UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

MONOTYPE IMAGING HOLDINGS INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

600 Unicorn Park Drive

Woburn, Massachusetts 01801

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 3, 2018

Notice is hereby given that the 2018 Annual Meeting of Stockholders (the “Annual Meeting”) of Monotype Imaging Holdings Inc., a Delaware corporation (the “Company”), will be held on Thursday, May 3, 2018, at 8:00 a.m. local time at the Company’s headquarters at 600 Unicorn Park Drive, Woburn, MA 01801 for the following purposes:

1. To elect three Class III directors nominated by the board of directors to serve until the 2021 annual meeting of stockholders and until their respective successors are duly elected and qualified or until their earlier resignation or removal;

2. To hold an advisory vote to approve the compensation of the Company’s named executive officers; and

3. To consider and vote upon such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

Any action may be taken on the foregoing matters at the Annual Meeting on the date specified above, or on any date or dates to which, by original or later postponement or adjournment, the Annual Meeting may be postponed or adjourned.

The board of directors has fixed the close of business on March 26, 2018 as the record date for determining the stockholders entitled to receive notice of and to vote at the Annual Meeting and at any postponements or adjournments thereof. Only holders of record of the Company’s common stock, par value $0.001 per share, at that time will be entitled to receive notice of and to vote at the Annual Meeting and at any postponements or adjournments thereof.

You must bring to the Annual Meeting picture identification and proof that you are a stockholder of record in order to vote your shares at the Annual Meeting.

By Order of the Board of Directors,

Janet M. Dunlap

Executive Vice President, Chief Administrative Officer, General Counsel and Secretary

Woburn, Massachusetts

April 5, 2018

Table of Contents

Questions and Answers about Our Annual Meeting

This proxy statement (the “Proxy Statement”) is being furnished in connection with the solicitation of proxies by the board of directors (the “Board”) of Monotype Imaging Holdings Inc., a Delaware corporation (the “Company”), for use at the Company’s 2018 Annual Meeting of Stockholders (the “Annual Meeting”). This Proxy Statement and form of proxy will be made available to stockholders on or about April 5, 2018.

When and where is the Annual Meeting?

Who can vote?

Stockholders of record as of March 26, 2018 (our “Record Date”) are entitled to vote. As of our Record Date, there were 42,151,830 shares of our common stock (the “Common Stock”) entitled to vote. Each share of our Common Stock is entitled to one vote for each Nominee (as defined herein) and one vote for each Proposal.

How many shares must be present to conduct the Annual Meeting?

The presence at the meeting in person or by proxy of holders of shares representing a majority of all the votes entitled to be cast at the meeting, or 21,075,915 voting shares, will constitute a quorum for the transaction of business at the Annual Meeting.

What is the difference between a “stockholder of record” and a “street name” holder?

These terms describe how your shares of our Common Stock are held. If your shares are registered directly in your name with Computershare Investor Services, our transfer agent, you are a “stockholder of record.” If your shares are held in the name of a brokerage, bank, trust or other nominee as a custodian, you are a “street name” holder.

What is a proxy?

A proxy is your legal designation of another person to vote on your behalf. By completing and returning the enclosed proxy card, you are giving the persons named in the proxy card, Scott Landers and Anthony Callini, or each of them, each with the power of substitution, the authority to vote your shares in the manner you indicate on your proxy card.

How do I vote my shares?

If you are a stockholder of record, you have several choices. You can indicate your vote and designate your proxy:

Note that votes made by phone or on the Internet must be received by 11:59 p.m., local time, on May 2, 2018. Please refer to the specific instructions on the printed proxy card. If you hold your shares in street name, your

1

broker, bank, trustee, or nominee will provide you with materials and instructions for voting your shares. If you return a properly signed proxy card but do not mark your vote on any matter, your shares will be voted FOR the Nominees and Proposals set forth on the proxy card.

Why did I receive more than one Proxy Statement and proxy card?

You will receive multiple Proxy Statements and proxy cards if you hold your shares in different ways (for example, by joint tenancy, in a trust, in a custodial account) or in multiple accounts. If your shares are held in street name, you will receive your proxy card or other voting information from your broker and you will return your proxy card(s) to your broker. You should vote on and sign each proxy card you receive. To request that only one copy of any of these materials be mailed to your household, please contact your broker.

Can I vote my shares in person at the Annual Meeting?

If you are a stockholder of record, you may vote your shares in person at the Annual Meeting. If you hold your shares in street name, you must obtain the appropriate documents from your broker, bank, trustee, or nominee, giving you the right to vote the shares at the Annual Meeting. You must bring to the Annual Meeting a picture identification and proof that you are a stockholder of record in order to vote your shares at the Annual Meeting. Please note that even if you plan to attend the Annual Meeting, we recommend that you vote using the enclosed proxy card in advance, to ensure that your shares will be represented.

What is a broker non-vote?

A “broker non-vote” refers to a share of our Common Stock represented at the Annual Meeting that is held by a broker or other nominee who has not received instructions from the beneficial owner or person entitled to vote such share and where the broker or nominee does not have discretionary power to vote. If you hold shares of our Common Stock in street name, you must provide written instructions on how you want your shares to be voted on each Proposal. If you do not provide voting instructions and the Proposal is considered a non-routine matter, then your shares will not be voted. Please note that Proposal One – Election of Directors and Proposal Two – Advisory Vote on Executive Compensation are considered a non-routine matters, so it is very important that you provide written instructions on each Proposal if you want your vote to be counted.

What Proposals will be voted on at the Annual Meeting and how does the Board recommend I vote?

The following is a summary of the Proposals being voted on at the Annual Meeting and the recommendations of the Board:

2

What vote is required to approve each Proposal?

To approve each of the Proposals, the following votes are required from our stockholders:

What happens if additional matters are presented at the Annual Meeting?

As of the filing date of this Proxy Statement, we know of no other matters other than the items of business described herein which can be considered at the Annual Meeting. If other matters requiring a vote do arise, the persons named as proxies will have the discretion to vote on those matters for you.

Can I change my vote after I have mailed my proxy card?

You may revoke your proxy by doing one of the following:

Monotype Imaging Holdings Inc.

Attention: Corporate Secretary

600 Unicorn Park Drive

Woburn, MA 01801

Please note that your written revocation stating that you revoke your proxy must be received by our corporate secretary prior to the Annual Meeting.

Who pays the cost of this proxy solicitation?

The cost of solicitation of proxies for the Annual Meeting will be paid by the Company. In addition to the solicitation of proxies by mail, the directors, officers, and employees of the Company may also solicit proxies personally or by telephone without additional compensation. The Company will also request persons, firms, and corporations holding shares in their names or in the names of their nominees, which are beneficially owned by others, to send proxy materials to and obtain proxies from the beneficial owners. The Company will reimburse holders for their reasonable expenses. Further, we have retained Innisfree M&A Inc. to aid in soliciting proxies and advise on certain matters relating to our Annual Meeting for a fee estimated not to exceed $50,000 plus reasonable out-of-pocket expenses.

How do I make a proposal for consideration at next year’s annual meeting of stockholders?

Stockholder proposals submitted pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) for inclusion in the Company’s proxy statement and form of proxy for the 2019 annual meeting

3

of stockholders must be received by the Company by December 6, 2018. Proposals must comply with the requirements as to form and substance established by the Securities and Exchange Commission (the “SEC”) in order to be included in our proxy statement and form of proxy.

In accordance with our current by-laws, for a stockholder to nominate a director or for a proposal of a stockholder to be presented at the Company’s 2019 annual meeting of stockholders, other than a stockholder proposal intended to be included in our proxy statement and submitted pursuant to Rule 14a-8 of the Exchange Act, a stockholder’s notice must be delivered to, or mailed and received at, the principal offices of the Company, together with all supporting documentation required by the Company’s by-laws, not prior to the close of business on January 3, 2019, nor later than the close of business on February 2, 2019. You may contact the Company’s corporate secretary at the address below for a copy of the relevant by-law provisions regarding the requirements for making stockholder proposals and nominating director candidates. Any proposals should be mailed to:

Monotype Imaging Holdings Inc.

