Exhibit 10.1

PQ GROUP HOLDINGS INC.
2017 Omnibus Incentive Plan

Performance Stock Unit Award Agreement
This Performance Stock Unit Award Agreement (this “Agreement”) is made by and
between PQ Group Holdings Inc., a Delaware corporation (the “Company”), and [●]
(the “Participant”), effective as of [●] (the “Date of Grant”).
RECITALS

WHEREAS, the Company has adopted the PQ Group Holdings Inc. 2017 Omnibus
Incentive Plan (as the same may be amended and/or amended and restated from time
to time, the “Plan”), which Plan is incorporated herein by reference and made a
part of this Agreement, and capitalized terms not otherwise defined in this
Agreement will have the meanings ascribed to those terms in the Plan; and
WHEREAS, the Committee has authorized and approved the grant of an Award of
performance stock units (“PSUs”) to the Participant that provides the
Participant the conditional opportunity to acquire one share of Common Stock (a
“Share”) with respect to each PSU forming part of the Award, subject to the
terms and conditions set forth in the Plan and this Agreement.
NOW THEREFORE, in consideration of the premises and mutual covenants set forth
in this Agreement, the parties agree as follows:
1.
Grant of PSUs. The Company has granted to the Participant [●] PSUs (the “Target
Award), effective as of the Date of Grant, on the terms and conditions set forth
in the Plan and this Agreement, subject to adjustment as forth in the Plan.

2.
Earning and Vesting of PSUs. Subject to the terms and conditions set forth in
the Plan and this Agreement, the PSUs may be earned and will vest as follows:

(a)
Performance Conditions. Between 0% and 200% (the “Payout Range”) of the Target
Award is eligible to be earned contingent on achievement of the Performance
Measures set forth on Appendix A to this Agreement during the period beginning
on January 1, 2019 and ending on December 31, 2021 (the “Performance Period”)
and other terms and conditions as set forth in Appendix A to this Agreement.

(b)
Vesting Schedule. Subject to the terms and conditions set forth in the Plan and
this Agreement, and except as otherwise provided in Section 2(b) or Appendix A
of this Agreement, any PSUs that are earned in accordance with Appendix A will
vest on the date the Committee certifies the levels of achievement of the
Performance Measures, which shall be no later than sixty (60) days following the
end of the Performance Period (the “Performance Vesting Date”), subject to the
Participant’s continued Service through the Performance Vesting Date (or other

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earlier vesting date specified in Appendix A). Any PSUs that are not earned in
accordance with Appendix A on the Performance Vesting Date (or any other date
specified in Appendix A) will immediately terminate and be forfeited and
cancelled without payment of consideration therefor.

(c)
Termination of Service. Except as otherwise provided in Appendix A of this
Agreement, the Participant shall forfeit, immediately and without consideration,
all unvested PSUs upon a termination of the Participant’s Service for any
reason. Without limiting the generality of the foregoing, the PSUs and the
Shares (and any resulting proceeds) will continue to be subject to Section 13 of
the Plan.

3.
Payment

(a)
Settlement. The Company shall deliver to the Participant within thirty (30) days
following the vesting date of the PSUs (but no later than March 15th of the year
following the year in which such PSUs are earned hereunder) a number of Shares
equal to the aggregate number of PSUs that are earned in accordance with
Appendix A and that vest on such date. No fractional Shares shall be delivered.
The Company may deliver such Shares either through book entry accounts held by,
or in the name of, the Participant or cause to be issued a certificate or
certificates representing the number of Shares to be issued in respect of the
PSUs registered in the name of the Participant.

(b)
Withholding Requirements. The Company will have the power and the right to
deduct or withhold automatically from any Shares deliverable under this
Agreement or from any other compensation payable to the Participant, or to
require the Participant or the Participant’s representative to remit to the
Company, up to the maximum statutory amount necessary to satisfy federal, state
and local taxes, domestic or foreign, required by law or regulation to be
withheld with respect to any taxable event arising as a result of this
Agreement. Nothing in this Agreement may be construed as relieving the
Participant of his or her obligation to satisfy all taxes required to be
withheld in connection with the award, vesting or settlement of the PSUs.

4.
Adjustment of Shares. In the event of any change with respect to the outstanding
shares of Common Stock contemplated by Section 4.5 of the Plan, the PSUs may be
adjusted by the Committee in accordance with Section 4.5 of the Plan.

