needs and technology innovation. Mr. Clements brings his broad corporate operational experience to the Board and serves as the sole member of senior management on the Board.

MARK S. HOYT—In November 2015, the Board of Directors appointed Mr. Hoyt to the positions of Chief Financial Officer and Treasurer. In March 2018, the Board also appointed Mr. Hoyt an Executive Vice President. Prior to joining the Company, Mr. Hoyt was the Chief Financial Officer of operations in Europe, Middle East and Africa for Groupon, Inc., and was based in Switzerland from 2012 to 2015, and from 2010 to 2012, he was Vice President of International Financial Operations of Groupon, Inc. and was based in Chicago. Mr. Hoyt is a CPA and began his career at PricewaterhouseCoopers, followed by international positions at Motorola, Inc. and CareerBuilder. Mr. Hoyt holds an MBA from the University of Chicago Booth School of Business and a B.S. in Accountancy from Miami University. Mr. Hoyt is 52 years old.

Meetings of the Board of Directors

The Board of Directors met 13 times during 2019. Each incumbent director attended more than 75% of the meetings of the Board and the meetings held by all committees on which he or she served in 2019, in the aggregate. As part of their duties, the directors are expected to attend the annual meetings of stockholders. Each of the directors attended last year’s annual meeting.

The Board of Directors presently has three standing committees, the Corporate Governance and Nominating Committee, the Audit Committee and the Compensation Committee, each of which is described more fully below.

Board Independence

Our Board of Directors conducts an annual review as to whether each of our directors meets the applicable standards of the NASDAQ Stock Market Rules. Our Board of Directors has determined that each of the current directors, other than T. Kendall Hunt (our former CEO) and Scott M. Clements (our current CEO), has no material relationship with OneSpan other than as a director and is independent within the listing standards of NASDAQ. In making its independence determinations, the Board of Directors has broadly considered all relevant facts and circumstances and has concluded that there are no transactions or relationships that would impair the independence of any of the directors, other than T. Kendall Hunt and Scott M. Clements.

Board Leadership Structure

The current leadership structure of the Company provides for the separation of the roles of the Chief Executive Officer and the Chairman of the Board of Directors. John N. Fox, Jr. serves as our independent Chairman of the Board and Scott M. Clements, also a director, serves as our President and Chief Executive Officer. At this time, the Board believes that in light of the Company’s size, the nature of our business, the separation of these roles serves the best interests of OneSpan and our stockholders.

Lead Independent Director

In 2017, the Board adopted a lead independent director policy. In the absence of an independent director holding the position of Chairman, the Board of Directors will appoint a Lead Independent Director. Given that Mr. Fox is our independent Chairman of the Board, the Lead Independent Director position is currently vacant. The duties of the lead independent director include:

Executive Sessions

 Preside at all meetings of the Board of Directors at which the Chairman is not present, including executive sessions of the independent Directors. Provide a report to the CEO on all relevant matters arising from those sessions, and invites the CEO to join those sessions for further discussion as appropriate.

Call Meetings of Independent Directors

 Has the authority to call meetings of the independent Directors. Provide a report to the CEO on all relevant matters arising from those sessions, and invites the CEO to join those sessions for further discussion as appropriate.

Board Information, Agendas and Schedules

 Provide input on the quality, quantity, appropriateness and timeliness of information supplied by management to the Board with the objective of obtaining information sufficient for the Board to make informed decisions.

 Collaborate with the CEO, Chairman and management on setting the agenda for each Board meeting.

 Provide input on the frequency of Board meetings and meeting schedules, assuring there is sufficient time for discussion of all agenda items.

Our independent directors regularly meet alone in executive session. In addition, the Audit, Compensation and Corporate Governance and Nominating Committees are comprised solely of independent directors. The Board regularly reviews the Company’s leadership structure and reserves the right to alter the structure as it deems appropriate.