Attention: Corporate Secretary

600 Unicorn Park Drive

Woburn, Massachusetts 01801

The Company’s Annual Report, including financial statements for the year ended December 31, 2017, is being mailed to stockholders concurrently with this Proxy Statement. The Annual Report, however, is not part of the proxy solicitation material, even when we specifically refer to the Annual Report on Form 10-K in this Proxy Statement. A copy of the Company’s Annual Report on Form 10-K filed with the SEC, including all exhibits to the Annual Report, may be obtained free of charge by writing to:

Monotype Imaging Holdings Inc.

Attention: Investor Relations

600 Unicorn Park Drive

Woburn, Massachusetts 01801

The Annual Report can also be viewed and/or downloaded from the Company’s website at http://ir.monotype.com/. The information contained on, or connected to, our website is not incorporated herein by reference.

4

Security Ownership Guidelines, Beneficial Ownership, and Section 16(a) Reporting Compliance

Security Ownership Guidelines and Anti-Hedging Policy

Our Board believes that security ownership by the Board and our chief executive officer ( our “CEO”) is important to align their interests with the interests of our stockholders and to further demonstrate to the investing public and our employees the Board’s and CEO’s commitment to our Company. Accordingly, we maintain stock ownership guidelines for both our non-employee directors and our CEO, which we make available on our website at http://ir.monotype.com/.

Our director stock ownership requirements state that any non-employee director who has served on our Board for at least three years is required to beneficially own a combination of shares of our Common Stock, vested stock options and unvested shares of restricted stock with a dollar value at least equal to five times the Board’s annual cash retainer on the measurement date, which is December 31 of their current service year. As of December 31, 2017, all non-employee directors met the requirements.

Our CEO is subject to equity ownership guidelines that, beginning four years after the later of the adoption of the guidelines and the first date he was employed as the Company’s CEO, require him to hold a combination of shares of our Common Stock, vested stock options, and unvested shares of restricted stock with an aggregate value at least equal to three times his base salary on the measurement date. The measurement date is defined as the close of business on December 31 at the Company’s principal place of business. Our President and CEO, Scott Landers, was appointed to that position on January 1, 2016 and will become subject to these guidelines on January 1, 2020. However, as of December 31, 2017, Mr. Landers satisfied these ownership requirements.

We maintain an insider trading policy that prohibits all directors, officers and employees and their immediate family members from engaging in the following transactions relating to our securities or derivatives thereof: purchasing or selling puts or calls, short sales, trading during a standard quarterly or special blackout period and/or placing standing orders (other than under Company approved Rule 10b5-1 trading plans), and holding our securities or derivatives thereof in a margin account or pledging them.

Security Ownership of Certain Beneficial Owners

The beneficial ownership of entities known to the Company to directly or indirectly own more than five percent of our Common Stock as of December 31, 2017 can be found in the table below. This information is based on publicly available filings on Form 13G for the period ending December 31, 2017 and the percentage ownership calculations are based on 42,132,627 shares outstanding on March 9, 2018.

5

Security Ownership of the Board and Management

The beneficial ownership of the Company’s Common Stock of all current directors and executive officers, both individually and as a group, is listed in the table below. This information is based on written representations made by each director and executive officer and the percentage ownership calculations are based on 42,132,627 shares outstanding on March 9, 2018.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our executive officers, directors and persons who beneficially own more than 10% of a registered class of our equity securities (collectively, “Insiders”) to file reports of ownership and changes in ownership with the SEC. Insiders are required by the SEC to furnish the Company with copies of all Section 16(a) reports they file. The Company has received written representations from all directors and named executive officers that no other reports were required during the year ended December 31, 2017 and all filing requirements applicable to the Insiders were timely satisfied.

6

Proposal One - Election of Directors

The Board, upon the recommendation of its nominating and corporate governance committee, has nominated Scott E. Landers, Pamela F. Lenehan, and Timothy B. Yeaton, and recommends that they be re-elected to the Board, each as a Class III director, to serve until the 2021 annual meeting of stockholders and until each of their successors is duly elected and qualified and until each of their earlier resignation or removal. Ms. Lenehan and Messrs. Landers and Yeaton are currently Class III directors whose terms expire at this Annual Meeting. The Board anticipates that Ms. Lenehan and Messrs. Landers and Yeaton, if elected, will each serve as a director. Each Nominee has consented to be named in this Proxy Statement. This Proposal relates solely to the election of the Nominees and does not include any other matters including the election of directors nominated by any stockholder of the Company.

Proxies will be voted FOR the election of Ms. Lenehan and Messrs. Landers and Yeaton as Class III directors unless contrary instructions are set forth on the enclosed proxy card.

The Board of Directors recommends that stockholders vote FOR the election of the Nominees.

Recent Board and Governance Changes

On April 2, 2018 the Board expanded the number of directors from eight to ten and elected two additional directors to the Board, Eileen A. Campbell and Denise F. Warren, whose biographies appear in the section entitled “Biographical Information of our Current Non-Employee Directors.” In addition, the Board accepted the resignations of Robert L. Lentz, currently Chair of our Board, and Douglas J. Shaw, in each case effective immediately following the Annual Meeting, at which time the number of directors on our Board will be back to eight. Also immediately following the Annual Meeting, the following changes will be effective:

Upon such changes, 90% of our Board will be comprised of independent directors (with our one non-independent director being our President and CEO, Scott E. Landers) and 50% of our directors will be women.

In addition, on February 14, 2018 our Board strengthened their ownership guidelines to increase the value of stock required to be held by each non-employee director from 3x annual cash retainer to 5x annual cash retainer.

Biographies, Skills, and Experience of our Board

Biographies of our Non-Employee Directors and Nominees

The following biographical information lists the names, ages as of January 31, 2018, positions within the Company, current term and class, and relevant experience for the last five years for each of our non-employee directors, including the Nominees, and is based on information that has been provided to us by our directors and the Nominees. There is no family relationship between any director, Nominee or executive officer of the Company. None of our directors has been convicted of a criminal offense in the past ten years.

7

Biographical Information of the 2018 Nominees (current term expires on the date of our Annual Meeting)

		Scott E. Landers, 47		President and Chief Executive Officer Class III director since 2016
		Mr. Landers has served as our President and CEO since 2016, served as our Interim Chief Financial Officer from October 2016 to January 2017, as our Chief Operating Officer, Chief Financial Officer, Assistant Secretary and Treasurer throughout 2015, and as our Senior Vice President, Chief Financial Officer, Assistant Secretary and Treasurer from 2008 to 2015. Mr. Landers has been with Monotype since 2008. He has served as a member of the board of directors of Bridgeline Digital since January 2010, a member of its audit committee since February 2010 and its governance committee since May 2014. Mr. Landers holds a BA in accounting from Le Moyne College and an MBA from the College of Saint Rose.