5.
Miscellaneous Provisions

(a)
Securities Laws Requirements. No Shares will be issued or transferred pursuant
to this Agreement unless and until all then applicable requirements imposed by
federal and state securities and other laws, rules and regulations and by any
regulatory agencies having jurisdiction, and by any exchanges upon which the
Shares may be listed, have been fully met. As a condition precedent to the
issuance of Shares pursuant to this Agreement, the Company may require the

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Participant to take any reasonable action to meet those requirements. The
Committee may impose such conditions on any Shares issuable pursuant to this
Agreement as it may deem advisable, including, without limitation, restrictions
under the Securities Act, under the requirements of any exchange upon which
shares of the same class are then listed and under any blue sky or other
securities laws applicable to those Shares.

(b)
Rights of a Shareholder of the Company. Prior to settlement of the PSUs and the
delivery of Shares to the Participant with respect thereto, neither the
Participant nor the Participant’s representative will have any rights as a
shareholder of the Company with respect to any Shares underlying the PSUs and
the Participant will not receive payment of, or credit for, dividends or
dividend equivalents with respect to any Shares underlying the PSUs.

(c)
Transfer Restrictions. The PSUs may not be transferred except as expressly
permitted under Section 15.3 of the Plan. The Shares delivered hereunder will be
subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the Plan or the rules, regulations and other requirements
of the Securities and Exchange Commission, any stock exchange upon which such
Shares are listed, any applicable federal or state laws and any agreement with,
or policy of, the Company or the Committee to which the Participant is a party
or subject, and the Committee may cause orders or designations to be placed upon
the books and records of the Company’s transfer agent to make appropriate
reference to such restrictions.

(d)
No Right to Continued Service. Nothing in this Agreement or the Plan confers
upon the Participant any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Company (or any Subsidiary retaining the Participant) or of the Participant,
which rights are hereby expressly reserved by each, to terminate his or her
Service at any time and for any reason, with or without Cause.

(e)
Notification. Any notification required by the terms of this Agreement will be
given by the Participant (i) in a writing addressed to the Company at its
principal executive office and will be deemed effective upon actual receipt when
delivered by personal delivery or by registered or certified mail, with postage
and fees prepaid, or (ii) by electronic transmission to the Company’s e-mail
address of the Company’s General Counsel and will be deemed effective upon
actual receipt. Any notification required by the terms of this Agreement will be
given by the Company (x) in a writing addressed to the address that the
Participant most recently provided to the Company and will be deemed effective
upon personal delivery or within three (3) days of deposit with the United
States Postal Service, by registered or certified mail, with postage and fees
prepaid, or (y) by facsimile or electronic transmission to the Participant’s
primary work fax number or e-mail address (as applicable) and will be deemed
effective upon confirmation of receipt by the sender of such transmission.

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(f)
Entire Agreement. This Agreement and the Plan constitute the entire agreement
between the parties hereto with regard to the subject matter of this Agreement.
This Agreement and the Plan supersede any other agreements, representations or
understandings (whether oral or written and whether express or implied) that
relate to the subject matter of this Agreement.

(g)
Waiver. No waiver of any breach or condition of this Agreement will be deemed to
be a waiver of any other or subsequent breach or condition whether of like or
different nature.

(h)
Successors and Assigns. The provisions of this Agreement will inure to the
benefit of, and be binding upon, the Company and its successors and assigns and
upon the Participant, the Participant’s executor, personal representative(s),
distributees, administrator, permitted transferees, permitted assignees,
beneficiaries, and legatee(s), as applicable, whether or not any such person
will have become a party to this Agreement and have agreed in writing to be
joined herein and be bound by the terms hereof.

(i)
Severability. The provisions of this Agreement are severable, and if any one or
more provisions are determined to be illegal or otherwise unenforceable, in
whole or in part, then the remaining provisions will nevertheless be binding and
enforceable.