The Board’s Role in Risk Oversight

The Board of Directors is primarily responsible for overseeing the assessment and management of the Company’s risk exposure and does so directly and through each of its committees. The Board of Directors and each of its committees regularly discuss with management the Company’s major risk exposures, their likelihood, the potential financial impact such risks may have on the Company, and the steps the Company takes to manage any such risks. The Audit Committee oversees the Company’s risks and exposures regarding financial reporting and legal compliance. The Compensation Committee oversees risk management relating to our overall incentive compensation programs, including those for senior management. The Corporate Governance and Nominating Committee oversees risks related to succession planning and compliance with our Corporate Governance Guidelines and Code of Conduct and Ethics. As necessary or appropriate, the Board and its committees may also retain outside legal, financial or other advisors. The Board reviews the Company’s overall risk management program at least annually, including the corporate insurance program. Throughout the year, management updates the Board and relevant committees about factors that affect areas of potential significant risk. In addition, our internal audit director is involved with our enterprise risk management process and he communicates directly with our Audit Committee apart from management. We believe that this is an effective approach for addressing the risks faced by OneSpan and that our Board’s leadership structure, with an independent Chairman of the Board, also supports this approach by providing additional independent risk oversight.

Communications with Directors

Stockholders may send communications to the Board of Directors at the Company’s address, 121 West Wacker Drive, 20th Floor, Chicago, IL 60601. Any such communication addressed to a specific Board member and designated as “Confidential” will be delivered unopened to the specific Board member. If a communication is addressed to the Board as a whole and designated as “Confidential,” the communication will be delivered to the Chairman of the Board. Any communication not designated as “Confidential” will be reviewed by management and brought to the attention of the Board at its next regularly scheduled meeting.

Corporate Governance and Nominating Committee

The Board of Directors constituted and established the Corporate Governance and Nominating Committee with authority, responsibility, and specific duties as described in the Corporate Governance and Nominating Committee Charter. A copy of the charter is available on our website, investors.onespan.com, in the governance section of our investor relations webpage. The primary function of this committee is to assist the Board in:

The Corporate Governance and Nominating Committee will consider director candidates who have relevant business experience, are accomplished in their respective fields, and who possess the skills and expertise to make a significant contribution to the Board of Directors, the Company and its stockholders. Director nominees should have high-leadership business experience, knowledge about issues affecting the Company and the ability and willingness to apply sound and independent business judgment. OneSpan does not have a formal policy with respect to director diversity. However, the Board believes that it is essential that OneSpan’s Board members represent diverse viewpoints, with a broad array of business experiences, professions, skills and backgrounds that, when considered as a group, provide a sufficient mix of perspectives to allow the Board to best fulfill its responsibilities to the long-term interests of our stockholders.

The Corporate Governance and Nominating Committee will consider nominees for election to the Board of Directors that are recommended by stockholders, provided that a complete description of the nominees’ qualifications, experience and background, together with a statement signed by each nominee in which he or she consents to act as such, accompany the recommendations. Such recommendations should be submitted with any other required information in writing to the attention of the Corporate Governance and Nominating Committee, c/o OneSpan Inc., 121 W. Wacker Drive., 20th Floor, Chicago, IL 60601 not less than 90 nor more than 120 days prior to the anniversary date of the prior year Annual Meeting of Stockholders and should not include self-nominations. Further requirements related to stockholder nominations can be found in the Company’s bylaws. The committee applies the same criteria described above to nominees recommended by stockholders.

The Corporate Governance and Nominating Committee is comprised of three or more directors, each of whom must be an independent director, as defined by the NASDAQ Stock Market Rules. The members of the committee are elected by the Board at its annual organizational meeting and serve at the pleasure of the Board until their successors are duly elected and qualified. The members of the Corporate Governance and Nominating Committee are Jean K. Holley (Chair), Marc Boroditsky, Michael P. Cullinane, John N. Fox, Jr., Matthew Moog, Marc Zenner, Naureen Hassan (as of March 17, 2020) and Marianne Johnson (as of March 17, 2020).  The Corporate Governance and Nominating Committee met five times during 2019.