		Pamela F. Lenehan, 65		Chair, Management Development and Compensation Committee Member, Audit Committee Class III director since 2006
		Immediately following our Annual Meeting, Ms. Lenehan will assume the role of Chair of our Board, and will step down as Chair of our Management Development and Compensation Committee and as a member of our Audit Committee.   Ms. Lenehan has served as President of Ridge Hill Consulting, LLC, a strategy consulting firm, since June 2002. She has served on the board of directors of Civitas Solutions, Inc., a provider of services for individuals with intellectual and developmental disabilities and acquired brain injury, since December 2008, as a member of their audit committee since January 2009 and as audit committee Chair from January 2009 to January 2016, as a member of the compensation committee since October 2014, and presiding director since January 2016. She has served on the board of directors of American Superconductor Corporation, which offers technology and solutions for clean energy, since March 2011, as a member of their audit committee since March 2011 and as their audit committee Chair since August 2011. She formerly served on the board of directors and compensation committee for Spartech Corporation from December 2004 to March 2013, as Chair of their compensation committee from March 2007 to March 2013, and a member of their audit committee from January 2005 to March 2013 when it was acquired by PolyOne Corporation. She sits on the board of directors for the Center for Women and Enterprise, the National Association of Corporate Directors of New England and is the co-Chair of the Boston Chapter of Women Corporate Directors, each not-for-profit organizations. Ms. Lenehan holds an Executive Masters Professional Director Certification, Silver Level from the American College of Corporate Directors, a BA in mathematical economics from Brown University, and an MA in economics from Brown University.

		Timothy B. Yeaton, 59		Chair, Nominating and Corporate Governance Committee Member, Management Development and Compensation Committee Class III director since 2012
		Mr. Yeaton has served as the Executive Vice President and Chief Marketing Officer and previously as the Senior Vice President and Group Executive of the Infrastructure Business Group at Red Hat, Inc., a global leader in providing open source software solutions to the enterprise, since January 2014. Previously, Mr. Yeaton served as President and Chief Executive Officer of Black Duck Software from February 2009 to December 2013. He formerly served on the board of directors of Actuate Corporation from January 2011 to January 2015 when it was acquired by OpenText, and Black Duck Software from February 2009 to January 2016. Mr. Yeaton holds a BS in management from Roger Williams University and an MBA from Babson College.

8

Biographical Information of Our Non-Employee Directors

		Eileen A. Campbell, 58		Class II director since 2018 Current term expires in 2020
		Ms. Campbell joined our Board in April 2018. Immediately following our Annual Meeting, Ms. Campbell will become a member of our Management Development and Compensation Committee.   Ms. Campbell has served as the Founder of Womintuition, a consulting agency, since 2017. From 2013 to 2017, she served as Chief Marketing Officer for IMAX Corporation, one of the world’s leading entertainment technology companies specializing in immersive motion picture technologies. Prior to that, she served as Chief Executive Officer, North America at Millward Brown, a $1B research-based consultancy owned by WPP, from 2000 to 2013. Ms. Campbell serves on the board of the Committee of 200 (C200), a pre-eminent global women’s business organization, as Executive Chair of the Reid Campbell Group and on the board of advisors of Reimagine Group, each providers of market research services. From July 2014 to September 2015, she served the board of directors of Vision Critical, a provider of cloud-based customer intelligence platforms that allows companies to build engaged, secure communities of customers. Ms. Campbell holds a BS in economics and business administration from Heidelberg University.

		Gay W. Gaddis, 60		Member, Management Development and Compensation Committee Member, Nominating and Corporate Governance Committee Class I director since 2014 Current term expires in 2019
		Ms. Gaddis has served as Chief Executive Officer and Founder of T-3, a collaborative think tank that works with Fortune 500 and international companies to design technology-fueled digital marketing strategies, since 1989. She currently serves as Chair of the executive committee for the Texas Business Leadership Council, and as a member of the advisory board of Womensphere, and formerly served as Chair of the board of the Committee of 200 (C200), a pre-eminent global women’s business organization. Ms. Gaddis holds a BFA from the University of Texas at Austin.

		Roger J. Heinen, Jr., 66		Member, Management Development and Compensation Committee Member, Audit Committee Class I director since 2006 Current term expires in 2019
		Immediately following our Annual Meeting, Mr. Heinen will become the Chair of our Management Development and Compensation Committee.   Mr. Heinen served as Senior Vice President, Developer Division for Microsoft Corporation from 1993 to 1996 and as Senior Vice President, Software Division for Apple Computer from 1989 to 1993. He served on the board of directors of Progress Software Corporation from 1999 until 2009. Mr. Heinen holds a BS in computer science from Worcester Polytechnic Institute, an S.E.P. from Stanford University and a PhD, Hon. from Worcester Polytechnic Institute.

9

		Robert L. Lentz, 67		Chair of the Board of Directors since 2014 Class II director since 2008 Current term expires in 2020
		Immediately following our Annual Meeting, Mr. Lentz’s resignation from our Board will become effective.   Mr. Lentz has served as a Professor and the Entrepreneur in residence for the Center for Entrepreneurship Education at Northeastern University since July 2012, as an independent consultant from March 2009 to June 2012, and as the interim Chief Executive Officer of Digital Reef, Inc. from July 2009 until March 2011. He has served on the board of directors of Northern Power Systems since March 2014 and on the board of advisors for Hyperplane Venture Capital since January 2015. Mr. Lentz holds a BA from Northeastern University in Business Administration, an MBA from Babson College and is a former CPA.

		Douglas J. Shaw, 62		Class II director since 2004 Current term expires in 2020
		Immediately following our Annual Meeting, Mr. Shaw’s resignation from our Board will become effective.   Mr. Shaw is a member of the part time faculty at Boston College’s Carroll School of Management serving as a Professor of Entrepreneurial Management. Previously, he served as our President and Chief Executive Officer from 2007 until he retired in 2015, as well as in various capacities with our predecessor companies, Agfa Corporation and Agfa Monotype, since 1986. He sits on the board of directors for the Center for Women and Enterprise, a not-for-profit organization. Mr. Shaw holds a BA in accounting from Boston College and an MBA from Babson College.

		Peter J. Simone, 70		Chair, Audit Committee Member, Nominating and Corporate Governance Committee Class II director since 2006 Current term expires in 2020
		Mr. Simone has served as an investment consultant and a consultant to numerous private companies since 2001, as interim CEO of Lilliputian Systems, Inc. during the first half of 2013, and as President, Chief Executive Officer and director of Xionics Document Technologies, Inc., a developer of software solutions for printing and digital page processing, from April 1997 until Xionics’ acquisition by Oak Technology, Inc., in January 2000. He has served on the board of directors of Veeco Instruments, Inc., an equipment developer and supplier to various industries including data storage and semiconductors, since July 2004. He formerly served on the board of directors of Cymer, Inc. from 1993 to 2013, on the board of Inphi Corporation from 2010 to 2013, and on the board of Newport Corporation from 2003 until 2016 when it was sold to MKS Instruments. Mr. Simone holds a Masters Professional Director Certification from the American College of Corporate Directors, a BS in accounting from Bentley University, an MBA from Babson College and is a former CPA.

10

		Denise F. Warren, 54		Class I director since 2018 Current term expires in 2019
		Ms. Warren joined our Board in April 2018. Immediately following our Annual Meeting, Ms. Warren will become a member of our Audit Committee.   Ms. Warren has served as the Chief Executive Officer and Founder of Netlyst, LLC, a consulting and advisory firm focused on catalyzing digital business growth and scaling consumer and business-to-business revenue streams, since 2016. Prior to that, she served as President of Digital, Chief Executive Officer of East Coast Publishing and Executive Vice President of the Tribune Publishing Company, from June 2015 to February 2016. She also previously served in a number of executive positions at The New York Times Company from 2005 through 2014, including Executive Vice President of Digital Products and Services from March 2013 until October 2014, General Manager of NYTimes.com from 2008 to 2013, and as Chief Advertising Officer of The New York Times from 2005 until 2013. She has served on the board of directors and as a member of the audit committee of Electronic Arts, Inc. since May 2013. Ms. Warren holds a BS in management from Tulane University and an MBA in communications and media management from Fordham University.

