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 that 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 change your vote and revoke your proxy by doing one of the following:

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.

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 2017 annual meeting of stockholders must be received by the Company by December 12, 2016. 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 2017 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 5, 2017, nor later than the close of business on February 4, 2017. 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, 2015, is being mailed to stockholders concurrently with this Proxy Statement. The Annual Report, however, is not part of the proxy solicitation material. 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.

Biographies of our Non-Employee Directors

and Director Nominees

The following biographical information lists the names, ages as of January 31, 2016, 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.

Biographical Information of the 2016 Nominees (current term expires on the date of the Annual Meeting)

Gay W. Gaddis, 59

Member, Management Development and Compensation Committee

Member, Nominating and Corporate Governance Committee (effective on March 3, 2016)

Class I director since 2014

Other key strengths and experience Gay brings to the Monotype Board include:

Roger J. Heinen, Jr., 64

Member, Management Development and Compensation Committee

Member, Audit Committee

Member, Nominating and Corporate Governance Committee (stepped down on March 3, 2016)

Class I director since 2006

Other key strengths and experience Roger brings to the Monotype Board include:

Biographical Information of Our Current

Non-Employee Directors

Chairman of the Board of Directors since 2014

Class II director since 2008

Current term expires in 2017

Other key strengths and experience Bob brings to the Monotype Board include:

Chair, Management Development and Compensation Committee

Member, Audit Committee

Class III director since 2006

Current term expires in 2018

Other key strengths and experience Pam brings to the Monotype Board include:

Chair, Audit Committee

Member, Nominating and Corporate Governance Committee

Class II director since 2006

Current term expires in 2017

Other key strengths and experience Pete brings to the Monotype Board include:

Chair, Nominating and Corporate Governance Committee

Member, Management Development and Compensation Committee

Class III director since 2012

Current term expires in 2018

Other key strengths and experience Tim brings to the Monotype Board include:

Skills and Experiences 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 sets we believe each director and Nominee bring to our Board is as follows:

Nominees

Directors

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

Board Structure

The structure and composition of our Board is as follows:

Board Leadership

We have separate positions for the chairman of the Board and president and CEO. Robert Lentz currently serves as the chairman of our Board. Our Board believes that there are advantages to having an independent chairman, including:

The Board believes that Mr. Lentz’s skill set, understanding of the Company’s business and end user markets, and his ability to offer strategic guidance to our executive management team, allows him to excel in his role as our chairman.

Board Governance

The Company and the Board are committed to good corporate governance practices which 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:

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 Board 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 risk identification and prioritization process, our Sarbanes-Oxley Act of 2002 compliance program and our internal audit 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.

Board Independence

Our Board has considered the relationships of all directors and any transactions involving the directors and determined that two of our directors, Douglas Shaw who retired as our president and CEO on December 31, 2015 but remained on the Board as a director and Scott Landers who was appointed as our president and CEO and elected to the Board on January 1, 2016, each have a relationship that would interfere with the exercise of independent judgment in carrying out his responsibility as a director. Neither Messer. Shaw or Landers serves on any committee of the Board. Aside from Messrs. Shaw and Landers, each director qualifies as an independent director under the rules of the SEC and the NASDAQ Global Select Market.

Management Development and Compensation

Committee Interlocks and Insider Participation

None of our executive officers serve 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.

The following provides information about the

2015 Meetings of the Board, its committees

and any executive sessions of non-employee directors.

The Meetings of the Board of Directors

The Board met 13 times during 2015 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 2015, an executive session of the independent directors was held at least one time following a scheduled meeting of the Board and included only those directors who met the independence requirements of the NASDAQ Global Select Market. Our chairman, Robert Lentz, 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 the NASDAQ Global Select Market. On March 3, 2016, Ms. Gaddis was appointed to our Nominating and Corporate Governance Committee and Mr. Heinen stepped down from such committee. 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

Chair: Pamela F. Lenehan

Additional Members:

Gay W. Gaddis, Roger J. Heinen, Jr., and Timothy B. Yeaton

Number of Meetings in 2015: 13

Committee Member Attendance in 2015: 92%

Responsibilities:

Independence of Management Development

and Compensation Committee Members

Each member of our management development and compensation committee is independent as defined under the Exchange Act, Rule 162(m) of the Internal Revenue Code of 1986, as amended, (the “Code”) and the rules of the NASDAQ Global Select Market.

Audit Committee

Chair: Peter J. Simone

Additional Members:

Roger J. Heinen, Jr. and Pamela F. Lenehan

Number of Meetings in 2015: 6

Committee Member Attendance in 2015: 100%

Responsibilities:

overseeing the work of our independent registered public accounting firm;

Independence of Audit Committee Members

and Financial Expert Status

The 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 the NASDAQ Global Select Market. 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 have 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 the NASDAQ Global Select Market.

Nominating and Corporate Governance Committee

Chair: Timothy B. Yeaton

Additional Members:

Roger J. Heinen, Jr. and Peter J. Simone.

Number of Meetings in 2015: 3

Committee Member Attendance in 2015: 100%

In order to have a better balance of committee membership, on March 3, 2016, Ms. Gaddis joined the Nominating and Corporate Governance Committee, and Mr. Heinen stepped down.

Responsibilities:

Independence of Nominating

and Corporate Governance Committee Members

Each member of our nominating and corporate governance committee is independent as defined under the rules of the NASDAQ Global Select Market.

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

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 a web page submission form to allow 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, under Governance Documents, on our website at http://ir.monotype.com/. Information submitted through the web submission from or hotline is forwarded to our Board or audit committee and concerns can be reported anonymously if the caller chooses.

The following provides a summary of the structure of our non-employee director compensation in 2015.

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, however, if the number of meetings of the Board or any committee exceeds 10 per year, non-employee directors are entitled to receive per meeting payments of $1,000 for any additional meeting attended. Further, the Board has discretion to award additional compensation to any director who undertakes additional responsibility above and beyond any of their committee responsibilities. Our non-employee directors are also entitled to reimbursement of reasonable travel expenses for Board or committee meetings, Company-related activities that require their attendance and payment of director-related education expenses. Our Board reviews the structure and amount of director compensation every two years. As our director compensation structure was last reviewed in 2014, in 2016 a review of director compensation was completed and approved by the Board in March 2016, and will be applied retroactively to the beginning of 2016.

Our annual cash retainer structure for our non-employee directors in 2015, and the annual cash retainer structure for our non-employee directors that was approved in March 2016, are as follows:

Additional cash retainers for each non-employee director who served on one or more Board committees in 2015 or will serve in 2016, are as follows:

Actual cash retainers paid to each non-employee director in 2015 are set forth in the “Director Compensation Table- Fiscal 2015.” In addition, although there were 13 meetings of the Board in 2015, no meeting fees were paid in 2015 as the directors decided to waive them.

Equity Compensation

In 2015, our non-employee directors received a grant of restricted stock equal to the number of shares with a dollar value of $105,000 based on the closing price of a share of our Common Stock on the grant date. The award granted in 2015 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 annual meeting. In 2015, no additional equity awards were granted. Beginning in 2016, it is anticipated that our non-employee directors will receive annual grants of restricted stock equal to the number of shares with a dollar value of $125,000 based on the closing price of our Common Stock on the grant date.

Equity Grants upon Election to the Board

Upon election to the Board, new non-employee directors receive a grant of restricted stock with a dollar value equal to $120,000 based upon the closing price of our Common Stock on the grant date. The grant vests quarterly in equal installments over four years. Beginning in 2016, upon election to the Board, new non-employee directors will receive a grant of restricted stock with a dollar value equal to one and a half times the annual cash retainer paid to a member of the Board.

The aggregate total number of outstanding unvested shares of restricted stock at December 31, 2015 is shown below. With the exception of the 2,278 of the 4,049 shares granted to Ms. Gaddis upon her election to the Board on February 24, 2014 and 1,746 of the 9,310 shares granted to Mr. Yeaton upon his election to the Board on July 25, 2012, all shares shown below will vest on May 5, 2016, which is the date of our Annual Meeting.

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:

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.

The Company gives its stockholders the annual opportunity to approve the compensation of our named executive officers. We believe our executive compensation programs have been designed to align executive incentives with the creation of 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 and determine what actions may be appropriate to address those concerns when making future executive compensation decisions.

This Proposal relates solely to the advisory vote on the Company’s executive compensation 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 the named executive officers.

Relative Change* In Revenue,

Operating Profit, and Net Income

over a five year period

*Data is presented in index form, where revenue, operating profit and net income start in 2011 with a base value of 100.

Some of our 2015 fiscal year

financial highlights** include:

** See our Form 10-K filed with the SEC for the year ended December 31, 2015 for a reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures.

Change In Value* of Our Common Stock, NASDAQ Composite, NASDAQ Computer, Russell 2000, and S&P 600 Indicies, and our President and CEO’s Total Compensation

          ^*Data is presented in index form, where the Company and

          all indices started on January 1, 2011 with a base value of 100.

  Quick Facts About:

  Breakdown of Equity

  Granted in 2015 to Our

  Named Executive Officers

The following provides information on the named executive officers, executive officers and senior officers of the Company, including their ages as of January 31, 2016, and is based on information they have 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 or until his or her successor is duly elected and qualified or until his or her resignation or removal in accordance with the Company’s by-laws.

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

		Steven R. Martin, 54   Executive Vice President and Chief Innovation Officer since 2015   Senior Vice President, Engineering from 2012 to 2015   Vice President, Engineering and Development from 2005 to 2012

		John L. Seguin, 61   Executive Vice President since 2006   Senior Vice President and General Manager, Display Imaging from 2004 to 2006

Our Executive Officers

		Benjamin W. L. Semmes, III, 49   Executive Vice President, Market Strategy and Sales since 2015

Our Senior Officers

Below is biographical information for the senior officers of the Company, or our key employees, including their ages as of January 31, 2015.

		Mark S. Brown, 57   Senior Vice President, OEM Solutions since 2015   Vice President, Display Imaging Sales from 2008 to 2015   Director, OEM Sales from 2006 to 2008

		Daniel T. Gerron, 49   Senior Vice President, Corporate Strategy and Development since 2015   Vice President, Corporate Development from 2010 to 2015   Vice President, Business Development from 2008 to 2010

		Lisa A. Landa, 51   Senior Vice President, Corporate Marketing since 2015   Vice President, Corporate Marketing from 2011 to 2015

This section describes the Company’s compensation programs for our named executive officers that were in effect for 2015 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 2015, as well as our three other most highly compensated executive officers who had been designated by the Company as executive officer as of December 31, 2015. These individuals are referred to as our named executive officers, or NEOs, in this Compensation Discussion and Analysis and are as follows:

On September 1, 2015, we adjusted the titles of our executive and senior officers to better align their titles with comparable positions. Except for Mr. Landers and Mr. Martin, these title adjustments were not considered promotions and accordingly no salary adjustments were made. Each named executive officer will be referred to with the title they held on December 31, 2015 throughout this Proxy Statement.

Our Executive Compensation

Objectives and Principles

We believe the Company’s success is dependent on experienced, engaged and motivated talent at all levels of the organization. We strive to provide a total compensation package to our executive officers that we believe:

We focus on maintaining total compensation levels that we believe will be perceived by our executive officers and stockholders as fair and equitable. We rely on the following principles to guide our executive compensation decisions:

Compensation decisions are based on the overall compensation opportunity, which includes base salary, short-term cash incentive compensation, equity incentive compensation and benefits.

We target the total compensation opportunity to be in line with executives who hold comparable positions at public companies of similar size and in similar industries.

A significant portion of the total compensation opportunity is variable and performance-based, subject to increase when results exceed corporate targets and decrease when results fall below target. No payout is made if results do not achieve threshold levels of performance.

Other than an annual physical examination that gives our executives the opportunity to complete all of their annual doctors’ appointments in one visit, the benefits package offered to our executives is the same as the benefits package provided to all full-time employees.

All of our named executive officers are compensated under the same policies, which are reviewed regularly by the management development and compensation committee to assure they are aligned with our overall compensation objectives and principles.

Our management development and compensation committee determines executive compensation by utilizing input from our president and CEO, senior vice president of human resources and an independent compensation advisor from Pearl Meyer & Partners LLP (“Pearl Meyer”). Pearl Meyer has been engaged by our management development and compensation committee and provides no other services to the Company. The individual compensation consultant from Pearl Meyer who advises the committee has no prior relationship with any of our named executive officers.

In order to make executive compensation determinations, the committee considers a variety of topics and reviews materials that are provided either by the Company, Pearl Meyer or other industry sources. The chart below shows the compensation topics considered by the 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 Executive Incentive Bonus Plan (the “Incentive Plan”) which was established by the Board in February 2014 and under which certain performance goals were adopted by the Board in February 2015, our equity award plan, our profit sharing plan and our Second Amended and Restated 2007 Stock Option and Incentive Plan (the “2007 Option Plan”). Further, the Board

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, the mechanics of each program element and who determines the level of compensation provided for each element.

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 named executive officers which 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 named 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 committee benchmarks total compensation and each individual compensation element to determine whether our compensation is competitive. This is accomplished by

comparing the levels of executive compensation and the financial performance of the Company against an approved peer group of companies. The peer group is selected with guidance from Pearl Meyer and approved by the committee based on the following criteria:

In 2015, we benchmarked total compensation to a peer group of companies, with revenue generally ranging from $75 million to $460 million, or 0.4 to 2.5 times our annual revenue and a market capitalization generally ranging from $460 million to $3.2 billion, or 0.4 to 2.5 times our market capitalization. In addition, the committee looked at revenue growth, EBITDA, profit margin and percentage of revenue coming from international sources. The management development and compensation committee determined that it was appropriate to slightly adjust the market capitalization and revenue ranges used to determine our 2015 peer group companies from the ranges used in 2014 to reflect the current

revenue performance, EBITDA, revenue growth and market capitalization of the Company and the peer group companies. In 2015 one peer group company, Open Table, Inc., was removed from the peer group as it was acquired by the Priceline Group, Inc. whose revenue performance and market capitalization fell outside of our peer group ranges, and was replaced with Progress Software Corporation as it met the stated criteria for our peer group companies. Accordingly, our peer group of companies for benchmarking purposes in 2015 was as follows:

Upon determining our 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 doesn’t 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 cash, restricted stock and stock option 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 the vesting of grants of performance shares.

In determining the compensation targets for individual named executive officers, the committee also considered recommendations from our president and CEO and senior vice president of human resources, based on:

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. Financial and other performance goals are established so that target attainment is not assured and payment for performance at or above target levels will require the named executive officer to perform at a high level, devote significant effort to the business and produce significant results. Individual performance objectives are developed to support achievement of our annual corporate goals in order to ensure that the named executive officer’s priorities, focus and efforts 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 a named executive officer’s 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. The committee has 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. The committee generally allocates a greater percentage of total compensation to equity, or long-term compensation, as they believe equity incentive awards are an important component of our total compensation structure to provide appropriate competitive total compensation, motivate and retain our 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 other. Individual performance objectives are also established for each named executive officer. No payment is made under the Incentive Plan unless the Company achieves at least 90% of one of the pre-determined corporate performance goals that have been approved by our Board. The Incentive Plan contains a claw back provision in the event the audit committee indicates there will be a subsequent change in our audited financial statements that impacts whether the financial performance targets were satisfied. In the event of a claw back, a named executive officer would be required to repay any amount that was paid based solely on the satisfaction of any 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, that committee does have discretion on determining the amounts to be repaid.

We generally weight our compensation elements toward longer-term elements such as equity awards, including performance based awards that align with stockholder interests. In furtherance of this goal, we use grants of performance shares (RSUs) which are tied to difficult to achieve, pre-determined financial or corporate targets that must be attained in order for vesting to occur, and grants of non-qualified stock options because our share price must rise from the stock option grant price in order for there to be any value realized by the recipient. We believe weighting toward long-term compensation effectively aligns the interests of our named executive officers and stockholders. Further, our president and CEO is subject to equity ownership guidelines that, beginning four years after the latter of the adoption of the guidelines or the first date he was employed as our CEO, 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 three times his base salary during a fiscal year, which further reinforces this alignment.

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.

Shareholder Outreach

In 2015, 99.4% of votes cast by our stockholders were in favor of our executive compensation program. 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 2015, our management team reached out to our largest stockholders and provided them with a forum to discuss the state of our business and ask questions about and provide feedback on, any element of our business, including our executive compensation programs and corporate governance practices. The Company’s management intends to continually 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.

2015 Executive Compensation Payments

Base Salary

When determining base salary increases for 2015, the management development and compensation committee considered the variance in base salary of named executive officers when compared to the median for market and 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 their scope and responsibilities since his or her last base salary increase.

Based on this analysis, the committee awarded varying base salary increases to each named executive officer, in some cases, in anticipation of a significant change in scope and responsibility. For example, Mr. Martin received an above median salary increase to reflect his anticipated promotion from senior vice president, engineering to chief innovation officer; Mr. Landers received an above median salary increase to reflect his promotion from senior vice president and chief financial officer to chief operating officer, and to better align his salary with that of a chief executive officer in anticipation of his appointment to that position in 2016. These base salary percentage increases listed below were approved on March 8, 2015, and applied retroactively to January 1, 2015. Salary increases and the resulting 2015 base salary for each of our named executive officers were as follows:

Cash Incentive Compensation

In March 2015, 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. In 2015, the Corporate Performance Goals were a full year revenue goal of $198.0 million and a full year non-GAAP net adjusted EBITDA goal of $77.1 million. Individual threshold, target and maximum cash incentive compensation amounts for all participants in the Incentive Plan were set as a percentage of annual base salary, with no payment made unless the Company achieved at least 90% of the 2015 revenue goal or net adjusted EBITDA goal, as follows:

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.

In February 2016, the committee determined that each named executive officer had substantially achieved his or her individual performance objectives for fiscal year 2015, with the exception of Mr. Hill whose employment started late in fiscal 2015 and accordingly, he did not have individual performance objectives for the year. Our named executive officers individual performance objectives were as follows:

Drive achievement of the Company-wide revenue and net adjusted EBITDA targets and major corporate initiatives; develop long-term strategies to drive increase in market share and pursue acquisition opportunities; drive achievement of business unit and major initiative

revenue and customer attainment goals; add 3 major new stockholders; assure smooth transition for Chief Operating Officer into CEO role; and work with Chief Operating Officer to define longer-term market strategies in existing and new markets.

Drive achievement of the Company-wide revenue and net adjusted EBITDA targets and major corporate initiatives; achieve metrics associated with corporate initiatives; determine long term customer value proposition for new markets; ensure new ERP system implementation is on time and on budget; drive cyber security processes; and execute on organizational initiatives.

Drive achievement of the Company-wide revenue and net adjusted EBITDA targets; drive achievement of business unit sales targets; drive achievement of key metrics for key initiatives; support Chief Operating Officer transition; drive sales methodology and expansion; and support product marketing and management process and organization.

Drive achievement of the Company-wide revenue and net adjusted EBITDA targets; identify new and emerging platforms; drive innovation and technical road map; deliver key products on time and to specification; drive refinement of open source strategy; and ensure organizational structure results in velocity and efficiency gains.

Drive achievement of the Company-wide revenue and net adjusted EBITDA targets; drive risk management program; expand web font IP enforcement efforts; assist with M&A efforts from diligence through deal structure; participate in at least one customer focused event; and assist with contracts automation process.

In February 2016, our Board determined that, subject to the receipt of audited financial statements for fiscal year 2015, we had reached 97% of our full year revenue target of $198.0 million, or $192.4 million and 92% of our full year non-GAAP net adjusted EBITDA target of $77.1 million, or $71.0 million. Based on the percentage achievement of the Corporate Performance Goals for 2015 and the achievement of each named executive officer’s individual performance objectives, payments of annual cash incentive compensation under the Incentive Plan were made at less than target to each named executive officer, as listed below:

Equity Compensation

We generally grant equity awards during the first quarter of the fiscal year. In determining the mix of equity awards to be granted in 2015, our management development and compensation committee reviewed our management equity award recommendations and our 2015 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 non-qualified stock options, restricted stock and performance shares (RSUs) as equity grants to our named executive officers was appropriate for 2015. On March 8, 2015, the committee approved the equity awards listed below to our named executive officers, which were granted on March 12, 2015. Except for the grants awarded to Douglas Shaw, stock options and restricted stock granted in 2015 each vest 25% on the first anniversary of the grant date, with the remainder of the award vesting in equal quarterly installments over the following three years. The stock options have an exercise price of $32.96, which

was the closing market price on the NASDAQ Global Select Market for a share of our Common Stock on that date.

Vesting of performance shares granted in 2015 are tied to the achievement of corporate annual targets over a three-year period, with each target being applicable to each fiscal year covered. Achievement of a fiscal year’s corporate annual target or targets provides the opportunity for one third of the total award to vest. If a corporate annual target is not achieved in any fiscal year, certain of the shares that were eligible to vest upon the achievement of such year’s corporate annual target will vest if later year targets are achieved. Vesting may accelerate if later year corporate annual targets are achieved early. If, at the end of the three year period, none of the annual corporate targets are achieved, the entire grant is forfeited. Equity grants made to our named executive officers in 2015 were as follows:

With respect to performance shares granted to our named executive officers in 2014 and 2015, on March 3, 2016, our management development and compensation committee

determined that certain corporate performance targets for 2014 and 2015 grants were not met, and one corporate performance target for the 2015 grant was met, as shown below:

Tax and Accounting Considerations

We have considered the provisions of Section 162(m) of the Code and related treasury regulations that restrict deductibility of compensation paid to our named executive officers holding office at the end of any calendar year to the extent such compensation exceeds $1,000,000 in any year and does not qualify for an exception under the statute or regulations. The management development and compensation committee endeavors to take into consideration deductibility of compensation under Section 162(m) of the Code to the extent practicable while maintaining a competitive, performance-based compensation program, however, tax consequences, including tax deductibility, are subject to many factors which are beyond the control of the Company and the committee. The committee believes that it is important to retain maximum flexibility in designing 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 or types that will be deductible. The committee considers alternative forms of compensation consistent with its compensation goals which preserve deductibility, as appropriate. However, tax consequences, including tax deductibility, are subject to many factors which are beyond the control of the Company and the committee. The committee believes that it is important to retain maximum flexibility in designing 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 or types that will be deductible. The committee considers alternative forms of compensation consistent with its compensation goals which preserve deductibility, as appropriate.

The table below lists the compensation provided to our named executive officers for the fiscal years ended December 31 in 2015, 2014 and 2013.