Compensation Committee

The Compensation Committee of OneSpan’s Board of Directors is composed of three or more independent directors as determined in accordance with applicable rules of the NASDAQ Stock Market and the SEC and applicable rules under the Code. The Compensation Committee operates under a written charter adopted by the Board of Directors. A copy of the charter is available on our website, www.investors.onespan.com in the governance section of our investor relations webpage. The Compensation Committee acts on behalf of our Board of Directors to establish the compensation of OneSpan’s named executive officers and makes recommendations to the Board regarding compensation of our non-employee directors. The Compensation Committee oversees risk management relating to our overall incentive compensation programs, including those for senior management. The Compensation Committee administers the Company’s incentive plans for senior management, directors and other eligible individuals, both equity and cash-based plans.  The members of the Compensation Committee are John N. Fox, Jr. (Chairman), Marc Boroditsky, Michael P. Cullinane, Jean K. Holley, Matthew Moog, Marc Zenner, Naureen Hassan (as of March 17, 2020) and Marianne Johnson (as of March 17, 2020).  The Compensation Committee met eight times during 2019.

Audit Committee

The Audit Committee of the Board of Directors, as established in accordance with Section 3(a)(58)(A) of the Exchange Act, is composed of three or more independent directors, as required by the NASDAQ Stock Market Rules, who also meet the additional independence standards required for audit committee members. The Audit Committee operates under a written charter adopted by the Board of Directors and is responsible for overseeing the financial reporting process on behalf of the Board. A copy of the charter is available on our website, www.investors.onespan.com in the governance section of our investor relations webpage. The members of the Audit Committee are Michael P. Cullinane (Chairman), Marc Boroditsky, John N. Fox, Jr.,  Jean K.  Holley, Matthew Moog, Marc Zenner, Naureen Hassan (as of March 17, 2020) and Marianne Johnson (as of March 17, 2020).  The Board of Directors has determined that Messrs. Cullinane, Zenner and Moog qualify as audit committee financial experts and has designated them as such. Each year, the Audit Committee recommends the selection of the independent registered public accounting firm to the Board of Directors. We are not required under our charter or Bylaws to submit the selection of the independent registered public accounting firm to a vote of the stockholders. The Audit Committee met ten times during 2019.

REPORT OF THE AUDIT COMMITTEE

Management is responsible for the Company’s financial statements and the financial reporting process, including internal controls. The independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with auditing standards of the Public Company Accounting Oversight Board (United States) and for issuing a report thereon. The Audit Committee’s  responsibility is to monitor and oversee these processes.

In this context, the Audit Committee held discussions with management and KPMG LLP. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee reviewed and discussed the consolidated financial statements with management and KPMG LLP. The Audit Committee discussed with KPMG LLP the matters required to be discussed by Auditing Standard 1301, as amended, (Communications with Audit Committees) as adopted by the Public Company Accounting Oversight Board. These matters included a discussion of KPMG LLP’s judgments about the quality (not just the acceptability) of the Company’s accounting principles as applied to financial reporting and their evaluation of the Company’s internal control over financial reporting.

The Audit Committee also received the written disclosures and the letter from KPMG LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding KPMG LLP’s communication with the Audit Committee concerning independence and has discussed with KPMG LLP its independence. The Audit Committee further considered whether the provision by KPMG LLP of the non-audit services described below is compatible with maintaining the independent registered public accounting firm’s independence.

Based upon the Audit Committee’s  discussion with management and the independent registered public accounting firm and the Audit Committee’s  review of the representation of management and the disclosures by the independent registered public accounting firm to the Audit Committee, the Audit Committee recommended to the Company’s Board of Directors that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2019, for filing with the Securities and Exchange Commission.

Respectfully submitted,

Michael P. Cullinane, Chairman
Marc Boroditsky
John N. Fox, Jr.
Naureen Hassan
Jean K. Holley
Marianne Johnson
Matthew Moog
Marc Zenner

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND OTHER MATTERS

The Audit Committee has implemented policies and procedures for the pre-approval of all audit, audit-related, tax, and permitted non-audit services rendered by KPMG LLP,  OneSpan’s independent registered public accounting firm. Those policies and procedures include a review of the independent registered public accounting firm’s audit plan and fee schedule for the period under review. If such audit plan and fee schedule are approved by the Audit Committee, the independent registered public accounting firm provides an engagement letter in advance of the start of the audit work to the Audit Committee outlining the scope of the audit and related audit fees. Our senior management will also recommend, from time to time, to the Audit Committee that it approve non-audit services that would be provided by the independent registered public accounting firm. Our senior management and the independent registered public accounting firm will each confirm to the Audit Committee that each non-audit service is permissible under all applicable legal requirements. A budget, estimating the cost of the non-audit services, will be provided to the Audit Committee along with the request. The Audit Committee must approve both permissible non-audit services and the budget for such services. The Audit Committee will be informed routinely as to the non-audit services actually provided by the independent registered public accounting firm pursuant to this pre-approval process. The Audit Committee has also delegated to its Chairman the authority to pre-approve KPMG permissible non-audit services, with the Chairman and KPMG required to summarize any such approvals at the subsequent Audit Committee meeting.