Skills and Experience of our Board

We want our directors to provide a collective skill set that not only strengthens the diversity and experience of our Board but also provides the oversight and strategic guidance we believe is integral to the success of our Company. We seek out certain specific characteristics in our Board members that we believe will enhance the Board’s ability to provide such oversight and strategic guidance as it relates to our business. Some of the specific characteristics we believe are important include:

We believe the characteristics and experiences that our directors, including the Nominees, bring to the Board complement each other and match the needs of our Company. The skill set we believe each director and Nominee brings to our Board is as follows:

Nominees

11

Continuing Directors

Immediately following our Annual Meeting, Messrs. Lentz and Shaw will step down from our Board.

Board Structure, Leadership, Governance, and Independence

The following provides information about the structure, leadership, governance, and independence of our Board.

Board Structure

The structure and composition of our Board is as follows:

Board Leadership

We have separate positions for the Chair of the Board and President and CEO. As our Chair is elected to three year terms, the Board has the opportunity to review the Chair’s effectiveness in the position at the end of each term. Robert L. Lentz will serve as our Chair until our Annual Meeting at which time his resignation will become effective, and Pamela F. Lenehan will assume the role of Chair of our Board effective immediately following our Annual Meeting. Our Board believes that there are advantages to having an independent Chair, including:

12

The Board believes that Ms. Lenehan’s skill set, board level experience, understanding of the Company’s business, and her interactions with and ability to offer guidance to our executive management team will allow her to excel in this role.

Board Governance

The Company and the Board are committed to good corporate governance practices that promote the long-term interests of our stockholders. We believe our governance practices not only strengthen our Board and executive management team accountability but also build trust in our Company with our stockholders. Our governance practices include:

Any of our committee charters, our corporate governance guidelines, and our Code of Business Conduct and Ethics can also be obtained, free of charge, by writing to us at:

Monotype Imaging Holdings Inc.

Attention: Corporate Secretary

600 Unicorn Park Drive

Woburn, Massachusetts 01801

Board Responsibility for Risk Oversight

The Company’s management is responsible for day-to-day risk management and implementation of Company policies. We maintain an internal risk management committee that is responsible for ensuring that our risk management program, which is comprised of strategic, operational, financial, and legal risk identification and prioritization, as well as active risk management and mitigation, is reflected in our policies and actions. Our

13

Board is responsible for our risk identification and prioritization process, has oversight of our risk management program, risks related to our operations and business strategy, and receives reports on risk management from members of our executive management team.

Our audit committee has oversight responsibility for our Sarbanes-Oxley Act of 2002 compliance program, our internal audit function, and oversight of the resolution of certain issues identified by our information technology and security function. Our management development and compensation committee has oversight of risk considerations with respect to our executive compensation programs. The committee works directly with management to determine whether our programs improperly encourage management to take unnecessary risks relating to the business or whether risks arising from our executive compensation programs are reasonably likely to have a material adverse effect on the Company. Our Board believes that this shared oversight is appropriate, rather than consolidation of responsibility with a single board level risk management committee.

Board Review of Business Relationships and Transactions

All related party transactions are reviewed under our related person transaction approval policy by our audit committee and reported to and, if required, approved by our Board. The term “related party transactions” refers to transactions required to be disclosed in our filings with the SEC pursuant to Item 404 of Regulation S-K. Responsibilities for these reviews and associated actions are as follows:

If it is determined that we have entered into or may enter into a related person transaction, including any modification or addition to an existing contract or arrangement, our general counsel is notified and she reviews the applicable rules and determines whether the approval of our Board, the audit committee, or both, is required and if so that approval is obtained prior to entering into the transaction. No related person transaction is allowed unless our general counsel has either specifically confirmed in writing that no further approvals are necessary, or specifically confirmed in writing that all approvals necessary for us to enter into such arrangement have been obtained. In the event that a related party transaction requires the approval of the Board, the audit committee reviews the transaction and then makes a recommendation to the Board for its consideration before the transaction is entered into.

Independent Compensation Consultants

The management development and compensation committee has engaged Pearl Meyer & Partners LLC (“Pearl Meyer”) to serve as its independent compensation consultant. In this capacity, Pearl Meyer provides peer group advice, peer group pay practices and other relevant benchmarks with respect to the Company’s executive officer and key employee compensation, reviews of director compensation pay practices, and provides an ongoing overview of regulatory developments and compensation trends. Pearl Meyer takes direction from the management development and compensation committee, reports directly to the committee and does not provide any services to the Company other than those described above. The management development and compensation committee has assessed the independence of Pearl Meyer pursuant to SEC and Nasdaq Stock Market (“Nasdaq”) rules and determined that Pearl Meyer is independent and that their work has not raised any conflict of interest.

14

In making this assessment, the committee considered each of the factors set forth by the SEC and Nasdaq with respect to the compensation consultant’s independence, including that Pearl Meyer provides no other services for the Company other than pursuant to its engagement by the management development and compensation committee and the individual compensation consultants from Pearl Meyer who advise the committee have no prior relationship with any of our named executive officers or any member of the Board. The committee also determined that there were no other factors that should be considered in connection with the assessment or that were otherwise relevant to the management development and compensation committee’s engagement of Pearl Meyer.

Independence of our Board and Committee Members

Board Member Independence

Our Board has considered the relationships of all directors and any transactions involving the directors and determined that one of our continuing directors, Scott E. Landers who was appointed as our President and CEO and elected to the Board in 2016, has a relationship that would interfere with the exercise of independent judgment in carrying out his responsibility as a director. Mr. Landers does not serve on any committee of the Board. Effective immediately following our Annual Meeting, Mr. Shaw, who was our President and CEO from 2007 through 2015 and accordingly did not qualify as an independent director, will step down from our Board. Aside from Mr. Landers, each continuing director qualifies as an independent director under the rules of the SEC and Nasdaq.

Management Development and Compensation Committee Member Independence

Each member of our management development and compensation committee is independent as defined under the Exchange Act and the rules of Nasdaq, is an outside director as defined under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and a non-employee director as defined in Rule 16b-3 under the Exchange Act.

Audit Committee Member Independence

Our Board has determined that Mr. Simone and Ms. Lenehan each qualify as an “audit committee financial expert” as defined under the Exchange Act and the applicable rules of Nasdaq. In making its determination, our Board considered the nature and scope of the experiences and responsibilities that Mr. Simone and Ms. Lenehan have previously had with reporting companies and, in the opinion of our Board, neither of them has a relationship that would interfere with the exercise of independent judgment in carrying out their responsibilities as a director. Each member of our audit committee is independent as defined under the Exchange Act and the applicable rules of Nasdaq. Immediately following our Annual Meeting, Ms. Lenehan will step down as a member of our audit committee.

Nominating and Corporate Governance Committee Member Independence

Each member of our nominating and corporate governance committee is independent as defined under the rules of Nasdaq.

Management Development and Compensation Committee Interlocks and Insider Participation

In 2017, Ms. Lenehan, Ms. Gaddis and Messrs. Heinen and Yeaton served on our management development and compensation committee. None of our executive officers serves as a member of the management development and compensation committee or as a director of any entity that has one or more of its executive officers serving as a member of our Board or management development and compensation committee. None of the members of our management development and compensation committee has ever been one of our employees.

15

2017 Meetings of the Board, its Committees, and Executive Sessions of Non-Employee Directors

The following provides information about the 2017 Meetings of the Board, its committees and any executive sessions of non-employee directors. All of our directors attended our 2017 annual meeting of stockholders.

The Meetings of the Board of Directors

The Board met 15 times during 2017 and each director attended at least 75% of the total number of meetings of the Board and committees of the Board of which he or she was a member. In 2017, an executive session of the independent directors was held following a scheduled meeting of the Board and included only those directors who met the independence requirements of Nasdaq. Our Chair is responsible for chairing any executive session.

