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 2, 2019

Notice is hereby given that the 2019 Annual Meeting of Stockholders (the “Annual Meeting”) of Monotype Imaging Holdings Inc., a Delaware corporation (the “Company”), will be held on Thursday, May 2, 2019, at 8:30 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 I directors nominated by the board of directors to serve until the 2022 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;

3. To ratify the audit committee’s appointment of Deloitte & Touche, LLP as the Company’s independent registered public accounting firm for 2019; and

4. 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 22, 2019 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 4, 2019

Table of Contents

Questions and Answers about Monotype’s 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” or “Monotype”), for use at the Company’s 2019 Annual Meeting of Stockholders (the “Annual Meeting”). This Proxy Statement and form of proxy will be made available to stockholders on or about April 4, 2019.

When and where is the Annual Meeting?

Who can vote?

Stockholders of record as of March 22, 2019 (our “Record Date”) are entitled to vote. As of our Record Date, there were 41,391,437 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 20,695,719 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 Tony 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 1, 2019. Please refer to the specific instructions on the printed proxy card. If you hold your shares in street name, your

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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:

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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, Massachusetts 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.

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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 2020 annual meeting of stockholders must be received by the Company by December 6, 2019. 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 2020 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, 2020, nor later than the close of business on February 2, 2020. 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, 2018, 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.

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Beneficial Ownership and Section 16(a) Reporting Compliance

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 March 1, 2019 can be found in the table below. This information is based on publicly available filings on Form 13G for the period ending December 31, 2018 and the percentage ownership calculations are based on 41,447,514 shares outstanding on March 1, 2019.

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 41,447,514 shares outstanding on March 1, 2019.

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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, 2018 and all filing requirements applicable to the Insiders were timely satisfied, with the exception of one Form 4 for each of Messrs. Landers, Semmes, Martin, Zucker, and Ms. Dunlap, which were filed late. These errors were remediated immediately upon discovery.

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Corporate Social Responsibility, Employee Engagement and Corporate Governance

At Monotype, we empower creative minds to build and express authentic brands. We strive to be the first stop for leaders and innovators of brand expression, providing the design assets, technology and expertise that drive brand engagement and the best user experiences. Our products, services and expertise help brands build authentic, memorable experiences at every customer touchpoint. We partner with some of the industry’s largest font and marketing asset companies and employ many of the world’s most talented font designers. While great products and unmatched talent are a good start, we must also earn and maintain the trust of customers, employees and stockholders.

Monotype focuses on conducting business in a manner that is principled, accountable and transparent. Our core values are at the center of everything we do:

These values are embodied in our corporate social responsibility efforts, employee engagement programs and corporate governance programs. With building long-term relationships at the heart of what we do, we seek to make Monotype a great place to work for our employees and to earn the trust of our customers and stockholders.

Corporate Social Responsibility

We know that customers and stockholders would rather engage with a company that operates in a manner that promotes social responsibility and acts accordingly.

Creating Trust

Green Initiatives

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Charitable Giving

Employee Engagement

We believe Monotype’s success flows from nurturing our diverse, talented and engaged team through providing clear avenues for professional development and the ability to give meaningful, regular feedback to management.

Training and Development

Soliciting and Providing Feedback

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Embracing Diversity

Corporate Governance

Our Board and management team believe that effective corporate governance programs build a foundation of trust between Monotype and its stockholders, maintain internal checks and balances, and strengthen management accountability.

Equity Ownership Guidelines and Anti-Hedging

We Maintain Board and Executive Officer Equity Ownership Guidelines

Our Board believes that equity ownership by the Board, our president and chief executive officer (our “President and CEO”), and our other executive officers is important to align their interests with the interests of our stockholders. Equity ownership also demonstrates to the investing public and our employees that the Board, President and CEO and our other executive officers are committed to our Company. Our current equity ownership guidelines, which require our non-employee directors, President and CEO and other executive officers to beneficially own a combination of shares of our Common Stock, vested stock options and unvested shares of restricted stock with a dollar value as set forth below, are as follows:

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Each non-employee director is subject to the guidelines once they have served on our Board for at least three years. Our President and CEO and other executive officers are subject to the guidelines four years after the later of the adoption of the guidelines and the first date he or she was employed as the Company’s President and CEO or executive officer, as applicable. Compliance with each set of guidelines is measured at the close of business at the Company’s principal place of business on December 31 of each year. You can find our stock ownership guidelines for our non-employee directors, our President and CEO and our other executive officers on our website at http://ir.monotype.com/.

