8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

February 27, 2012

Date of Report (Date of earliest event reported)

MONOTYPE IMAGING HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware	001-33612	20-3289482
(State or Other Jurisdiction of Incorporation)	(Commission File No.)	(IRS Employer Identification No.)

500 Unicorn Park Drive

Woburn, Massachusetts 01801

(Address of Principal Executive Offices, including Zip Code)

Registrant’s telephone number, including area code: (781) 970-6000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement

See Item 5.02, which is incorporated herein by reference.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e) On February 27, 2012 the Management Development and Compensation Committee (the “Compensation Committee”) of Monotype Imaging Holdings Inc. (the “Company”) approved payments under the Company’s 2011 Executive Incentive Compensation Program (the “2011 Bonus Plan”), payable upon the satisfaction of the conditions set forth in the 2011 Bonus Plan, to Douglas J. Shaw, President and Chief Executive Officer, Scott E. Landers, Senior Vice President and Chief Financial Officer, John L. Seguin, Executive Vice President, David L. McCarthy, Vice President and General Manager, Printer Imaging, and Steven R. Martin, Vice President Engineering, of $323,625, $160,524, $188,279.44, $112,500, and $120,000, respectively.

On February 28, 2012, the Compensation Committee also approved awards of non-qualified stock options under the Company’s Amended and Restated 2007 Stock Option and Incentive Plan (the “2007 Option Plan”) to Messrs. Shaw, Landers, Seguin, McCarthy and Martin of 85,000, 30,000, 33,000, 16,000 and 22,000 shares, respectively. Pursuant to the Company’s Equity Award Grant Policy, such awards will be granted to the employee on the third business day following the filing of the Company’s Form 10-K for the year ended December 31, 2011, or if such date is not a day on which the NASDAQ Global Select Market is open for trading, then on the next such trading day (the “Grant Date”). The exercise price of the awards shall be equal to the closing market price on the NASDAQ Global Select Market of a share of the Company’s common stock on the Grant Date. In order to receive the award, the executive officer must be employed by the Company on the Grant Date. These awards are subject to time-based vesting, with 25% of the shares underlying each award vesting on the first anniversary of the Grant Date and the remaining shares vesting in equal quarterly installments over the following three years.

Also on February 28, 2012, the Compensation Committee approved awards of restricted common stock under the 2007 Option Plan to Messrs. Shaw, Landers, Seguin, McCarthy and Martin of 28,000, 10,000, 11,000, 6,000 and 8,000 shares, respectively. These awards will also be granted to the employee on the Grant Date and the fair market value of a share of restricted Common Stock shall be equal to the closing market price on the NASDAQ Global Select Market of a share of the Company’s Common Stock on the Grant Date. The shares of restricted Common Stock shall be issued to each such individual with no payment by such individual for the shares and are subject to time-based vesting, with 25% of the shares underlying each award vesting on the first anniversary of the Grant Date and the remaining shares vesting in equal quarterly installments over the following three years.

Finally, on February 27, 2012, the Compensation Committee approved the Company’s 2012 Executive Incentive Compensation Plan (the “2012 Bonus Plan”) and established awards that may be earned for fiscal 2012 under the 2012 Bonus Plan by Messrs. Shaw, Landers, Seguin, McCarthy and Martin, and other officers approved by the Compensation Committee for participation in the 2012 Bonus Plan (each, a “Participant”). A Participant may receive a cash bonus payment under the 2012 Bonus Plan based upon the attainment of performance targets that are established by the Board of Directors or the Compensation Committee and may relate to financial measures with respect to the Company, as well as individual performance goals (collectively, the “Performance Goals”) and a Participant’s overall performance. No cash bonuses under the 2012 Bonus Plan shall be paid to Participants unless and until the Board of Directors or the Compensation Committee makes a determination with respect to the attainment of the Performance Goals. The Compensation Committee and the Board of Directors retain the right to amend, alter or terminate the 2012 Bonus Plan at any time. The above description of the 2012 Bonus Plan is a summary and is qualified in its entirety by the 2012 Bonus Plan itself, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

9.01. Exhibits

(d) Exhibits

10.1 Monotype Imaging Holdings Inc. 2012 Executive Incentive Compensation Plan.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized.

	MONOTYPE IMAGING HOLDINGS INC.
February 29, 2012	By:	/s/ Douglas J. Shaw
		Douglas J. Shaw
		President and Chief Executive Officer (Principal Executive Officer)

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EX-10.1

Exhibit 10.1

MONOTYPE IMAGING HOLDINGS INC.

2012 Executive Incentive Compensation Plan

Overview

The compensation philosophy of Monotype Imaging is to pay competitive base salaries and to provide the potential to significantly overachieve market average compensation through incentive compensation if performance of both the organization and the individual exceed expectations. Base compensation and total compensation targets are set based on peer group data and area market survey data.

Incentive Compensation Goals

• Provide incentive to Executives to exceed annual net adjusted EBITDA and revenue targets established by the Board of Directors.

• Provide incentive to Executives to achieve individual goals that have a direct relationship to Monotype Imaging’s organizational success.

• Motivate exceptional performance at all organizational levels.

• Pay for performance. No guarantees of bonus if performance does not warrant.

• Significant differentiation in bonus payments between less than expected performance and exceptional performance.

Eligibility

• Employees who, for purposes of compensation, are classified by the President and Chief Executive Officer or the Management Development and Compensation Committee as “Executives” for FY 2012, unless the Management Development and Compensation Committee determines that any such Executive shall be eligible for incentive compensation under an alternative Company plan.

• Executives hired after January 1, 2012 will be prorated based on date of hire.

• An Executive must be employed by the Company on December 31, 2012 to be eligible to receive any incentive compensation payment under this plan.

Total Incentive Compensation Pool

The total incentive compensation pool available to Executives under this plan is based on the Company’s achievement of specific net adjusted EBITDA and revenue targets established by the Board of Directors for 2012. At each pre-determined net adjusted EBITDA and revenue percentage achievement, beginning at 90% of the applicable target, an incentive compensation pool is established and will be paid on a sliding scale up to a maximum of 105% of each of targeted net adjusted EBITDA and revenue, subject to Section VII below, as follows:

	Pool Based on Revenue		Pool Based on naEBITDA		Total Potential Payout
At 90% Achievement of Target	$	296,500	$	296,500	$	593,000
At 100% Achievement of Target	$	780,000	$	780,000	$	1,560,000
At Achievement of the maximum % of Target	$	1,170,500	$	1,170,500	$	2,341,000

Monotype Imaging Holdings Inc. Confidential Page 1

The Total Potential Payment amount may be allocated if either (i) the Company achieves at least 105% of the revenue target and 105% of the naEBITDA target or (ii) the Company achieves at least 100% of the revenue target and achieves 110% of the naEBITDA target with payment scaling beginning in excess of 105% up to 110% of such target.

Calculation of the incentive compensation pool at each level is based upon the number of Executives on the date this plan is approved by the Management Development and Compensation Committee. If the Management Development and Compensation Committee determines that the total number of Executives participating in this plan increased or decreased during 2012, the Management Development and Compensation Committee may, but is not required to, adjust the incentive compensation pool at any or all levels.

Individual Incentive Compensation for Executives - Target Incentive Compensation:

• President/CEO =70% of his or her base salary

• Executive Vice President = 50% of his or her base salary

• Sr. Vice President/Chief Financial Officer = 45% of his or her base salary

• Other Executives = Varies based on position and will range from 30 – 40% of his or her base salary.

• Actual incentive compensation payments to an Executive will depend on (i) the satisfaction of the Company’s net adjusted EBITDA and revenue targets, (ii) the satisfaction of the Executive’s individual pre-determined performance objectives, and (iii) the Executive’s overall performance during 2012.

• The satisfaction of the individual performance objectives of the President and Chief Executive Officer, and his overall performance in 2012, will be reviewed by the Management Development and Compensation Committee.

• The satisfaction of the individual performance objectives, and overall performance in 2012, of all other Executives will be reviewed by the President and Chief Executive Officer, together with the Executive’s supervisor.

• All bonus recommendations will be made by the President and Chief Executive Officer to the Management Development and Compensation Committee for approval.

Monotype Imaging Holdings Inc. Confidential Page 2

Payments

• Payments will be made to Executives following approval of such payments by the Management Development and Compensation Committee and receipt by the Company of audited financial statements for the year ended December 31, 2012; provided, however, that such payments, if any, shall be made to Executives between January 1st and March 15th of 2012. In the event that there is a subsequent change in the Company’s audited financial statements that impacts whether the bonus targets were satisfied, Executives will be required to repay to the Company any amount that was paid based solely on the satisfaction of a bonus target that was not, after such change, satisfied. While the Management Development and Compensation Committee shall have no discretion to determine whether or not the repayment obligations shall be enforced, the final amounts to be repaid by each Executive shall be determined by the Management Development and Compensation Committee.

Plan Guidelines

• Total Executive incentive compensation pool is amount budgeted and accrued for plan year 2012.

• Organization must achieve 90% of net adjusted EBITDA or revenue target in order for any incentive compensation to be paid under this plan.

• The Management Development and Compensation Committee will make the final determination on all Executive bonus payments.

• The Executive compensation pool set forth in Section IV may be increased by the Management Development and Compensation Committee without amendment of this plan, but solely from amounts allocated by the Company to other Company incentive compensation plans in the event any such amounts are not paid or distributed under such other plans. In addition, in the event the Executive compensation pool is decreased or not fully allocated or paid to Executives, such amounts may be added by the Company to other non-executive Company incentive compensation plans.

• Although it is the intent of the Company to continue this compensation plan through FY2012, any Monotype Imaging compensation plan may be changed, amended, modified or terminated at the sole discretion of the Management Development and Compensation Committee.

• No Monotype Imaging compensation plan represents a contract of employment, implied or otherwise.

Monotype Imaging Holdings Inc. Confidential Page 3