The Meetings of the Committees of the Board

The Board has three standing committees: audit committee, management development and compensation committee, and nominating and corporate governance committee. The composition and function of each of our committees complies with the rules of the SEC and Nasdaq. The Board has adopted a written charter for each committee which is available to view or download on our website at http://ir.monotype.com/ or by writing to us at:

Monotype Imaging Holdings Inc.

Attention: Corporate Secretary

600 Unicorn Park Drive

Woburn, Massachusetts 01801

Management Development and Compensation Committee

Effective immediately following our Annual Meeting, the Management Development and Compensation Committee will be comprised of Eileen A. Campbell, Gay W. Gaddis, Timothy B. Yeaton, and Chaired by Roger J. Heinen, Jr.

Responsibilities:

16

Audit Committee

Effective immediately following our Annual Meeting, the Audit Committee will be comprised of Roger J. Heinen, Jr. and Denise F. Warren, and Chaired by Peter J. Simone.

Responsibilities:

17

Nominating and Corporate Governance Committee

Responsibilities:

Communication with our Directors

You can contact any of our directors by writing to them at:

Monotype Imaging Holdings Inc.

Attention: Corporate Secretary

600 Unicorn Park Drive

Woburn, Massachusetts 01801

18

Your letter should clearly specify the name of the individual director or group of directors you want your letter to be delivered to and the Company will deliver it.

As required by the Company’s Code of Business Conduct and Ethics and Audit Committee Complaint Procedures, a third-party provides a hotline and web page submission form for employees and other parties to communicate concerns to our management and Board. The web page submission form is located at www.alertline.com, and the hotline number in the United States is (800) 826-6762; a link to the numbers for calls made outside of the U.S. is available on the Corporate Governance section of our website, under Governance Documents, at http://ir.monotype.com/. Information submitted through the web submission or hotline is forwarded to our Board or audit committee and concerns can be reported anonymously if you choose.

Director Compensation

The following provides a summary of the structure of our non-employee director compensation in 2017. Total annual compensation including all cash compensation and equity awards to non-employee directors is capped under our Third Amended and Restated 2007 Stock Option and Incentive Plan (our “2007 Option Plan”).

Board and Committee Cash Retainers

Our non-employee directors receive cash compensation in the form of an annual cash retainer for their service on our Board and additional cash retainers for their service on committees. They do not receive meeting fees unless the number of meetings of the Board or any committee exceeds ten per year, in which case non-employee directors are entitled to receive per meeting fees of $1,000 for any additional meeting attended. Further, the Board has discretion to award additional compensation to any non-employee director who undertakes additional responsibility above and beyond their Board and committee responsibilities. Our non-employee directors are also entitled to reimbursement of reasonable travel expenses for Board and committee meetings, Company-related activities that require their attendance, and payment of director-related education expenses.

Our annual cash retainer structure for our non-employee directors in 2017 was as follows:

Additional cash retainers for each non-employee director who served on one or more Board committees in 2017 were as follows:

There were 15 meetings of the Board in 2017, and accordingly, meeting fees were paid in 2017 in an amount reflective of the number of meetings over ten attended by each non-employee director. Actual cash retainers and meeting fees paid to each non-employee director in 2017 are set forth in the “Director Compensation Table – Fiscal 2017.”

19

Equity Compensation

In 2017, the only equity award our non-employee directors received was a grant of restricted stock equal to the number of shares with an approximate dollar value of $125,000 based on the closing price of a share of our Common Stock on the grant date. The restricted stock award granted in 2017 vests on the earlier of the first anniversary of the grant date or the date of our next annual meeting of stockholders. Additional equity awards to our non-employee directors, which may include options to purchase shares of our Common Stock, are considered and approved by our Board during regularly scheduled or special meetings of our Board prior to the grant date, which is generally the third business day following the date of our annual meeting of stockholders.

Equity Grants upon Election to the Board

Upon election to the Board, new non-employee directors receive a grant of restricted stock with an approximate dollar value equal to one and a half times the annual cash retainer paid to a member of the Board.

Director Compensation Review

Our Board reviews the structure and amount of director compensation every two years. In 2018, the management development and compensation committee engaged Pearl Meyer to assist with a comprehensive review of director pay practices, and the committee provided this information to our Board in conjunction with its director compensation review. The Board made no changes to the current level of Board compensation.

Director Compensation Table – Fiscal 2017

The following table provides a summary of the compensation we paid to our non-employee directors in fiscal 2017.

20

The aggregate total number of outstanding unvested shares of restricted stock held by each non-employee director at December 31, 2017 is shown below. All shares shown below will vest on May 3, 2018, which is the date of our Annual Meeting. Our directors do not hold any unvested equity awards other than as set forth in the table below.

Director Nominations

When our Board is required to select a new member, it relies on the nominating and corporate governance committee to identify suitable candidates for nomination and to assess their qualifications in light of the policies and principles in our corporate governance guidelines and the charter of the nominating and corporate governance committee.

Process for Identifying and Evaluating Director Nominations

Generally, the nominating and corporate governance committee identifies candidates for director nominees by consulting with other members of the Board and management, on its own, by utilizing search firms or other advisors, through the recommendations submitted by stockholders or through other methods deemed helpful in identifying candidates. Once candidates have been identified, the committee confirms the candidates meet the minimum qualifications by gathering information about the candidates through interviews, detailed questionnaires, comprehensive background checks or any other means deemed to be helpful in the process. The committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the Board. Based on the results of this process, a recommendation is made with regard to the suitability for election of such candidates. The specific qualities and skills our Board and nominating and corporate governance committee look for in each candidate are outlined below.

Director Qualifications

In identifying prospective director candidates, the nominating and corporate governance committee considers all facts and circumstances it deems appropriate, including among other things, skill set, depth and breadth of business experience, independence, and the needs of the Board. This assessment includes consideration of the following minimum qualifications that must be met by all directors:

21

The committee also considers factors such as:

Procedures for Recommendation of Director Nominees by Stockholders

If you would like the nominating and corporate governance committee to consider a prospective director candidate, please submit the candidate’s name and qualifications and other information in accordance with the requirements for director nominations by stockholders in the Company’s by-laws to:

Monotype Imaging Holdings Inc.

Attention: Corporate Secretary

600 Unicorn Park Drive

Woburn, Massachusetts 01801

The corporate secretary will promptly forward any nominations to the nominating and corporate governance committee.

All recommendations for nomination of a director candidate must be in writing and include the following:

Candidates may be required to undergo a comprehensive private investigation background check by a qualified company of the Company’s choosing and a candidate must complete a detailed questionnaire regarding his or her experience, background, and independence. Once the nominating and corporate governance committee receives the nomination of a candidate and the candidate has complied with the minimum procedural requirements above, the candidate is evaluated by the committee and a recommendation regarding the candidate is delivered to the Board. In addition, a stockholder can propose an individual for election to the Board in accordance with the Company’s by-laws.

22

Proposal Two - Advisory Vote on Executive Compensation

The Company gives its stockholders the annual opportunity to approve, on a non-binding, advisory basis, the compensation of our named executive officers. This proposal is commonly known as a “say-on-pay” proposal. We believe our executive compensation programs have been designed to align executive incentives with the creation of long-term value for our stockholders. Although stockholder approval of our compensation plans for named executive officers is advisory in nature and not binding on the Company, our Board and management development and compensation committee value our stockholders’ opinions and will consider the outcome of this vote when making future executive compensation decisions.

This Proposal relates solely to the advisory vote to approve the compensation of the Company’s named executive officers and does not include any other matters. This vote is advisory and therefore not binding on us, our Board or our management development and compensation committee.

Proxies will be voted FOR this Proposal Two unless contrary instructions are set forth on the enclosed proxy card.

The Board of Directors recommends that stockholders vote FOR the approval of the compensation of our named executive officers.

Company, Performance, and Compensation Highlights

Company Strategy

Monotype is the brand company. Named one of the Top 10 Most Innovative Companies in Design by Fast Company in 2018, we empower expression and engagement for creatives, designers, marketers and engineers to allow them to produce compelling brand experiences that resonate with their audiences and cultivate relationships with those audiences by engaging with brand enthusiasts. From creating compelling brand experiences on devices and multiple forms of media to cultivating engaging relationships between brands and their best customers, Monotype strives to be the first place to turn for the design assets, technology and expertise that empower brand engagement and the best user experiences.

2017 Financial Highlights*

Connecting Compensation to Company Performance

23

Biographical Information of Our Executive Officers

The following provides information on the executive officers (including our named executive officers) of the Company, including their titles and their ages as of January 31, 2018. These biographies are based on information each executive officer has provided to us. Officers of the Company are elected annually at the first meeting of the Board following each annual meeting of stockholders. Each officer holds office until the first meeting of the Board following the next annual meeting of stockholders and until his or her successor is duly elected and qualified and until his or her resignation or removal in accordance with the Company’s by-laws. Mr. Landers has been omitted from this section as he is a Class III director Nominee. You can read biographical information for Mr. Landers in the section entitled “Biographical Information of the 2018 Nominees.”

There is no family relationship between any director, Nominee or executive officer of the Company.

Our Named Executive Officers

		Anthony Callini, 45 Mr. Callini has served as our Executive Vice President, Chief Financial Officer, Assistant Secretary and Treasurer since 2017. Prior to joining Monotype, Mr. Callini served as Senior Vice President, Finance for Avid Technology, Inc., from April 2013 to July 2016. From March 2004 to February 2013 he served in various financial leadership positions, including most recently as Senior Vice President, Finance and Treasurer, at Open Solutions Inc. Mr. Callini holds a BS in Accounting from Fordham University.
		Janet M. Dunlap, 53 Ms. Dunlap currently serves as our Executive Vice President, Chief Administrative Officer, General Counsel and Secretary. She served as our Executive Vice President, General Counsel and Secretary from 2015 to 2018, as our Vice President, General Counsel and Secretary from 2010 to 2015 and as our General Counsel and Secretary from 2006 to 2010. She serves on the board of directors of Snow Farm: The New England Craft Program and the Center for Women and Enterprise, both not-for profit organizations. Ms. Dunlap holds a Professional Director Certification from the American College of Corporate Directors, a BA in economics from Franklin and Marshall College, and a JD from Boston College Law School.
		Steven R. Martin, 55 Mr. Martin has served as our Executive Vice President and Chief Technology Officer since 2018. He served as our Executive Vice President and Chief Innovation Officer from 2015 to 2018, as our Senior Vice President, Engineering from 2012 to 2015 and as our Vice President, Engineering and Development from 2005 to 2012. Mr. Martin holds a BS in computer science from Fitchburg State College and an MS in computer science from George Washington University.
		Benjamin W. L. Semmes, III, 51 Mr. Semmes has served as our Executive Vice President and Chief Revenue Office since 2018. He served as our Executive Vice President, Market Strategy and Sales from 2015 to 2018. Prior to joining the Company, he served as Senior Vice President, Maintenance and Professional Services – Digital Commerce Solutions at Pitney Bowes, Inc. from 2013 to 2015, as its Software Group Operating Officer from 2008 to 2013, and as its Senior Vice President, Global Services from 2006 to 2008. Mr. Semmes holds a BS in Chemistry from Virginia Military Institute and an MS in Information Management from Stevens Institute of Technology.

24

Our Other Executive Officers

		Brett S. Zucker, 45 Mr. Zucker has served as our Executive Vice President and Chief Marketing Officer since 2018. He served as our Senior Vice President, Product Management and Marketing from 2015 to 2018. Prior to joining the Company, he served as Chief Technology Officer for Bridgeline Digital Inc. from 2006 to 2015, as its General Manager from 2004 to 2006, and as its Director of Delivery from 2002 to 2004. Mr. Zucker holds a BS in electrical engineering from Cornell University and an MBA from Harvard Business School.

Compensation Discussion and Analysis

This section describes the Company’s compensation programs for our executive officers that were in effect for 2017 and the decisions made with respect to these programs. Our goal is to explain the details of these compensation programs and describe why we believe they are appropriate for our Company and our stockholders. The compensation tables found in this section contain information for the individuals who served as our principal executive officer and principal financial officer at any time during fiscal 2017, as well as our three other most highly compensated executive officers who had been designated by the Company as executive officers as of December 31, 2017. We refer to these individuals in this Proxy Statement as our named executive officers.

Our Executive Compensation Objectives and Principles

We believe the Company’s success is dependent on the integrated efforts of curious, creative, and committed talent at all levels in our organization. Our compensation philosophy applies to executives and employees alike in order to:

We design total rewards programs that we believe will be perceived by our executive officers and shareholders as fair and equitable, applying the following principles:

25

Executive Compensation Program Elements, Mechanics, and Timing

Our management development and compensation committee determines executive compensation by utilizing input from our President and CEO, our senior human resources professional, and Pearl Meyer, the committee’s independent compensation consultant. In order to make executive compensation determinations, the committee considers a variety of topics and reviews materials that are provided by the Company, Pearl Meyer and/or other industry sources. The chart below shows the compensation topics considered by the management development and compensation committee and when the committee discusses, reviews, and approves each topic, as applicable:

The committee oversees the development of our executive compensation plans and policies, including our 2007 Option Plan and our Executive Incentive Bonus Plan (the “Incentive Plan”), which was adopted by the Board in February 2014, and under which certain financial performance goals for fiscal 2017 were established by the Board. Further, the management development and compensation committee reviews and approves the cash and equity compensation of our executive officers. The next chart summarizes the three main elements of our executive compensation programs, including why the element is part of our compensation program, when the element is approved, and the mechanics of each program element. The management development and compensation committee makes the determination with respect to each of these elements and the President and CEO provides input on all executive officers except himself.

26

27

Above and beyond the compensation elements listed in the chart, we also offer the following benefits to all employees, including our named executive officers:

We offer only one perquisite to our executive officers that is not available to our entire employee base - a comprehensive, Company-paid yearly physical examination. Although the Company’s medical plan already provides for annual physicals, the comprehensive examination provides the convenience of doing all appointments and tests in one location on a single day, which helps encourage our executive officers to conveniently take the time necessary to maintain their health and wellness.

Benchmarking and Peer Group

In order to make compensation decisions, the management development and compensation committee benchmarks total compensation and each individual compensation element to determine whether our compensation is competitive by comparing our financial performance and executive compensation against an approved peer group of companies. For the purposes of benchmarking 2017 named executive officer compensation, the peer group was selected in 2016 with guidance from Pearl Meyer and approved by the management development and compensation committee based on a comparison of the following objective and qualitative criteria between the peer group and the Company:

Objective Criteria

Qualitative Criteria

28

The peer group used for benchmarking total named executive officer compensation in 2017 was as follows:

Upon determining our 2017 final peer group of companies, the committee performed a detailed analysis of the cash and equity compensation programs and levels provided to similarly situated executives of our peer group companies as compared to our current executive compensation programs and levels. While the committee does not target specific percentiles for individual executives for cash or equity compensation, the committee does have a philosophy of, on an overall basis, being within a competitive range of the market median for target cash and time-based equity compensation. Further, the committee has structured the executive compensation program to provide the opportunity to attain above market median compensation through the achievement of pre-determined corporate performance targets associated with cash incentive compensation and the vesting of grants of performance-based equity. In determining the compensation targets for individual named executive officers, the committee also considered recommendations from our President and CEO (for named executive officers other than himself) and our senior human resources professional, based on:

On an annual basis, the management development and compensation committee reviews and, if appropriate, updates the peer group to assure that the Company is benchmarking its total compensation and each individual compensation element for our named executive officers against an appropriate peer group which is reflective of current objective and qualitative criteria. In 2017, with guidance from Pearl Meyer, the peer group was modified and approved by the management development and compensation committee for the purposes of benchmarking 2018 named executive officer compensation based on a comparison of objective and qualitative criteria, with the following updates to such criteria:

The management development and compensation committee determined that it was appropriate to adjust the market capitalization and revenue ranges used to determine our 2017 peer group companies from the ranges used in 2016 to reflect the current revenue performance, EBITDA, revenue growth, and market capitalization of the Company and the peer group companies, and to add the qualitative criteria of comparable strategies for growth to reflect the Company’s current growth strategy. This resulted in five peer group companies, Demandware, Inc.,

29

Interactive Intelligence Group, Inc., LogMeIn, Inc., Marketo, Inc. and Tangoe, Inc., being removed from the peer group - Demandware, Interactive Intelligence Group and Marketo being removed because they were acquired, LogMeIn being removed because its market capitalization fell outside the comparable range, and Tangoe being removed due to delinquent filings. Six companies were added to the peer group as they met the majority of the stated peer group criteria – A10 Networks, Inc., Callidus Software Inc., Carbonite, Inc., Telenav, Inc., Workiva Inc., and XO Group Inc. The management development and compensation committee believes that this group is reflective of our market for executive talent and that in aggregate the group reflects companies that meet both the objective and qualitative criteria. The resulting 2017 peer group for the purposes of benchmarking 2018 named executive officer compensation is as follows:

How We Weight the Elements of Executive Compensation

We determine the appropriate allocation between annual cash and equity incentive compensation with a goal of weighting the allocation toward variable compensation based on corporate financial and other performance goals and individual performance. We establish financial and other performance goals so that target attainment is not assured and payment for performance at or above target levels will require the individuals to perform at a high level, devote significant effort to the business, and produce significant results. We also develop named executive officer performance objectives to support achievement of our annual corporate goals in order to ensure that the priorities, focus, and efforts of our named executive officers support the success of our strategic initiatives and drive achievement of our business objectives and financial goals. The management development and compensation committee considers total compensation (cash and equity) when evaluating competitive data provided by Pearl Meyer and tally sheets prepared by our human resources department that include information on each named executive officer’s current and past compensation.

Based on this review, the committee can decide to adjust one or more elements of their compensation. Certain compensation decisions may specifically impact other elements of compensation. For example, because potential annual cash incentive payouts are based on the individual’s base salary, increases in base salary may also increase the amount of the cash incentive payout. We have not implemented a specific policy for determining the allocation between cash and non-cash compensation, however in designing the total compensation structure, the committee assures that compensation remains generally aligned with the market median, with the opportunity for increased compensation if the Company overachieves against any pre-determined performance targets. The management development and compensation committee generally allocates a greater percentage of total compensation to equity, including both time- and performance-based equity compensation, as the committee believes equity awards are an important component of our total compensation structure to provide appropriate competitive total compensation, motivate and retain our named executive officers, and align management and stockholder interests.

Risk Mitigation in our Executive Compensation Programs

Payments under our Incentive Plan are based on pre-determined, annual corporate performance goals which are equally weighted to mitigate the risk of decisions driven by the impact to one metric at the expense of the others,

30

as well as the achievement of performance objectives which are established for our named executive officers. In 2017, no executive officer was eligible for a bonus under the Incentive Plan unless the Company achieved at least 95% of the pre-determined corporate revenue performance goal or 90% of the pre-determined corporate net adjusted EBITDA performance goal as approved by the management development and compensation committee.

We maintain an executive compensation clawback policy which is available on our website at http://ir.monotype.com/, under which any cash incentive compensation, unvested time-based equity awards and vested or unvested performance-based equity awards can be recouped in the event of a restatement of our financial statements for any period where the management development and compensation committee determines there was intentional misconduct by an executive officer which led to such restatement, and where such compensation element would not have been awarded or paid to any executive officer that would not have been awarded or paid under such restatement. Further, our Incentive Plan contains a clawback provision where, in the event that there is a subsequent change in our audited financial statements that impacts whether the financial performance targets were satisfied, a named executive officer would be required to repay any amount that was paid based solely on the satisfaction of a target that was no longer satisfied based on the change in our audited financials. While the management development and compensation committee has no discretion to determine whether a repayment is required under our Incentive Plan, that committee is responsible for determining the amount that must be repaid.

Our President and CEO is subject to equity ownership guidelines that, beginning four years after he became our President and CEO, or as of January 1, 2020, require him to hold shares of a combination of shares of our Common Stock, vested stock options and unvested shares of restricted stock, with an aggregate value of at least equal to three times his base salary during any fiscal year, which further reinforces the alignment of his interests with those of our stockholders. As of December 31, 2017, our President and CEO met the equity ownership guidelines.

We believe that these compensation practices encourage longevity and stability in our management team and discourage individuals from making decisions based on immediate personal gain, thus reducing the overall risk in our business activities.

Stockholder Outreach

In 2017, 97.2% of votes cast by our stockholders were in favor of our named executive officer compensation. Although the results of our say-on-pay proposal have shown strong support for our named executive officer compensation, we believe it is important to maintain on-going conversations with our stockholders to discuss our executive compensation programs including our cash compensation and equity award granting philosophies, dilution, and general corporate governance practices. During 2017, our management team reached out to our largest stockholders and provided them with an opportunity to provide feedback on, among other topics, our executive compensation programs and corporate governance practices. The Company’s management intends to continue to regularly engage our stockholders in these conversations.

Further, our management development and compensation committee invites our stockholders to communicate directly with its members to inquire about, or provide their opinions about the Company’s executive compensation philosophies and programs. Any communications should be mailed to:

Monotype Imaging Holdings Inc.

Attention: Chair, Management Development and Compensation Committee

600 Unicorn Park Drive

Woburn, Massachusetts 01801

A member of the committee will respond to all communications as quickly as possible.

31

2017 Executive Compensation Payments

Base Salary

When determining base salary increases for 2017, the management development and compensation committee considered the variance in base salary of named executive officers when compared to the median of our peer group as well as the financial performance of the Company, the overall performance and effectiveness of each named executive officer, and any significant change in his or her scope and responsibilities since the officer’s last base salary increase.

Based on this analysis, the committee awarded percentage base salary increases to each named executive officer that were generally in-line with the salary increases granted to our employee base, with the exception of Mr. Landers who received an above median salary increase, reflecting a market adjustment designed to keep his base salary at approximately the 50^th percentile when compared to the base salary of similarly situated individuals in our peer group of companies. These base salary percentage increases listed below were approved in February 2017, and applied retroactively to January 1, 2017. Salary increases and the resulting 2017 base salary for each of our named executive officers were as follows:

Cash Incentive Compensation

In February 2017, our management development and compensation committee set annual corporate performance goals (the “Corporate Performance Goals”) and established the participants in and individual targets under the Incentive Plan. For 2017, the Corporate Performance Goals included a full year revenue goal of $241.5 million and a full year non-GAAP net adjusted EBITDA goal of $54.9 million. Each Corporate Performance Goal was compared to the full year guidance the Company gave on its earnings call on February 17, 2017, and the committee concluded that these goals were set sufficiently beyond the high end of the Company’s stated full year revenue and non-GAAP net adjusted EBITDA guidance. The committee chose these metrics because this is how management and our stockholders judge our success and because the committee believes that revenue growth must also be profitable. These goals were weighted equally. See our Form 10-K for the year ended December 31, 2017 for a reconciliation of all non-GAAP financial measures to the comparable GAAP financial measures. Individual threshold, target, and maximum cash incentive compensation amounts for all participants in the Incentive Plan are set as a percentage of annual base salary, with no payment made unless the Company achieved at least 95% of the 2017 revenue goal or 90% of the 2017 non-GAAP net adjusted EBITDA goal. For 2017, the threshold, target, and maximum payments as a percentage of annual base salary were as follows:

32

In 2017, the management development and compensation committee set the target incentive cash percentage of annual base salary for our President and CEO at the median when compared to target cash percentages of similarly situated individuals in our peer group of companies. Under the Incentive Plan, the committee cannot establish a maximum cash incentive compensation amount for any participant that is greater than two times such participant’s base salary. In addition, once the targets are established, the committee does not have discretion to increase a payout under the Incentive Plan for any participant but does retain discretion to reduce the amount of any payment under the Incentive Plan.

In February 2017, our management development and compensation committee reviewed and approved our named executive officer performance objectives for 2017. These objectives were applicable to our CEO as well as the remainder of our named executive officers as the committee believes that each named executive officer should be focused on the same overall annual corporate performance goals, but driving the achievement of these goals as it relates to the functions they oversee. The committee does not formally assign weighting between the Corporate Performance Goals and the named officer performance objectives, but does consider what percentage of the Corporate Performance Goals were achieved when determining what cash incentive payout should be for each of our named executive officers. In February 2018, the committee determined that our named executive officers had substantially achieved the named executive officer performance objectives for fiscal year 2017. Our named executive officers’ 2017 performance objectives were as follows:

In February 2018, our Board determined that, subject to the receipt of audited financial statements for fiscal year 2017, we had reached 98% of our full year revenue target of $241.5 million, or $235.8 million, and 101% of our full year non-GAAP net adjusted EBITDA target of $54.9 million, or $55.4 million (which included a restructuring add-back). For more information on our financial performance in fiscal 2017, please refer to our Annual Report on Form 10-K filed with the SEC.

33

Based on the percentage achievements of the final Corporate Performance Goals for 2017 and the achievement of the named executive officer performance objectives described herein, we paid annual cash incentive compensation under the Incentive Plan at target, as follows:

Equity Compensation

The management development and compensation committee targets yearly time-based equity compensation for our President and CEO at the 50^th percentile when compared to our peer group of companies, with grants of performance shares providing him with the opportunity to achieve higher than 50^th percentile equity compensation if we exceed our budgeted, pre-determined financial and other performance targets. The committee believes that tying above median equity compensation to yearly corporate performance is a strong motivator and helps directly align the interests of our President and CEO with those of our stockholders.

We generally grant equity awards during the first quarter of the fiscal year. In determining the mix of equity awards to be granted in 2017, our management development and compensation committee reviewed our management equity award recommendations and our 2017 benchmarking to industry and peer group data, which included an analysis of overhang and dilution compared to our peer group. After such review, the committee determined that a mix of restricted stock and performance-based restricted stock units as equity grants to our named executive officers was appropriate for 2017. On February 14, 2017, the committee approved equity awards to our named executive officers, which were granted effective as of March 3, 2017.

Equity grants made to our named executive officers in 2017 were as follows:

Time-based restricted stock awards granted in 2017 each vest as to 25% percent of the shares on the first anniversary of the grant date, with the remainder of the award vesting in equal quarterly installments over the

34

following three years. Vesting of performance-based restricted stock units is tied to stretch goals that the committee believes are difficult to attain and require over-performance against our annual operating plan or overall or business line revenue, each as approved by our Board. Performance-based restricted stock units that have been granted to our named executive officers that were outstanding in 2017, including targets and status are as follows:

35

For accounting purposes, the portion of the 2016 award associated with each annual performance target (one-third of the total grant) is deemed granted on the approval date of the Company’s yearly performance target, which for the 2018 yearly performance target was December 20, 2017.

Tax and Accounting Considerations

In 2017, we considered the provisions of Section 162(m) of the Code as then in effect and related Treasury regulations that restricted deductibility of compensation paid to our named executive officers (other than our principal financial officer) to the extent such compensation exceeded $1,000,000 and did not qualify for an exception as commission-based compensation or “qualified performance-based compensation.” In 2017, the management development and compensation committee endeavored to structure compensation to maintain deductibility under Section 162(m) of the Code to the extent practicable while maintaining the ability to provide competitive, compensation program for our named executive officers. Beginning in 2018, recently-enacted tax legislation (1) expands the scope of Section 162(m) such that all named executive officers are “covered employees” and anyone who was a named executive officer in any year after 2016 will remain a covered employee for as long as he or she (or his or her beneficiaries) receive compensation from the Company, and (2) eliminates the exception to the deduction limit for commission-based compensation and performance-based compensation except with respect to certain grandfathered arrangements in effect as of November 2, 2017. Accordingly, any compensation paid to a covered employee in excess of $1,000,000 will be non-deductible going forward. The committee believes that stockholder interests are best served if the committee retains maximum flexibility to design executive compensation programs that meet stated business objectives. For these reasons, the committee, while considering tax deductibility as a factor in determining executive compensation, will not limit such compensation to those levels that will be deductible, particularly in light of the elimination of the expansion of the covered employee group and the elimination of the exception for performance-based compensation.

36

Compensation Committee Report

No portion of this Compensation Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, through any general statement incorporating by reference in its entirety the Proxy Statement in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act.

The management development and compensation committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy Statement. Based on its review of, and the discussions with management with respect to the Compensation Discussion and Analysis, the management development and compensation committee recommended to the board of directors and the board of directors has agreed that the Compensation Discussion and Analysis be included in this Proxy Statement.

Submitted by the management development and compensation committee,

37

Summary Compensation Table - Fiscal Years 2017, 2016, and 2015

The table below lists the compensation provided to our named executive officers for the fiscal years ended December 31 indicated above.

38

Grants of Plan-Based Awards – Fiscal Year 2017

The threshold, target, and maximum payouts under the Incentive Plan listed below were approved by our management development and compensation committee on February 14, 2017. Actual payment amounts under these awards were approved on February 13, 2018. Except as set forth in the footnotes, grants of equity awards listed below were approved by our management development and compensation committee on February 14, 2017, and granted effective as of March 3, 2017.

39

Discussion of Compensation and Grants of Plan-Based Awards – Fiscal Year 2017

All of our named executive officers have employment agreements with us that provide benefits upon the termination of employment, however, these agreements do not include guaranteed compensation amounts that are payable in the ordinary course. The benefits payable under the employment agreements upon a termination of employment are described below under the heading “Potential Payments upon Termination or Change in Control.” No adjustments were made to any plan-based awards that were made to our named executive officers in 2017.

Outstanding Equity Awards at Fiscal Year End – 2017

The following table provides information regarding outstanding equity grants made to our named executive officers as of December 31, 2017.

40

Option Exercises and Stock Vested – Fiscal Year 2017

The following table sets forth certain information regarding the number of shares of restricted stock issued under the 2007 Option Plan that vested and the amounts realized by the named executive officers upon vesting. No option awards were exercised and no restricted stock units vested in 2017.

Potential Payments upon Termination or Change-in-Control

Employment Agreements

We have employment agreements with all of our named executive officers that provide certain benefits upon the termination of their employment, including in the event of termination following a change-in-control, as summarized in the chart below:

41

42

In the employment agreements, Cause means:

Good Reason means that the executive has complied with the “Good Reason Process” following the occurrence of any of the following:

Good Reason Process means:

Equity Awards

Upon a Change in Control:

Under our 2007 Option Plan and our 2010 Inducement Stock Plan (the “2010 Inducement Plan”), upon the effective time of any sale event, the 2007 Option Plan and the 2010 Inducement Plan and all awards under such plans will terminate unless the parties to the transaction, in their discretion, provide for appropriate substitutions or assumptions of outstanding awards.

43