The following sets forth the amount of fees paid to our independent registered public accounting firm, KPMG LLP, for services rendered in 2019 and 2018:

Audit Fees: The aggregate fees billed by KPMG LLP for professional services rendered for the audit of the Company’s annual consolidated financial statements, the reviews of the consolidated financial statements included in the Company’s quarterly reports on Form 10‑Q, and services normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings were $1,951,017 for the fiscal year ended 2019 and $1,969,262 for the fiscal year ended 2018.

Audit-related Fees: The aggregate fees billed by KPMG LLP for professional services rendered that reasonably relate to the performance of the audit or review of our financial statements and fees related to assistance with registration statements filed with the SEC were $43,420 for the fiscal year ended 2019 and $0 for the fiscal year ended 2018.

Tax Fees: The aggregate fees billed by KPMG LLP for tax compliance and tax advice were $2,611 in 2019 and $39,198 in 2018.  The 2019 and 2018 fees represent permissible foreign subsidiary tax compliance services and permissible tax consulting services in the U.S.

All Other Fees: There were $85,085 of other fees billed by KPMG in 2019 and $65,737 in 2018, associated with the performance of permissible attestation services.

It is currently the policy of the Audit Committee to pre-approve all services rendered by KPMG LLP. The Committee is authorized by its Charter to review and pre-approve the audit plan and all other audit and permitted non-audit services, and related fees or other compensation to be paid to KPMG LLP. The Audit Committee pre-approved all of the above fees for both 2019 and 2018.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed with management the section of this Proxy Statement entitled “Compensation Discussion and Analysis,” and, based on such review and discussions, recommended to our Board of Directors that the “Compensation Discussion and Analysis” section be included in this Proxy Statement. The Board approved our recommendation.

Respectfully submitted,

John N. Fox, Jr., Chairman
Marc Boroditsky
Michael P. Cullinane
Naureen Hassan
Jean K. Holley
Marianne Johnson
Matthew Moog
Marc Zenner

COMPENSATION DISCUSSION AND ANALYSIS (CD&A)

This CD&A describes the material components of 2019 compensation and discusses the compensation decisions for our named executive officers (NEOs) listed in the Summary Compensation Table below. The NEOs are as follows:

SAY-ON-PAY AND SAY-ON-PAY FREQUENCY VOTES

At our 2017 annual meeting, 96% of the votes cast by our stockholders approved our Say-on-Pay proposal. We meet with key investors throughout the year to understand the topics that matter most to them, including any that relate to executive compensation. We consider any such stockholder input, and evolving practices in the market, to strive for alignment in our executive pay programs.

Consistent with the recommendation of the Board, at our 2017 annual meeting, 53% of the votes cast by our stockholders approved our proposal to hold Say-on-Pay votes every three years. Therefore, at this time we are holding such advisory vote every three years.

EXECUTIVE SUMMARY

Our Company Evolution

Over the last several years, we have been actively engaged in an evolution of the Company across multiple dimensions. For over 20 years prior to this, the Company derived the vast majority of its revenue from the sale of hardware authentication tokens and associated services. Now that hardware revenue comprises approximately half of our total revenue and we expect continued growth of software sales to accelerate this evolution. The Board also tasked management with building the underlying organization, talent, tools and processes to transition into a software company; as well as develop new solutions, all while continuing to be cash flow positive. Some specific goals for 2019 included:

These goals reflect a fundamental evolution of the Company that is underway. We have been experiencing a transition in leadership, in geographies that we serve, in revenue source, in corporate infrastructure and in the technology needs of our customers. We have many strengths that are helping us navigate this evolution including strong leadership, strong customer relationships, new solutions that address urgent business needs, a growing market for our overall solutions, a sound strategy and a strong balance sheet. In 2020, we are focused on continuing to execute this transition, particularly the improvement and optimization of the work that has been done over the last several years and our recent solution introductions.