(j)
Choice of Law; Jurisdiction. This Agreement and all claims, causes of action or
proceedings (whether in contract, in tort, at law or otherwise) that may be
based upon, arise out of or relate to this Agreement will be governed by the
laws of the State of Delaware, excluding any conflicts or choice-of-law rule or
principle that might otherwise refer construction or interpretation of this
Agreement to the substantive law of another jurisdiction. The Participant agrees
that he or she will bring all claims, causes of action and proceedings (whether
in contract, in tort, at law or otherwise) that may be based upon, arise out of
or be related to the Plan and this Agreement exclusively in the federal and
state courts located within the geographic boundaries of the United States
District Court for the Eastern District of Pennsylvania (the “Chosen Court”),
and hereby (i) irrevocably submits to the exclusive jurisdiction of the Chosen
Court, (ii) waives any objection to laying venue in any such proceeding in the
Chosen Court, (iii) waives any objection that the Chosen Court is an
inconvenient forum or does not have jurisdiction over any party and (iv) agrees
that service of process upon such party in any such claim or cause of action
will be effective if notice is given in accordance with this Agreement.

(k)
Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan
and this Agreement. The Participant has read and understands the terms and
provisions of the Plan and this Agreement, and accepts the PSUs subject to all
of the terms and conditions of the Plan and this Agreement. In the event of a
conflict between any term or provision contained in this Agreement and a term or
provision of the Plan, the applicable term and provision of the Plan will govern
and prevail.

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Appendix A
PERFORMANCE MEASURES AND VESTING TERMS
Performance Measures. The Performance Measures associated with the PSUs are
Three-Year Average Return on Average Net Tangible Assets (“ROANTA”), as
calculated utilizing the methodology and adjustments described in the definition
below, and Three-Year Average Adjusted Free Cash Flow, as calculated utilizing
the methodology and adjustments described in the definition below. After
Three-Year Average ROANTA and Three-Year Average Adjusted Free Cash Flow are
determined, a performance factor (the “Performance Factor”) is applied, as set
forth in the table below.

 
THREE-YEAR AVERAGE ROANTA
Performance Factor
Maximum
18.5%
100%
125%
150%
175%
200%
 
 
18.3%
75%
100%
125%
150%
175%
Target
18.1%
50%
75%
100%
125%
150%
 
17.55%
25%
50%
75%
100%
125%
Threshold
17.0%
12.5%
25%
50%
75%
100%
 
THREE-YEAR AVERAGE ADJUSTED FREE CASH FLOW

$117MM

$127MM

$138MM

$145MM

$150MM
 
 
Threshold
 
Target
 
Maximum
 

            
1.
Determination of Earned PSUs. The number of PSUs that are earned under this
Appendix A will be determined by multiplying the Performance Factor by the
Target Award.

2.
Rules for Determining the Performance Factor. The following rules will apply in
determining the Performance Factor:

2.1
If actual performance is below threshold for either Performance Measure, the
Performance Factor will be zero percent (0%), and no PSUs will be earned.

2.2
If actual performance is above maximum for both Performance Measures, the
Performance Factor will be (and will not exceed) two hundred percent (200%).

2.3
If actual performance is between the threshold and maximum benchmarks for
Three-Year Average ROANTA and Three-Year Average Adjusted Free Cash Flow set
forth in the chart above, then the Performance Factor will be determined by
linear interpolation.

2.4
In calculating the Performance Factor, all percentages will be rounded to the
nearest one-tenth (1/10th) of one percent (1%). In calculating the number of
PSUs that are earned under Section 1 of this Appendix A, the number of earned
PSUs shall be rounded to the nearest whole PSU.

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3.
Definition of Three-Year Average ROANTA. ROANTA is defined as:

(Adjusted EBITDA – Depreciation) * (1- Adjusted Tax Rate)
Average Investment (Average Net Working Capital + Average Net Property, Plant &
Equipment)
EBITDA consists of net income (loss) attributable to the Company before
interest, taxes, depreciation and amortization. Adjusted EBITDA consists of
EBITDA adjusted for (i) non-operating income or expense, (ii) the impact of
certain non-cash, nonrecurring or other items included in net income (loss) and
EBITDA that the Company does not consider indicative of its ongoing operating
performance, and (iii) depreciation, amortization and interest of the Company’s
50% share of the Zeolyst Joint Venture.
Adjusted Tax Rate – the tax rate effective for each tax jurisdiction. Tax rates
are frozen at the assumed 2019 operating plan tax rates.
Average Net Working Capital – the sum of Accounts Receivable and Inventory, less
Accounts Payable for the corresponding year.
Average Net Working Capital and Average Net Property, Plant & Equipment shall be
calculated each year based upon the balances at the beginning and ending of each
year.
Three-Year Average ROANTA shall be calculated as the simple average of the three
annual ROANTA calculations.
4.
Three-Year Average Adjusted Free Cash Flow is defined as:

Cash Flow from Operating Activities – Purchases of Property, Plant and Equipment
+ Proceeds from Asset Sales + appropriate addbacks with the following
assumptions:
Cash taxes – excludes any U.S. Federal cash taxes for the period.
Foreign exchange rates – frozen using assumptions in the 2019 operating plan.
Three-Year Average Adjusted Free Cash Flow shall be calculated as the simple
average of the three annual Adjusted Free Cash Flow calculations.
5.
Adjustments. Certain adjustments may be made at the discretion of the Committee
to the Average Three-Year ROANTA and the Three-Year Average Adjusted Free Cash
Flow thresholds, targets and maximums as set forth in the table above in the
event of the Company’s acquisition or divestiture of an entity, business, or
product line, or any capital market transactions including debt refinancings or
equity offerings.

    
    

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6.
Termination by Reason of Disability, Retirement, Good Reason, Termination by the
Company without Cause or Death. Upon a termination of the Participant’s Service
during the Performance Period by reason of Disability, Retirement (defined
below), Good Reason (defined below), termination by the Company without Cause,
or death, the PSUs shall be eligible to be earned and to vest as follows (and
any PSUs that are not earned and do not vest under the circumstances described
below will be forfeited and cancelled without payout of consideration therefor):

6.1
If the Participant’s Service is terminated by the Company without Cause or due
to his or her Disability, or if the Participate terminates his or her Service
due to Retirement or Good Reason, in each case, before the end of the
Performance Period, the PSUs will remain outstanding and will be eligible to be
earned based on actual performance as determined under this Appendix A, subject
to pro ration as provided for below, and to vest on the Performance Vesting
Date. Any PSUs that are so earned will be pro rated by dividing the number of
earned PSUs by a fraction, the numerator of which is the number of days the
Participant actually worked in the Performance Period, and the denominator of
which is the number of days in the Performance Period.

6.2
If the Participant’s Service is terminated due to his or her death before the
end of the Performance Period, upon such termination, a number of PSUs will be
deemed earned and will vest equal to the Target Award multiplied by a fraction,
the numerator of which is the number of days worked in the Performance Period,
and the denominator which is the total number of days in the Performance Period.

6.3
For purposes of this Appendix A, “Retirement” means a termination of Service due
to the voluntary resignation of the Participant, other than at a time when Cause
exists, after attaining the age of 60 with a minimum of ten years of continued
Service (for the avoidance of doubt, from the most recent hire date, including
service with predecessor acquired entities).

6.4
For purposes of this Appendix A, “Good Reason” shall have the meaning set forth
in any severance agreement between the Participant and the Company and/or any of
its Subsidiaries to the extent that such severance agreement provides for the
voluntary resignation of the Participant for “Good Reason”.

7.
Change in Control.

7.1
If a Change in Control occurs during the Performance Period, upon such Change in
Control, a number of PSUs will be deemed earned and will vest as provided for in
Section 7.2 below. Any PSUs that do not vest in connection with such Change in
Control as provided for in this Section 7 will be forfeited and cancelled
without payment of consideration therefor.

7.2
For purposes of determining the number of PSUs that vest in connection with a
Change in Control, the Performance Factor shall be determined as otherwise set
forth in Sections 2, 3 and 4 of this Appendix A, except that (i) the Performance

    
    

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Period shall be deemed to have ended on (A) the date of the Change in Control,
if the Change in Control occurs on the last date of a fiscal quarter, or (B) the
last day of the fiscal quarter preceding the Change in Control if the Change in
Control does not occur on the last day of a fiscal quarter, and (ii) if the date
the Performance Period is deemed to have ended under clause (i) is not also the
last day of a fiscal year, then the period between the last day of the Company’s
immediately preceding fiscal year and the deemed last day of the Performance
Period (the “Stub Period”) shall be deemed a fiscal year for purposes of this
Appendix A and the Company’s ROANTA and Free Cash Flow for such deemed fiscal
year shall be annualized amounts based on the Company’s actual ROANTA and Free
Cash Flow for the Stub Period.