We Maintain an Anti-Hedging Policy

Our insider trading policy prohibits all directors, officers and employees and their immediate family members from engaging in the following transactions relating to our securities or derivatives thereof:

Governance Practices, Risk Oversight and Business Relationships and Transactions

We Have Strong Governance Practices

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

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Any of our committee charters, our corporate governance guidelines, and our Code of Business Conduct and Ethics can be accessed on our website at http://ir.montype.com and 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

We Have Shared Board and Executive Officer Responsibility for Risk Oversight

The Company’s senior 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 is responsible for our risk identification and prioritization process, has oversight of our risk management program and risks related to our operations and business strategy, and receives reports on risk management from members of our executive management team. Our audit committee oversees our Sarbanes-Oxley Act of 2002 compliance program, internal audit function, and the resolution of certain issues identified by our information technology and information security functions. Our management development and compensation committee oversee the risks with respect to our executive compensation programs. This committee works directly with management to assure that our compensation programs properly encourage management to take informed risks as they strive for business success and avoid risks that would 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.

Our Board Reviews 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.

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Board Leadership and Independence

We Have Separate Board and Executive Leadership

We have separate positions for the Chair of the Board (our “Chair”) 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. Our Board believes that there are advantages to having an independent Chair, including:

Pamela F. Lenehan is our Chair, with her three-year term expiring upon the date of our 2021 annual meeting of stockholders. 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 senior management team allow her to excel in this role.

We Have an Independent Board

Our Board has eight members, is divided into three staggered classes (Class I, II and III), and each director in each class serves until a successor has been elected and qualified and until the earlier of their resignation or removal. Our current Board is comprised of seven independent and one non-independent director. Our one non-independent director is Scott Landers, our current President and CEO, who became a director in 2016.

Board Member Independence

Our Board has considered the relationships of all directors and any transactions involving the directors and determined that one of our directors, Scott 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. Aside from Mr. Landers, each director qualifies as an independent director under the rules of the SEC and the Nasdaq Stock Market (“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

Each member of our audit committee is independent as defined under the Exchange Act and the applicable rules of Nasdaq. Our Board has determined that Peter Simone qualifies 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 previously had with reporting companies and, in the opinion of our Board, he does not have a relationship that would interfere with the exercise of independent judgment in carrying out his responsibilities as a director.

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.

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Management Development and Compensation Committee Interlocks and Insider Participation

In 2018, Pamela Lenehan, Gay Gaddis, Eileen Campbell, Roger Heinen and Timothy Yeaton served on our management development and compensation committee. Ms. Lenehan stepped down as a member of the committee immediately following the date of our 2018 annual meeting of stockholders when she assumed the role of Chair of our Board. 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.

Our Board Engages an Independent Compensation Consultant

Our 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 advises on executive compensation best practices, peer group construction; peer group pay practices; and other relevant benchmarks with respect to the Company’s:

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 rules and determined that Pearl Meyer is independent and that their work has not raised any conflict of interest.

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.

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Proposal One - Election of Directors

The Board, upon the recommendation of its nominating and corporate governance committee, has nominated Gay W. Gaddis, Roger J. Heinen, Jr., and Denise F. Warren, and recommends that they be re-elected to the Board, each as a Class I director to serve until the 2022 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. Gaddis, Mr. Heinen and Ms. Warren are currently Class I directors whose terms expire at this Annual Meeting. The Board anticipates that Ms. Gaddis, Mr. Heinen and Ms. Warren, 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. Gaddis, Mr. Heinen and Ms. Warren as Class I 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.

Board Statistics, Skills and Experience, and Biographical Information (including the Nominees)

Board Statistics

Our Board believes that having a diverse mix of directors with complementary qualifications, skills and attributes, varied types of business and leadership experience, and unique perspectives is essential to meeting its responsibilities and contributing to the overall direction of Monotype. When we add new members to our Board, as we did in 2018, our nominating and corporate governance committee actively seeks highly qualified women and individuals from diverse racial and ethnic groups to include in the pool from which new candidates are selected so that a diverse set of experiences and perspectives is represented.

Some statistics relating to the age, diversity and tenure of our Board are as follows:

Skills and Experience of our Directors

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

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Board’s ability to provide such oversight and strategic guidance as it relates to our business. The following chart shows the number of directors that bring each key experience, expertise or attribute to our Board:

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 chart below notes the specific key experience, expertise or attributes each of our directors, including the Nominees, which our Board has identified as particularly valuable to the effective oversight of the Company and the execution of our strategy:

Biographies of our Non-Employee Directors and Nominees

The following biographical information lists the names, ages as of January 31, 2019, positions on the Board, current term and class, and relevant experience for the last five years for each of our non-employee directors, including the Nominees, which 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.

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You can find the biographical information of Scott. Landers, our President and CEO and a Class III director, in the section entitled “Biographical Information of our Executive Officers” of this Proxy Statement.

Biographical Information of the 2019 Nominees (current term expires on the date of our Annual Meeting)

		Gay W. Gaddis, 61		Member, Management Development and Compensation Committee Member, Nominating and Corporate Governance Committee Class I director since 2014
		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., 67		Chair, Management Development and Compensation Committee Member, Audit Committee Class I director since 2006
		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.

		Denise F. Warren, 55		Chair, Nominating and Corporate Governance Committee Member, Audit Committee Class I director since 2018
		Ms. Warren has served as the Chief Executive Officer and Founder of Netlyst, LLC, a consulting and advisory firm focused on digital business growth, 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 as 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 from 2005 until 2013. Ms. Warren currently serves on the board of directors and as a member of the audit committee of Taylor Morrison Home Corporation since August 2018, and on the board of directors of privately held Newscycle, LLC since October 2017. She previously served on the board of directors and as a member of the audit committee of Electronic Arts, Inc. from May 2013 to August 2018. Ms. Warren holds a BS in management from Tulane University and an MBA in communications and media management from Fordham University.

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Biographical Information of Our Non-Employee Directors

		Eileen A. Campbell, 59		Member, Management Development and Compensation Committee Class II director since 2018 Current term expires in 2020
		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 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, and as Executive Chair of the Reid Campbell Group, a provider 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.

		Pamela F. Lenehan, 66		Chair of the Board of Directors since 2018 Class III director since 2006 Current term expires in 2021
		Ms. Lenehan has served as President of Ridge Hill Consulting, LLC, a strategy consulting firm, since June 2002. She formerly served on the board of directors of Civitas Solutions, Inc. from December 2008 to March 2019, including as a member of its audit committee from January 2009 to March 2019 and its audit committee Chair from January 2009 to January 2016, as a member of its compensation committee from October 2014 to March 2019, and as presiding director from January 2016 to March 2019 when it was purchased in a private equity transaction; on the board of directors and audit committee of American Superconductor Corporation from March 2011 to July 2018, including as its audit committee Chair from August 2011 to July 2018; on the board of directors and compensation committee for Spartech Corporation from December 2004 to March 2013, including as its compensation committee Chair from March 2007 to March 2013, and a member of its 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 a not-for-profit organization. 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.

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		Peter J. Simone, 71		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 its 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.

		Timothy B. Yeaton, 60		Member, Nominating and Corporate Governance Committee Member, Management Development and Compensation Committee Class III director since 2012 Current term expires in 2021
		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.

2018 Meetings of the Board, its Committees, and Executive Sessions of Non-Employee Directors

The following provides information about the 2018 Meetings of the Board, its committees and any executive sessions of non-employee directors.

Meetings of the Board of Directors

Our Board met 16 times during 2018, and each director attended at least 75% of the total number of meetings of the Board or committee of which he or she was a member, with the exception of Mr. Simone who attended 63% of the meetings of the Board due to an illness requiring several weeks of hospitalization, from which he has since recovered. Ms. Campbell and Ms. Warren joined our Board in April 2018. In 2018, 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.

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. Our Board holds regularly scheduled meetings based on a calendar that is reviewed yearly, however the Board will schedule meetings as the need arises throughout the year. The composition and function of each of our committees complies with the rules of the SEC and Nasdaq.

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Management Development and Compensation Committee

Annual Responsibilities:

Audit Committee

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Annual Responsibilities:

Nominating and Corporate Governance Committee

Annual Responsibilities:

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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 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 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

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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. The committee actively seeks highly qualified women and individuals from diverse racial and ethnic groups to include in the pool from which new candidates are selected so that a diverse set of experiences and perspectives is represented. The committee then assesses each candidate, with such assessment including 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:

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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.

Director Compensation

Board and Committee Cash Retainers

Our non-employee directors receive 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, and Company-related activities that require their attendance. Our non-employee directors are also entitled to payment of director-related education expenses, which in 2018 totaled approximately $15,000 excluding travel.

Our annual cash retainer structure for our non-employee directors in 2018 was as follows:

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Additional cash retainers for each non-employee director who served on one or more Board committees in 2018 were as follows:

There were 16 meetings of the Board in 2018, and accordingly, meeting fees were paid in an amount reflective of the number of meetings over ten attended by each non-employee director. Actual cash retainers and meeting fees paid for service on our Board in 2018 are set forth in the “Director Compensation Table – Fiscal 2018.”

Equity Compensation

On May 8, 2018, our non-employee directors received a restricted stock award 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 2018 vests on the earlier of the first anniversary of the grant date or the date of our next annual meeting of stockholders, or May 2, 2019.

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 and vest quarterly over four years. In 2018, two non-employee directors, Ms. Campbell and Ms. Warren, received an equity grant upon their election to our Board in April 2018.

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 Board compensation at that time. The Board intends to review our director compensation structure again in 2020.

Director Compensation Table – Fiscal 2018

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”). Any and all equity awards to our non-employee directors, which may include options to purchase shares of our

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Common Stock, are considered and approved by our Board during regularly scheduled or special meetings. The following table provides a summary of the compensation we paid to our non-employee directors in fiscal 2018.

The aggregate total number of outstanding unvested shares of restricted stock held by each non-employee director at December 31, 2018 is shown below. With the exception of the 5,126 shares granted to Ms. Campbell and Ms. Warren upon their election to the Board on April 2, 2018, all shares shown below will vest on May 2,

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2019, 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.

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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 Executive Compensation Program Highlights and Information

Company Performance

2018 Financial Highlights

Executive Compensation Program Highlights and Information

Our Say-on-Pay Historical Voting Results

Over the past five years, between 90% and 100% of votes cast by our stockholders were in favor of our say-on-pay proposals, as follows:

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Connecting Executive Compensation to Company Performance

Risk Mitigation in our Executive Compensation Practices

Compensation Discussion and Analysis

This section describes the Company’s compensation programs for our executive officers that were in effect for 2018 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.

Our Board reaches out to our stockholders to discuss executive compensation matters such as the structure of our plans, our compensation philosophy, dilution and capital allocation. The Board wants your feedback on matters of executive compensation and encourages you to provide any comments on our policies and programs to our management development and compensation committee.

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 2018, 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, 2018. 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:

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

Executive Compensation Program Elements, Mechanics, and Timing

Our management development and compensation committee determines executive compensation by utilizing input on a variety of topics from our President and CEO, our senior human resources professional, and Pearl Meyer, the committee’s current independent compensation consultant. This work is done over the course of the year, when appropriate. The chart below summarizes the compensation topics considered by the management development and compensation committee and when the committee discusses, reviews, and approves each topic, as applicable:

The management development and compensation committee utilizes three compensation program elements in determining the compensation of the President and CEO and other executive officers. The following chart summarizes these elements, including why the element is part of our compensation program, when the element is

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approved, and the mechanics of each. These elements, their applicability and implementation are reviewed annually for their effectiveness. The committee uses these elements for the compensation of the President and CEO and utilizes them to provide guidance on the compensation of all executive officers except the President and CEO. Our President and CEO provides input to the committee on all executive officers except himself. The committee makes recommendations consistent with the policies of our 2007 Option Plan and our Executive Incentive Bonus Plan (the “Incentive Plan”), which was adopted by the Board in February 2014.

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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

2018 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 2018 named executive officer compensation, the peer group was selected in 2017 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 reflecting preferred peer company characteristics:

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The peer group used for benchmarking total named executive officer compensation in 2018 was as follows:

Upon approval of our peer group of companies for 2018 executive compensation, 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 absolute 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:

2019 Peer Group

In 2018, as part of its annual review of the peer group, the committee, with guidance from Pearl Meyer, modified and approved a revised peer group for the purposes of benchmarking 2019 compensation programs for named executive officer compensation. The committee determined it was appropriate to adjust the market capitalization and revenue ranges used in our 2018 to better reflect the current revenue performance and market capitalization of the Company with respect to the peer group companies. Specifically:

This adjustment, as well as updating other factors resulted in seven companies being removed from the peer group:

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The resulting peer group for the purposes of benchmarking 2019 named executive officer compensation is given below. The management development and compensation committee believes 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.

How We Weight the Elements of Executive Compensation

Our goal when setting the appropriate balance between annual cash and equity incentive compensation is to link variable compensation to measurable corporate financial and business goals as well as individual performance. We establish measurable 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 develop these performance objectives 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 as well as specific 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 an individual’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. 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.

With respect to our President and CEO’s total compensation, the management development and compensation committee allocates a greater percentage to both time- and performance-based equity compensation. This reinforces the committee’s belief that equity awards are important to motivate and retain our President and CEO and align his interests with those of our stockholders. Further, the committee balances his equity grants between performance-based and time-based equity to assure that his overall incentive compensation, inclusive of performance-based cash compensation, weighs more heavily toward performance-based compensation elements.

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Risk Mitigation in our Executive Compensation Programs

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

Stockholder Outreach

In 2018, 94.5% 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 2018, our executive management team and Board members discussed executive compensation with many of our stockholders and provided them with an opportunity to provide feedback on, among other topics, our executive compensation programs and corporate governance practices, and the committee factored in consistent, repeated feedback to the overall design of our executive compensation programs. The Company’s management and Board intend to continue to 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

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compensation philosophies and programs. A member of the committee will respond to all communications as quickly as possible. Any communications should be mailed to:

Monotype Imaging Holdings Inc.

Attention: Chair, Management Development and Compensation Committee

600 Unicorn Park Drive

Woburn, Massachusetts 01801

Biographical Information of Our Executive Officers

The following provides information on our executive officers (including our named executive officers), including their titles and their ages as of January 31, 2019. 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. There is no family relationship between any director, Nominee or executive officer of the Company.

Our Named Executive Officers

		Scott E. Landers, 48 Mr. Landers has served as our President and CEO since 2016, 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. He has served as a Class III director on our Board since 2016, with his current term expiring in 2021. Mr. Landers 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.

		Anthony Callini, 47 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, 54 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.

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		Steven R. Martin, 56 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, 52 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.

Our Other Executive Officers

		Brett S. Zucker, 46 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.

2018 Executive Compensation Payments

Base Salary

When determining base salary increases for 2018, 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. Callini who received an above average salary increase to reflect a market adjustment designed to keep his base salary at approximately the 50^th percentile when compared to the base salaries of similarly situated individuals in our peer group companies and Ms. Dunlap who received an above average increase to reflect increased responsibility in her role with the Company. These base salary percentage increases

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listed below were approved in February 2018, and applied retroactively to January 1, 2018. Salary increases and the resulting 2018 base salary for each of our named executive officers were as follows:

Cash Incentive Compensation

Our management development and compensation committee believes cash incentive compensation is an important element of our executive compensation package. The committee sets yearly measurable corporate performance goals (the “Goals”) which must be attained at the percentages set by the committee before any payout of cash incentive compensation is made. The committee sets Goals that it believes are difficult to attain, relate to our financial performance, and are sufficiently above the annual full year guidance reported to our stockholders. Over the preceding five fiscal years, our Goal attainment has resulted in the following percentage to base salary payouts to our then-current president and chief executive officer, demonstrating the difficulty of attainment of target or above payouts:

The management development and compensation committee set the 2018 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. The committee cannot establish a maximum cash incentive compensation amount under the Incentive Plan for any participant that is greater than two times the 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 2018, our management development and compensation committee reviewed and approved our named executive officer performance objectives for 2018. These objectives were applicable to our President and CEO as well as the remainder of our executive officers, including our named executive officers, as the committee believes that each 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 Goals and the named officer performance objectives, but does consider what percentage of the Goals were achieved when determining what cash incentive payout should be for each of our named executive officers.

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Further, in February 2018, our management development and compensation committee set our annual Goals, selected participants to be eligible under the Incentive Plan and established financial targets. The Goals included a full year revenue goal of $248.0 million and a full year non-GAAP net adjusted EBITDA goal of $65.0 million, which the committee concluded would be difficult to attain. 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, 2018 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 2018 revenue goal or 90% of the 2018 non-GAAP net adjusted EBITDA goal. Maximum bonuses under the Incentive Plan will not be paid unless the Company overachieves both individual targets by an established amount (105% in 2018), or a substantial overachievement of one target, when combined with achievement of the other target, reaches the maximum performance calculation. For 2018, the threshold, target, and maximum payments under the Incentive Plan as a percentage of annual base salary were as follows:

In February 2019, the committee determined that our named executive officers had substantially achieved the performance objectives for fiscal year 2018, which were as follows:

Further, in February 2019, our Board determined that, subject to the receipt of audited financial statements for fiscal year 2018, we had reached at least 99% of our full year revenue target of $248.0 million, or $246.7 million, and at least 112% of our full year non-GAAP net adjusted EBITDA target of $65.0 million, or $73.4 million. Based on these 2018 achievements, including the substantial overachievement of net adjusted EBITDA above the maximum performance level under the Incentive Plan, our management development and compensation

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committee determined that the Company had reached the total maximum bonus achievement and we paid annual cash incentive compensation under the Incentive Plan as follows:

For more information on our financial performance in fiscal 2018, please refer to our Annual Report on Form 10-K filed with the SEC.

Equity Compensation

The management development and compensation committee grants 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 Goals. 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. The performance share targets are set to levels that meet or exceed our annual plan targets and thus are actually awarded only when the Company outperforms.

We generally grant equity awards during the first quarter of the fiscal year. In determining the mix of equity awards to be granted in 2018, our management development and compensation committee reviewed our management equity award recommendations and our 2018 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 2018. On February 13, 2018, the committee approved equity awards to our named executive officers, which were granted effective as of March 2, 2018.

Equity grants made to our named executive officers in 2018 were as follows:

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Time-based restricted stock awards granted in 2018 each vest as to 25% percent of the shares on the first anniversary of the grant date and quarterly thereafter over the next 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. As evidenced below, only 33% (4 of 12) of the tranches granted since 2014 have been earned. Performance-based restricted stock units that have been granted to our named executive officers, including those that were outstanding in 2018, including targets and status are as follows:

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Early 2019 Executive Compensation Decisions

In addition to the 2018 decisions regarding executive compensation, the management development and compensation committee took the following material actions during the first quarter of 2019:

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Tax and Accounting Considerations

In 2018, 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 2018, 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 a competitive compensation program for our named executive officers. Beginning in 2018, certain 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. Accordingly, any compensation paid to a covered employee in excess of $1,000,000 is now non-deductible. 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.

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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,

Roger J. Heinen, Jr., Chair

Eileen A. Campbell

Gay W. Gaddis

Timothy B. Yeaton

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Summary Compensation Table - Fiscal Years 2018, 2017 and 2016

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

Grants of Plan-Based Awards – Fiscal Year 2018

The threshold, target, and maximum payouts under the Incentive Plan listed below were approved by our management development and compensation committee on February 13, 2018. Actual payment amounts under

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these awards were approved on February 12, 2019. All grants of equity awards listed below were approved by our management development and compensation committee on February 13, 2018, and granted effective as of March 2, 2018.