Our 2019 Performance

Company Financial Results

Our financial results for 2019 exceeded the performance targets established by the Compensation Committee at the beginning of 2019 for annual cash bonuses. For long-term performance-based equity incentive compensation, which was measured on a three-year performance period from 2017 - 2019, the performance targets were exceeded. As a result, our named executive officers received a cash bonus for 2019 at 122% of the target amount and earned their three-year performance-based equity for 2017- 2019 at 116% of the target award. The long-term performance-based equity compensation issued at the beginning of 2018 will be measured on three-year performance from 2018-2020, and the long-term performance-based equity compensation issued at the beginning of 2019 will be measured on there-year performance from 2019-2021. The “Summary Compensation Table” below reflects the total compensation, consisting of earned salary and cash bonuses and the grant value of the 2019 – 2021 long-term performance-based equity compensation for our named executive officers for 2019.

Company Strategic Results

Consistent with our pay-performance philosophy, the Compensation Committee chose to focus primarily on quantitative goals for setting long-term compensation and annual bonus targets in 2019, performance against qualitative goals was also considered generally and with respect to setting 2020 compensation amounts. In addition, in 2020 the Compensation Committee introduced a strategic dimension discretionary component with a 10% weighting for the annual cash bonus.

Summary 2019 Compensation Results

The annual cash bonus opportunity for the named executive officers for 2019 was based on the achievement of one-year financial targets. As discussed more fully below, OneSpan’s results in 2019 exceeded the cash bonus targets and the named executive officers received cash bonuses in 2020 related to 2019 performance at 122% of target. The long-term equity incentive awards for 2019 were based 60% on the achievement of three-year financial targets, and 40% time-based vesting. If the three-year targets are achieved, the performance shares will cliff vest after the close of 2021. Time-based shares vest semi-annually over four years.

COMPENSATION OVERVIEW AND APPROACH

We operate in the very competitive global technology industry, specializing in cybersecurity, fraud management, e-signature and related hardware and software solutions, which are subject to constant change and require market-leading innovation and management. To succeed in this environment, OneSpan is required to attract, motivate, reward and retain highly talented and experienced executives and key employees.

Accordingly, the Compensation Committee is guided by the following principles:

We use compensation data for a peer group of companies as one of several inputs and, specifically, as a reasonableness standard in determining the types and amounts of compensation we believe are appropriate for our named executive officers. We do not target a percentile range within the peer group. The total targeted compensation of our CEO and CFO were below the median of the peer group for 2019.

We believe that our approach to setting targets with multiple performance measurement metrics assists in mitigating excessive risk-taking that could harm OneSpan’s value or reward poor judgment by our executives. We have allocated compensation among base salary and short and long-term compensation opportunities in such a way as to not encourage excessive risk taking, but to reward meeting strategic company goals that should enhance shareholder value over time. In addition, we believe that the mix of equity awards granted under our long-term incentive program, which includes awards with multi-year vesting, as well as the significant equity holdings of our named executive officers, also mitigates against risk that would not be justified by a longer-term investment horizon.

We do not consider the realized value of past awards when determining current compensation. Rather, our focus in setting compensation is to ensure that the expected values of the equity grants at the time they are made are reasonable

and competitive. However, our Compensation Committee also considers other factors, including the current equity holdings of our executives who are not founders and who joined the Company in recent years.

WHAT WE DO

shares. Overachievement of targets would result in the payment of cash or the issuance of stock above the targeted amounts, subject to maximums.

Consideration of Company and Industry Performance

The Compensation Committee took into account the Company’s performance during 2019, its 2019 budget, and long-term strategy as well as information about our peer group in its compensation decisions, as described below:

in 2018 (2019 compensation data was utilized to the extent available at the time the Committee’s information was gathered in late 2019).

There were 17 companies in the peer group reviewed by the Compensation Committee as part of establishing 2019 compensation levels for the named executive officers: